Author Question: How did the international monetary system influenced macroeconomic policy-making and performance ... (Read 19 times)

oliviahorn72 · **on:** Jun 30, 2018

How did the international monetary system influenced macroeconomic policy-making and performance during the gold standard era (1870-1914)?

What will be an ideal response?

Question 2

The domestic currency value of the return on a foreign investment when the foreign currency proceeds are sold in the forward market, is defined to be the

A) covered return.
B) uncovered return.
C) forward return.
D) Both B and C.

Brummell1998 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

London was the center of the international monetary system. The primary responsibility of the central bank was to preserve the official parity between its currency and gold. To maintain this price, the central bank needed an adequate stock of gold reserves. Central banks tried to avoid sharp fluctuations in the balance of payments.

Answer to Question 2

A