Question 1

The current exchange rate system can best be characterized as a ___ system.

Accepted Answer

A) free float 
B) managed float 
C) fixed-rate 
D) hybrid 
A) free float 
B) managed float 
C) fixed-rate 
D) hybrid

Question 2

In a fixed-rate system central banks would NOT maintain currency values by

Accepted Answer

A) increasing the money supplies of nations with overvalued currencies 
B) boosting the money supplies of nations with undervalued currencies 
C) buying up overvalued currencies in the foreign exchange market 
D) selling undervalued currencies in the foreign exchange market 
A) increasing the money supplies of nations with overvalued currencies 
B) boosting the money supplies of nations with undervalued currencies 
C) buying up overvalued currencies in the foreign exchange market 
D) selling undervalued currencies in the foreign exchange market

Question 3

The characteristic of gold that is most important to the success of a gold standard is that it is

Accepted Answer

A) portable 
B) storable 
C) easily standardized 
D) expensive to produce as well as universally acceptable 
A) portable 
B) storable 
C) easily standardized 
D) expensive to produce as well as universally acceptable

Question 4

________ is nonconvertible paper money backed only by faith in the monetary authorities.

Accepted Answer

A) Specie 
B) Fiat money 
C) Seignorage 
D) Par value 
A) Specie 
B) Fiat money 
C) Seignorage 
D) Par value

Question 5

The Bretton Woods system fell apart because

Accepted Answer

A) of the oil crisis 
B) U.S.monetary policy was too expansionary 
C) the United States ran a large trade deficit 
D) the United States no longer supported a pegged gold standard 
A) of the oil crisis 
B) U.S.monetary policy was too expansionary 
C) the United States ran a large trade deficit 
D) the United States no longer supported a pegged gold standard

Question 6

Under which one of the following would a country that followed policies leading to a lower inflation rate than that experienced by its trading partners would come under pressure to expand its money supply?

Accepted Answer

A) fixed-rate currency system 
B) freely-floating currency system 
C) managed float 
D) currency board 
A) fixed-rate currency system 
B) freely-floating currency system 
C) managed float 
D) currency board

Question 7

The________ is an exchange rate system that is relatively free from central bank and other government-type interventions.

Accepted Answer

A) managed float 
B) clean float 
C) dirty float 
D) target-zone arrangement 
A) managed float 
B) clean float 
C) dirty float 
D) target-zone arrangement

Question 8

The European Monetary System is best described as a

Accepted Answer

A) clean float 
B) target-zone arrangement 
C) dirty float 
D) managed float 
A) clean float 
B) target-zone arrangement 
C) dirty float 
D) managed float

Question 9

Which of the following produced a valuable lesson about exchange-rate stability and target-zone arrangements?

Accepted Answer

A) European Monetary System 
B) European Community 
C) European Common Market 
D) European Union 
A) European Monetary System 
B) European Community 
C) European Common Market 
D) European Union

Question 10

In order to boost the value of the DM relative to the dollar

Accepted Answer

A) the Fed should sell dollars for DM and the Bundesbank should buy DM with dollars 
B) the Fed should sell dollars for DM and the Bundesbank should buy dollars with DM 
C) the Fed should sell DM for dollars and the Bundesbank should sell dollars for DM 
D) the Fed should sell DM for dollars and the Bundesbank should buy DM with dollars 
A) the Fed should sell dollars for DM and the Bundesbank should buy DM with dollars 
B) the Fed should sell dollars for DM and the Bundesbank should buy dollars with DM 
C) the Fed should sell DM for dollars and the Bundesbank should sell dollars for DM 
D) the Fed should sell DM for dollars and the Bundesbank should buy DM with dollars

Question 11

A gold standard ensures a long-run tendency toward price stability because

Accepted Answer

A) gold is desirable 
B) gold is durable and storable 
C) the cost of producing an ounce of gold stays relatively constant overtime 
D) gold supply is directly related to consumer satisfaction 
A) gold is desirable 
B) gold is durable and storable 
C) the cost of producing an ounce of gold stays relatively constant overtime 
D) gold supply is directly related to consumer satisfaction

The current exchange rate system can best be characterized as a ___ system.

In a fixed-rate system central banks would NOT maintain currency values by

The characteristic of gold that is most important to the success of a gold standard is that it is

________ is nonconvertible paper money backed only by faith in the monetary authorities.

The Bretton Woods system fell apart because

Under which one of the following would a country that followed policies leading to a lower inflation rate than that experienced by its trading partners would come under pressure to expand its money supply?

The________ is an exchange rate system that is relatively free from central bank and other government-type interventions.

The European Monetary System is best described as a

Which of the following produced a valuable lesson about exchange-rate stability and target-zone arrangements?

In order to boost the value of the DM relative to the dollar

A gold standard ensures a long-run tendency toward price stability because

Introduction

The Determination of Exchange Rates

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters

Exam 3: The International Monetary System

The current exchange rate system can best be characterized as a ___ system.

In a fixed-rate system central banks would NOT maintain currency values by

The characteristic of gold that is most important to the success of a gold standard is that it is

________ is nonconvertible paper money backed only by faith in the monetary authorities.

The Bretton Woods system fell apart because

Under which one of the following would a country that followed policies leading to a lower inflation rate than that experienced by its trading partners would come under pressure to expand its money supply?

The________ is an exchange rate system that is relatively free from central bank and other government-type interventions.

The European Monetary System is best described as a

Which of the following produced a valuable lesson about exchange-rate stability and target-zone arrangements?

In order to boost the value of the DM relative to the dollar

A gold standard ensures a long-run tendency toward price stability because

Introduction

The Determination of Exchange Rates

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters