Exam 18: The International Financial System

When Americans ________ their net holdings of foreign assets,this change is recorded as a net U.S. acquisition of financial assets in the financial account. When foreigners ________ their net holdings of U.S. assets,this change is recorded as a net U.S. incurrence of liabilities.

The seignorage for a government is greater for ________ than for ________.

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.

The German central bank gained international reserves in the early 1970s because it sold ________ to prevent mark ________.

A central bank ________ of domestic currency and corresponding ________ of foreign assets in the foreign exchange market leads to an equal decline in its international reserves and the monetary base,everything else held constant.

The fixed exchange rate regime established at a meeting in New Hampshire in 1944 has been known as the

Policymakers in a country with a balance of payments surplus may not want to see their country's currency appreciate because this would

Two reasons for an industrialized country to adopt an exchange-rate targeting regime are if the country ________ conduct successful monetary policy on its own,and if the country wants to ________ integration of the domestic economy with its neighbors.

Everything else held constant,if a central bank makes an unsterilized sale of foreign assets,then the domestic money supply will ________ and the domestic currency will ________.

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

Which of the following is not included in the current account?

The difference between merchandise exports and imports is called the ________ balance.

The account that shows a country's current international transactions (that is,transactions that do not involve the purchase or sale of financial assets)for a given year is called the

The World Bank is an international organization that

The Policy Trilemma states that a country or a monetary union can't pursue the following three policies at the same time

Explain an additional disadvantage for a country undergoing dollarization compared to a currency board or other exchange-rate targeting regimes.

The monetary policy strategy that does NOT allow the policy to focus on domestic considerations is

A capital ________ can promote financial instability in an emerging-market country because it is what forces a country to ________ its currency.

Under a fixed exchange rate regime,if a central bank must intervene to purchase the ________ currency by selling ________ assets,then,like an open market sale,this action reduces the monetary base and the money supply,causing the interest rate on domestic assets to rise.

When the central bank allows the purchase or sale of domestic currency to have an effect on the monetary base,it is called