Question

. The trilemma states that policymakers must choose among the following policy goals: Fixed exchange rates,...

. The trilemma states that policymakers must choose among the following policy goals:

Fixed exchange rates, monetary autonomy and capital mobility. Which of the above goals is the least important to policymakers under the following exchange rate systems:

a. Gold standard

b. Bretton woods

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1) Under Gold standard the values of currencies are fixed against the price of Gold so that exchange rate is fixed. Capital is allowed to move from country to country. Now given these two conditions, the third condition of central bank autonomy is compromised because it has to intervene everytime exchange rate deviates from its value due to committment towards fixed exchange rate. Hence the least important was central bank's autonomy

2) Bretton woods had fixed capital mobility because it attempted to restrict movement of capital between countries while maintaining pegged exchanged rates and independent monetary authority. Hence capital mobility was the least important to policymakers.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The trilemma states that policymakers must choose among the following policy goals: Fixed exchange rates, monetary...
The trilemma states that policymakers must choose among the following policy goals: Fixed exchange rates, monetary autonomy and capital mobility. Which of the above goals is the least important to policymakers under the following exchange rate systems: a. Gold standard b. Bretton woods
The "unholy trinity," "impossible trinity," or the "policy Trilemma" are all synonyms for the concept that...
The "unholy trinity," "impossible trinity," or the "policy Trilemma" are all synonyms for the concept that a country must choose two of three monetary policy goals, but it can never have all three (exchange rate stability, private capital mobility, monetary policy autonomy) . For the following countries identify what two policy goals their current (last 20 years) monetary policy reflects and explain your reasoning: U.S., China, and France .
The financial policy trilemma says that a) An economy can maintain floating exchange rates, free capital...
The financial policy trilemma says that a) An economy can maintain floating exchange rates, free capital mobility, and an independent monetary authority at the same time. b)An economy can maintain fixed exchange rates, free capital mobility, and an independent monetary authority at the same time. c) An economy can maintain floating exchange rates, low capital mobility, and an independent monetary authority at the same time. d) An economy cannot maintain fixed exchange rates, low capital mobility, and an independent monetary...
Impossible trinity principle states that only two of the three following features are compatible with each...
Impossible trinity principle states that only two of the three following features are compatible with each other: Group of answer choices A)Flexible exchange rate, full capital mobility and monetary policy autonomy B)Flexible exchange rate, limited capital mobility and monetary policy autonomy C)Fixed exchange rate, limited capital mobility and monetary policy autonomy D)Fixed exchange rate, full capital mobility and monetary policy autonomy
1. There were fixed exchange rates with: a. the gold standard. b. the Bretton Woods System....
1. There were fixed exchange rates with: a. the gold standard. b. the Bretton Woods System. c. Unmanaged free floating rates. d. All of the above. e. Only A and B of the above. 2. Capital flows are automatically restricted under: a. the gold standard. b. the Bretton Woods System. c. Unmanaged free floating rates. d. Managed rates. e. All of the above. 3. The so-called “law of one price” will hold as long as: a. transportation costs are relatively...
QUESTION 1 Inflows of investment capital are accounted for in a state's: Capital Account Balance of...
QUESTION 1 Inflows of investment capital are accounted for in a state's: Capital Account Balance of Trade Current Account All of the above None of the above QUESTION 2 Monetary policy may included: Interest rate targets Exchange rate targets Supply of currency All of the above None of the above QUESTION 3 Give one example of a policy that might be imposed as part of an IMF lending conditionality. QUESTION 4 The monetary regime of the Bretton Woods system was...
Question: A significant increase in inflation in a country causes, a. investors to sell domestic assets...
Question: A significant increase in inflation in a country causes, a. investors to sell domestic assets b. foreign exchange market pressure to depreciate the domestic currency c. currency traders to sell the domestic currency d. all of the above Question 2 Capital flight from a domestic country tends to cause, a. selling of the domestic country's currency b. weakening of the domestic country's currency c. greater difficulty of domestic borrowers in repaying debt denominated in a foreign currency d. all...
40. Under perfect capital mobility and fixed exchange rates, expansionary _____ is a futile attempt because...
40. Under perfect capital mobility and fixed exchange rates, expansionary _____ is a futile attempt because the _____. a. fiscal policy; LM curve effectively is vertical. b. monetary policy; LM curve effectively is the same as the FE curve. c. fiscal policy; interest rate does not change. d. monetary policy; IS curve will shift to the left. 41. The J curve shows that: a. devaluation is more likely to improve the trade balance in the short-run than in the long-run....
Match the date with the change in US Monetary Policy Question 5 options: 123456789101112 1st bank...
Match the date with the change in US Monetary Policy Question 5 options: 123456789101112 1st bank bailouts occur 123456789101112 National Banking Act set standards for chartering national banks and notes. 123456789101112 1st Bank of the U.S. is established 123456789101112 2nd Bank of the United States is established 123456789101112 Federal Reserve Bank gets the power to independently set interest rates. 123456789101112 Coinage act bans the use of silver in coin production 123456789101112 Bretton Woods summit that establishes the value of the...
Which one of the following statements is true? Select one: a. Traditional Keynesian analysis indicates that...
Which one of the following statements is true? Select one: a. Traditional Keynesian analysis indicates that increases in government purchases are a more potent tool than decreases in taxes. b. According to Keynesians, fiscal policy is the first line of defense against economic downturns. c. Advocates of sacrifice ration claim that a zero-inflation target imposes only small costs on society. d. Sacrifice ration implies that a credible commitment to reducing inflation can lower the costs of disinflation by inducing a...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT