FNCE-404 Study Guide - Midterm Guide: Government Debt, Managed Float Regime, Seigniorage

• School: MacEwan University
• Department: Finance
• Course: FNCE-404
• Professor: James Martin

Document Summary

Created the imf to supplement existing foreign exchange reserves. Based against which some countries peg their currency. Defined initially in terms of fixed quantity of gold. Currently, it is the weighted average value of currencies of 5 imf members having the largest exports. President nixon to suspend official purchases or sales of gold: exchange rates of most leading trading countries were allowed to float in relation to the. The last 150 years has seen periods of increasing and decreasing political and economic openness between countries. Beginning with the bretton woods era, global markets moved toward increasing open exchange of goods and capital, making it increasingly difficult to maintain fixed or even stable rates of exchange between currencies. The most recent era, characterized by the growth and development of emerging economies is likely to be even more challenging. Exchange rate regimes tradeoffs: rules vs. discretion and cooperation vs. independence.