Question 1

In a managed float exchange-rate system

Accepted Answer

A)  governments commit themselves to maintaining a specific fixed price against other currencies 
B)  governments allow their currencies to float freely. 
C)  governments intervene in the foreign exchange market to influence the value of their currency. 
D)  currency speculation is prohibited. 
E)  governments only change the value of their currency very rarely. 
A)  governments commit themselves to maintaining a specific fixed price against other currencies 
B)  governments allow their currencies to float freely. 
C)  governments intervene in the foreign exchange market to influence the value of their currency. 
D)  currency speculation is prohibited. 
E)  governments only change the value of their currency very rarely.

Question 2

The income subcategory of the balance of payments current account system registers

Accepted Answer

A)  imports and exports of manufacturing and agricultural products. 
B)  imports and exports of service sector activities. 
C)  payments such as royalties, interest payments and profits. 
D)  remittances, gifts and foreign aid. 
E)  direct foreign investment. 
A)  imports and exports of manufacturing and agricultural products. 
B)  imports and exports of service sector activities. 
C)  payments such as royalties, interest payments and profits. 
D)  remittances, gifts and foreign aid. 
E)  direct foreign investment.

Question 3

Which of the following innovations was not introduced by the Bretton Woods system?

Accepted Answer

A)  Greater exchange-rate flexibility 
B)  Capital controls 
C)  A stabilization fund 
D)  The IMF 
E)  The World Bank 
A)  Greater exchange-rate flexibility 
B)  Capital controls 
C)  A stabilization fund 
D)  The IMF 
E)  The World Bank

Question 4

The capital account of the balance of payments accounting system registers the financial flows between the United States and the rest of the world.Which of the following is not one of its subcategories?

Accepted Answer

A)  Total US Owned Assets Abroad 
B)  Foreign assets in the United States 
C)  Balance of Trade 
D)  Balance on Capital Account 
E)  Overall Balance (statistical adjustment) 
A)  Total US Owned Assets Abroad 
B)  Foreign assets in the United States 
C)  Balance of Trade 
D)  Balance on Capital Account 
E)  Overall Balance (statistical adjustment)

Question 5

Immigrant worker remittances,gifts and foreign aid are registered in the

Accepted Answer

A)  direct foreign investment account subcategory of the balance of payments current account system. 
B)  unilateral transfers account subcategory of the balance of payments current account system. 
C)  the income account subcategory of the balance of payments current account system. 
D)  the service account subcategory of the balance of payments current account system. 
E)  the trade account subcategory of the balance of payments current account system. 
A)  direct foreign investment account subcategory of the balance of payments current account system. 
B)  unilateral transfers account subcategory of the balance of payments current account system. 
C)  the income account subcategory of the balance of payments current account system. 
D)  the service account subcategory of the balance of payments current account system. 
E)  the trade account subcategory of the balance of payments current account system.

Question 6

Imports and exports of activities such as banking,insurance,transportation and tourism are registered in the

Accepted Answer

A)  the trade account. 
B)  the service account. 
C)  the income account. 
D)  the expense account. 
E)  unilateral transfers account. 
A)  the trade account. 
B)  the service account. 
C)  the income account. 
D)  the expense account. 
E)  unilateral transfers account.

Question 7

The trade in goods subcategory of the balance of payments current account system registers

Accepted Answer

A)  imports and exports of manufacturing and agricultural products. 
B)  imports and exports of service sector activities. 
C)  payments such as royalties, interest payments and profits. 
D)  remittances, gifts and foreign aid. 
E)  direct foreign investment. 
A)  imports and exports of manufacturing and agricultural products. 
B)  imports and exports of service sector activities. 
C)  payments such as royalties, interest payments and profits. 
D)  remittances, gifts and foreign aid. 
E)  direct foreign investment.

Question 8

Most countries have national currencies that are not generally accepted as legal payment outside their borders.

Accepted Answer

A) True 
 B)False

Question 9

The Smithsonian realignment solved neither the economic imbalances nor the political conflicts that were the cause of the Bretton Woods system's weakening.

Accepted Answer

A) True 
 B)False

Question 10

In floating exchange rate systems,balance of payments adjustment occurs through changes in domestic prices.

Accepted Answer

A) True 
 B)False

Question 11

The gold standard emerged at the center of the international monetary system during the

Accepted Answer

A)  1790s. 
B)  1830s. 
C)  1870s. 
D)  1910s. 
E)  1940s. 
A)  1790s. 
B)  1830s. 
C)  1870s. 
D)  1910s. 
E)  1940s.

Question 12

In a pure floating exchange-rate system governments engage in foreign exchange market intervention to influence the value of their currency.

Accepted Answer

A) True 
 B)False

Question 13

The current account of the balance of payments accounting system has several subcategories.Which of the following is not one of those subcategories?

Accepted Answer

A)  The trade account 
B)  The service account 
C)  The income account 
D)  The expense account 
E)  Unilateral transfers account 
A)  The trade account 
B)  The service account 
C)  The income account 
D)  The expense account 
E)  Unilateral transfers account

Question 14

If a government is unwilling to accept occasional deflation and inflation caused by balance of payments adjustments,

Accepted Answer

A)  it cannot maintain a fixed exchange rate system. 
B)  it must maintain a fixed exchange system. 
C)  it can both stabilize exchange rates and domestic prices at the same time. 
D)  it cannot trade with other countries. 
E)  it cannot maintain a floating exchange system. 
A)  it cannot maintain a fixed exchange rate system. 
B)  it must maintain a fixed exchange system. 
C)  it can both stabilize exchange rates and domestic prices at the same time. 
D)  it cannot trade with other countries. 
E)  it cannot maintain a floating exchange system.

