Exam 2: International Monetary System

Prior to the 1870s,both gold and silver were used as international means of payment and the exchange rates among currencies were determined by either their gold or silver contents.Suppose that the dollar was pegged to gold at $30 per ounce,the French franc is pegged to gold at 90 francs per ounce and to silver at 9 francs per ounce of silver,and the German mark pegged to silver at 1 mark per ounce of silver.What would the exchange rate between the U.S.dollar and German mark be under this system?

At the outbreak of World War I

Once the changeover to the euro was completed by July 1,2002,the legal-tender status of national currencies in the euro zone

During the period between World War I and World War II,the political reality was characterized by

Under the Bretton Woods system each country established a par value for its currency in relation to the dollar.And the U.S.dollar was pegged to gold at

According to the theory of optimum currency areas,

Assume that a country is on the gold standard.In order to support unrestricted convertibility into gold,banknotes need to be backed by a gold reserve of some minimum stated ratio.In addition,

Under a purely flexible exchange rate system

Gold was officially abandoned as an international reserve asset

Put the following in correct date order:

The Triffin paradox

Under the Bretton Woods system,each country was responsible for maintaining its exchange rate within $\pm$ 1 percent of the adopted par value by

Suppose that Britain pegs the pound to gold at six pounds per ounce,whereas the exchange rate between pounds and U.S.dollars is $5 = £1.What should an ounce of gold be worth in U.S.dollars?

An "international" gold standard can be said to exist when

Willem Duisenberg,the first president of the European Central Bank,defined "price stability" as an annual inflation rate of

Following the demise of the Bretton Woods system,the IMF

Put the following in correct date order:

The main cost of European monetary union is

One potential drawback of the gold standard is that

The United States adopted the gold standard in