Question 1

What is a floating 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 gold. 
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 during currency crises. 
D) A monetary system in which exchange rates are allowed to change according to their market prices. 
E) A trading system in which governments do not 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 gold. 
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 during currency crises. 
D) A monetary system in which exchange rates are allowed to change according to their market prices. 
E) A trading system in which governments do not limit how many goods can be sent between countries.

Question 2

Which of the following is an international monetary institution?

Accepted Answer

A) The World Trade Organization. 
B) The classical gold standard. 
C) The German government. 
D) The British pound. 
E) The United States Federal Reserve. 
A) The World Trade Organization. 
B) The classical gold standard. 
C) The German government. 
D) The British pound. 
E) The United States Federal Reserve.

Question 3

If a country has adopted a fixed exchange rate,what tool(s)has it lost to battle economic recessions?

Accepted Answer

A) The ability to spend money. 
B) The ability to place tariffs on imports. 
C) The ability to lower or raise interest rates through a central bank. 
D) The ability to use foreign currency. 
E) The ability to allow capitalism to adjust itself. 
A) The ability to spend money. 
B) The ability to place tariffs on imports. 
C) The ability to lower or raise interest rates through a central bank. 
D) The ability to use foreign currency. 
E) The ability to allow capitalism to adjust itself.

Question 4

Why would a country adopt floating exchange rates?

Accepted Answer

A) Floating exchange rates allow a government the freedom to pursue its own monetary policies. 
B) A floating exchange rate reduces the likelihood of abrupt changes in currency values. 
C) Floating exchange rates are beneficial for borrowers of foreign funds. 
D) Floating exchange rates make international trade less risky. 
E) Floating exchange rates make international travel more convenient. 
A) Floating exchange rates allow a government the freedom to pursue its own monetary policies. 
B) A floating exchange rate reduces the likelihood of abrupt changes in currency values. 
C) Floating exchange rates are beneficial for borrowers of foreign funds. 
D) Floating exchange rates make international trade less risky. 
E) Floating exchange rates make international travel more convenient.

Question 5

Which of the following do national governments NOT control?

Accepted Answer

A) The printing of bills. 
B) The minting of coins. 
C) The choice of currency. 
D) The control of the money supply. 
E) The setting of a floating exchange rate. 
A) The printing of bills. 
B) The minting of coins. 
C) The choice of currency. 
D) The control of the money supply. 
E) The setting of a floating exchange rate.

Question 6

Which of the following are LEAST likely to want to switch to a floating exchange rate?

Accepted Answer

A) Farmers growing rice in California. 
B) Construction workers building homes in South Carolina. 
C) Indian companies manufacturing semiconductors for U.S.companies. 
D) New York restaurants serving French wine. 
E) British bankers lending money to Latin America. 
A) Farmers growing rice in California. 
B) Construction workers building homes in South Carolina. 
C) Indian companies manufacturing semiconductors for U.S.companies. 
D) New York restaurants serving French wine. 
E) British bankers lending money to Latin America.

Question 7

Why was the Bretton Woods System a compromise?

Accepted Answer

A) Countries agreed to go back on a gold standard if the United States forgave their war debts. 
B) Countries agreed to go on a gold standard if the U.S.dollar was depreciated before the exchange rates were set. 
C) The system provided for periodic adjustments of the price of the U.S.dollar while European countries kept their currencies pegged to a gold standard. 
D) The system combined freely floating exchange rates with the creation of the International Monetary Fund to avoid currency crises. 
E) The system combined a fixed exchange rate with the flexibility of exchange rate changes during crises. 
A) Countries agreed to go back on a gold standard if the United States forgave their war debts. 
B) Countries agreed to go on a gold standard if the U.S.dollar was depreciated before the exchange rates were set. 
C) The system provided for periodic adjustments of the price of the U.S.dollar while European countries kept their currencies pegged to a gold standard. 
D) The system combined freely floating exchange rates with the creation of the International Monetary Fund to avoid currency crises. 
E) The system combined a fixed exchange rate with the flexibility of exchange rate changes during crises.

Question 8

What are the root causes of the 2011 European monetary crisis? What lessons from previous crises are valuable in understanding this new one?

Accepted Answer

The root causes of the 2011 European mon

What is a floating exchange rate?

Which of the following is an international monetary institution?

If a country has adopted a fixed exchange rate,what tool(s)has it lost to battle economic recessions?

Why would a country adopt floating exchange rates?

Which of the following do national governments NOT control?

Which of the following are LEAST likely to want to switch to a floating exchange rate?

Why was the Bretton Woods System a compromise?

What are the root causes of the 2011 European monetary crisis? What lessons from previous crises are valuable in understanding this new one?

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 is a floating exchange rate?

Which of the following is an international monetary institution?

If a country has adopted a fixed exchange rate,what tool(s)has it lost to battle economic recessions?

Why would a country adopt floating exchange rates?

Which of the following do national governments NOT control?

Which of the following are LEAST likely to want to switch to a floating exchange rate?

Why was the Bretton Woods System a compromise?

What are the root causes of the 2011 European monetary crisis? What lessons from previous crises are valuable in understanding this new one?

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