International Money and Business summary Questions and Answers 2023

International Monetary System - --establishes the rules by which countries value and exchange their currencies. It also provides a mechanism for correcting imbalances between a country's international payments and its receipts. -Balance of payments (BOP) accounting system - --records international transactions and supplies vital information about the health of a national economy and likely changes in its fiscal and monetary policies. -Gold Standard - --countries agree to buy or sell their paper currencies in exchange for gold on the request of any individual or firm and, in contrast to mercantilism's hoarding of gold, to allow the free export of gold bullion and coins. -Exchange Rate - --the price of one currency in terms of a second currency -Fixed Exchange Rate System - --the price of a given currency does not change relative to each other currency -Pegged - --"tied" - ex. the gold standard created a fixed exchange rate system because each country tied, or pegged, the value of its currency to gold. -Par Value - --official price in terms of gold - ex. the united kingdom pledged to buy or sell an ounce of gold for 4.247 pounds sterling, thereby establishing the pound's par value. -Sterling-Based gold standard - --From 1821 - the end of World War 1 the most important currency in international commerce was the British pound sterling which was accepted at most firms worldwide in settlement of tra