This problem describes the gold standard. It also gives a short desctiption of the relationship with the Bretton Woods System and finally gives some rellevant web references.© BrainMass Inc. brainmass.com October 16, 2018, 4:40 pm ad1c9bdddf
What is the gold standard?
1. An international monetary system in which currencies are defined in terms of their gold content and payment imbalances between countries are settled in gold. It was in effect from about 1870-1914.
2. A monetary system in which currencies are defined in terms of a given weight of gold
3. A monetary system based on gold. The basic currency unit of a country is pegged to a specified amount of gold
4. An international monetary system in which the value of a currency is fixed in terms of gold. A government whose currency is on the gold standard agrees to convert it to gold at a pre-established price. This creates a self-regulating mechanism for adjusting the balance of payments, since disequilibria can be remedied by inflows and outflows of gold.
5. A monetary standard which defines the monetary unit of a country as consisting of a certain amount of gold. Every citizen could come to the Mint with a bar of gold and ask for currency (for example dollars) in exchange, at the legal price.
6. A system of monetary organization whereby the value of a country's currency is legally defined and ...
International Monetary System
Please help with the following:
1(a) What are the alleged advantages of a fixed over a flexible exchange rate system? How do advocates of flexible exchange rates respond? (b) What overall conclusion can be reached on whether flexible or fixed exchange rates are preferred?
2. What is meant by a crawling peg system? How can such a system overcome the disadvantage of an adjustable peg system?
3. Explain: (a) How economic conditions today differ from those prevailing under the gold standard period. (b) Why the different economic conditions today would make the reestablishment of a smoothly working gold standard impossible.
4. (a) With respect to a nation with a $100-million quota in the IMF, indicate how the nation was to pay in its quota to the IMF and the amount that the nation could borrow in any one year under the original rules. (b) How are the rules different today?
5. Explain the role of the dollar under the Bretton Woods System.
6. Explain briefly the operation of the present international monetary system.
7. (a) With respect to a nation with a $100-million quota in the IMF, indicate how the nation was to pay in its quota to the IMF and the amount that the nation could borrow in any one year under the original rules.View Full Posting Details