Question 1

Why did the European currency crisis of 1992 occur?

Accepted Answer

A) Germany raised its interest rates to combat inflation,which led investors to question whether other European countries would keep their currencies pegged to the Deutsche mark. 
B) West and East Germany reunited after the Cold War ended,which led investors to question whether the country could support the Deutsche mark,so they sold the currency and bought U.S.dollars. 
C) Sweden raised its interest rates to 500 percent to reduce inflation,which led investors to dump their other currencies and buy Swedish krona. 
D) A housing bubble collapsed in Italy,sparking a financial crisis throughout the region. 
E) The United States withdrew troops and reduced military spending after the end of the Cold War,which caused Western European economies to shrink. 
A) Germany raised its interest rates to combat inflation,which led investors to question whether other European countries would keep their currencies pegged to the Deutsche mark. 
B) West and East Germany reunited after the Cold War ended,which led investors to question whether the country could support the Deutsche mark,so they sold the currency and bought U.S.dollars. 
C) Sweden raised its interest rates to 500 percent to reduce inflation,which led investors to dump their other currencies and buy Swedish krona. 
D) A housing bubble collapsed in Italy,sparking a financial crisis throughout the region. 
E) The United States withdrew troops and reduced military spending after the end of the Cold War,which caused Western European economies to shrink.

Question 2

Why is it difficult for a government to avoid a currency crisis?

Accepted Answer

A) Important companies that have borrowed in foreign currencies can be a powerful lobby in favor of abrupt devaluations of the currency in order to reduce their debts. 
B) Exporters clamor for the government to maintain overvalued exchange rates when the currency should be devalued. 
C) The common strategy of lowering interest rates to avoid a crisis worsens domestic economic conditions. 
D) In democracies,government officials have to worry about the votes of consumers who would be hurt by overvalued exchange rates. 
E) International investors are easily alarmed by any sign of instability and are quick to sell off currency. 
A) Important companies that have borrowed in foreign currencies can be a powerful lobby in favor of abrupt devaluations of the currency in order to reduce their debts. 
B) Exporters clamor for the government to maintain overvalued exchange rates when the currency should be devalued. 
C) The common strategy of lowering interest rates to avoid a crisis worsens domestic economic conditions. 
D) In democracies,government officials have to worry about the votes of consumers who would be hurt by overvalued exchange rates. 
E) International investors are easily alarmed by any sign of instability and are quick to sell off currency.

Question 3

Which of the following is NOT a policy that countries have adopted in the past 100 years?

Accepted Answer

A) Some countries have given up their own currencies and used another country's currency instead. 
B) Some countries have given up their own currencies and created a new shared currency. 
C) Some countries have used gold as a currency instead of their own paper currencies. 
D) Some countries have kept their own currencies but have tied its value to another country's currency. 
E) Some countries have kept their own currencies separate from other countries' currencies. 
A) Some countries have given up their own currencies and used another country's currency instead. 
B) Some countries have given up their own currencies and created a new shared currency. 
C) Some countries have used gold as a currency instead of their own paper currencies. 
D) Some countries have kept their own currencies but have tied its value to another country's currency. 
E) Some countries have kept their own currencies separate from other countries' currencies.

Question 4

Which of the following countries has NOT joined the European Monetary Union?

Accepted Answer

A) The United Kingdom. 
B) Germany. 
C) France. 
D) Italy. 
E) Spain. 
A) The United Kingdom. 
B) Germany. 
C) France. 
D) Italy. 
E) Spain.

Question 5

What is a national paper currency standard?

Accepted Answer

A) Governments issue a currency and peg its value to gold. 
B) Governments issue a currency and commit to exchanging the currency for a set gold price. 
C) Governments issue a currency and use gold as a standard value but do not commit to exchanging gold for the currency. 
D) Governments issue a currency and commit to supporting the value of the currency. 
E) Governments issue a currency but make no efforts to support the currency. 
A) Governments issue a currency and peg its value to gold. 
B) Governments issue a currency and commit to exchanging the currency for a set gold price. 
C) Governments issue a currency and use gold as a standard value but do not commit to exchanging gold for the currency. 
D) Governments issue a currency and commit to supporting the value of the currency. 
E) Governments issue a currency but make no efforts to support the currency.

Question 6

Why did the European Crisis of 2011 occur?

Accepted Answer

A) A handful of European countries borrowed heavily during an economic boom,and the global financial crisis of 2007 made it difficult to pay off those debts. 
B) Greece,Ireland,Portugal,and Spain never fully adopted the euro,and their preference for a dual currency made investors wary. 
C) Germany wanted to allow countries like Greece,Ireland,Portugal,and Spain to set their own monetary policies. 
D) Countries heavily in debt wanted free monetary policy control so they could appreciate the currency in response to the crisis. 
E) Countries were too willing to cut social spending programs,which made investors unwilling to keep using the euro. 
A) A handful of European countries borrowed heavily during an economic boom,and the global financial crisis of 2007 made it difficult to pay off those debts. 
B) Greece,Ireland,Portugal,and Spain never fully adopted the euro,and their preference for a dual currency made investors wary. 
C) Germany wanted to allow countries like Greece,Ireland,Portugal,and Spain to set their own monetary policies. 
D) Countries heavily in debt wanted free monetary policy control so they could appreciate the currency in response to the crisis. 
E) Countries were too willing to cut social spending programs,which made investors unwilling to keep using the euro.

