Review: ECON 4322 (International Finance)
FINAL SUMMER 2013
In the textbook, we have covered the following pages:
Chapter 2:
Please also note that any material covered on handouts is fair game for the exam as
well. I have posted copies of the exams from Spring 2013 on the course website.
Please note, although I have posted extensive answers for all of the problem sets, I will
not be able to post answers for last year’s exams. Good luck!
Relevant questions from posted exams:
EXAM #2: All multiple choice except #9,10
Section II: All of section II except Q2.
IT TRULY HAS BEEN A PLEASURE TO HAVE EACH OF YOU IN MY
CLASS…GOOD LUCK IN PREPARING FOR YOUR EXAM, AND PLEASE LET
ME KNOW IF YOU HAVE ANY QUESTIONS!
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Gold standard
o Price specie-flow mechanism
o A system of fixed exchange rates
o Sterility of monetary policy under a gold standard
o Advantages/disadvantages of a gold standard
Interwar period
o Competitive devaluations and beggar-thy-neighbor policies
o International comparison of the performance of countries on the gold
standard (referring to the paper by Bernanke and Harold James)
Bretton Woods
o 5 key elements of Bretton Woods
o “A gold exchange standard with an adjustable peg”
o The collapse of Bretton Woods and the Triffin paradox
Smithsonian agreement
Modern floating period
o Jamaica Accord
o Plaza Accord
o The Louvre Accord
IMF classification of exchange rate regimes
Advantages/Disadvantages of fixed exchange rate systems
Trillema
Undervalued versus overvalued currencies
o The real exchange rate
The Euro and European Monetary system
o European Coal and Steel Community
o Treaty of Rome
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o The European Economic Community
o The European Community
o The European Monetary System
ƒ The snake
o European Currency Unit
o The European Monetary System II
o Maastricht treaty
o The Stability and Growth Pact
o Sovereign debt crisis
o European Financial Stability Facility
o European Stability Mechanism
o Asymmetric shocks
o Optimum currency unions
o Advantages/disadvantages of currency unions
International Reserve currencies
Advantages and disadvantages to being in a currency union