Discussion Thread: Financial Markets, Monetary Systems, and Regional Economic Integration Key Term and Why You Are Interested in It During this week’s reading for Chapters 5 and 6, one key term that specifically stuck out to me was the other international groups, Organization of Petroleum Exporting Countries – OPEC. This international group is interesting to me because they dictate how much oil and gas the participating countries will produce and market to the rest of the world. This is an interesting concept because this group holds a monopoly over the rest of the world as OPEC has the most influence on the spot price of brent crude oil. Specifically, OPEC relates to me because that I work in the Upstream function for an integrated supermajor oil and gas company. This means that OPEC has a direct affect on how much or how little that we try to produce oil as it is dictated by the spot commodities price. Should OPEC increase production of oil, this could over supply the world, thus driving down the price per barrel.   Explanation of the Key Term             Every modern nation in the world is driven by energy, where it is often produced in foreign lands. The Organization of the Petroleum Exporting Countries or also known as OPEC, is a key factor in the world supply of both oil and gas that is sold and distribute globally. OPEC’s major function is to help member countries coordinate oil production in an effort to stabilize the oil market, while achieving a reasonable return on oil investment (Scatterlee, 2018). OPEC is setup to soften the wild swings in the oil and gas commodity space, where there are numerous things that might affect pricing. A few factors that can affect the global price of oil and gas, is geopolitical risks, weather patterns, climate, among others. When countries do not have a secured energy source, this can cause conflicts between nations, much like we are seeing in Eastern Europe currently. An increase in economic growth in developing countries may be associated with a higher expected growth for commodity demand than an increase in growth in developed countries (Ratti & Vespignani, 2015). Major Article Summary The article that I chose for this week’s discussion board post was, Determinants of OPEC production: Implications for OPEC behavior, by Kaufmann, Bradford, Belanger, Mclaughlin and Miki. In this article, the authors discuss how OPEC countries influence the price of oil on the commodity market and how there is a quota system for the minimum amount of oil that is produced by OPEC countries. But when realized spot pricing for oil further exceeds the lifting cost for the OPEC producers, there is an incentive to produce or increase production of oil and gas to further supply the world.  These decisions are generally used for short-run economics to help swing production or should the producing country have spare capacity to sell excess amounts of oil to capture the economic benefits of high pricing environment. Real price ...

1. Discussion Thread: Financial Markets, Monetary Systems, and
Regional Economic Integration
Key Term and Why You Are Interested in It
During this week’s reading for Chapters 5 and 6, one key term
that specifically stuck out to me was the other international
groups, Organization of Petroleum Exporting Countries –
OPEC. This international group is interesting to me because
they dictate how much oil and gas the participating countries
will produce and market to the rest of the world. This is an
interesting concept because this group holds a monopoly over
the rest of the world as OPEC has the most influence on the spot
price of brent crude oil. Specifically, OPEC relates to me
because that I work in the Upstream function for an integrated
supermajor oil and gas company. This means that OPEC has a
direct affect on how much or how little that we try to produce
oil as it is dictated by the spot commodities price. Should OPEC
increase production of oil, this could over supply the world,
thus driving down the price per barrel.
Explanation of the Key Term
Every modern nation in the world is driven by energy,
where it is often produced in foreign lands. The Organization of
the Petroleum Exporting Countries or also known as OPEC, is a
key factor in the world supply of both oil and gas that is sold
and distribute globally. OPEC’s major function is to help
member countries coordinate oil production in an effort to
stabilize the oil market, while achieving a reasonable return on
oil investment (Scatterlee, 2018). OPEC is setup to soften the
wild swings in the oil and gas commodity space, where there are
numerous things that might affect pricing. A few factors that
can affect the global price of oil and gas, is geopolitical risks,
weather patterns, climate, among others. When countries do not
have a secured energy source, this can cause conflicts between
nations, much like we are seeing in Eastern Europe currently.
An increase in economic growth in developing countries may be

