Question 1

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 2

A country that introduces a currency board commits itself to converting its domestic currency on demand into another currency at a fixed exchange rate.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

It is difficult if not impossible to get adequate insurance coverage for exchange rates 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)  are likely to 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)  are likely to occur in the coming days.

Question 5

Which of the following changes were made to the International Monetary Fund's Articles of Agreement in the Jamaica agreement?

Accepted Answer

A)  IMF members were permitted to use the U.S. dollar as the convertible currency. 
B)  Gold was declared as a formal reserve asset for IMF members. 
C)  IMF members were permitted to sell their gold reserves at the market price. 
D)  IMF members were restricted from entering the foreign exchange market. 
A)  IMF members were permitted to use the U.S. dollar as the convertible currency. 
B)  Gold was declared as a formal reserve asset for IMF members. 
C)  IMF members were permitted to sell their gold reserves at the market price. 
D)  IMF members were restricted from entering the foreign exchange market.

Question 6

A pegged exchange rate means that the value of a currency is:

Accepted Answer

A)  fixed against other currencies based on an agreement. 
B)  not determined by free market forces. 
C)  fixed relative to a reference currency. 
D)  independent of the valuations of other currencies. 
A)  fixed against other currencies based on an agreement. 
B)  not determined by free market forces. 
C)  fixed relative to a reference currency. 
D)  independent of the valuations of other currencies.

Question 7

World Bank offers low-interest loans to risky customers whose credit rating is often poor.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following arguments is against the use of fixed exchange rates?

Accepted Answer

A)  Monetary discipline is the most important determinant of a strong economy. 
B)  Each country has the freedom to choose its own inflation rate. 
C)  Market speculation can cause fluctuations in exchange rates. 
D)  Governments are likely to expand the monetary supply far too rapidly due to political pressures. 
A)  Monetary discipline is the most important determinant of a strong economy. 
B)  Each country has the freedom to choose its own inflation rate. 
C)  Market speculation can cause fluctuations in exchange rates. 
D)  Governments are likely to expand the monetary supply far too rapidly due to political pressures.

Question 9

The International Monetary Fund made pegging the Mexican peso to the dollar, a condition for lending money to the Mexican government in the 1980s.

Accepted Answer

A) True 
 B)False

Question 10

Moral hazard arises when people behave recklessly because:

Accepted Answer

A)  of the restrictions that exist in a country's monetary policy. 
B)  of the restrictions that IMF has imposed on them. 
C)  they know they will be saved if things go wrong. 
D)  they face financial difficulties arising out of external factors. 
A)  of the restrictions that exist in a country's monetary policy. 
B)  of the restrictions that IMF has imposed on them. 
C)  they know they will be saved if things go wrong. 
D)  they face financial difficulties arising out of external factors.

Question 11

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

Question 12

Countries that require substantial loans from the International Monetary Fund to survive will _____ due to IMF-mandated economic policies.

Accepted Answer

A)  benefit from a sharp expansion of demand in the long term 
B)  endure a sharp contraction of demand in the long term 
C)  benefit from a sharp expansion of demand in the short term 
D)  endure a sharp contraction of demand in the short term 
A)  benefit from a sharp expansion of demand in the long term 
B)  endure a sharp contraction of demand in the long term 
C)  benefit from a sharp expansion of demand in the short term 
D)  endure a sharp contraction of demand in the short term

Question 13

The world's four major trading currencies, the Japanese yen, the U.S. dollar, the British pound, and the European Union's euro are all free to float against each other. What is this an example of?

Accepted Answer

A)  pegged exchange rate regime 
B)  floating exchange rate regime 
C)  managed-float system 
D)  fixed exchange rate regime 
A)  pegged exchange rate regime 
B)  floating exchange rate regime 
C)  managed-float system 
D)  fixed exchange rate regime

Question 14

Moral hazard arises when people behave recklessly because they know they will be saved if things go wrong.

