Question 1

According to Oatley,the American dollar became the post WWII's foreign exchange system's reserve currency

Accepted Answer

A)  at the insistence of American MNCs. 
B)  as an unintended consequence of the Bretton Woods system. 
C)  as an intended consequence of the Bretton Woods system. 
D)  at the insistence of the IMF. 
E)  because of the inability of the US government to exchange dollars for gold. 
A)  at the insistence of American MNCs. 
B)  as an unintended consequence of the Bretton Woods system. 
C)  as an intended consequence of the Bretton Woods system. 
D)  at the insistence of the IMF. 
E)  because of the inability of the US government to exchange dollars for gold. B

Question 2

Exchange restrictions are government regulations that

Accepted Answer

A)  require substantial domestic adjustments that governments are unwilling to accept. 
B)  allow a central bank to establish a monopoly on foreign exchange. 
C)  in the 1930s allowed governments to maximize capital flows. 
D)  Americans wanted to restore after WW II to liberalize international capital markets. 
E)  were used by the IMF to disallow residents to convert domestic currency into foreign currencies to settle current-account transactions. 
A)  require substantial domestic adjustments that governments are unwilling to accept. 
B)  allow a central bank to establish a monopoly on foreign exchange. 
C)  in the 1930s allowed governments to maximize capital flows. 
D)  Americans wanted to restore after WW II to liberalize international capital markets. 
E)  were used by the IMF to disallow residents to convert domestic currency into foreign currencies to settle current-account transactions. B

Question 3

Between 1880 and 1913,the gold standard stabilized exchange rates

Accepted Answer

A)  but at the price of modest external price instability. 
B)  as well as domestic prices. 
C)  but at the price of substantial domestic price instability. 
D)  and neutralized potential political conflict caused by falling domestic prices. 
E)  until bimetallic standards were re-established after WWI. 
A)  but at the price of modest external price instability. 
B)  as well as domestic prices. 
C)  but at the price of substantial domestic price instability. 
D)  and neutralized potential political conflict caused by falling domestic prices. 
E)  until bimetallic standards were re-established after WWI. C

Question 4

Why do we live in a world where currencies are so unstable?

Accepted Answer

Currency instability can be attributed t

Question 5

The IMF was intended to limit two kinds of behavior:

Accepted Answer

A)  competitive devaluations and abuse of the stabilization fund. 
B)  competitive revaluations and exchange restrictions. 
C)  abuse of the gold standard and conditionality agreements. 
D)  exchange restrictions and conditionality agreements. 
E)  competitive devaluations and conditionality agreements. 
A)  competitive devaluations and abuse of the stabilization fund. 
B)  competitive revaluations and exchange restrictions. 
C)  abuse of the gold standard and conditionality agreements. 
D)  exchange restrictions and conditionality agreements. 
E)  competitive devaluations and conditionality agreements.

Question 6

The most important feature of a fixed exchange-rate system is that

Accepted Answer

A)  markets establish the values for currencies. 
B)  central banks establish the values for their currencies. 
C)  governments establish the values for gold and silver. 
D)  governments establish the fixed values for their currencies. 
E)  governments buy and sell their currencies. 
A)  markets establish the values for currencies. 
B)  central banks establish the values for their currencies. 
C)  governments establish the values for gold and silver. 
D)  governments establish the fixed values for their currencies. 
E)  governments buy and sell their currencies.

Question 7

Explain each of the four innovations introduced by the Bretton Woods system.

Accepted Answer

The Bretton Woods system introduced four

Question 8

What is "dollar overhang" and how did it threaten the stability of the Bretton Woods system?

Accepted Answer

Dollar overhang refers to the situation

Question 9

The Bretton Woods system

Accepted Answer

A)  represented the first time that governments explicitly made exchange rates a matter of international cooperation. 
B)  was a form of floating exchange rates. 
C)  was not fully implemented until 1949. 
D)  was an attempt to limit domestic economic autonomy after WW II. 
E)  was unsuccessful at establishing exchange rate stability in spite of rapid growth in international trade after WW II. 
A)  represented the first time that governments explicitly made exchange rates a matter of international cooperation. 
B)  was a form of floating exchange rates. 
C)  was not fully implemented until 1949. 
D)  was an attempt to limit domestic economic autonomy after WW II. 
E)  was unsuccessful at establishing exchange rate stability in spite of rapid growth in international trade after WW II.

Question 10

How does the IMF stabilization fund work?

Accepted Answer

The International Monetary Fund (IMF) st

Question 11

What were the three policy options for governments to resolve the payments imbalances that worsened with the onset of the war in Vietnam in 1965?

Accepted Answer

The three policy options for governments

Question 12

The emergence of political constraints on domestic adjustment after WW II

Accepted Answer

A)  mandated a return to rigidly fixed exchange rates. 
B)  mandated a return to successful floating rates from the 1930s. 
C)  was not influenced by the emergence of mass-based democracies. 
D)  ruled out a return to rigidly fixed exchange rates. 
E)  weakened the gold standard during a fundamental exchange disequilibrium. 
A)  mandated a return to rigidly fixed exchange rates. 
B)  mandated a return to successful floating rates from the 1930s. 
C)  was not influenced by the emergence of mass-based democracies. 
D)  ruled out a return to rigidly fixed exchange rates. 
E)  weakened the gold standard during a fundamental exchange disequilibrium.

Question 13

Why was the postwar attempt to create an international monetary system that provided both exchange rate stability and domestic economic autonomy ultimately unsuccessful?

