Macroeconomics (7th Edition)
7th Edition
ISBN: 9780134738314
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 19, Problem 19.1.6PA
To determine
The reason for choosing the Bretton Woods system over the gold standard system after World War II.
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How did the world transition from the gold standard to the Bretton Woods system? What was its immediate impact?
What was the gold standard, and why did it collapse?
“A well-functioning international monetary system is a public good that is essential for economic and financial stability. The IMS has helped support unprecedented economic growth and trade expansion over the past few decades.” (Furusawa, 2019).
In 250 - 300 words, evaluate the role of the international monetary system in promoting international trade and investments.
Chapter 19 Solutions
Macroeconomics (7th Edition)
Ch. 19.A - Prob. 1RQCh. 19.A - Prob. 2RQCh. 19.A - Prob. 3RQCh. 19.A - Prob. 4RQCh. 19.A - Prob. 5RQCh. 19.A - Prob. 6RQCh. 19.A - Prob. 7PACh. 19.A - Prob. 8PACh. 19.A - Prob. 9PACh. 19.A - Prob. 10PA
Ch. 19.A - Prob. 11PACh. 19.A - Prob. 12PACh. 19.A - Prob. 13PACh. 19.A - Prob. 14PACh. 19.A - Prob. 15PACh. 19.A - Prob. 1RDECh. 19 - Prob. 19.1.1RQCh. 19 - Prob. 19.1.2RQCh. 19 - Prob. 19.1.3PACh. 19 - Prob. 19.1.4PACh. 19 - Prob. 19.1.5PACh. 19 - Prob. 19.1.6PACh. 19 - Prob. 19.2.1RQCh. 19 - Prob. 19.2.2RQCh. 19 - Prob. 19.2.3RQCh. 19 - Prob. 19.2.4RQCh. 19 - Prob. 19.2.5PACh. 19 - Prob. 19.2.6PACh. 19 - Prob. 19.2.7PACh. 19 - Prob. 19.2.8PACh. 19 - Prob. 19.2.9PACh. 19 - Prob. 19.2.10PACh. 19 - Prob. 19.2.11PACh. 19 - Prob. 19.2.12PACh. 19 - Prob. 19.2.13PACh. 19 - Prob. 19.2.14PACh. 19 - Prob. 19.2.15PACh. 19 - Prob. 19.2.16PACh. 19 - Prob. 19.2.17PACh. 19 - Prob. 19.2.18PACh. 19 - Prob. 19.2.19PACh. 19 - Prob. 19.2.20PACh. 19 - Prob. 19.3.1RQCh. 19 - Prob. 19.3.2RQCh. 19 - Prob. 19.3.3PACh. 19 - Prob. 19.3.4PACh. 19 - Prob. 19.3.5PACh. 19 - Prob. 19.2RDE
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Similar questions
- Who broke away from the gold exchange standard first?arrow_forwarddiscuss the qualities if an efficient international monetary system that US should work towardsarrow_forwardThe gold standard likely facilitated the Great Depression because Group of answer choices the Fed kept interest rates high to maintain the gold standard. this simply isn't true. Britain abandoned it in favor of a flexible exchange rate system. foreign nations released their gold to US reserves.arrow_forward
- Explain why a country with fixed exchange rate and open financial markets has to give up its monetary policy independence?arrow_forwardSuppose country A’s goods become more popular with foreign consumers, and country B’s less so. How would this affect each country, assuming that they share a common currency? What are the pros or cons for each country?arrow_forwardDescribe the international monetary systems implemented under the Bretton Woods, Smithsonian, and Jamaica Agreements.arrow_forward
- Discuss the arguments for privatization. Are you for or against privatization? Explain the steps that lead to economic and monetary integration under optimum currency area (OCA).arrow_forwardIn the overshooting model, an increase in the money supply leads to higher inflation and currency depreciation. Can you think of a situation where higher inflation could lead to currency appreciation?arrow_forwardAfter leaving the gold standard system, the exchange rate in terms of gold changed from 100 to 60. Mt textbook expresses it as the reduction in exchange rate. However, I feel that the currency becomes strong given that if I give 60 currencies of a country, I can gain 1 gold instead of 100 currencies. Could you explain what the change from 100 to 6o means?arrow_forward
- Which of the following statements is FALSE? Group of answer choices a) The Bretton Woods system failed because the supply of the U.S. dollar as not sufficient to support the growth in global trade and the related financial transactions. b) The Bretton Woods system created the World Bank to enforce the agreement and serve the function of the global central bank from which member countries can borrow. c) Under the Bretton Woods system, the U.S. dollar was the only currency that was full convertible to gold because after WWII, the United States held three-fourths of the world's supply of gold. No other countries had enough gold to back its currency. d) Under the Bretton Woods system, each country had to have a monetary policy that kept the exchange rate of its currency within a fixed value plus or minus one percent-in terms of gold. e) The Bretton Woods agreement of 1944 replaced the gold standard with the U.S. dollar as the global currency.arrow_forwardwhat does it mean that the optimum currency area is not the world but region?arrow_forward
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