Exam 2: The International Monetary System

Dollarization is the use of the U.S. dollar as the official currency of the country. List and explain the arguments for and against dollarization. Provide example/s of countries that used the dollar as its official currency.

The post WWII international monetary agreement that was developed in 1944 is known as the:

China today is a clear example of a nation that has chosen the following policies EXCEPT:

Under the gold standard of currency exchange that existed from 1879 to 1914, an ounce of gold cost $20.67 in U.S. dollars and £4.2474 in British pounds. Therefore, the exchange rate of pounds per dollar under this fixed exchange regime was:

Since March 1973, when exchange rates become more volatile and less predictable than during the "fixed" exchange rate period, the nominal exchange rate index of the U.S. dollar peaked in 2011.

The members of the EU do have relative freedom to set their own fiscal policies-government spending, taxation, and the creation of government surpluses or deficits. They are expected to keep deficit spending within limits.

Which of the following is NOT an attribute of the "ideal" currency?

Since 2009 the IMF's exchange rate regime classification system uses a "de facto classification" methodology. Under this system, countries with "fixed exchange rates" are considered to have:

A currency board exists when a country's central bank commits to back its money supply entirely with foreign reserves at all times.

The ability of a country to profit from its ability to print money is known as:

All exchange rate regimes must deal with the trade-off between rules and discretion as well as between cooperation and independence.

Today, the United States has been ejected from the International Monetary Fund for refusal to pay annual dues.

The Euro currency is fixed against other currencies on the international currency exchange markets, but allows member country currencies to float against each other.

Based on the premise that, other things equal, countries would prefer a fixed exchange rate, which of the following statements is NOT true?

According to the terminology associated with changes in currency values, depreciation is a case when a currency's value relative to other currencies is changed by a government.

Which of the following is a way in which the euro affects markets?

In January 2000 Ecuador officially replaced its national currency, the Ecuadorian sucre, with the U.S. dollar. This practice is known as:

For the three years from early 2002 to early 2005, the euro maintained a strong and steady rise in value against the U.S. dollar (USD). After a brief respite in 2005, the euro continued its climb against the USD into 2008. Which of the following were NOT a contributing factor in the assent of the euro and the decline in the dollar?

From the time of its creation through September 2017, the euro peaked versus the USD in April 2008 at around $1.60/€.

Dollarization is a common solution for countries suffering from currency revaluation.