first

• refers to the exchange rates system, international financial institutions (i.e., IMF and the World Bank), and the international

  International Finance
• is a system that adopts a so-called international medium of exchange

  international monetary system
• during the second half of the 20th century, the main medium of exchange or the monetary system

  US DOLLAR
• is a widely accepted good that is used to exchange with other goods and services.

  Money
• It can be used to buy goods and services

  As Medium of exchange
• It can be used to measure the worth of goods and services (i.e. Price)

  As Unit of Account
• Money is an important tool to store wealth

  As Store of Value
• 3 Main Requirements of Financial or Monetary System

  Liquidity, Adjustment Mechanism, Confidence
• This refers to any assets available in order to finance international transactions of a certain country. These assets are usually in the form of currencies.

  Liquidity
• is the balance between the assets and liabilities of a certain country respective of other foreign countries

  Balance of payments
• Assets exceed Liabilities

  Favorable Balance of Payment
• Liabilities exceed assets

  Unfavorable balance of payment
• Under the Bretton Woods System, it is the ______ that will provide financial assistance to countries.

  IMF
• Countries must have ______ or must trust the system otherwise when they abandon the system, it will collapse.

  Confidence
• This era was marked by which the people used commodities as a medium of exchange to facilitate transactions

  Era of Commodity Money
• The main element under this category is the influence or control of the government issuing such legal tender currency.

  The Era of Political Money
• 1 Dollar is equivalent to a certain amount or grams of gold.

  Commodity-backed currency
• Under this category, the face money of a certain currency is derived from the relationship between supply and demand

  Non Commodity-backed currency
• _____ mean that the government encourages more economic activities because maybe the economic growth is not sufficient or satisfactory.

  expansionary policies
• This system was adopted during the period of Pax Britannica. This period marked the relative peace during the reign of the UK as the superpower. the UK first initiated to peg the value of its currency against gold.

  Classical Gold Standard
• The Classical Gold Standard had two main features:

  Fixed Exchange Rate System, Transferability of Gold
• ______ which a certain country’s wealth was dependent on the amount of gold reserves it had

  Bullionism
• This system was in place or commenced during the Interwar Period or Interregnum Period (a gap in continuity when there is no ruler or clear governance) between WWI and WWII. under this system, the US Dollar is first pegged or valued to a specific commodity- or gold-backed currency before it is convertible into gold.

  Gold Exchange Standard
• The Gold Exchange Standard collapsed because of WWII and particularly the _______. The ______ was the series of financial recessions that countries experienced from the 1930s to 1940s

  Great Depression