Exam 17: International Banking: Reserves, debt, and Risk

Gold constitutes the largest component of the world's international reserves.

Which of the following constitute(s)the largest component of the world's international reserves?

Under a system of fixed exchange rates,international reserves are needed to bridge the gap between monetary receipts and monetary payments.

In response to the international debt problem,the United States set up a special fund in 1986 to help make up for lost oil revenues.Under the plan,the United States would make more money available as world oil prices fell.This plan was designed to help:

A goal of the International Monetary Fund is to make short-term loans to member nations so as to allow them to correct balance of payments disequilibriums without resorting to measures that would destroy national prosperity.

When exchange rates are fixed by central bankers,the need for international reserves disappears.

A dollar shortage would indicate that the dollar is:

The U.S.dollar glut of the 1960s was due in part to:

In the 1970s,the major industrial countries abandoned the managed-floating exchange rate system and adopted a system of fixed exchange rates tied to the price of gold.

Concerning international lending risk of commercial banks,____ refers to the probability that part/all of the interest/principal of a loan will not be repaid.

The main purpose of the International Monetary Fund is to grant long-term loans to developing nations to help them finance the development of infrastructure such as roads,dams,and bridges.

With floating exchange rates,countries require sizable amounts of international reserves for the stabilization of exchange rates.

There exists a direct relationship between the degree of exchange rate flexibility and the need for international reserves.