Question 1

A country is said to be in balance-of-trade equilibrium when it produces all the goods needed for domestic consumption.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an advantage of using the gold standard?

Accepted Answer

A)  The standard makes sure that goods are not priced out from markets due to inflation. 
B)  The standard does not require a commitment from nations to maintain its currency's value. 
C)  The standard effectively prevents the devaluation of currencies across the world. 
D)  It contains a powerful mechanism for achieving balance-of-trade equilibrium by all countries. 
A)  The standard makes sure that goods are not priced out from markets due to inflation. 
B)  The standard does not require a commitment from nations to maintain its currency's value. 
C)  The standard effectively prevents the devaluation of currencies across the world. 
D)  It contains a powerful mechanism for achieving balance-of-trade equilibrium by all countries.

Question 3

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 4

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

Accepted Answer

A)  microeconomic parameters 
B)  exchange rates 
C)  gross domestic produce 
D)  foreign direct investment 
A)  microeconomic parameters 
B)  exchange rates 
C)  gross domestic produce 
D)  foreign direct investment

Question 5

Which of the following observations is true of the Bretton Woods agreement?

Accepted Answer

A)  All countries agreed to fix the value of their currency in terms of gold under the agreement. 
B)  The system accepted Pound as the official reference currency against gold. 
C)  The agreement established a floating system of monetary exchange. 
D)  Two multinational institutions, World Economic Forum and WTO, were formed under the agreement. 
A)  All countries agreed to fix the value of their currency in terms of gold under the agreement. 
B)  The system accepted Pound as the official reference currency against gold. 
C)  The agreement established a floating system of monetary exchange. 
D)  Two multinational institutions, World Economic Forum and WTO, were formed under the agreement.

Question 6

A country's trade balance is in surplus when _____.

Accepted Answer

A)  its exports are more than its imports 
B)  it experiences negative inflation 
C)  its exports equal the imports 
D)  the prices of commodities are low in the country 
A)  its exports are more than its imports 
B)  it experiences negative inflation 
C)  its exports equal the imports 
D)  the prices of commodities are low in the country

Question 7

Recent policies of the IMF have drawn a lot of criticism. Discuss these criticisms.

Accepted Answer

The IMF's policies designed to cool over

Question 8

The quality of investments declined significantly in the Asian countries during the 1990s.

Accepted Answer

A) True 
 B)False

Question 9

The agreement reached at Bretton Woods established ____.

Accepted Answer

A)  International Monetary Fund 
B)  World Economic Forum 
C)  United Nations 
D)  International Atomic Energy Agency 
A)  International Monetary Fund 
B)  World Economic Forum 
C)  United Nations 
D)  International Atomic Energy Agency

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)  In-house manufacturing of raw materials 
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)  In-house manufacturing of raw materials 
C)  Basing business in a single country 
D)  Dispersing production to different geographic locations

Question 11

Which of the following is a function of World Bank?

Accepted Answer

A)  Implementing a rigid fixed exchange rate regime 
B)  Promoting gold standard across the world 
C)  Lending money to governments for development 
D)  Implementing a flexible fixed exchange rate regime 
A)  Implementing a rigid fixed exchange rate regime 
B)  Promoting gold standard across the world 
C)  Lending money to governments for development 
D)  Implementing a flexible fixed exchange rate regime

Question 12

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

Accepted Answer

As major players in the international tr

Question 13

In the face of unpredictable movements in exchange rates, businesses should pursue strategies that will reduce their economic exposure.

Accepted Answer

A) True 
 B)False

Question 14

Discuss the arguments that favor a floating exchange rate system against a fixed exchange rate system.

Accepted Answer

There are two main elements in the case

Question 15

Which of the following is NOT a characteristic of a foreign debt crisis?

Accepted Answer

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

Question 16

Advocates of a floating exchange rate regime argue that removal of the obligation to maintain exchange rate parity would restore monetary control to a government.

Accepted Answer

A) True 
 B)False

Question 17

Identify the currency that was convertible to gold under the Bretton Woods system.

Accepted Answer

A)  Pound 
B)  Yen 
C)  Euro 
D)  Dollar 
A)  Pound 
B)  Yen 
C)  Euro 
D)  Dollar

Question 18

IMF members were permitted to sell their own gold reserves at the market price in the Jamaica agreement.

Accepted Answer

A) True 
 B)False

Question 19

A country that introduces a currency board commits itself to converting its domestic currency on demand into ____.

Accepted Answer

A)  another currency at a fixed exchange rate 
B)  gold or silver at a fixed exchange rate 
C)  gold or silver at a floating exchange rate 
D)  another currency at a floating exchange rate 
A)  another currency at a fixed exchange rate 
B)  gold or silver at a fixed exchange rate 
C)  gold or silver at a floating exchange rate 
D)  another currency at a floating exchange rate

Question 20

_____ exchange rates were declared as acceptable in the Jamaica agreement of IMF.

Accepted Answer

A)  Pegged 
B)  Fixed 
C)  Floating 
D)  Gold standard 
A)  Pegged 
B)  Fixed 
C)  Floating 
D)  Gold standard

A country is said to be in balance-of-trade equilibrium when it produces all the goods needed for domestic consumption.

Which of the following is an advantage of using the gold standard?

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

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

Which of the following observations is true of the Bretton Woods agreement?

A country's trade balance is in surplus when _____.

Recent policies of the IMF have drawn a lot of criticism. Discuss these criticisms.

The quality of investments declined significantly in the Asian countries during the 1990s.

The agreement reached at Bretton Woods established ____.

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

Which of the following is a function of World Bank?

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

In the face of unpredictable movements in exchange rates, businesses should pursue strategies that will reduce their economic exposure.

Discuss the arguments that favor a floating exchange rate system against a fixed exchange rate system.

Which of the following is NOT a characteristic of a foreign debt crisis?

Advocates of a floating exchange rate regime argue that removal of the obligation to maintain exchange rate parity would restore monetary control to a government.

Identify the currency that was convertible to gold under the Bretton Woods system.

IMF members were permitted to sell their own gold reserves at the market price in the Jamaica agreement.

A country that introduces a currency board commits itself to converting its domestic currency on demand into ____.

_____ exchange rates were declared as acceptable in the Jamaica agreement of IMF.

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of 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, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 11: The International Monetary System

A country is said to be in balance-of-trade equilibrium when it produces all the goods needed for domestic consumption.

Which of the following is an advantage of using the gold standard?

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

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

Which of the following observations is true of the Bretton Woods agreement?

A country's trade balance is in surplus when _____.

Recent policies of the IMF have drawn a lot of criticism. Discuss these criticisms.

The quality of investments declined significantly in the Asian countries during the 1990s.

The agreement reached at Bretton Woods established ____.

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

Which of the following is a function of World Bank?

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

In the face of unpredictable movements in exchange rates, businesses should pursue strategies that will reduce their economic exposure.

Discuss the arguments that favor a floating exchange rate system against a fixed exchange rate system.

Which of the following is NOT a characteristic of a foreign debt crisis?

Advocates of a floating exchange rate regime argue that removal of the obligation to maintain exchange rate parity would restore monetary control to a government.

Identify the currency that was convertible to gold under the Bretton Woods system.

IMF members were permitted to sell their own gold reserves at the market price in the Jamaica agreement.

A country that introduces a currency board commits itself to converting its domestic currency on demand into ____.

_____ exchange rates were declared as acceptable in the Jamaica agreement of IMF.

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of 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, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters