ECON 4131, International Finance, Spring 2002, Exam 3 Final Essay examp

Final Exam Questions -- Economics 4131, Spring 20061. Explain how the gold exemplification operated in the classical period (1870-1914). What werethe advantages and disadvantages? Some say the gold precedent sacrificed internal balanceto external balance. How? What were the rules of the game and what would come upwhen they were violated? What would happen when the demand for monetary gold rosefaster than the supply, and why was this a problem?2. Explain the functioning of the Bretton Woods currency arrangement. Why was itdesigned as it was? What strains appe bed over time, and what factors led to its collapse?What was Triffins dilemma?3. practice session the national income accounting identity to explain the phenomenon of twindeficits. Explain how the thrill in the U.S. fiscal deficit has spilled into a need forinternational finance. What are the current sources of this finance? Describe the dilemmafacing the Asian telephone exchange banks. Describe the hard landing scenario. W hat needs to bedone to match a soft landing?4. Explain step-by-step why and how a central bank might w...