Exam 2: The International Monetary System

The People's Republic of China has two official currencies,the Chinese renminbi (RMB)and the yuan (CNY).

A review of the evolution of the Global Monetary System shows that capital flows dominate trade in which of the following eras EXCEPT:

The ability of a country to profit from its ability to print money is known as:

Dollarization is a common solution for countries suffering from currency revaluation.

One of the innovations introduced by Bretton Woods was the creation of the Special Drawing Right or SDR.The SDR is an international reserve asset created by the:

Of the following,which is NOT a trade-off that must be dealt with in any exchange rate regime?

Among IMF member countries since 2010 the dominating exchange rate regime has been:

By and large,high capital mobility is forcing emerging market nations to choose between the two extremes of a free floating exchange rate or a hard peg regime.

Another name for the International Bank for Reconstruction and Development is:

A small economy country whose GDP is heavily dependent on trade with the United States could use a(n)________ exchange rate regime to minimize the risk to their economy that could arise due to unfavorable changes in the exchange rate.

A currency board exists when a country's central bank commits to back a fraction of its money base with foreign reserves at all times.

You have been hired as a consultant to the central bank for a country that has for many years suffered from repeated currency crises and depends heavily on the U.S.financial and product markets.Which of the following policies would have the greatest effectiveness for reducing currency volatility of the client country with the United States?

Since 2009 the IMF's exchange rate regime classification system uses a "de facto classification" methodology.Under this system,currencies that are predominantly market-driven are considered to be:

World War I caused the suspension of the gold standard for fixed international exchange rates because the war:

Dollarization is the use of the U.S.dollar as the official currency of the country.List and explain the arguments for and against dollarization.Provide example/s of countries that used the dollar as its official currency.

Under the terms of Bretton Woods,countries tried to maintain the value of their currencies to within 1% of a hybrid security made up of the U.S.dollar,British pound,and Japanese yen.

Which of the following factors make it difficult for emerging market economies to choose a specific currency regime?

Based on the premise that,other things equal,countries would prefer a fixed exchange rate: Variable rates provide stability in international prices for the conduct of trade.

List and explain three benefits the euro would generate for the states participating in the European Economic and Monetary Union.

Since 2009 the IMF's exchange rate regime classification system uses a "de facto classification" methodology.Under this system,a country that has given up their own sovereignty over monetary policy is considered to have: