Question 1

When the foreign exchange market determines the relative value of a currency,we say that the country is adhering to a _____ regime.

Accepted Answer

A)  currency board exchange 
B)  pegged exchange rate 
C)  fixed exchange rate 
D)  floating exchange rate 
A)  currency board exchange 
B)  pegged exchange rate 
C)  fixed exchange rate 
D)  floating exchange rate

Question 2

_____ 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

Question 3

Contracting out manufacturing allows companies to reduce economic exposure because _____.

Accepted Answer

A)  having multiple suppliers attracts subsidies from government 
B)  it reduces the pressure on them to maintain a trade surplus 
C)  it allows companies to shift suppliers from country to country 
D)  quality issues are insignificant when manufacturing is contracted to others 
A)  having multiple suppliers attracts subsidies from government 
B)  it reduces the pressure on them to maintain a trade surplus 
C)  it allows companies to shift suppliers from country to country 
D)  quality issues are insignificant when manufacturing is contracted to others

Question 4

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 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

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

Accepted Answer

The Bretton Woods agreement,signed in 19

Question 7

Exchange rates are determined by the government under a pure "free float" system.

Accepted Answer

A) True 
 B)False

Question 8

The monetary autonomy argument is supported by the advocates of fixed exchange rates.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Discuss the pegged exchange rate regime.

Accepted Answer

Under a pegged exchange rate regime,a co

Question 11

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 12

Which of the following statements is true of the Gold standard?

Accepted Answer

A)  Gold standard was adopted only by the smaller nations of the world. 
B)  Currencies were pegged to gold under the gold standard. 
C)  Convertibility to gold was not guaranteed under the gold standard. 
D)  Gold standard was not helpful in maintaining balance-of-trade equilibrium. 
A)  Gold standard was adopted only by the smaller nations of the world. 
B)  Currencies were pegged to gold under the gold standard. 
C)  Convertibility to gold was not guaranteed under the gold standard. 
D)  Gold standard was not helpful in maintaining balance-of-trade equilibrium.

Question 13

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 14

A dirty float refers to a situation in which _____.

Accepted Answer

A)  a set of currencies are fixed against each other at some mutually agreed on exchange rate 
B)  many countries join hands to form a monetary system and an exchange rate 
C)  more than one foreign currency is used as the formal reference for a country's currency 
D)  a country tries to hold its currency against an important reference currency without a formal pegged rate 
A)  a set of currencies are fixed against each other at some mutually agreed on exchange rate 
B)  many countries join hands to form a monetary system and an exchange rate 
C)  more than one foreign currency is used as the formal reference for a country's currency 
D)  a country tries to hold its currency against an important reference currency without a formal pegged rate

Question 15

Adopting a pegged exchange rate regime increases the inflationary pressures in a country.

Accepted Answer

A) True 
 B)False

Question 16

Firms should not utilize the forward exchange market when they are faced with uncertainty about the future value of currencies.

Accepted Answer

A) True 
 B)False

Question 17

A pegged exchange rate means the value of a currency is fixed relative to a reference currency.

Accepted Answer

A) True 
 B)False

Question 18

Compare and contrast a pegged exchange system with a dirty float system of exchange rates.

Accepted Answer

A pegged exchange rate means the value o

Question 19

Gold par value refers to the _____.

Accepted Answer

A)  ratio of price of gold in a currency to price of gold in U.S. dollars 
B)  amount of a currency needed to purchase one ounce of gold 
C)  ratio of price of gold in a currency to price of gold in euros 
D)  amount of gold required to equal the reference currency that a nation is using 
A)  ratio of price of gold in a currency to price of gold in U.S. dollars 
B)  amount of a currency needed to purchase one ounce of gold 
C)  ratio of price of gold in a currency to price of gold in euros 
D)  amount of gold required to equal the reference currency that a nation is using

Question 20

After World War II,world's major industrial nations arranged their currencies against each other at a mutually agreed on exchange rate.This is an example of a _____ system.

Accepted Answer

A)  fixed exchange rate 
B)  dirty float exchange 
C)  pegged exchange rate 
D)  floating exchange rate 
A)  fixed exchange rate 
B)  dirty float exchange 
C)  pegged exchange rate 
D)  floating exchange rate

When the foreign exchange market determines the relative value of a currency,we say that the country is adhering to a _____ regime.

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

Contracting out manufacturing allows companies to reduce economic exposure because _____.

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

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

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

Exchange rates are determined by the government under a pure "free float" system.

The monetary autonomy argument is supported by the advocates of fixed exchange rates.

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

Discuss the pegged exchange rate regime.

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

Which of the following statements is true of the Gold standard?

Moral hazard arises when people behave recklessly because _____.

A dirty float refers to a situation in which _____.

Adopting a pegged exchange rate regime increases the inflationary pressures in a country.

Firms should not utilize the forward exchange market when they are faced with uncertainty about the future value of currencies.

A pegged exchange rate means the value of a currency is fixed relative to a reference currency.

Compare and contrast a pegged exchange system with a dirty float system of exchange rates.

Gold par value refers to the _____.

After World War II,world's major industrial nations arranged their currencies against each other at a mutually agreed on exchange rate.This is an example of a _____ system.

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

When the foreign exchange market determines the relative value of a currency,we say that the country is adhering to a _____ regime.

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

Contracting out manufacturing allows companies to reduce economic exposure because _____.

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

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

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

Exchange rates are determined by the government under a pure "free float" system.

The monetary autonomy argument is supported by the advocates of fixed exchange rates.

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

Discuss the pegged exchange rate regime.

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

Which of the following statements is true of the Gold standard?

Moral hazard arises when people behave recklessly because _____.

A dirty float refers to a situation in which _____.

Adopting a pegged exchange rate regime increases the inflationary pressures in a country.

Firms should not utilize the forward exchange market when they are faced with uncertainty about the future value of currencies.

A pegged exchange rate means the value of a currency is fixed relative to a reference currency.

Compare and contrast a pegged exchange system with a dirty float system of exchange rates.

Gold par value refers to the _____.

After World War II,world's major industrial nations arranged their currencies against each other at a mutually agreed on exchange rate.This is an example of a _____ system.

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