Floating Exchange
System Gold Standard Bretton Woods System
Rates
Simple, widely
Flexible, responsive to
trusted, mandated Fixed rate, good for trade
Pros market forces, good for
monetary growth
huge volume
discipline
Led to US balance of payment
Impractical with deficit, led to US government
Causes widely swinging
Cons large trade flows, liabilities to foreign central
currency values
costly to hold banks, reduced US gold
reserves
Controlling Government adjusted rates
Price-specie-flow Market forces with some
Mechanis against dollar, dollar constant
mechanism government intervention
m against gold
,
System Gold Standard Bretton Woods System
Rates
Simple, widely
Flexible, responsive to
trusted, mandated Fixed rate, good for trade
Pros market forces, good for
monetary growth
huge volume
discipline
Led to US balance of payment
Impractical with deficit, led to US government
Causes widely swinging
Cons large trade flows, liabilities to foreign central
currency values
costly to hold banks, reduced US gold
reserves
Controlling Government adjusted rates
Price-specie-flow Market forces with some
Mechanis against dollar, dollar constant
mechanism government intervention
m against gold
,