Accepted Answer

A) True 
 B)False

Question 15

International Development Association loans:

Accepted Answer

A)  receive direct funding from the World Bank. 
B)  must be countersigned by a partnering, wealthy country such as the United States, Japan, or Germany. 
C)  are funded through subscriptions from wealthy members. 
D)  receive direct funding from the International Monetary Fund. 
A)  receive direct funding from the World Bank. 
B)  must be countersigned by a partnering, wealthy country such as the United States, Japan, or Germany. 
C)  are funded through subscriptions from wealthy members. 
D)  receive direct funding from the International Monetary Fund.

Question 16

Which of the following is a characteristic of a foreign debt crisis?

Accepted Answer

A)  Narrowing current account deficit 
B)  Excessive expansion of domestic borrowing 
C)  Low relative price inflation rates 
D)  Asset price deflation 
A)  Narrowing current account deficit 
B)  Excessive expansion of domestic borrowing 
C)  Low relative price inflation rates 
D)  Asset price deflation

Question 17

Most of the loans issued by the IMF:

Accepted Answer

A)  are conditional loans. 
B)  are unconditional loans. 
C)  include a macroeconomic policy that calls for lower interest rates. 
D)  include a macroeconomic policy that calls for increases in public spending to improve infrastructure in a country. 
A)  are conditional loans. 
B)  are unconditional loans. 
C)  include a macroeconomic policy that calls for lower interest rates. 
D)  include a macroeconomic policy that calls for increases in public spending to improve infrastructure in a country.

Question 18

Do you think businesses can influence government policies? Explain your answer.

Accepted Answer

As major players in the international tr

Question 19

Explain the events that led to the failure of the Bretton Woods system.

Accepted Answer

The Bretton Woods system started to fall

Question 20

What is international monetary system? What are the major trading currencies?

Accepted Answer

The international monetary system refers

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

A country that introduces a currency board commits itself to converting its domestic currency on demand into another currency at a fixed exchange rate.

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

It is difficult if not impossible to get adequate insurance coverage for exchange rates that:

Which of the following changes were made to the International Monetary Fund's Articles of Agreement in the Jamaica agreement?

A pegged exchange rate means that the value of a currency is:

World Bank offers low-interest loans to risky customers whose credit rating is often poor.

Which of the following arguments is against the use of fixed exchange rates?

The International Monetary Fund made pegging the Mexican peso to the dollar, a condition for lending money to the Mexican government in the 1980s.

Moral hazard arises when people behave recklessly because:

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

Countries that require substantial loans from the International Monetary Fund to survive will _____ due to IMF-mandated economic policies.

The world's four major trading currencies, the Japanese yen, the U.S. dollar, the British pound, and the European Union's euro are all free to float against each other. What is this an example of?

Moral hazard arises when people behave recklessly because they know they will be saved if things go wrong.

International Development Association loans:

Which of the following is a characteristic of a foreign debt crisis?

Most of the loans issued by the IMF:

Do you think businesses can influence government policies? Explain your answer.

Explain the events that led to the failure of the Bretton Woods system.

What is international monetary system? What are the major trading currencies?

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 11: The International Monetary System

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

A country that introduces a currency board commits itself to converting its domestic currency on demand into another currency at a fixed exchange rate.

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

It is difficult if not impossible to get adequate insurance coverage for exchange rates that:

Which of the following changes were made to the International Monetary Fund's Articles of Agreement in the Jamaica agreement?

A pegged exchange rate means that the value of a currency is:

World Bank offers low-interest loans to risky customers whose credit rating is often poor.

Which of the following arguments is against the use of fixed exchange rates?

The International Monetary Fund made pegging the Mexican peso to the dollar, a condition for lending money to the Mexican government in the 1980s.

Moral hazard arises when people behave recklessly because:

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

Countries that require substantial loans from the International Monetary Fund to survive will _____ due to IMF-mandated economic policies.

The world's four major trading currencies, the Japanese yen, the U.S. dollar, the British pound, and the European Union's euro are all free to float against each other. What is this an example of?

Moral hazard arises when people behave recklessly because they know they will be saved if things go wrong.

International Development Association loans:

Which of the following is a characteristic of a foreign debt crisis?

Most of the loans issued by the IMF:

Do you think businesses can influence government policies? Explain your answer.

Explain the events that led to the failure of the Bretton Woods system.

What is international monetary system? What are the major trading currencies?

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters