Reference no: EM131009992
1. If a governments money is backed by gold and global instability causes its mint parity rate to become too high and as a result the country falls into a depression, can the governments central bank fight the recession by increasing the money supply? Explain.
2. Do fixed exchange rates that result from being on the gold standard require conditions of international peace and economic stability? Explain.
3. What was the Bretton Woods System and why did it eventually collapse?
4. Does a flexible exchange rate system provide a buffer between external economic shocks and a countries internal variables like wages, prices, and interest rates? Explain.
5. When compared to a fixed exchange rate system, does a flexible exchange rate system allow a nation to focus more on internal domestic goals like full employment and price stability?
6. Is a fixed exchange rate system better at reducing the various types of exchange rate risk than a flexible exchange rate system?
7. For a given country, does dollarization have the same drawbacks as the gold standard?
8. Given the material covered in the chapter, if economists said they have an accord, what accord(s) would they most likely be referring too? Explain.
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Conditions of international peace and economic stability
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