Chapter 10 Student P10 MGT 302

Chapter 10 Student - Chapter10 System KeyTerms Systems Systems Allowcurre

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Chapter 10 The International Monetary  System
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Key Terms: International Monetary System:   institutional arrangements countries  adopt to govern exchange rates
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Floating Exchange Rate  Systems Benefits of Floating Exchange Rate  Systems Maintain monetary policy autonomy Allow currency devaluations to adjust trade  imbalances Drawbacks of Floating Exchange Rate  Systems Volatility of exchange rates Contagion and currency speculation
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Fixed Exchange Rate Systems Benefits of Fixed Exchange Rate Systems Encourage monetary discipline Provide predictability Drawbacks of Fixed Exchange Rate  Systems Limit flexibility to deal with economic problems
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Evolution of the International  Monetary System Gold Standard (1870-1914) Period between the Wars (1918-1939) Bretton Woods System (1944-1973) Floating Exchange Rate Regime (1976- current)
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Created a fixed exchange rate system where  the countries agreed to peg their currencies  to the US dollar which was convertible to  gold at $35 an ounce. Countries agreed not to engage in  competitive devaluations for trade purposes. Countries agreed to defend the value of their 
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This note was uploaded on 04/17/2010 for the course MGT 302 taught by Professor West during the Spring '10 term at ASU.

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Chapter 10 Student - Chapter10 System KeyTerms Systems Systems Allowcurre

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