[GEB 3373] - Final Exam Guide - Ultimate 106 pages long Study Guide!

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History of the international monetary system (ims) Roots traced to gold/silver, used as media of exchange. Beginning in 16th/17th centuries, coins traded on basis of relative gold/silver content. Before gold/silver: salt, turmeric wrapped in coconut fibers, cacao, parmigiano reggiano. Why do we need currency? have in exchange for exactly what they have/you want. > bartering is inefficient; requires you to find someone willing to take exactly what you. Balance of payments accounting system business in nation. > can ensure smooth conversion of foreign money into home currency. > can detect trade restrictions, higher r, inflation, decrease d, general cost of doing. Evolution & functioning of the gold standard. > a fixed exchange rate system because each country pegged (tied) value of. Exchange rate: price of one currency in terms of another. Fixed exchange rate: price of currency does not change relative to other currencies. Gold standard its currency a & b = (par value)b / (par value)a.

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