Question 1

The interest rate on soft loans is traditionally set at ________.

Accepted Answer

A)  0 percent to very low 
B)  5 to 10 percent 
C)  11 to 20 percent 
D)  21 to 25 percent 
A)  0 percent to very low 
B)  5 to 10 percent 
C)  11 to 20 percent 
D)  21 to 25 percent

Question 2

Membership in the IMF is limited to democratic nations only.

Accepted Answer

A) True 
 B)False

Question 3

Under a ________, the price of a given currency does not change relative to other currency.

Accepted Answer

A)  free trade agreement 
B)  fixed exchange rate system 
C)  floating exchange rate system 
D)  balance of payment system 
A)  free trade agreement 
B)  fixed exchange rate system 
C)  floating exchange rate system 
D)  balance of payment system

Question 4

Which agreement resulted in each country adopting its own exchange rate system?

Accepted Answer

A)  Bretton Woods 
B)  Smithsonian 
C)  Jamaica 
D)  Genoa 
A)  Bretton Woods 
B)  Smithsonian 
C)  Jamaica 
D)  Genoa

Question 5

The balance of payments is useful to international business people for which of the following reasons?

Accepted Answer

A)  warning of new policies that could affect a country's business climate 
B)  indicating stability in a country's foreign policy 
C)  signaling increased riskiness of lending to countries 
D)  predicting future technological changes 
A)  warning of new policies that could affect a country's business climate 
B)  indicating stability in a country's foreign policy 
C)  signaling increased riskiness of lending to countries 
D)  predicting future technological changes

Question 6

Carmen is a vice president at TechWorks, an MNE that manufactures computer chips. TechWorks is considering expansion, and Carmen is responsible for identifying potential locations. Which of the following would best help Carmen identify a country's unilateral transfers and income generated by past investments?

Accepted Answer

A)  current account balance 
B)  official settlements balance 
C)  balance on merchandise trade 
D)  balance on goods and services 
A)  current account balance 
B)  official settlements balance 
C)  balance on merchandise trade 
D)  balance on goods and services

Question 7

The ________ was created to manage currency relationships within the European Union.

Accepted Answer

A)  European Monetary System 
B)  World Bank 
C)  Brady Plan 
D)  Baker Plan 
A)  European Monetary System 
B)  World Bank 
C)  Brady Plan 
D)  Baker Plan

Question 8

The gold standard was a monetary system whereby countries agreed to buy or sell their paper currencies in exchange for gold.

Accepted Answer

A) True 
 B)False

Question 9

The balance of payments accounting system is a double entry system.

Accepted Answer

A) True 
 B)False

Question 10

Todd, an analyst for the U.S. government, has been given the task of assessing the economic performance of Country X in the international marketplace. Todd will most likely review the ________ of Country X.

Accepted Answer

A)  BOP statistics 
B)  IMF quotas 
C)  portfolios 
D)  FDI 
A)  BOP statistics 
B)  IMF quotas 
C)  portfolios 
D)  FDI

Question 11

What is an SDR? How are SDRs used?

Accepted Answer

SDRs, or special drawing rights, were cr

Question 12

What occurred at the Louvre Accord?

Accepted Answer

A)  Central banks allowed the dollar's value to fall. 
B)  The value of the U.S. dollar was stabilized. 
C)  EU members adopted a common currency. 
D)  An exchange rate mechanism was established. 
A)  Central banks allowed the dollar's value to fall. 
B)  The value of the U.S. dollar was stabilized. 
C)  EU members adopted a common currency. 
D)  An exchange rate mechanism was established.

Question 13

Currencies that can be freely exchanged for other currencies without legal restrictions are called ________.

Accepted Answer

A)  floating currencies 
B)  fixed currencies 
C)  convertible currencies 
D)  free currencies 
A)  floating currencies 
B)  fixed currencies 
C)  convertible currencies 
D)  free currencies

Question 14

Under the gold standard ________.

Accepted Answer

A)  currency values were determined by supply and demand 
B)  countries agreed to buy or sell their paper currencies for gold 
C)  countries were free to adopt any nation's exchange rate system 
D)  the dollar's value was allowed to fall on currency markets 
A)  currency values were determined by supply and demand 
B)  countries agreed to buy or sell their paper currencies for gold 
C)  countries were free to adopt any nation's exchange rate system 
D)  the dollar's value was allowed to fall on currency markets

Question 15

The Smithsonian agreement established a fixed exchange rate system.