Question 7

When and why do governments agree on a particular monetary system?

Accepted Answer

The answer of When and why do governments agree on...

Question 8

Why did the East Asian Crisis of 1997 occur?

Accepted Answer

A) East Asian countries were unwilling to borrow enough international money to build sufficient infrastructure. 
B) As inflation rose in East Asian countries,investors anticipated devaluations and began to sell off East Asian currencies. 
C) Investors were surprised by an abrupt devaluation of its currency by the Thai government and responded by selling the Thai currency. 
D) The Suharto dictatorship in Indonesia collapsed,sparking instability in the region. 
E) China threatened to take over Taiwan,prompting investors to remove their money from the region. 
A) East Asian countries were unwilling to borrow enough international money to build sufficient infrastructure. 
B) As inflation rose in East Asian countries,investors anticipated devaluations and began to sell off East Asian currencies. 
C) Investors were surprised by an abrupt devaluation of its currency by the Thai government and responded by selling the Thai currency. 
D) The Suharto dictatorship in Indonesia collapsed,sparking instability in the region. 
E) China threatened to take over Taiwan,prompting investors to remove their money from the region.

Question 9

What is the exchange rate?

Accepted Answer

A) The amount of trade passing from one country to another. 
B) The price of a national currency relative to other national currencies. 
C) The pace of trade that passes from one country to another. 
D) The price of gold. 
E) The speed with which currency traders buy and sell currencies. 
A) The amount of trade passing from one country to another. 
B) The price of a national currency relative to other national currencies. 
C) The pace of trade that passes from one country to another. 
D) The price of gold. 
E) The speed with which currency traders buy and sell currencies.

Question 10

How did interests,institutions,and interactions contribute to the success of the Bretton Woods monetary system?

Accepted Answer

The success of the Bretton Woods monetar

Question 11

Which of these countries have adopted the U.S.dollar as their currencies?

Accepted Answer

A) Israel and Egypt. 
B) Mexico and Canada. 
C) Japan and China. 
D) Russia and Georgia. 
E) Ecuador and El Salvador. 
A) Israel and Egypt. 
B) Mexico and Canada. 
C) Japan and China. 
D) Russia and Georgia. 
E) Ecuador and El Salvador.

Question 12

Which of the following is an example of a country using monetary policy?

Accepted Answer

A) Sweden increases import taxes to raise government revenues. 
B) Iceland decreases its interest rate to increase consumer spending. 
C) Mexico reduces tariffs to increase imports. 
D) China increases spending on hydroelectric projects. 
E) Japan borrows from the People's Republic of China for domestic consumption. 
A) Sweden increases import taxes to raise government revenues. 
B) Iceland decreases its interest rate to increase consumer spending. 
C) Mexico reduces tariffs to increase imports. 
D) China increases spending on hydroelectric projects. 
E) Japan borrows from the People's Republic of China for domestic consumption.

Question 13

How did domestic interests and international conditions affect the adoption of the euro?

Accepted Answer

The answer of How did domestic interests and international conditions...

Question 14

Which of the following is LEAST likely to determine a government's exchange rate policy?

Accepted Answer

A) Domestic interest groups. 
B) Whether the country is democratic or authoritarian. 
C) The structure of the economy. 
D) The international monetary regime. 
E) The amount of the global gold and silver supply. 
A) Domestic interest groups. 
B) Whether the country is democratic or authoritarian. 
C) The structure of the economy. 
D) The international monetary regime. 
E) The amount of the global gold and silver supply.

Question 15

Monetary policy is the government's ability to:

Accepted Answer

A) affect the economy by using its power to spend on public works projects. 
B) raise tax revenues. 
C) regulate imports and exports. 
D) affect the economy by manipulating the money supply. 
E) borrow and spend. 
A) affect the economy by using its power to spend on public works projects. 
B) raise tax revenues. 
C) regulate imports and exports. 
D) affect the economy by manipulating the money supply. 
E) borrow and spend.

Question 16

How are international monetary affairs "organized" in the absence of an international government?

Accepted Answer

In the absence of an international gover

Question 17

In the late nineteenth century,which effect of a change in the gold standard would have been desired by the Populists?