2. associated with a higher expected growth for commodity
demand than an increase in growth in developed countries (Ratti
& Vespignani, 2015).
Major Article Summary
The article that I chose for this week’s discussion board post
was, Determinants of OPEC production: Implications for OPEC
behavior, by Kaufmann, Bradford, Belanger, Mclaughlin and
Miki. In this article, the authors discuss how OPEC countries
influence the price of oil on the commodity market and how
there is a quota system for the minimum amount of oil that is
produced by OPEC countries. But when realized spot pricing for
oil further exceeds the lifting cost for the OPEC producers,
there is an incentive to produce or increase production of oil
and gas to further supply the world. These decisions are
generally used for short-run economics to help swing production
or should the producing country have spare capacity to sell
excess amounts of oil to capture the economic benefits of high
pricing environment. Real prices generally have a positive
effect on production and the size of this effect may depend on
spare capacity, which implies that OPEC behaviors also embody
competitive elements (Kaufmann, Bradford, Belanger,
Mclaughlin, & Miki, 2008). This is a major reason that OPEC
generally meets once a month to discuss production quotas,
pricing of different weights or APIs of crude, and consumption
forecasts that companies such as Woods Mackenzie are
projecting.
Discussion
In the article, Determinants of OPEC production:
Implications for OPEC behavior, by Kaufmann, Bradford,
Belanger, Mclaughlin and Miki, they discuss how OPEC
countries take advantages of pricing, when they can.
Throughout this article, I learned about how OPEC, who
controls a majority the world’s oil and gas supply, regulate
production and place quotas on how much the participating
countries will produce. Right now, the United States is
experiencing tight oil supply and low availability of crude to be

3. purchased on the open market, which is driving prices of oil
higher. But eventually, the OPEC countries will begin to ramp
up production of oil to bring on more supplies to help balance
out the market. Higher oil prices increase production by
individual OPEC nations, rather than depressing production,
thus implying that OPEC behavior also embodies competitive
elements (Kaufmann, Bradford, Belanger, Mclaughlin, & Miki,
2008). One such country that can help balance out the supply
demand is Saudi Arabia, which is generally thought of as the
leading member of OPEC. The reason for this, is Saudi Arabia
has some of the world’s largest reserves of oil, and it has the
ability to rapidly increase oil production in a short time frame.
In addition, they have the financial coffers to withstand
producing oil in a low economic environment for a sustained
time. Given the complexities that are associated with the
geological, economic, and institutional determinates of oil
production in the completive market, it is often hard to find an
equilibrium balance with vastly different geological
endowments, economic structures, and political/social
aspirations (Kaufmann & Cleveland, 2001).
References
Kaufmann, R. K., Bradford, A., Belanger, L. H., Mclaughlin, J.
P., & Miki, Y. (2008). Determinants of OPEC production:
Implications for OPEC behavior. Energy Economics, 30(2),
333-351. https://doi.org/10/1016/j.eneco.2007.04.003
Kaufmann, R. K., & Cleveland, C. J. (2001). Oil production in
the lower 48 states: economic, geological, and institutional
determinates. The Energy Journal, 22(1), pp. 27-49.
Ratti, R. A., & Vespignani, J. L. (2015). OPEC and non-OPEC
oil production and the global economy. Energy Economics, 50,
364-378. https://doi.org/10.1016.j.eneco.2014.12.001
Scatterlee, B. (2018). International Business: with Biblical
Worldview. 1st Edition. McGraw Hill.

4. Federal Reserve Bank
My key term for this week’s Discussion Board is Federal
Reserve Bank. The reason that I chose the Federal Reserve Bank
is academic curiosity and potential career opportunities. I
currently work as an accountant for a large Oil company in San
Antonio, Texas. I would like to switch career paths, so once I
finish up my courses for my MBA I want to look into a career in
banking. I believe that banking would be a good career
opportunity for me so I would like to know as much about the
banking industry as possible. I have been trying to do as much
research on this topic as possible, and now that I have this as a
topic for school, I feel like this is an added bonus in learning.
Explanation
Satterlee’s definition of the Federal Reserve Bank is
“responsible for regulating the growth of the economy, which is
accomplished by the increase or decrease of money supply”
(Satterlee, 2018, p.136). Other countries and economies also
have similar financial institutions such as the Bank of England,
the European Central Bank, and the Bank of Japan. The Federal
Reserve Bank is a central banking system that was created on
December 23, 1913 along with the Federal Reserve Act. The
Great Depression in the 1930’s and the Great Recession in the
2000’s has increased the duties and responsibilities of the
Federal Reserve System.
There are twelve Federal Reserve Banks spread across the
United States and serve many districts and territories. The
Federal Reserve system also has 5 major functions that helps to
stimulate the United States economy. The Federal Reserve
handles the nations monetary policy, fosters the stability of the
financial system, ensures the safety and security of individual
financial institutions, provides services to the banking industry
that ensures payment and clearing house transactions occur
safely, Ensures consumer protection through numerous
programs (Federal Reserve, 2022).

