Question 1

What did the classic gold standard era and the Bretton Woods System have in common?

Accepted Answer

A) The flexibility to adjust exchange rates when currency crises occurred. 
B) The world's major powers cooperated in maintaining the system. 
C) In both cases a major power (the United States and Soviet Union,respectively)opted out of the system. 
D) Both were created in response to devastating wars. 
E) Both failed because of a major depression. 
A) The flexibility to adjust exchange rates when currency crises occurred. 
B) The world's major powers cooperated in maintaining the system. 
C) In both cases a major power (the United States and Soviet Union,respectively)opted out of the system. 
D) Both were created in response to devastating wars. 
E) Both failed because of a major depression. B

Question 2

What is a fixed exchange rate?

Accepted Answer

A) A monetary system in which the exchange rates of major currencies retain nearly the same value with respect to the U.S.dollar but are allowed to fluctuate during crises. 
B) A monetary system in which the exchange rates of currencies are set at a permanent price of another currency or a precious metal. 
C) A monetary system in which the exchange rates of major currencies retain nearly the same value with respect to gold but are periodically adjusted in response to currency crises. 
D) A monetary system in which exchange rates are allowed to change according to their market price. 
E) A trading system in which governments limit how many goods can be sent between countries. 
A) A monetary system in which the exchange rates of major currencies retain nearly the same value with respect to the U.S.dollar but are allowed to fluctuate during crises. 
B) A monetary system in which the exchange rates of currencies are set at a permanent price of another currency or a precious metal. 
C) A monetary system in which the exchange rates of major currencies retain nearly the same value with respect to gold but are periodically adjusted in response to currency crises. 
D) A monetary system in which exchange rates are allowed to change according to their market price. 
E) A trading system in which governments limit how many goods can be sent between countries. B

Question 3

What is the Bretton Woods System?

Accepted Answer

A) A monetary system in which the exchange rate of major currencies retained nearly the same value with respect to the U.S.dollar. 
B) A monetary system in which the exchange rates of the major currencies remained fixed to gold. 
C) A monetary system in which the exchange rate of the U.S.dollar was periodically adjusted in response to currency crises in its allies' economies. 
D) A monetary system in which exchange rates were allowed to change according to their market prices. 
E) An alliance system that was created to protect Western Europe from a Soviet invasion. 
A) A monetary system in which the exchange rate of major currencies retained nearly the same value with respect to the U.S.dollar. 
B) A monetary system in which the exchange rates of the major currencies remained fixed to gold. 
C) A monetary system in which the exchange rate of the U.S.dollar was periodically adjusted in response to currency crises in its allies' economies. 
D) A monetary system in which exchange rates were allowed to change according to their market prices. 
E) An alliance system that was created to protect Western Europe from a Soviet invasion. A

Question 4

Why can interactions in an international monetary regime be like a Prisoner's Dilemma?

Accepted Answer

A) Each government has an incentive to cheat by pegging its currency;the result is a world where every government wants to peg its currency to someone else. 
B) Each government has an incentive to cheat by devaluing its currency,and the result is all governments become worse off because of competitive devaluations. 
C) Each government faces a choice between fixing its currency's exchange rate or letting the currency float freely. 
D) Each government is trapped by the rules of the international monetary regime. 
E) All governments have a clear incentive to create an international government to regulate monetary affairs even though this will make them captive to its rules. 
A) Each government has an incentive to cheat by pegging its currency;the result is a world where every government wants to peg its currency to someone else. 
B) Each government has an incentive to cheat by devaluing its currency,and the result is all governments become worse off because of competitive devaluations. 
C) Each government faces a choice between fixing its currency's exchange rate or letting the currency float freely. 
D) Each government is trapped by the rules of the international monetary regime. 
E) All governments have a clear incentive to create an international government to regulate monetary affairs even though this will make them captive to its rules.

Question 5

Why did the Bretton Woods System end?

Accepted Answer

A) The United States decided to go on the gold standard. 
B) The major European countries decided to go on the gold standard. 
C) Prime Minister Winston Churchill decided that Great Britain should stop supporting the system. 
D) President Richard Nixon decided that the United States could no longer support the system. 
E) The major European countries decided to adopt the euro. 
A) The United States decided to go on the gold standard. 
B) The major European countries decided to go on the gold standard. 
C) Prime Minister Winston Churchill decided that Great Britain should stop supporting the system. 
D) President Richard Nixon decided that the United States could no longer support the system. 
E) The major European countries decided to adopt the euro.

Question 6

Explain how an international monetary system is a public good.

Accepted Answer

The answer of Explain how an international monetary system is...

Question 7

Why would a country want a currency to float? Why might it instead prefer it to be fixed in value with a nearby nation's currency?