Question 15

A currency's exchange-rate is determined by the interaction between the supply and demand for currencies in the foreign exchange market.

Accepted Answer

A) True 
 B)False

Question 16

The sole purpose of the international monetary system is to

Accepted Answer

A)  maximize the profits of MNCs. 
B)  protect the rights of home countries of MNCs. 
C)  protect the rights of host countries of MNCs. 
D)  control and regulate the currencies of countries. 
E)  facilitate international economic exchange. 
A)  maximize the profits of MNCs. 
B)  protect the rights of home countries of MNCs. 
C)  protect the rights of host countries of MNCs. 
D)  control and regulate the currencies of countries. 
E)  facilitate international economic exchange.

Question 17

Fixed exchange-rates provide exchange rate stability but they also prevent governments from using monetary policy to manage domestic economic activity.

Accepted Answer

A) True 
 B)False

Question 18

An exchange-rate system is a set of rules governing how much currencies in the foreign exchange market can

Accepted Answer

A)  rise or fall in value. 
B)  be traded for imports. 
C)  be traded for exports. 
D)  be used to make debt payments. 
E)  be regulated by the IMF. 
A)  rise or fall in value. 
B)  be traded for imports. 
C)  be traded for exports. 
D)  be used to make debt payments. 
E)  be regulated by the IMF.

Question 19

Explain the differences between fixed and floating currency exchange systems.Which is better?

Accepted Answer

Fixed and floating currency exchange sys

Question 20

In the balance of payments accounting system,if a country

Accepted Answer

A)  has a current account deficit, it must have a capital account surplus. 
B)  has a current account deficit, it must have a capital account deficit. 
C)  has a current account surplus, it must have a capital account surplus. 
D)  has a capital account deficit, it must have a current account deficit. 
E)  has a capital account surplus, it must have a current account surplus. 
A)  has a current account deficit, it must have a capital account surplus. 
B)  has a current account deficit, it must have a capital account deficit. 
C)  has a current account surplus, it must have a capital account surplus. 
D)  has a capital account deficit, it must have a current account deficit. 
E)  has a capital account surplus, it must have a current account surplus.

In a managed float exchange-rate system

The income subcategory of the balance of payments current account system registers

Which of the following innovations was not introduced by the Bretton Woods system?

The capital account of the balance of payments accounting system registers the financial flows between the United States and the rest of the world.Which of the following is not one of its subcategories?

Immigrant worker remittances,gifts and foreign aid are registered in the

Imports and exports of activities such as banking,insurance,transportation and tourism are registered in the

The trade in goods subcategory of the balance of payments current account system registers

Most countries have national currencies that are not generally accepted as legal payment outside their borders.

The Smithsonian realignment solved neither the economic imbalances nor the political conflicts that were the cause of the Bretton Woods system's weakening.

In floating exchange rate systems,balance of payments adjustment occurs through changes in domestic prices.

The gold standard emerged at the center of the international monetary system during the

In a pure floating exchange-rate system governments engage in foreign exchange market intervention to influence the value of their currency.

The current account of the balance of payments accounting system has several subcategories.Which of the following is not one of those subcategories?

If a government is unwilling to accept occasional deflation and inflation caused by balance of payments adjustments,

A currency's exchange-rate is determined by the interaction between the supply and demand for currencies in the foreign exchange market.

The sole purpose of the international monetary system is to

Fixed exchange-rates provide exchange rate stability but they also prevent governments from using monetary policy to manage domestic economic activity.

An exchange-rate system is a set of rules governing how much currencies in the foreign exchange market can

Explain the differences between fixed and floating currency exchange systems.Which is better?

In the balance of payments accounting system,if a country

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

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

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Exam 10: The International Monetary System

In a managed float exchange-rate system

The income subcategory of the balance of payments current account system registers

Which of the following innovations was not introduced by the Bretton Woods system?

The capital account of the balance of payments accounting system registers the financial flows between the United States and the rest of the world.Which of the following is not one of its subcategories?

Immigrant worker remittances,gifts and foreign aid are registered in the

Imports and exports of activities such as banking,insurance,transportation and tourism are registered in the

The trade in goods subcategory of the balance of payments current account system registers

Most countries have national currencies that are not generally accepted as legal payment outside their borders.

The Smithsonian realignment solved neither the economic imbalances nor the political conflicts that were the cause of the Bretton Woods system's weakening.

In floating exchange rate systems,balance of payments adjustment occurs through changes in domestic prices.

The gold standard emerged at the center of the international monetary system during the

In a pure floating exchange-rate system governments engage in foreign exchange market intervention to influence the value of their currency.

The current account of the balance of payments accounting system has several subcategories.Which of the following is not one of those subcategories?

If a government is unwilling to accept occasional deflation and inflation caused by balance of payments adjustments,

A currency's exchange-rate is determined by the interaction between the supply and demand for currencies in the foreign exchange market.

The sole purpose of the international monetary system is to

Fixed exchange-rates provide exchange rate stability but they also prevent governments from using monetary policy to manage domestic economic activity.

An exchange-rate system is a set of rules governing how much currencies in the foreign exchange market can

Explain the differences between fixed and floating currency exchange systems.Which is better?

In the balance of payments accounting system,if a country

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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