国际商务Chap011.ppt

International Business 9e by Charles W.L. Hill Chapter 11 The International Monetary System Introduction The institutional arrangements that countries adopt to govern exchange rates are known as the international monetary system When a country allows the foreign exchange market to determine the relative value of a currency, a floating exchange rate system exists When a country fixes the value of its currency relative to a reference currency, a pegged exchange rate system exists Introduction When a country tried to hold the value of its currency within some range of a reference currency, dirty float exists Countries that adopt a fixed exchange rate system fix their currencies against each other Prior to the introduction of the euro, some European Union countries operated with fixed exchange rates within the context of the European Monetary System (EMS) Classroom Performance System A ________ exchange rate system exists when the foreign exchange market determines the relative value of a currency. a) Fixed b) Floating c) Pegged d) Market The Gold Standard The gold standard dates back to ancient times when gold coins were a medium of exchange, unit of account, and store of value Payment for imports was made in gold or silver Later, as trade grew, payment was made in paper currency which was linked to gold at a fixed rate Mechanics Of The Gold Standard Pegging currencies to gold and guaranteeing convertibility is known as the gold standard In the 1880s, most of the world’s trading nations followed the gold standard Under the gold standard one U.S. dollar was defined as equivalent to 23.22 grains of fine (pure) gold The amount of a currency needed to purchase one ounce of gold was called the gold par value Strength Of The Gold Standard The great strength of the gold standard was that it contained a powerful mechanism for achieving balance-of-trade equilibrium (when the income a country’s residents earn from its exports is equal to the money its