5. Summary
The article I chose for my key term the Federal Reserve Bank is
an article published by Kimberly Amadeo. This article was
fascinating, it spoke about how the Federal Reserve works and
who owns it. The Federal Reserve is the central bank for the
United States and is there to regulate the economy. President
Woodrow Wilson was the president at the time that the Federal
Reserve Bank and the Federal Reserve Act were enacted in
1913. This article also spoke about funding and the bank
members on its board. The funding does not come from
Congress as one might think, funding actually comes from
investments.
The Federal Reserve is also made up of twelve banks across the
United States and each bank services certain states. To become
a member of the Federal Reserve banks must own shares of
stock in the twelve regional Federal Reserve Banks across the
country.
But owning Federal Reserve bank stock is nothing like owning
stock in a private company. It cannot be traded and does not
give the member banks voting rights. These pay out dividends,
mandated by law to be 6%. But the banks must return all
profits, after paying expenses, to the U.S. Treasury (Amadeo,
2022, para. 9).
In summary, the Federal Reserve Bank was established to help
regulate the economy. After the Great Depression in the 1930’s
and the Great Recession of the 2000’s, the Federal Reserve has
been in more demand and has had more responsibilities such as
reducing inflation and trying to cut interest rates.
Discussion
The Federal Reserve plays an important role in the United
States Economy. It will adjust the monetary policy as needed to
help stabilize prices, interest rates, and help the unemployment
rate. It does this by either stimulating demand by reducing
interest rates or and constricting the policy by increasing
interest rates. “How does the Fed cut interest rates? It lowers

6. the target for the fed funds rate. Banks usually follow the Fed's
lead, cutting benchmark rates such as the prime rate” (Amadeo,
2022, para.18). With inflation starting to increase in the United
States over the last few months the Federal Reserve is starting
to implement higher interest rates in hopes to lower inflation.
The article I cited is similar as all the articles talk about the
monetary policy of the Federal Reserve. The Federal Reserve is
responsible for setting the monetary policy for the United
States. At times the policy set by the Federal Reserve and other
central banks of other countries have an impact on international
financial markets. With the global economy the Federal Reserve
bank’s policy has more impacts on other countries and
currencies. “More specifically, the monetary policy of a center
country could be transmitted to the periphery economies via the
exchange rate, trade, credit, and risk-taking channels” (Inoue &
Okimoto, 2022, p.2).
This can sometimes lead to the United States receiving criticism
from other countries due to the fact that the dollar is a dominant
currency in the global market. Due to these concerns the Federal
Reserve attends meetings with other central banks during the
year in order to allow other central banks the opportunity to
question and respond to the Federal Reserve Bank (Bernanke,
2017). With continued globalization of the economy the
monetary policy of the United States will become increasingly
important to other nations.
References
Amadeo, K. 2022. Who Really Owns the Federal Reserve? The
Balance. https://www.thebalance.com/who-owns-the-federal-
reserve-
3305974#:~:text=The%20Federal%20Reserve%20is%20the%20c
entral%20bank%20for,agency.%20Its%20leader%20is%20not%
20an%20elected%20official.
Bernanke, B. S. (2017, April). Federal Reserve Policy in an
international context. IMF Economic Review, 65(1), 5+.
Retrieved from https://bi-gale-

