The Global Economy Flashcards
(44 cards)
It refers to a system that forms rules and standards
for facilitating international trade among the nations.
International Monetary Systems (IMS)
It helps in reallocating the capital and investment from one nation to another.
International Monetary Systems (IMS)
It is the global network of the government and financial institutions that determine the
exchange rate of different currencies and set rules by which different nations exchange
currencies for international trade.
International Monetary Systems (IMS)
In 1870 to 1914, with the help of _______ and _______, trade was carried without any
institutional support. Monetary system during that time was _________ while market
based and money played a minor role in international trade in contrast to gold.
gold
silver
decentralized
___________ functioned as a fixed exchange rate regime, with gold as the only
international reserve.
Gold standard
____________ is a system of backing a country’s currency with its gold reserves. Such
currencies are freely convertible into gold at a fixed price, and the country settles all its
international trade transactions in gold.
Gold Standard
After ________, the use of gold declined due to increased expenditure and inflation
which were caused by war. Major economic powers were on gold standards but could not
maintain it and failed because of the _____________ in 1929.
World War I
Great depression
the aim of which is to create a stabilized international currency system and
ensure a monetary stability for all the nations.
Bretton Woods system
In 1944, 730 representatives of 44 nations met at ___________, ________, _________ to create a new international monetary system called as the Bretton Woods
system.
Bretton Woods
New Hampshire
United States
In 1944, ____ representatives of ___ nations met at Bretton Woods, New Hampshire, United
States to create a new international monetary system called as the Bretton Woods
system,
730
44
Since the United States held most of the world’s gold, all the nations would determine
the values of their currencies in terms of _________. The central banks of nations were given
the task of maintaining fixed exchange rates with respect to _________ for each currency.
dollar
dollar
In 1973, the ___________________, also known as flexible exchange rate system
was developed that was market based.
floating exchange rate system
In 1973, the floating exchange rate system, also known as _________________
was developed that was market based.
flexible exchange rate system
______________________ refers to a 30-year long process that began at the end of the 1960s as a form of monetary cooperation intended to reduce the excessive influence of the __________ on domestic exchange rates, and led, through various attempts, to the creation of a Monetary Union and a ________________. This Union brings many benefits
to Member States.
European monetary integration
US dollar
common currency
It is a 1979 arrangement between several
European countries which links their currencies in an attempt to stabilize the exchange
rate.
The European Monetary System (EMS)
EMS was succeeded by the ______________, an institution of the European Union (EU).
European Economic and Monetary Union
(EMU)
In June 1998, the European Central Bank was established and, in January 1999, a unified
currency, the _____, was born and came to be used by most EU member countries.
euro
According to the European Commission, the first ten years of the EMU were an evident
success for participating countries in terms of increased trade and capital transactions,
more integrated economies, and the utilization of ________ as the second most widely used
reserve currency.
Euro
But in 2008 to 2009, ___________________ is presented with dramatic challenges brought by global financial
and economic crisis.
EU european union
The EU in 2010 in response to the crisis, enacted the three-pillar financial rescue program
which includes: the _____________________, the _________________, and the _________________. The future
of EMU depends on the willingness of member states to agree on more fundamental
changes in the governance of ____________.
European Financial Stability Mechanism
European Financial Stability Facility
Financial assistance of International Monetary Fund
Eurozone
It is a permanent fund to
provide emergency assistance to member states within the Union.
The European Financial Stabilisation Mechanism (EFSM)
It is an organization which aids member
states with unstable economies.
The European Financial Stability Facility (EFSF)
The __________ is a special purpose vehicle (SPV) managed by
the European Investment Bank, a lending institution. The fund raises money by issuing
debt, and distributes the funds to eurozone countries
The European Financial Stability Facility (EFSF)
It is an international financial institution,
formed in July 1944, at the Bretton Woods Conference, and is now headquartered in
Washington, D.C.
The International Monetary Fund (IMF)
