International Money and Business summary [Level A+] Questions and Answers 2023

international monetary system - -the framework within which countries value and exchange their currencies -balance of payments accounting system - -provides valuable information about an economy health. System provides analysts with information about international transactions that allow them to predict likely changes in monetary and fiscal policies the future. -double coincidence of wants - -the unlikely occurrence that two people each have a good the other wants -uk - -first country to adopt the gold standard -gold standard - -countries agree to buy and sell unlimited amounts of their paper currencies in exchange for gold at the request of any individual or firm at a specified price called a par value. Also, countries. allowed free export of gold bullion(coins) -exchange rate - -The measure of how much one currency is worth in relation to another. -pegging - -tying the value of each countries currency to gold to set up a regime of fixed exchange rates -fixed exchange rate - -An exchange rate policy under which a government commits itself to keep its currency at or around a specific value in terms of another currency or a commodity, such as gold. -fixed exchange rate equation - -par value of currency B/par value of currency A