Question 1

Why did European countries adopt the euro?

Accepted Answer

A) Adoption of the euro was connected to other favorable economic and political joint endeavors. 
B) Most European currencies depended on the British pound,but Britain could no longer provide sufficient support for its own currency. 
C) Germany could not continue to defend its currency when it reunified after the Cold War. 
D) By adopting the euro,France would take Germany's place as the center of European monetary decision making. 
E) European countries wanted to connect their currency with Germany's Deutsche mark. 
A) Adoption of the euro was connected to other favorable economic and political joint endeavors. 
B) Most European currencies depended on the British pound,but Britain could no longer provide sufficient support for its own currency. 
C) Germany could not continue to defend its currency when it reunified after the Cold War. 
D) By adopting the euro,France would take Germany's place as the center of European monetary decision making. 
E) European countries wanted to connect their currency with Germany's Deutsche mark.

Question 2

There have been numerous international monetary orders in the past two centuries.Which fact explains why we have had to go through several monetary orders to reach the current one?

Accepted Answer

A) An international monetary order is an easily provided public good. 
B) The global financial world benefits from having regularly changing international monetary orders. 
C) Global banks adapt too well to existing monetary orders and take advantage of them. 
D) The United Kingdom has rejected each of the previous monetary orders. 
E) There is no global government to provide a single global monetary order. 
A) An international monetary order is an easily provided public good. 
B) The global financial world benefits from having regularly changing international monetary orders. 
C) Global banks adapt too well to existing monetary orders and take advantage of them. 
D) The United Kingdom has rejected each of the previous monetary orders. 
E) There is no global government to provide a single global monetary order.

Question 3

What is a commodity standard?

Accepted Answer

A) A widely accepted model for the production of goods. 
B) An agreement on trade that sets the standard for the exchange of goods. 
C) When a government uses a paper currency whose value is close to a universal standard unit. 
D) When a government uses a good with a value of its own as the basic measure of trade. 
E) When governments use a good with a value of its own as the basic underlying monetary unit. 
A) A widely accepted model for the production of goods. 
B) An agreement on trade that sets the standard for the exchange of goods. 
C) When a government uses a paper currency whose value is close to a universal standard unit. 
D) When a government uses a good with a value of its own as the basic measure of trade. 
E) When governments use a good with a value of its own as the basic underlying monetary unit.

Question 4

What explains why governments choose particular currency arrangements?

Accepted Answer

The answer of What explains why governments choose particular currency...

Question 5

Explain how an international monetary regime depends on interactions among the governments of the world's major economies.

Accepted Answer

The answer of Explain how an international monetary regime depends...

Question 6

Which of the following events did NOT contribute to the start of the Mexican peso crisis of 1994?

Accepted Answer

A) Mexico had entered a free-trade agreement with the United States and wanted to keep the peso exchange rate fixed relative to the U.S.dollar. 
B) The Mexican government kept the peso strong to improve Mexicans' standard of living before an important election in 1994. 
C) A rebellion occurred in southern Mexico. 
D) The United States abruptly raised interest rates to reduce inflation. 
E) A Mexican ruling party official was assassinated. 
A) Mexico had entered a free-trade agreement with the United States and wanted to keep the peso exchange rate fixed relative to the U.S.dollar. 
B) The Mexican government kept the peso strong to improve Mexicans' standard of living before an important election in 1994. 
C) A rebellion occurred in southern Mexico. 
D) The United States abruptly raised interest rates to reduce inflation. 
E) A Mexican ruling party official was assassinated.

Question 7

Germany supported the creation of the euro for all of the following reasons EXCEPT:

Accepted Answer

A) the new European central bank would be located in Germany. 
B) the new European central bank would be similar to the German central bank. 
C) the new system had controls in place to maintain Germany's commitment to high inflation. 
D) the euro would help reduce currency volatility in Europe. 
E) other European countries were unlikely to support a Deutsche mark-based currency system. 
A) the new European central bank would be located in Germany. 
B) the new European central bank would be similar to the German central bank. 
C) the new system had controls in place to maintain Germany's commitment to high inflation. 
D) the euro would help reduce currency volatility in Europe. 
E) other European countries were unlikely to support a Deutsche mark-based currency system.

Question 8

Which of the following events in the history of international monetary regimes came first?

