People and their sexual urges
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Chapter 9 The Global Monetary System
| eLearning Session | Online Quizzing | Global News Today | Web Exercises |
eLearning Session
Learning Objective #1: "Describe the role played by the global monetary system in exchange rate determination."
Although we discussed the workings of the foreign exchange rate market is some depth in Chapter 8, we did not mention the international monetary system's role in determining exchange rates. We simplified our explanation of how exchange rates are determined by assuming that currencies were free to "float" against each other. In reality, exchange rates are determined within the context of an international monetary system in which many currencies' ability to float against other currencies is limited by their respective governments or by intergovernmental arrangements. View slide.
Learning Objective #2: "Outline the historical development of the modern global monetary system."
The gold standard was thought to contain an automatic mechanism that would contribute to the simultaneous achievement of a balance-of-payments equilibrium by all countries. The gold standard broke down during the 1930s as countries engaged in competitive devaluations in an attempt to stimulate exports and thereby to stimulate their economies during the Great Depression. View slide.
The Bretton Woods system of fixed exchange rates was established in 1944...