Exam 16: The International Financial System and Monetary Policy

Throughout most of the post-World War II period, the use of capital controls by governments around the world was declining. But in the late 1990s, a number of governments expressed renewed interest in capital controls. What accounts for this renewed interest?

Under the Bretton Woods system the international reserve currency was the

An unsterilized intervention in which the central bank sells foreign assets to purchase domestic currency will result in

The Bretton Woods system was expected to be more stable than the gold standard because

If the Japanese central bank performed a sterilized intervention to reduce the value of the yen, the most likely result is:

Members of the European Exchange Rate Mechanism (ERM)

Make use of a T-account to show the effect of the Fed's sale of $500 million worth of government securities on the Fed's balance sheet. (assume the Fed receives a check from the sale of securities)

If a nation's current account is -$200 billion and its financial account (excluding its official settlements balance)is $175 billion, how much is its official settlements balance?

The exchange rate system followed by the United States is known as

Countries in which region experienced disruptive capital flows in 1997-98?

Briefly describe how the Bretton Woods system worked. What advantages did it have over the gold standard? What problems did the Bretton Woods system eventually encounter?

The main reason central banks engage in foreign-exchange interventions is to

If a central bank wishes to lower the foreign-exchange value of its currency, it will

A central bank may be reluctant to see its currency appreciate because

Make use of a graph of the foreign exchange market to show how the Brazilian Central Bank can use an unsterilized intervention to reduce the value of its currency, the real, in terms of the dollar.

Which of the following statements is correct?

How did the global savings glut in the 2000s affect the U.S. current account balance?

What accounted for much of policymakers' concern over U.S. current account deficits in the 1980s, 1990s, and 2000s?

Assets denominated in foreign currency and use in international transactions are referred to as:

Why may a central bank intervene in the foreign exchange market when its currency is depreciating?