Exam 18: The International Financial System

The United States chooses to have ________ and ________ and therefore,cannot have a fixed exchange rate at the same time.

Because many emerging market countries have not developed the political or monetary institutions that allow the successful use of discretionary monetary policy,

To maintain fixed exchange rates when countries had balance of payments deficits and were losing international reserves,the ________ would loan ________ countries international reserves contributed by other members.

If a central bank does not want to see its currency fall in value,it may pursue ________ monetary policy to ________ the domestic interest rate,thereby strengthening its currency.

To keep from running out of international reserves under the Bretton Woods system,a country had to implement ________ monetary policy to ________ its currency.

The net amount of international reserves that move between governments to finance international transactions is called the ________ balance.

If the current account balance shows a surplus,and the capital account also shows a surplus,then the official reserve transactions balance

China chooses to have ________ and ________ and therefore,cannot have free capital mobility at the same time.

The monetary policy strategy that directly ties down the price of internationally traded goods is

A foreign exchange intervention with an offsetting open market operation that leaves the monetary base unchanged is called

Under a fixed exchange rate regime,if a country has an ________ exchange rate,then its central bank's attempt to keep its currency from appreciating will result in a ________ of international reserves.

The Bretton Woods system was one in which central banks

Since the abandonment of the Bretton Woods system,balance of payments considerations have become ________ important,and exchange rate considerations ________ important in the conduct of monetary policy.

In response to the overvalued dollar in the early 1970s,the German Bundesbank bought dollars and sold marks to keep the exchange rate fixed,gaining international reserves.The huge purchase of international reserves meant that the German monetary base began to ________,leading to ________ growth in the German money supply.

Under an exchange-rate targeting rule for monetary policy,a crawling peg

Under the Exchange Rate Mechanism of the European Monetary System,when the British pound depreciated below its lower limit against the German mark,the German central bank was required to buy ________ and sell ________,thereby ________ international reserves.

Under a fixed exchange rate system,countries that ran large,persistent balance of payments surpluses would ________ international reserves,thereby pressuring them into ________ their exchange rate.

An ECU was

Which of the following is not an advantage to exchange-rate targeting?

The account that shows international transactions involving financial transactions (stocks,bonds,bank loans,etc.)is called the