Accepted Answer

A) The competitive devaluations of the Great Depression. 
B) Unsuccessful attempts to reestablish the gold standard. 
C) The Bretton Woods monetary system. 
D) The classic gold standard. 
E) Exchange rates that freely float according to their market price. 
A) The competitive devaluations of the Great Depression. 
B) Unsuccessful attempts to reestablish the gold standard. 
C) The Bretton Woods monetary system. 
D) The classic gold standard. 
E) Exchange rates that freely float according to their market price.

Question 9

During the classic gold standard era,which country was NOT pivotal to maintaining the system?

Accepted Answer

A) Germany. 
B) China. 
C) France. 
D) Great Britain. 
E) Russia. 
A) Germany. 
B) China. 
C) France. 
D) Great Britain. 
E) Russia.

Question 10

What type of country would be the strongest supporter of adopting the euro?

Accepted Answer

A) A large country with a very protectionist trade policy. 
B) A large country with a moderately liberal trade policy. 
C) A small country with a very liberal trade policy. 
D) A small country with a very protectionist trade policy. 
E) A medium-sized country with a moderately protectionist trade policy. 
A) A large country with a very protectionist trade policy. 
B) A large country with a moderately liberal trade policy. 
C) A small country with a very liberal trade policy. 
D) A small country with a very protectionist trade policy. 
E) A medium-sized country with a moderately protectionist trade policy.

Question 11

Why would a country change its interest rate?

Accepted Answer

A) Poorer countries peg their interest rates to the exchange rate. 
B) Countries try to lure foreign investors with lower interest rates. 
C) Lowering interest rates can reduce the country's trade deficit. 
D) Increasing interest rates can lead to an appreciation of the currency. 
E) The International Monetary Fund (IMF)encourages debtor countries to lower interest rates during currency crises. 
A) Poorer countries peg their interest rates to the exchange rate. 
B) Countries try to lure foreign investors with lower interest rates. 
C) Lowering interest rates can reduce the country's trade deficit. 
D) Increasing interest rates can lead to an appreciation of the currency. 
E) The International Monetary Fund (IMF)encourages debtor countries to lower interest rates during currency crises.

Question 12

Imagine that you are the financial adviser to the leader of a new country.The leader wants your advice on how to set up its currency-should it be pegged to a commodity,pegged to the large neighboring nation's currency,or allowed to float? Of what considerations would you want to take into account before giving your advice? What might make you recommend one alternative over another?

Accepted Answer

As the financial adviser to the leader o

Question 13

A national monetary system represents a public good because:

Accepted Answer

A) it is easy to exclude people from using a currency. 
B) it only has benefits for a minority of people who buy and sell goods internationally. 
C) there are no downsides to providing a national currency. 
D) people cannot be excluded from the monetary system or charged for using it. 
E) multiple actors in the international system would like control over the monetary supply and only one actor should have it. 
A) it is easy to exclude people from using a currency. 
B) it only has benefits for a minority of people who buy and sell goods internationally. 
C) there are no downsides to providing a national currency. 
D) people cannot be excluded from the monetary system or charged for using it. 
E) multiple actors in the international system would like control over the monetary supply and only one actor should have it.

Question 14

A currency that has depreciated is one that:

Accepted Answer

A) has been devalued. 
B) has been abandoned in favor of adopting a stronger currency. 
C) has lost the loyalty of a country's citizens. 
D) is worth more than it was previously when compared to other currencies. 
E) has been tied to the price of gold. 
A) has been devalued. 
B) has been abandoned in favor of adopting a stronger currency. 
C) has lost the loyalty of a country's citizens. 
D) is worth more than it was previously when compared to other currencies. 
E) has been tied to the price of gold.

Question 15

Why do monetary interactions between governments sometimes resemble a Prisoner's Dilemma?

Accepted Answer

The answer of Why do monetary interactions between governments sometimes...

Question 16

Which of the following is able to carry out monetary policy?

Accepted Answer

A) The International Monetary Fund (IMF). 
B) The World Bank. 
C) The European Central Bank. 
D) The World Trade Organization. 
E) The North American Free Trade Agreement. 
A) The International Monetary Fund (IMF). 
B) The World Bank. 
C) The European Central Bank. 
D) The World Trade Organization. 
E) The North American Free Trade Agreement.

Question 17

Why did the Bretton Woods System succeed?

