Question 1

How can international companies reduce their economic exposure in a world of constantly fluctuating exchange rates?

Accepted Answer

For companies operating in a world of vo

Question 2

The current system of foreign exchange is a mixed system of government intervention and speculative activity.

Accepted Answer

A) True 
 B)False

Question 3

The agreement reached at Bretton Woods established the International Monetary Fund (IMF) and the World Bank.

Accepted Answer

A) True 
 B)False

Question 4

An effective business strategy to reduce economic exposure is to contract out high-value-added manufacturing.

Accepted Answer

A) True 
 B)False

Question 5

The ________ refers to the institutional arrangements that govern exchange rates.

Accepted Answer

A)  World Bank 
B)  international monetary system 
C)  currency exchange 
D)  gold standard 
A)  World Bank 
B)  international monetary system 
C)  currency exchange 
D)  gold standard

Question 6

It is difficult if not impossible to get adequate insurance coverage for exchange rate changes that

Accepted Answer

A)  will occur in the next few weeks. 
B)  might occur in the next few months. 
C)  might occur several years in the future. 
D)  might occur in the coming days. 
A)  will occur in the next few weeks. 
B)  might occur in the next few months. 
C)  might occur several years in the future. 
D)  might occur in the coming days.

Question 7

________ limits the ability of the government to print money and, thereby, create inflationary pressures.

Accepted Answer

A)  A dirty-float system 
B)  A managed-float system 
C)  The European Monetary System 
D)  A currency board system 
A)  A dirty-float system 
B)  A managed-float system 
C)  The European Monetary System 
D)  A currency board system

Question 8

What is the Bretton Woods agreement? How was it different from the gold standard?

Accepted Answer

The Bretton Woods agreement, signed in 1

Question 9

The amount of a currency needed to purchase one ounce of gold was referred to as the

Accepted Answer

A)  golden rule. 
B)  gold standard. 
C)  pegged gold value. 
D)  gold par value. 
A)  golden rule. 
B)  gold standard. 
C)  pegged gold value. 
D)  gold par value.

Question 10

Which of the following will help a company hedge against currency fluctuations?

Accepted Answer

A)  finding a large supplier to supply all the raw materials 
B)  manufacturing raw materials in-house 
C)  basing business in a single country 
D)  dispersing production to different geographic locations 
A)  finding a large supplier to supply all the raw materials 
B)  manufacturing raw materials in-house 
C)  basing business in a single country 
D)  dispersing production to different geographic locations

Question 11

In the face of unpredictable movements in exchange rates, businesses should

Accepted Answer

A)  pursue strategies that will reduce their economic exposure. 
B)  pursue strategies that will decrease their strategic flexibility. 
C)  pursue strategies that will reduce their foreign market exposure. 
D)  sell off investments in foreign subsidiaries and consolidate domestic facilities. 
A)  pursue strategies that will reduce their economic exposure. 
B)  pursue strategies that will decrease their strategic flexibility. 
C)  pursue strategies that will reduce their foreign market exposure. 
D)  sell off investments in foreign subsidiaries and consolidate domestic facilities.

Question 12

International Monetary Fund members were ________ in the Jamaica agreement.

Accepted Answer

A)  not permitted to sell their own gold reserves 
B)  permitted to sell their own gold reserves, but only at the price set by IMF 
C)  required to hold their gold reserves in escrow 
D)  permitted to sell their own gold reserves at the market price 
A)  not permitted to sell their own gold reserves 
B)  permitted to sell their own gold reserves, but only at the price set by IMF 
C)  required to hold their gold reserves in escrow 
D)  permitted to sell their own gold reserves at the market price

Question 13

The monetary autonomy argument is supported by the advocates of

Accepted Answer

A)  a dirty-float system. 
B)  fixed exchange rates. 
C)  pegged exchange rates. 
D)  floating exchange rates. 
A)  a dirty-float system. 
B)  fixed exchange rates. 
C)  pegged exchange rates. 
D)  floating exchange rates.

Question 14

The IMF does not expect governments to meet any obligations except to pay back the money it borrows.

Accepted Answer

A) True 
 B)False

Question 15

The international monetary system refers to the institutional arrangements that govern exchange rates.

Accepted Answer

A) True 
 B)False

Question 16

A ________ is a situation in which a country cannot service its foreign debt obligations.

Accepted Answer

A)  currency crisis 
B)  banking crisis 
C)  foreign debt crisis 
D)  moral crisis 
A)  currency crisis 
B)  banking crisis 
C)  foreign debt crisis 
D)  moral crisis

Question 17

Which of the following observations is true of the current system of the foreign exchange market?