Accepted Answer

A) True 
 B)False

Question 16

Truman officially ended the Bretton Woods system when he announced that the United States would no longer redeem gold at $35 per ounce.

Accepted Answer

A) True 
 B)False

Question 17

What was the purpose and result of the Plaza Accord?

Accepted Answer

The Plaza Accord was the result of a 198

Question 18

Which of the following is a typical short-term foreign portfolio investments included in the capital account?

Accepted Answer

A)  government bonds 
B)  checking accounts 
C)  municipal bonds 
D)  special drawing rights 
A)  government bonds 
B)  checking accounts 
C)  municipal bonds 
D)  special drawing rights

Question 19

What was the Baker Plan?

Accepted Answer

The 1985 Baker Plan was an effort to res

Question 20

Japan holds the largest bloc of votes in the World Bank.

Accepted Answer

A) True 
 B)False

The interest rate on soft loans is traditionally set at ________.

Membership in the IMF is limited to democratic nations only.

Under a ________, the price of a given currency does not change relative to other currency.

Which agreement resulted in each country adopting its own exchange rate system?

The balance of payments is useful to international business people for which of the following reasons?

The ________ was created to manage currency relationships within the European Union.

The gold standard was a monetary system whereby countries agreed to buy or sell their paper currencies in exchange for gold.

The balance of payments accounting system is a double entry system.

Todd, an analyst for the U.S. government, has been given the task of assessing the economic performance of Country X in the international marketplace. Todd will most likely review the ________ of Country X.

What is an SDR? How are SDRs used?

What occurred at the Louvre Accord?

Currencies that can be freely exchanged for other currencies without legal restrictions are called ________.

Under the gold standard ________.

The Smithsonian agreement established a fixed exchange rate system.

Truman officially ended the Bretton Woods system when he announced that the United States would no longer redeem gold at $35 per ounce.

What was the purpose and result of the Plaza Accord?

Which of the following is a typical short-term foreign portfolio investments included in the capital account?

What was the Baker Plan?

Japan holds the largest bloc of votes in the World Bank.

An Overview of International Business

Global Marketplaces and Business Centers

Legal, Technological, and Political Environments

The Role of Culture

Ethics and Social Responsibility in International Business

International Trade and Investment

Foreign Exchange and International Financial Markets

Formulation of National Trade Policies

International Cooperation Among Nations

International Strategic Management

Strategies for Analyzing and Entering Foreign Markets

International Strategic Alliances

International Organization Design and Control

Leadership and Employee Behavior in International Business

International Marketing

International Operations Management

International Financial Management

International Human Resource Management and Labor Relations

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Exam 7: The International Monetary System and the Balance of Payments

The interest rate on soft loans is traditionally set at ________.

Membership in the IMF is limited to democratic nations only.

Under a ________, the price of a given currency does not change relative to other currency.

Which agreement resulted in each country adopting its own exchange rate system?

The balance of payments is useful to international business people for which of the following reasons?

The ________ was created to manage currency relationships within the European Union.

The gold standard was a monetary system whereby countries agreed to buy or sell their paper currencies in exchange for gold.

The balance of payments accounting system is a double entry system.

Todd, an analyst for the U.S. government, has been given the task of assessing the economic performance of Country X in the international marketplace. Todd will most likely review the ________ of Country X.

What is an SDR? How are SDRs used?

What occurred at the Louvre Accord?

Currencies that can be freely exchanged for other currencies without legal restrictions are called ________.

Under the gold standard ________.

The Smithsonian agreement established a fixed exchange rate system.

Truman officially ended the Bretton Woods system when he announced that the United States would no longer redeem gold at $35 per ounce.

What was the purpose and result of the Plaza Accord?

Which of the following is a typical short-term foreign portfolio investments included in the capital account?

What was the Baker Plan?

Japan holds the largest bloc of votes in the World Bank.

An Overview of International Business

Global Marketplaces and Business Centers

Legal, Technological, and Political Environments

The Role of Culture

Ethics and Social Responsibility in International Business

International Trade and Investment

Foreign Exchange and International Financial Markets

Formulation of National Trade Policies

International Cooperation Among Nations

International Strategic Management

Strategies for Analyzing and Entering Foreign Markets

International Strategic Alliances

International Organization Design and Control

Leadership and Employee Behavior in International Business

International Marketing

International Operations Management

International Financial Management

International Human Resource Management and Labor Relations

Filters