Accepted Answer

A country may want its currency to float

Question 8

Which of the following is most like a commodity-backed paper standard?

Accepted Answer

A) The Deutsche mark. 
B) The British pound. 
C) The euro. 
D) The classic gold standard. 
E) The Bretton Woods System. 
A) The Deutsche mark. 
B) The British pound. 
C) The euro. 
D) The classic gold standard. 
E) The Bretton Woods System.

Question 9

Why would a country want a depreciated currency?

Accepted Answer

A) Depreciation makes imports cheaper for consumers. 
B) Depreciation makes a country's exports more competitive. 
C) Depreciation makes investment more attractive. 
D) Depreciation makes foreign loan repayment cheaper. 
E) Depreciation makes wages increase. 
A) Depreciation makes imports cheaper for consumers. 
B) Depreciation makes a country's exports more competitive. 
C) Depreciation makes investment more attractive. 
D) Depreciation makes foreign loan repayment cheaper. 
E) Depreciation makes wages increase.

Question 10

If a 100-euro pair of Italian shoes cost $200,how much would the shoes cost after the dollar appreciated by 100 percent?

Accepted Answer

A) $100. 
B) $200. 
C) $250. 
D) $300. 
E) $500. 
A) $100. 
B) $200. 
C) $250. 
D) $300. 
E) $500.

Question 11

Why did the Argentine currency crisis of 2001 occur?

Accepted Answer

A) The Argentine president continued to let the peso float in order to maintain political support for his party. 
B) The end of the Cold War led to too many imports from former communist countries. 
C) Argentina's beef exports increased so much that it led to a shortage of currency. 
D) A housing bubble collapsed in Thailand and international investors took their money out of all developing countries' economies. 
E) Argentina had pegged the peso to the dollar and could not easily change its policy. 
A) The Argentine president continued to let the peso float in order to maintain political support for his party. 
B) The end of the Cold War led to too many imports from former communist countries. 
C) Argentina's beef exports increased so much that it led to a shortage of currency. 
D) A housing bubble collapsed in Thailand and international investors took their money out of all developing countries' economies. 
E) Argentina had pegged the peso to the dollar and could not easily change its policy.

Question 12

In which of the following would a foreign company most likely invest its money?

Accepted Answer

A) A country with a 5 percent interest rate. 
B) A country with a 10 percent interest rate. 
C) A country with a 15 percent interest rate. 
D) A country with a 20 percent interest rate. 
E) A country with a 25 percent interest rate. 
A) A country with a 5 percent interest rate. 
B) A country with a 10 percent interest rate. 
C) A country with a 15 percent interest rate. 
D) A country with a 20 percent interest rate. 
E) A country with a 25 percent interest rate.

Question 13

Which of these steps usually comes first in a currency crisis?

Accepted Answer

A) The government offers substantially higher interest rates. 
B) The government devalues its currency. 
C) Investors begin to sell a nation's currency. 
D) The government faces some difficulty in maintaining a fixed exchange rate. 
E) People lose faith in the government's commitment to keeping a stable exchange rate. 
A) The government offers substantially higher interest rates. 
B) The government devalues its currency. 
C) Investors begin to sell a nation's currency. 
D) The government faces some difficulty in maintaining a fixed exchange rate. 
E) People lose faith in the government's commitment to keeping a stable exchange rate.

Question 14

A currency crisis in 1997 and 1998 spread quickly throughout ________,which eventually led to at least two governments falling from the resulting economic recessions.

Accepted Answer

A) Latin America 
B) Europe 
C) Africa 
D) East Asia 
E) Oceania 
A) Latin America 
B) Europe 
C) Africa 
D) East Asia 
E) Oceania

Question 15

What is NOT a feature of an international monetary regime?

Accepted Answer

A) It determines whether currency values are fixed. 
B) It determines whether currency values are allowed to float. 
C) It can determine that there is a mutually accepted benchmark by which values are measured. 
D) It determines that all states ought to use the same currency. 
E) It can determine that there is not a mutually accepted benchmark by which values are measured. 
A) It determines whether currency values are fixed. 
B) It determines whether currency values are allowed to float. 
C) It can determine that there is a mutually accepted benchmark by which values are measured. 
D) It determines that all states ought to use the same currency. 
E) It can determine that there is not a mutually accepted benchmark by which values are measured.

Question 16

Which global monetary system put the United States at the center,which left Europeans less than enthusiastic about it?

Accepted Answer

A) The gold standard. 
B) The Bretton Woods System. 
C) The floating exchange rate system. 
D) The fixed peg system. 
E) The penny-to-dollars system. 
A) The gold standard. 
B) The Bretton Woods System. 
C) The floating exchange rate system. 
D) The fixed peg system. 
E) The penny-to-dollars system.