7. com.ezproxy.liberty.edu/global/article/GALE|A494741776?u=vi
c_liberty&sid=summon
Federal Reserve. (2022) Board of Governors of the Federal
Reserve System. About the Fed.
https://www.federalreserve.gov/aboutthefed.htm
Inoue T & Okimoto T. (2022) International spillover effects of
unconventional monetary policies of major central
banks. International Review of Financial Analysis. Volume 79
ISSN 1057-5219, 1-19. (https://www-sciencedirect-
com.ezproxy.liberty.edu/science/article/pii/S1057521921002854
?via%3Dihub).
Satterlee, Brian. (2018) International Business with Biblical
Worldview. McGraw Hill Publishing
Gold Standard
Key Term
The gold standard is the key term I have chosen to
focus on for my discussion post. I picked the gold standard
because the relevance of a currency backed by gold relates to
the massive inflation that has occurred over the past year. As
most currencies are no longer backed by gold, inflation is likely
to occur more rapidly as governments can essentially print
money with no value behind it. This dilution of the currency has
occurred since the onset of the pandemic as the US government
looked to aid unemployed workers during the shutdowns across
the country. The gold standard is relevant as countries wouldn’t
be able to print money without the price of gold being diluted as
well.
Term Overview
Saterlee (2019) explains that the gold standard
occurred “when governments started issuing currency in the
form of paper money, it was usually convertible into a
predetermined amount of gold” (p. 146). The gold standard
spread across the world and was the major backing of most
currencies into the 20th century. The onset of World War I in

8. combination with the later Great Depression eventually led to
the end of the Gold Standard, with the United States among the
last to keep it in practice until the mid-1930s (Saterlee, 2019).
The gold standard was eventually replaced by a currency
exchange system, which we still utilize today.
Article Overview
Cutsinger (2020) focuses on how feasible it is to return our
modern economic systems to the antiquated gold standard. This
question is raised due to the massive inflation that has been
occurring in the past few years across the globe and discussions
in previous administrations on returning to a gold standard
(Cutsinger, 2020). Cutsinger (2020) argues that returning to the
gold standard is feasible and there is enough gold for it to be a
realistic option.
Many economists argue that returning to the gold standard is
unrealistic and “is a relic of a past marred by macroeconomic
instability that central banks helped to alleviate” (Cutsinger,
2020, p. 88). Cutsinger (2020) demonstrates that while
significant hurdles may exist, the gold standard would offer
advantages like lower inflation levels, a common currency,
increased international trade, and lower price-level uncertainty.
One of the major questions on returning to the gold standard is
the availability of above-ground gold. While a need to convert
non-monetary uses of gold would be needed to support a fully
backed currency, a realistic reserve ratio can be utilized
reducing the need by a factor of ten (Custinger, 2020). Overall,
the need to mine more gold is not necessary for a full
conversion as “Australia, Brazil, Canada, China, the Eurozone,
Great Britain, India, Japan, Russia, South Korea, and the United
States” own about 80% of all gold (Custinger, 2020, p. 89).
While additional costs for maintenance and conversion would
exist, conversion to the gold standard is still possible even as its
merits continue to be argued.
Discussion
Cutsinger (2020) directly addresses the gold standard
and discusses the reasons outlined by Satlerlee (2019) relating

9. to why the gold standard was replaced. This article furthers
understanding of how the gold standard was implemented and
why it is still a reasonable monetary system, despite years of
dismissal. Overall monetary policy is discussed by both
Custinger (2020) and Saterlee (2019), but Cutsinger (2020)
focuses on the merits and disadvantages of the gold standard.
Understanding the gold standard is fundamental to this module
as it provides an outline for how monetary policy was dictated
before the modernized economy and how central banks have
picked up the pieces since.
Many other supporting articles provided overviews on
the gold standard and other monetary policies. Dorn (2020)
discussed how the gold standard has many misguided criticisms
and could be an answer for current inflation and price
uncertainty. Lennard (2018) explores the causal effects of
monetary policy on economies including the British economy
during the gold standard. Othman et al. (2020) determine how
macroeconomic policies affect income inequality and wealth
distribution. Both the gold standard and cryptocurrency
contribute positively to government promotion of social
welfare, while centralization may lead to more inequalities
(Othman et al., 2020). Finally, Teupe (2020) explores the
historical significance of the gold standard with case studies on
Germany and the United States and the relation their monetary
systems had on inflation and wage negotiation.
References
Cutsinger, B. P. (2020). On the feasibility of returning to the
gold standard. The Quarterly Review of Economics and
Finance, 78, 88–97. https://doi.org/10.1016/j.qref.2020.03.002
Dorn, J. A. (2020). How the classical gold standard can inform
monetary policy. Cato Journal, 40(3), 777-790.
http://dx.doi.org/10.36009/CJ.40.3.11
Lennard, J. (2018). Did monetary policy matter? Narrative
evidence from the Classical Gold Standard. Explorations in
Economic History, 68, 16–36.

