Bretton Woods Fixed Exchange Rate System

Undergraduate
Essay
Miscellaneous
Pages 9 (2259 words)
Download 0
Money is omnipresent. Modern society cannot run without it. We cannot think of a society today which can do away with money. Money has changed its form with timekeeping in tune with the different stages of development of the society. Money performs a number of functions and its importance lies in the fact that it acts as a medium of exchange, as a unit of account, as a standard of deferred payments and as a store of value.

Introduction

Money provides innumerable benefits in our day-to-day lives. In the classical theory, money played an insignificant role as it had no causative influence on the economy. In the opinion of classical theorists, money was purely confined to medium of exchange and related itself to economic activity.
Money was used as a technical instrument to overcome the complexities involved in barter system. There was strong opinion that money was a passive element, which was used to help in the process of exchange. Contrary to this, in modern economics money plays a significant and an active role. Modern economists emphasize that the most important function of money is to regulate the general economic activity and to promote the wealth and welfare of a country's economy. It further explains how money influences production, consumption and distribution. Thus, the institution of money is considered to be an efficient instrument contributing to economic prosperity of a country.
Due to the advent of globalization, financial markets are getting integrated with ...
Download paper
Not exactly what you need?

Related papers

Bretton Woods Fixed Exchange Rate System
Money provides innumerable benefits in our day-to-day lives. In the classical theory, money played an insignificant role as it had no causative influence on the economy. In the opinion of classical theorists, money was purely confined to medium of exchange and related itself to economic activity.…
International Monetary System
The system was designed to ensure a world of full employment and economic growth.…
Bretton Woods system Essay
The main features of the system are the following: an obligation for each country to adopt a monetary policy to main the exchange rate of its currency within a predetermined value, allowing only a fluctuation of 1% in terms of gold; and the establishment of the International Monetary Fund (IMF) which is tasked to curb and resolve temporary payment imbalances (Bretton Woods System 1-4). Recognizing…
Macroeconomics. A fixed exchange rate
5. Using the closed economy IS-LM model, show how falls in business and consumer confidence can precipitate a deep and prolonged recession. Set out what Keynes meant when he advocated fiscal policy to solve the problem. 10…
Bretton Woods system
It is undeniable that in the current debate on the international economic co-operation, we miss historical prospect completely. Or at least, we do not want to remember us the context in which was set up what we can call the great sedentary project of post-war period, not more of the role that one intended to make play at the time each great institution in their respective field. It is not a…
APPLIED INTERNATIONAL MACROECONOMICS Tunisia Projet between 1956 1986
Tunisia, officially known as the Tunisian Republic, is a country situated on the Mediterranean coast of North Africa, bordering with Algeria to the west and Libya to the southeast. Tunisia got its independence from the French colonialism in March 20, 1956 and Habib Bourguib became the president of new state. He established a strict one-party political system with a strong hold on economy and state…
The Balance of Payments and Exchange Rate
could be viewed as its impact on the current account. It is estimated that almost 10% of every Dollar spent by U.S. customers is on purchase of imported goods (Kaplan) however as the income falls in the U.S. the customers demand for imported goods will surely be affected. As consumers spend less on goods and services the proportion they spend on imports will reduce. The effect would be rising…