Question 17

The gold standard is a monetary system in which:

Accepted Answer

A) the exchange rate of major currencies retained nearly the same value with respect to the U.S.dollar. 
B) the exchange rate of the U.S.dollar was periodically adjusted in response to currency crises in its allies' economies. 
C) exchange rates were allowed to change according to their market price. 
D) the exchange rates of the major currencies remained fixed to gold. 
E) governments used gold instead of paper currencies. 
A) the exchange rate of major currencies retained nearly the same value with respect to the U.S.dollar. 
B) the exchange rate of the U.S.dollar was periodically adjusted in response to currency crises in its allies' economies. 
C) exchange rates were allowed to change according to their market price. 
D) the exchange rates of the major currencies remained fixed to gold. 
E) governments used gold instead of paper currencies.

Question 18

Why do currency crises occur?

Accepted Answer

The answer of Why do currency crises occur?...

Question 19

Which of the following did NOT occur in reaction to the Argentine currency crisis of 2001?

Accepted Answer

A) The United States lent Argentina large sums of money to keep the government running. 
B) Nationwide riots occurred in Argentina. 
C) Several different presidents held office in Argentina during a two-week period. 
D) Argentina announced the largest default in history. 
E) The Argentine government froze bank accounts and citizens could not withdraw dollars. 
A) The United States lent Argentina large sums of money to keep the government running. 
B) Nationwide riots occurred in Argentina. 
C) Several different presidents held office in Argentina during a two-week period. 
D) Argentina announced the largest default in history. 
E) The Argentine government froze bank accounts and citizens could not withdraw dollars.

Question 20

Compare and contrast two currency crises of the last 30 years.What lessons should governments draw from these instances?

Accepted Answer

Two significant currency crises of the l

What did the classic gold standard era and the Bretton Woods System have in common?

What is a fixed exchange rate?

What is the Bretton Woods System?

Why can interactions in an international monetary regime be like a Prisoner's Dilemma?

Why did the Bretton Woods System end?

Explain how an international monetary system is a public good.

Why would a country want a currency to float? Why might it instead prefer it to be fixed in value with a nearby nation's currency?

Which of the following is most like a commodity-backed paper standard?

Why would a country want a depreciated currency?

If a 100-euro pair of Italian shoes cost $200,how much would the shoes cost after the dollar appreciated by 100 percent?

Why did the Argentine currency crisis of 2001 occur?

In which of the following would a foreign company most likely invest its money?

Which of these steps usually comes first in a currency crisis?

A currency crisis in 1997 and 1998 spread quickly throughout ________,which eventually led to at least two governments falling from the resulting economic recessions.

What is NOT a feature of an international monetary regime?

Which global monetary system put the United States at the center,which left Europeans less than enthusiastic about it?

The gold standard is a monetary system in which:

Why do currency crises occur?

Which of the following did NOT occur in reaction to the Argentine currency crisis of 2001?

Compare and contrast two currency crises of the last 30 years.What lessons should governments draw from these instances?

Introduction

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Trade

International Financial Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Foundations, war, and Peace

International Political Economy, transnational Politics, and Looking Ahead

Filters

Exam 10: International Monetary Relations

What did the classic gold standard era and the Bretton Woods System have in common?

What is a fixed exchange rate?

What is the Bretton Woods System?

Why can interactions in an international monetary regime be like a Prisoner's Dilemma?

Why did the Bretton Woods System end?

Explain how an international monetary system is a public good.

Why would a country want a currency to float? Why might it instead prefer it to be fixed in value with a nearby nation's currency?

Which of the following is most like a commodity-backed paper standard?

Why would a country want a depreciated currency?

If a 100-euro pair of Italian shoes cost $200,how much would the shoes cost after the dollar appreciated by 100 percent?

Why did the Argentine currency crisis of 2001 occur?

In which of the following would a foreign company most likely invest its money?

Which of these steps usually comes first in a currency crisis?

A currency crisis in 1997 and 1998 spread quickly throughout ________,which eventually led to at least two governments falling from the resulting economic recessions.

What is NOT a feature of an international monetary regime?

Which global monetary system put the United States at the center,which left Europeans less than enthusiastic about it?

The gold standard is a monetary system in which:

Why do currency crises occur?

Which of the following did NOT occur in reaction to the Argentine currency crisis of 2001?

Compare and contrast two currency crises of the last 30 years.What lessons should governments draw from these instances?

Introduction

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Trade

International Financial Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Foundations, war, and Peace

International Political Economy, transnational Politics, and Looking Ahead

Filters