Accepted Answer

A) A change to using the gold standard would have reduced currency instability and encouraged more international trade. 
B) A change to using a silver standard would have allowed an appreciation of the dollar,thus helping exporters. 
C) A change to using a silver standard would have allowed a devaluation of the dollar,thus helping exporters. 
D) A change to using a silver standard would have increased imports and made manufacturing cheaper. 
E) Going off the gold standard to a freely floating exchange rate would have allowed the government to deal more effectively with farm crises. 
A) A change to using the gold standard would have reduced currency instability and encouraged more international trade. 
B) A change to using a silver standard would have allowed an appreciation of the dollar,thus helping exporters. 
C) A change to using a silver standard would have allowed a devaluation of the dollar,thus helping exporters. 
D) A change to using a silver standard would have increased imports and made manufacturing cheaper. 
E) Going off the gold standard to a freely floating exchange rate would have allowed the government to deal more effectively with farm crises.

Question 18

If the Argentinean peso depreciates in relation to the dollar,it means that:

Accepted Answer

A) the Argentinean peso has increased in value relative to the dollar. 
B) the Argentinean peso has increased in value relative to all currencies but the dollar. 
C) the Argentinean peso has decreased in value relative to the dollar. 
D) the Argentinean peso has decreased in value relative to all currencies but the dollar. 
E) there is no change in the relative value of the two currencies. 
A) the Argentinean peso has increased in value relative to the dollar. 
B) the Argentinean peso has increased in value relative to all currencies but the dollar. 
C) the Argentinean peso has decreased in value relative to the dollar. 
D) the Argentinean peso has decreased in value relative to all currencies but the dollar. 
E) there is no change in the relative value of the two currencies.

Question 19

If the Argentinean peso appreciates in relation to the U.S.dollar,it means that:

Accepted Answer

A) the Argentinean peso has increased in value relative to the dollar. 
B) the Argentinean peso has increased in value relative to all currencies but the dollar. 
C) the Argentinean peso has decreased in value relative to the dollar. 
D) the Argentinean peso has decreased in value relative to all currencies but the dollar. 
E) there is no change in the relative value of the two currencies. 
A) the Argentinean peso has increased in value relative to the dollar. 
B) the Argentinean peso has increased in value relative to all currencies but the dollar. 
C) the Argentinean peso has decreased in value relative to the dollar. 
D) the Argentinean peso has decreased in value relative to all currencies but the dollar. 
E) there is no change in the relative value of the two currencies.

Question 20

What is one interest all domestic actors share with regard to the national currency?

Accepted Answer

A) All domestic actors favor a currency that has depreciated. 
B) All domestic actors prefer a currency that has appreciated. 
C) All domestic actors prefer a floating exchange rate. 
D) All domestic actors prefer a fixed exchange rate. 
E) All domestic actors favor a currency policy that ensures stable prices. 
A) All domestic actors favor a currency that has depreciated. 
B) All domestic actors prefer a currency that has appreciated. 
C) All domestic actors prefer a floating exchange rate. 
D) All domestic actors prefer a fixed exchange rate. 
E) All domestic actors favor a currency policy that ensures stable prices.

Why did the European currency crisis of 1992 occur?

Why is it difficult for a government to avoid a currency crisis?

Which of the following is NOT a policy that countries have adopted in the past 100 years?

Which of the following countries has NOT joined the European Monetary Union?

What is a national paper currency standard?

Why did the European Crisis of 2011 occur?

When and why do governments agree on a particular monetary system?

Why did the East Asian Crisis of 1997 occur?

What is the exchange rate?

How did interests,institutions,and interactions contribute to the success of the Bretton Woods monetary system?

Which of these countries have adopted the U.S.dollar as their currencies?

Which of the following is an example of a country using monetary policy?

How did domestic interests and international conditions affect the adoption of the euro?

Which of the following is LEAST likely to determine a government's exchange rate policy?

Monetary policy is the government's ability to:

How are international monetary affairs "organized" in the absence of an international government?

In the late nineteenth century,which effect of a change in the gold standard would have been desired by the Populists?

If the Argentinean peso depreciates in relation to the dollar,it means that:

If the Argentinean peso appreciates in relation to the U.S.dollar,it means that:

What is one interest all domestic actors share with regard to the national currency?

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

Why did the European currency crisis of 1992 occur?

Why is it difficult for a government to avoid a currency crisis?

Which of the following is NOT a policy that countries have adopted in the past 100 years?

Which of the following countries has NOT joined the European Monetary Union?

What is a national paper currency standard?

Why did the European Crisis of 2011 occur?

When and why do governments agree on a particular monetary system?

Why did the East Asian Crisis of 1997 occur?

What is the exchange rate?

How did interests,institutions,and interactions contribute to the success of the Bretton Woods monetary system?

Which of these countries have adopted the U.S.dollar as their currencies?

Which of the following is an example of a country using monetary policy?

How did domestic interests and international conditions affect the adoption of the euro?

Which of the following is LEAST likely to determine a government's exchange rate policy?

Monetary policy is the government's ability to:

How are international monetary affairs "organized" in the absence of an international government?

In the late nineteenth century,which effect of a change in the gold standard would have been desired by the Populists?

If the Argentinean peso depreciates in relation to the dollar,it means that:

If the Argentinean peso appreciates in relation to the U.S.dollar,it means that:

What is one interest all domestic actors share with regard to the national currency?

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