Accepted Answer

A) Fixing all currencies to the unchanging gold standard caused economic prosperity for all of the major countries. 
B) The World Trade Organization facilitated cooperation by providing monetary support during crises. 
C) The economic,political,and military interests of Western nations coincided. 
D) The monetary system received support from both of the superpowers,the United States and the Soviet Union. 
E) The system did not require any major sacrifices from Great Britain,which was its main supporter. 
A) Fixing all currencies to the unchanging gold standard caused economic prosperity for all of the major countries. 
B) The World Trade Organization facilitated cooperation by providing monetary support during crises. 
C) The economic,political,and military interests of Western nations coincided. 
D) The monetary system received support from both of the superpowers,the United States and the Soviet Union. 
E) The system did not require any major sacrifices from Great Britain,which was its main supporter.

Question 18

Why do we need international monetary regimes?

Accepted Answer

A) Each country would rather address its own currency problems without outside interference. 
B) Countries usually want to create a single global currency. 
C) There is no international government to coordinate monetary relations. 
D) Governments have an interest in creating a global government. 
E) International organizations such as the International Monetary Fund (IMF)can enforce currency standards. 
A) Each country would rather address its own currency problems without outside interference. 
B) Countries usually want to create a single global currency. 
C) There is no international government to coordinate monetary relations. 
D) Governments have an interest in creating a global government. 
E) International organizations such as the International Monetary Fund (IMF)can enforce currency standards.

Question 19

Which of the following correctly matches the area of the globe with the common currency shared?

Accepted Answer

A) Caribbean-euro. 
B) South Asia-dollar. 
C) West Africa-euro. 
D) South America-yen. 
E) Oceania-dollar. 
A) Caribbean-euro. 
B) South Asia-dollar. 
C) West Africa-euro. 
D) South America-yen. 
E) Oceania-dollar.

Question 20

Why would a country use another country's currency instead of its own?

Accepted Answer

A) This is the first step when a larger country takes over a smaller country. 
B) Smaller countries want to reduce the instability of their own currencies. 
C) The International Monetary Fund (IMF)forces smaller countries to adopt the U.S.dollar when they have serious currency crises. 
D) Larger countries force smaller countries to adopt their currencies in order to facilitate trade. 
E) Larger countries want to reduce the possibility of a global currency crisis. 
A) This is the first step when a larger country takes over a smaller country. 
B) Smaller countries want to reduce the instability of their own currencies. 
C) The International Monetary Fund (IMF)forces smaller countries to adopt the U.S.dollar when they have serious currency crises. 
D) Larger countries force smaller countries to adopt their currencies in order to facilitate trade. 
E) Larger countries want to reduce the possibility of a global currency crisis.

Why did European countries adopt the euro?

There have been numerous international monetary orders in the past two centuries.Which fact explains why we have had to go through several monetary orders to reach the current one?

What is a commodity standard?

What explains why governments choose particular currency arrangements?

Explain how an international monetary regime depends on interactions among the governments of the world's major economies.

Which of the following events did NOT contribute to the start of the Mexican peso crisis of 1994?

Germany supported the creation of the euro for all of the following reasons EXCEPT:

Which of the following events in the history of international monetary regimes came first?

During the classic gold standard era,which country was NOT pivotal to maintaining the system?

What type of country would be the strongest supporter of adopting the euro?

Why would a country change its interest rate?

A national monetary system represents a public good because:

A currency that has depreciated is one that:

Why do monetary interactions between governments sometimes resemble a Prisoner's Dilemma?

Which of the following is able to carry out monetary policy?

Why did the Bretton Woods System succeed?

Why do we need international monetary regimes?

Which of the following correctly matches the area of the globe with the common currency shared?

Why would a country use another country's currency instead of its own?

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 European countries adopt the euro?

There have been numerous international monetary orders in the past two centuries.Which fact explains why we have had to go through several monetary orders to reach the current one?

What is a commodity standard?

What explains why governments choose particular currency arrangements?

Explain how an international monetary regime depends on interactions among the governments of the world's major economies.

Which of the following events did NOT contribute to the start of the Mexican peso crisis of 1994?

Germany supported the creation of the euro for all of the following reasons EXCEPT:

Which of the following events in the history of international monetary regimes came first?

During the classic gold standard era,which country was NOT pivotal to maintaining the system?

What type of country would be the strongest supporter of adopting the euro?

Why would a country change its interest rate?

A national monetary system represents a public good because:

A currency that has depreciated is one that:

Why do monetary interactions between governments sometimes resemble a Prisoner's Dilemma?

Which of the following is able to carry out monetary policy?

Why did the Bretton Woods System succeed?

Why do we need international monetary regimes?

Which of the following correctly matches the area of the globe with the common currency shared?

Why would a country use another country's currency instead of its own?

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