Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 30, Problem 30.1.6PA
To determine
The reason for choosing the Bretton Woods system over the gold standard system after World War II.
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Students have asked these similar questions
How did the world transition from the gold standard to the Bretton Woods system? What was its immediate impact?
An important problem with the gold standard was that
one country could easily manipulate the system to its advantage and the disadvantage of other countries.
a country did not have control of its domestic monetary policy.
exchange rates tended to fluctuate a great deal, making it difficult for businesses to make long-run plans.
it was too complicated and restricted business activity.
Why did gold standard collapse?
Chapter 30 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 30.A - Prob. 1RQCh. 30.A - Prob. 2RQCh. 30.A - Prob. 3RQCh. 30.A - Prob. 4RQCh. 30.A - Prob. 5RQCh. 30.A - Prob. 6RQCh. 30.A - Prob. 7PACh. 30.A - Prob. 8PACh. 30.A - Prob. 9PACh. 30.A - Prob. 10PA
Ch. 30.A - Prob. 11PACh. 30.A - Prob. 12PACh. 30.A - Prob. 13PACh. 30.A - Prob. 14PACh. 30.A - Prob. 15PACh. 30.A - Prob. 1RDECh. 30 - Prob. 30.1.1RQCh. 30 - Prob. 30.1.2RQCh. 30 - Prob. 30.1.3PACh. 30 - Prob. 30.1.4PACh. 30 - Prob. 30.1.5PACh. 30 - Prob. 30.1.6PACh. 30 - Prob. 30.2.1RQCh. 30 - Prob. 30.2.2RQCh. 30 - Prob. 30.2.3RQCh. 30 - Prob. 30.2.4RQCh. 30 - Prob. 30.2.5PACh. 30 - Prob. 30.2.6PACh. 30 - Prob. 30.2.7PACh. 30 - Prob. 30.2.8PACh. 30 - Prob. 30.2.9PACh. 30 - Prob. 30.2.10PACh. 30 - Prob. 30.2.11PACh. 30 - Prob. 30.2.12PACh. 30 - Prob. 30.2.13PACh. 30 - Prob. 30.2.14PACh. 30 - Prob. 30.2.15PACh. 30 - Prob. 30.2.16PACh. 30 - Prob. 30.2.17PACh. 30 - Prob. 30.2.18PACh. 30 - Prob. 30.2.19PACh. 30 - Prob. 30.2.20PACh. 30 - Prob. 30.3.1RQCh. 30 - Prob. 30.3.2RQCh. 30 - Prob. 30.3.3PACh. 30 - Prob. 30.3.4PACh. 30 - Prob. 30.3.5PACh. 30 - Prob. 30.2RDE
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Similar questions
- “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.arrow_forwardWho broke away from the gold exchange standard first?arrow_forwarddiscuss the qualities if an efficient international monetary system that US should work towardsarrow_forward
- The 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_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_forwardExplain why a country with fixed exchange rate and open financial markets has to give up its monetary policy independence?arrow_forward
- Describe the international monetary systems implemented under the Bretton Woods, Smithsonian, and Jamaica Agreements.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_forwardDiscuss 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_forward
- After 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_forwardWhich 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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