Exam 3: The International Monetary System

The post WWII international monetary agreement that was developed in 1944 is known as the ________.

An international gold standard for currency exchanges has the implicit effect of

The mobility of international capital flows is causing emerging market nations to choose between a free-floating currency exchange regime and a currency board (or taken to the limit,dollarization).Describe how each of the regimes would work and identify at least two likely economic results for each regime.

Beginning in 1991 Argentina conducted its monetary policy through a currency board.In January 2002,Argentina abandoned the currency board and allowed its currency to float against other currencies.The country took this step because

In January 2002,the Argentine peso was officially valued at a rate of Peso 1.40/USD.More recently the exchange rate is Peso 3.10/USD,thus,the Argentine peso ________ against the U.S.dollar.

The global recession of 2009/2010 saw the major global economic players (USA,,China,and Europe)each choose the same international currency goals from the "impossible trinity".Meaning each felt an independent monetary policy was the most important goal followed by free movement of capital,and third,a policy of free floating currencies.

The euro is a somewhat unique currency in that it is a floating currency within the member nations but it is rigidly fixed relative to other international currencies.

The authors discuss the concept of the "Impossible Trinity" or the inability to achieve simultaneously the goals of exchange rate stability,full financial integration,and monetary independence.If a country chooses to have a pure float exchange rate regime,which two of the three goals is a country most able to achieve?

On September 9,2000 Ecuador officially replaced its national currency,the Ecuadorian sucre,with the U.S.dollar.This practice is known as ________.

Under the gold standard of currency exchange that existed from 1879 to 1914,an ounce of gold cost $20.67 in U.S.dollars and £4.2474 in British pounds.Therefore,the exchange rate of pounds per dollar under this fixed exchange regime was

Another name for the International Bank for Reconstruction and Development is

Which of the following is NOT an argument against dollarization?

If exchange rates were fixed,investors and traders would be relatively certain about the current and near future exchange value of each currency.

The United States currently uses a ________ exchange rate regime.