【正文】 of payments equilibrium. Because such measures speeded up the movement of countries toward their external balance goals, they increased the efficiency of the automatic adjustment processes inherent in the gold standard. However, research has shown that countries often reversed the steps mentioned above and sterilized gold flows, that is, sold domestic assets when foreign reserves were rising and bought domestic assets as foreign reserves fell. Government interference with private gold exports also undermined the system. The picture of 4smooth and automatic balance of payments adjustment before World War I therefore did not always match reality.Given the prices of currencies fixed in terms of gold, the price levels within gold standard countries did not rise as much between 1870 and 1914 as over the period after World War Ⅱ, but national price levels moved unpredictably over shorter horizons as periods of inflation and deflation followed each other. What is more, the gold standard does not seem to have done much to ensure full employment. A fundamental cause of short term internal instability under the pre1914 gold standard was the subordination of economic policy to external objectives. Internal policy objectives were only emphasized after World War Ⅰ as a result of the worldwide economic instability of the interwar years, 1918 — 1939. To understand how the postWorld War Ⅱ international moary system tried to reconcile the goals of internal and external balance, we need to examine the economic events of the period between the two world wars.復(fù)數(shù)問(wèn)題：本課中出現(xiàn)了大量的英語(yǔ)復(fù)數(shù)形式詞，需要學(xué)習(xí)者特加注意。s preeminence in international trade and the advanced development of its financial system, London naturally became the center of the international moary system built on the gold standard.The Gold Standard RulesThe gold standard regime has conventionally been associated with three rules of the game. The first rule is that in each participating country the price of the domestic currency must be fixed in terms of gold. Since the gold content in one unit of each currency was fixed, exchange rates were also fixed. This was called the mint parity. The second rule is that there must be a free import and export of gold. The third rule is that the surplus country, which is gaining gold, should allow its volume of money to increase while the deficit country, which is losing gold, should allow its volume of money to fall. The first two rules together ensure that exchange rates between participating countries are fixed within fairly narrow limits. With the price of any two currencies fixed in terms of gold the implied exchange rate between the two currencies is also fixed and any significant deviation from this fixed rate will be rapidly eliminated by arbitrage operations.The third rule, requiring the volume of money to be linked in each participating country to balance of payments developments, provides an automatic mechanism of adjustment which ensures that, ultimately, any balance of payments disequilibria will 3be corrected.The Automatic Adjustment Mechanism under the Gold StandardThe gold standard contains some powerful automatic mechanisms that contribute to the simultaneous achievement of balance of payments equilibrium by all countries. The most important of these was the pricespecieflow mechanism (precious metals were referred to as specie). Hume39。s description of this mechanism has been translated into modern terms. Assume that Britain39。如：reserves, movements, holdings, flows, outflows, loans等。 and the central bank bought and sold gold in any quantity at the fixed price. The system was set up again by 1928 in limited form but it broke down in the 1930s. After the Second World War some countries in Europe agreed to make their currencies freely convertible into gold for international payments only, thus forming a gold standard that was entirely external. Variations of the gold standard are: gold bullion standard。在完全金本位制下，如在19世紀(jì) 70年代至 1914年間的英國(guó)，金幣和金條/塊可以自由輸出輸入，金幣自由流通，中央銀行按固定價(jià)格收購(gòu)及出售任何數(shù)量的黃金。金本位的不同形式有：金塊本位制；金匯兌本位制。 and in surplus, active or favorable if the opposite is true. 國(guó)際收支是一個(gè)國(guó)家記錄一定時(shí)期內(nèi)發(fā)生支付貨幣的所有國(guó)際交易的賬戶上的余/差額。5． currency notes 流通券，國(guó)庫(kù)券 Currency notes are notes issued as money by the British Treasury during the war of 1914—1918 and after, of two values, 163。EXERCISESⅠ. Translate the following.1. the international moary system built on the gold standard2. participating country 3. significant deviation from this fixed rate4. automatic mechanism of adjustment 5. achievement of balance of payments equilibrium 6. the response of central banks to gold flows across their borders7. meet their obligation to redeem currency notes 8. ensure full employment 9. subordination of economic policy to external objectives 10. tried to reconcile the goals of internal and external balance Ⅱ. Put these paragraphs into Chinese.1. However, research has shown that countries often reversed the steps mentioned above and sterilized gold flows, that is, sold domestic assets when foreign reserves were rising and bought domestic assets as foreign reserves fell. Government interference with private gold exports also undermined the system. The picture of smooth and automatic balance of payments adjustment before World War I therefore did not always match reality. 2. The gold standard regime has conventionally been associated with three rules of the game. The first rule is that in each participating country the price of the domestic currency must be fixed in terms of gold. Since the gold 7content in one unit of each currency was fixed, exchange rates were also fixed. This was called the mint parity. The second rule is that there must be a free import and export of gold. The third rule is that the surplus country, which is gaining gold, should allow its volume of money to increase