Exchange
The market in which the world's currencies are traded.
Foreign Exchange Market
What did the book claim was the MAIN reason the Bretton Woods system failed?
Governments being unwilling to accept the domestic costs of balance of payment adjustments.
What was the official dollar price per ounce of gold mentioned about 5 times in the book for some reason?
$35
A set of rules governing how much national currencies can appreciate and depreciate in the foreign exchange market
Exchange rate system
Name 1 of the 4 innovations of the Bretton Woods system.
Greater exchange rate flexibility, capital controls, a stabilization fund, and the IMF
The accounting device that records all international transactions between a particular country and the rest of the world for a given period?
Balance of payments
What are the 2 prototypical exchange rate systems?
Fixed and floating exchange rate systems.
Which exchange system did the Bretton Woods system attempt to establish?
Fixed exchange rate system
What is one of the two consequences of government intervention in balance of payment adjustments?
It eliminates imbalance by equaling the supply and demand of currency and it changes each countries money supply
What are the trade-offs governments have to make when deciding between fixed and floating exchange systems?
Domestic autonomy and exchange rate stability
Each country involved in the Bretton Woods system created a pool of currencies called a what?
Stabilization fund
What did the Bretton Woods system create to limit opportunistic behavior?
The IMF
Which exchange rate system most accurately characterizes the current IMF?
Managed float
Speculative attacks
What are the two broad categories of the balance of payments? And what is something they each record?
Current account and financial account.
Current accounts record trade, service, and income.
Financial accounts record foreign stocks and bonds