Micro-Scholarship, What it is, How can it help me.pdf
02[1].international monetary system
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14. Bretton Woods System: 1945-1972 U.S. dollar Gold Pegged at $35/oz. German mark British pound French franc Par Value Par Value Par Value
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32. Fixed versus Flexible Exchange Rate Regimes Q of £ Dollar price per £ (exchange rate) S D $1.40 Trade deficit Demand (D) Supply (S)
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34. Fixed versus Flexible Exchange Rate Regimes Supply (S) Demand (D) Demand (D*) D = S Q of £ Dollar price per £ (exchange rate) $1.40 Dollar depreciates (flexible regime) $1.60
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36. Fixed versus Flexible Exchange Rate Regimes Supply (S) Demand (D) Demand (D*) D* = S Contractionary policies (fixed regime) Q of £ Dollar price per £ (exchange rate) $1.40
Editor's Notes
Price-specie flow mechanism Adjustment mechanism under the classic gold standard allowing disturbances in the price level in one country to be wholly or partly offset by a countervailing flow of specie (gold coins) that would act to equalize prices across countries and automatically bring international payments into balance.
Cyprus, Denmark, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia, Sweden and the United Kingdom are members of the EU but are not currently participating in the single currency. Denmark is a member of the Exchange Rate Mechanism II (ERM II). This means that the Danish krone is linked to the euro, but the exchange rate is not fixed. This map is used with permission
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