Chapter 2-The International Monetary System Flashcards
1
Q
Classical Gold Standard
A
A monetary system in which currencies are defined in terms of their gold content, and payment imbalances between countries are settled in gold.
2
Q
“Rules of the Game”
A
The basis of exchange rate determination under the international gold standard during most of the 19th and early 20th centuries. All countries agreed informally to follow the rule of buying and selling their currency at a fixed and predetermined priceagainst gold.
3
Q
Selling Short
A
The sale of an asset which the seller does not (yet) own. The premise is that the seller believes he will be able to purchase the asset for contract fulfillment at a lower price before sale contract expiration.