Accepted Answer

The postwar attempt to create an interna

Question 14

Balance-of-payments adjustments

Accepted Answer

A)  in a fixed exchange system, intervention does not change the money supply. 
B)  in a fixed exchange system, intervention changes the money supply. 
C)  in a fixed exchange system, does not change the relative prices of imports and exports between two trading countries. 
D)  in a floating exchange system, does not change through exchange-rate movements. 
E)  in a floating exchange system, internal prices do not remain stable. 
A)  in a fixed exchange system, intervention does not change the money supply. 
B)  in a fixed exchange system, intervention changes the money supply. 
C)  in a fixed exchange system, does not change the relative prices of imports and exports between two trading countries. 
D)  in a floating exchange system, does not change through exchange-rate movements. 
E)  in a floating exchange system, internal prices do not remain stable.

Question 15

The shift to floating exchange rates reflected agreement among governments that the international monetary system would perform better under floating rates than under fixed rates.

Accepted Answer

A) True 
 B)False

Question 16

The Bretton Woods system represented the first time that governments explicitly made exchange rates a matter of international cooperation.

Accepted Answer

A) True 
 B)False

Question 17

What political reasons explain why most governments prefer domestic price stability over exchange rate stability?

Accepted Answer

There are several political reasons why

Question 18

According to the Oatley book,the difference between total US owned assets abroad and foreign owned assets in the United States for 2007 was

Accepted Answer

A)  a surplus of $767.8 billion. 
B)  a deficit of $767.8 billion. 
C)  a deficit of $1.289 trillion. 
D)  a surplus of $2.057 trillion. 
E)  a deficit of $733.0 billion. 
A)  a surplus of $767.8 billion. 
B)  a deficit of $767.8 billion. 
C)  a deficit of $1.289 trillion. 
D)  a surplus of $2.057 trillion. 
E)  a deficit of $733.0 billion.

Question 19

What are "balance of payment" devices? How are adjustments made under fixed and floating systems?

Accepted Answer

Balance of payment devices refer to the

Question 20

The most important feature of a floating exchange-rate system is that

Accepted Answer

A)  markets establish the values for currencies. 
B)  central banks establish the values for their currencies. 
C)  governments establish the values for gold and silver. 
D)  governments establish the fixed values for their currencies. 
E)  governments buy and sell their currencies. 
A)  markets establish the values for currencies. 
B)  central banks establish the values for their currencies. 
C)  governments establish the values for gold and silver. 
D)  governments establish the fixed values for their currencies. 
E)  governments buy and sell their currencies.

According to Oatley,the American dollar became the post WWII's foreign exchange system's reserve currency

Exchange restrictions are government regulations that

Between 1880 and 1913,the gold standard stabilized exchange rates

Why do we live in a world where currencies are so unstable?

The IMF was intended to limit two kinds of behavior:

The most important feature of a fixed exchange-rate system is that

Explain each of the four innovations introduced by the Bretton Woods system.

What is "dollar overhang" and how did it threaten the stability of the Bretton Woods system?

The Bretton Woods system

How does the IMF stabilization fund work?

What were the three policy options for governments to resolve the payments imbalances that worsened with the onset of the war in Vietnam in 1965?

The emergence of political constraints on domestic adjustment after WW II

Why was the postwar attempt to create an international monetary system that provided both exchange rate stability and domestic economic autonomy ultimately unsuccessful?

Balance-of-payments adjustments

The shift to floating exchange rates reflected agreement among governments that the international monetary system would perform better under floating rates than under fixed rates.

The Bretton Woods system represented the first time that governments explicitly made exchange rates a matter of international cooperation.

What political reasons explain why most governments prefer domestic price stability over exchange rate stability?

According to the Oatley book,the difference between total US owned assets abroad and foreign owned assets in the United States for 2007 was

What are "balance of payment" devices? How are adjustments made under fixed and floating systems?

The most important feature of a floating exchange-rate system is that

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Exam 10: The International Monetary System

According to Oatley,the American dollar became the post WWII's foreign exchange system's reserve currency

Exchange restrictions are government regulations that

Between 1880 and 1913,the gold standard stabilized exchange rates

Why do we live in a world where currencies are so unstable?

The IMF was intended to limit two kinds of behavior:

The most important feature of a fixed exchange-rate system is that

Explain each of the four innovations introduced by the Bretton Woods system.

What is "dollar overhang" and how did it threaten the stability of the Bretton Woods system?

The Bretton Woods system

How does the IMF stabilization fund work?

What were the three policy options for governments to resolve the payments imbalances that worsened with the onset of the war in Vietnam in 1965?

The emergence of political constraints on domestic adjustment after WW II

Why was the postwar attempt to create an international monetary system that provided both exchange rate stability and domestic economic autonomy ultimately unsuccessful?

Balance-of-payments adjustments

The shift to floating exchange rates reflected agreement among governments that the international monetary system would perform better under floating rates than under fixed rates.

The Bretton Woods system represented the first time that governments explicitly made exchange rates a matter of international cooperation.

What political reasons explain why most governments prefer domestic price stability over exchange rate stability?

According to the Oatley book,the difference between total US owned assets abroad and foreign owned assets in the United States for 2007 was

What are "balance of payment" devices? How are adjustments made under fixed and floating systems?

The most important feature of a floating exchange-rate system is that

International Political Economy

The World Trade Organization and the World Trade System

The Political Economy of International Trade Cooperation

A Society-Centered Approach to Trade Politics

A State-Centered Approach to Trade Politics

Trade and Development I: Import Substitution Industrialization

Trade and Development II: Economic Reform

Multinational Corporations in the Global Economy

The Politics of Multinational Corporations

Cooperation, conflict and Crisis in the Contemporary International Monetary System

A Society-Centered Approach to Monetary and Exchange-Rate Policies

A State-Centered Approach to Monetary and Exchange-Rate Policies

Developing Countries and International Finance I: the Latin American Debt Crisis

Developing Countries and International Finance II: a Decade of Crises

Globalization: Consequences and Controversies

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