International Monetary System Overview

False (B)

The U.S. abandoning dollar-gold convertibility

<p>floating</p> Signup and view all the answers

<p>International Monetary Fund (IMF) = Provides short-term financial assistance and monitors global economies World Bank = Focuses on long-term development projects in emerging economies World Trade Organization (WTO) = Facilitates global trade by reducing trade barriers</p> Signup and view all the answers

<p>The Hong Kong dollar pegged to the U.S. dollar (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Fixed exchange rates are pegged to another currency or a basket of currencies, while floating exchange rates fluctuate based on market forces.</p> Signup and view all the answers

<p>1944</p> Signup and view all the answers

<p>A currency where central banks occasionally intervene to stabilize value (A)</p> Signup and view all the answers

<p>Unpredictable currency fluctuations (D)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>U.S.-China trade imbalance</p> Signup and view all the answers

<p>debt</p> Signup and view all the answers

<p>Gold Standard = A monetary system where currency value is directly linked to gold Bretton Woods = A system of fixed exchange rates pegged to the U.S. dollar Floating Exchange Rate = Currency values determined by market forces of supply and demand Managed Float = A system where the central bank intervenes to influence exchange rates</p> Signup and view all the answers

<p>The International Monetary Fund (IMF) (C)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Latin American debt crisis</p> Signup and view all the answers

<p>stability</p> Signup and view all the answers

<p>A shift toward floating exchange rates (D)</p> Signup and view all the answers

The system governing how currencies are exchanged and international financial transactions occur. It facilitates global trade, investment, and economic stability.

A system where currencies were tied to gold at fixed exchange rates. This ensured stable exchange rates but limited monetary policy flexibility. It collapsed during World War I due to economic disruptions.

Established fixed exchange rates, with the US dollar as the anchor currency convertible to gold at a fixed price. It created institutions like the IMF and World Bank to promote global economic stability and development. It collapsed in 1971 due to inflationary pressures and trade imbalances.

A system where currencies are valued by market forces (supply and demand). This provides flexibility for monetary policy but introduces exchange rate volatility.

An exchange rate regime where a currency's value is pegged to another currency or a basket of currencies.

An exchange rate regime where a currency's value fluctuates based on market forces, like supply and demand.

An exchange rate regime where central banks intervene to stabilize currencies without a fixed peg.

An exchange rate regime where a currency is periodically adjusted based on economic indicators.

The IMF provides short-term financial assistance to countries facing balance-of-payments crises. It also monitors global economic trends and offers policy advice to member nations. It promotes exchange rate stability and international monetary cooperation.

The World Bank focuses on long-term development projects in emerging economies, providing low-interest loans and grants to reduce poverty and foster sustainable development.

The system that governs exchange rates between currencies in international trade.

A monetary system where the value of a currency is fixed to a specific external standard, often gold.

A system of fixed exchange rates established after World War II, with the US dollar pegged to gold and other currencies pegged to the dollar.

A system where currencies are allowed to fluctuate freely against each other based on market forces.

Unpredictable changes in the value of a currency, which can affect trade and investment.

Significant differences in trade balances between countries, leading to imbalances in global economic flows.

Situations where governments struggle to repay their debts, posing risks to global financial stability.

The International Monetary Fund (IMF), World Bank, and World Trade Organization (WTO) play key roles in maintaining international economic stability.

The IMF provides loans and advice to countries facing financial difficulties.

Exchange rate volatility creates uncertainty for businesses, affecting trade and investment decisions.