Assignment :
When you have completed all of the assigned reading for this written assignment, prepare your answers to the following assignment questions. Use all of the relevant parts of the textbook. Be sure to refer to these directly in your answers. Of course, do not copy the answers word-for-word from the course materials. Answers must be in your own words. Do make appropriate references in an appropriate manner. If you use sources other than your course text and study guide, you must also provide specific references for these sources.
Please answer each question as completely as possible (a minimum of about 150 words).
Edit your assignment before submitting it. Be sure that you have addressed all required questions and every part of each question. Check your document for accurate spelling, punctuation, and grammar. Make sure that all sentences are complete and that paragraphing is appropriate.
1. What are the most important instruments of international economic policy?
2. What are some obstacles to successful international policy coordination?
3. Under a system of floating exchange rates and high capital mobility, is monetary policy or fiscal policy better suited for promoting internal balance? Why?
4. Under a system of fixed exchange rates and high capital mobility, is monetary policy or fiscal policy better suited to promoting internal balance? Why?
5. A nation's need for international reserves is similar to an individual's desire to hold cash balances. Explain.
6. What advantages does a gold exchange standard have over a pure gold standard?
7. What caused the international debt problem of the developing nations in the 1980s? Why did this debt problem threaten the stability of the international banking system?
8. What options are available to a nation experiencing debt-servicing difficulties? What limitations apply to each option?