Question 1

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

Accepted Answer

The IMF's policies designed to cool overheated economies by reining in inflation and reducing government spending have been highly criticized.One criticism is that the IMF's "one-size-fits-all" approach to macroeconomic policy is inappropriate for many countries.The IMF has also been accused of intensifying moral hazard through its rescue packages.Finally,it has been suggested that the IMF has become too powerful for an institution that lacks any real mechanism for accountability.

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

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  True

Question 4

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 5

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 6

Government projects were a factor behind the investment boom in most Southeast Asian economies.

Accepted Answer

A) True 
 B)False

Question 7

The great virtue claimed for a pegged exchange rate is that it imposes monetary discipline on a country and leads to low inflation.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Which of the following statements is true of pegged exchange rates?

Accepted Answer

A)  A pegged exchange rate allows a country's currency to be determined by market forces. 
B)  A pegged exchange rate weakens the monetary discipline of a country. 
C)  Pegged exchange rates are popular among many of the world's smaller nations. 
D)  Adopting a pegged exchange rate regime increases inflationary pressures in a country. 
A)  A pegged exchange rate allows a country's currency to be determined by market forces. 
B)  A pegged exchange rate weakens the monetary discipline of a country. 
C)  Pegged exchange rates are popular among many of the world's smaller nations. 
D)  Adopting a pegged exchange rate regime increases inflationary pressures in a country.

Question 10

Most of the loans issued by the IMF are unconditional loans.

Accepted Answer

A) True 
 B)False

Question 11

The monetary autonomy argument holds that _____.

Accepted Answer

A)  each country should be allowed to choose its own inflation rate 
B)  inflation is beneficial to a country's economy and growth 
C)  inflation is detrimental to a country's economy and growth 
D)  countries should restrict inflation based on the global standards 
A)  each country should be allowed to choose its own inflation rate 
B)  inflation is beneficial to a country's economy and growth 
C)  inflation is detrimental to a country's economy and growth 
D)  countries should restrict inflation based on the global standards

Question 12

The IMF's original function was to provide a pool of money from which members could borrow in the short term.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

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 17

Which of the following is a common criticism against IMF?

Accepted Answer

A)  IMF lacks any real mechanism for accountability. 
B)  It is hesitant to help banks when they are in crisis. 
C)  IMF has not intervened to resolve the Asian crisis. 
D)  It did not try to resolve the Mexican currency crisis. 
A)  IMF lacks any real mechanism for accountability. 
B)  It is hesitant to help banks when they are in crisis. 
C)  IMF has not intervened to resolve the Asian crisis. 
D)  It did not try to resolve the Mexican currency crisis.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The Asian economic crisis was caused by high inflation rates.

Accepted Answer

A) True 
 B)False

Question 20

The gold standard called for fixed exchange rates against the U.S.dollar.

Accepted Answer

A) True 
 B)False

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

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

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.

The agreement reached at Bretton Woods established _____.

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

Government projects were a factor behind the investment boom in most Southeast Asian economies.

The great virtue claimed for a pegged exchange rate is that it imposes monetary discipline on a country and leads to low inflation.

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

Which of the following statements is true of pegged exchange rates?

Most of the loans issued by the IMF are unconditional loans.

The monetary autonomy argument holds that _____.

The IMF's original function was to provide a pool of money from which members could borrow in the short term.

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

Which of the following is a function of World Bank?

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

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

Which of the following is a common criticism against IMF?

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

The Asian economic crisis was caused by high inflation rates.

The gold standard called for fixed exchange rates against the U.S.dollar.

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

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

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

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.

The agreement reached at Bretton Woods established _____.

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

Government projects were a factor behind the investment boom in most Southeast Asian economies.

The great virtue claimed for a pegged exchange rate is that it imposes monetary discipline on a country and leads to low inflation.

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

Which of the following statements is true of pegged exchange rates?

Most of the loans issued by the IMF are unconditional loans.

The monetary autonomy argument holds that _____.

The IMF's original function was to provide a pool of money from which members could borrow in the short term.

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

Which of the following is a function of World Bank?

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

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

Which of the following is a common criticism against IMF?

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

The Asian economic crisis was caused by high inflation rates.

The gold standard called for fixed exchange rates against the U.S.dollar.

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