10. https://doi.org/10.1016/j.eeh.2017.10.001
Othman, A. H., Musa Alhabshi, S., Kassim, S., Abdullah, A., &
Haron, R. (2020). The impact of monetary systems on income
inequity and wealth distribution. International Journal of
Emerging Markets, 15(6), 1161–1183.
https://doi.org/10.1108/ijoem-06-2019-0473
Teupe, S. (2020). Inflation and the negotiation of wages.
comparative responses to monetary changes in Germany and the
United States during the Gold Standard Era, 1876–1926. Labor
History, 62(1), 1–22.
https://doi.org/10.1080/0023656x.2020.1844875
Satterlee, B. (2019). International Business with Biblical
Worldview. McGraw-Hill.
Criteria Ratings Points
Thread 40 to >35.0 pts
Advanced
All key components of the
Discussion prompt are
answered in the thread, exactly
as listed in the instructions.
The thread has a clear, logical
flow. Major points are stated
clearly. Major points are
supported by good examples
or thoughtful analysis.
35 to >28.0 pts
Proficient

11. Most of the components of the
Discussion prompt are
answered in the thread,
exactly as listed in the
instructions. The thread has a
logical flow. Major points are
stated reasonably well. Major
points are supported by good
examples or thoughtful
analysis.
28 to >0.0 pts
Developing
The Discussion
prompt is addressed
minimally. The
thread lacks flow or
content, and does
not follow the exact
assignment
instructions. Major
points are unclear
or confusing. Major
points are not
supported by
examples or
thoughtful analysis.
0 pts
Not
Present

12. 40 pts
Replies 30 to >26.0 pts
Advanced
Each reply focuses on a
meaningful point made in
another student’s thread. Each
reply provides substantive
additional thoughts regarding
the thread and an explanation
of why the student agrees or
disagrees with the idea
presented in the thread. Each
reply is clear and coherent. A
minimum of 3 substantive
replies are submitted. See
instructions for what
constitutes a substantive reply.
26 to >21.0 pts
Proficient
Most replies focus on a
meaningful point made in
another student’s thread. Most
replies provide substantive
additional thoughts regarding
the thread and an explanation
of why the student likes or
dislikes the idea presented in
the thread. Most replies are
clear and coherent. A
minimum of 2 substantive

13. replies are submitted. See
instructions for what
constitutes a substantive reply.
21 to >0.0 pts
Developing
Some replies focus
on a point made in
another student’s
thread. Replies
could be more
substantive
regarding the
thread. Replies lack
clarity and
coherence. A
minimum of 1
substantive reply is
submitted. See
instructions for what
constitutes a
substantive reply.
0 pts
Not
Present
30 pts
Discussion Grading Rubric | BUSI604_B05_202220

14. Criteria Ratings Points
Spelling,
Grammar,
Current
APA
Formatting
30 to >26.0 pts
Advanced
Spelling and grammar are
correct. Sentences are
complete, clear, and concise.
Paragraphs contain
appropriately varied sentence
structures. Exact level heading
required wording is present. 5
references are cited in current
APA format.
26 to >21.0 pts
Proficient
Some spelling and grammar
errors are present. Sentences
are presented well.
Paragraphs contain some
varied sentence structures.
Inexact level heading required
wording is present Where
applicable, 4 references are
cited with APA formatting.

15. 21 to >0.0 pts
Developing
Spelling and
grammar errors
distract. Sentences
are incomplete or
unclear. Paragraphs
are poorly formed.
Level heading
required wording is
present references
are minimally or not
cited in current APA
format.
0 pts
Not
Present
30 pts
Total Points: 100
Discussion Grading Rubric | BUSI604_B05_202220