Accepted Answer

A)  Most of the currencies can be converted to gold in the current system of foreign exchange. 
B)  The current system is driven by fixed exchange rates. 
C)  Currencies float freely against others in the current system. 
D)  The current system is a combination of government intervention and speculative activity. 
A)  Most of the currencies can be converted to gold in the current system of foreign exchange. 
B)  The current system is driven by fixed exchange rates. 
C)  Currencies float freely against others in the current system. 
D)  The current system is a combination of government intervention and speculative activity.

Question 18

What is the gold standard? What was the major advantage of the system?

Accepted Answer

Pegging currencies to gold and guarantee

Question 19

Supporters of floating exchange rates

Accepted Answer

A)  argue that floating rates help adjust trade imbalances. 
B)  argue that floating rates lead to a more stable world monetary system. 
C)  claim that trade deficits are determined by the balance between savings and investment in a country. 
D)  claim that trade deficits are not determined by the external value of currency. 
A)  argue that floating rates help adjust trade imbalances. 
B)  argue that floating rates lead to a more stable world monetary system. 
C)  claim that trade deficits are determined by the balance between savings and investment in a country. 
D)  claim that trade deficits are not determined by the external value of currency.

Question 20

Increasingly the ________ has been acting as macroeconomic police of the world economy, insisting that countries seeking significant borrowings adopt certain macroeconomic policies.

Accepted Answer

A)  Economic and Social Council (ECOSO
C)  
B)  International Monetary Fund (IMF) 
C)  United Nations (UN) 
D)  World Bank 
A)  Economic and Social Council (ECOSO
C)  
B)  International Monetary Fund (IMF) 
C)  United Nations (UN) 
D)  World Bank

How can international companies reduce their economic exposure in a world of constantly fluctuating exchange rates?

The current system of foreign exchange is a mixed system of government intervention and speculative activity.

The agreement reached at Bretton Woods established the International Monetary Fund (IMF) and the World Bank.

An effective business strategy to reduce economic exposure is to contract out high-value-added manufacturing.

The ________ refers to the institutional arrangements that govern exchange rates.

It is difficult if not impossible to get adequate insurance coverage for exchange rate changes that

________ limits the ability of the government to print money and, thereby, create inflationary pressures.

What is the Bretton Woods agreement? How was it different from the gold standard?

The amount of a currency needed to purchase one ounce of gold was referred to as the

Which of the following will help a company hedge against currency fluctuations?

In the face of unpredictable movements in exchange rates, businesses should

International Monetary Fund members were ________ in the Jamaica agreement.

The monetary autonomy argument is supported by the advocates of

The IMF does not expect governments to meet any obligations except to pay back the money it borrows.

The international monetary system refers to the institutional arrangements that govern exchange rates.

A ________ is a situation in which a country cannot service its foreign debt obligations.

Which of the following observations is true of the current system of the foreign exchange market?

What is the gold standard? What was the major advantage of the system?

Supporters of floating exchange rates

Increasingly the ________ has been acting as macroeconomic police of the world economy, insisting that countries seeking significant borrowings adopt certain macroeconomic policies.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 11: The International Monetary System

How can international companies reduce their economic exposure in a world of constantly fluctuating exchange rates?

The current system of foreign exchange is a mixed system of government intervention and speculative activity.

The agreement reached at Bretton Woods established the International Monetary Fund (IMF) and the World Bank.

An effective business strategy to reduce economic exposure is to contract out high-value-added manufacturing.

The ________ refers to the institutional arrangements that govern exchange rates.

It is difficult if not impossible to get adequate insurance coverage for exchange rate changes that

________ limits the ability of the government to print money and, thereby, create inflationary pressures.

What is the Bretton Woods agreement? How was it different from the gold standard?

The amount of a currency needed to purchase one ounce of gold was referred to as the

Which of the following will help a company hedge against currency fluctuations?

In the face of unpredictable movements in exchange rates, businesses should

International Monetary Fund members were ________ in the Jamaica agreement.

The monetary autonomy argument is supported by the advocates of

The IMF does not expect governments to meet any obligations except to pay back the money it borrows.

The international monetary system refers to the institutional arrangements that govern exchange rates.

A ________ is a situation in which a country cannot service its foreign debt obligations.

Which of the following observations is true of the current system of the foreign exchange market?

What is the gold standard? What was the major advantage of the system?

Supporters of floating exchange rates

Increasingly the ________ has been acting as macroeconomic police of the world economy, insisting that countries seeking significant borrowings adopt certain macroeconomic policies.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Accounting and Finance in the International Business

Filters