Question 1

China's emergence as a creditor country has placed an emerging market economy in the center of the international monetary system for the first time in its history

Accepted Answer

A) True 
 B)False

Question 2

On October 19,1987,the single largest one day drop (in percentage terms)in world stock markets since WW I,the US Dow Jones Industrial Index fell by

Accepted Answer

A)  6.3 %. 
B)  9.4 %. 
C)  15.2 %. 
D)  18.5 %. 
E)  22.6%.

Question 3

In the past decade,the country with which the United States has had its largest bilateral trade deficit was

Accepted Answer

A)  Mexico. 
B)  Canada. 
C)  Japan. 
D)  China. 
E)  Germany.

Question 4

The Greek debt crisis has generated a discussion about

Accepted Answer

A)  why Germans are so afraid of inflation. 
B)  why all EU countries are not members of the euro zone. 
C)  the future viability of the EMU. 
D)  levels of the VAT tax. 
E)  China as a source of funds for European bailouts.

Question 5

Discuss the issues and countries involved in the Plaza and Louvre Accords in mid 1980s.Were they successful?

Accepted Answer

The answer of Discuss the issues and countries involved in...

Question 6

In 1985,in a compact known as the Plaza accord,the US,German,British,French and Japanese governments agreed to

Accepted Answer

A)  increase the value of the dollar against the Japanese yen and the German mark by 10-12 percent. 
B)  reduce the value of the dollar against the Japanese yen and the German mark by 10-12 percent. 
C)  reduce the value of the dollar against the Japanese yen and the German mark by 7-8 percent. 
D)  reduce the value of the dollar against the Japanese yen and the British pound by 7-8 percent. 
E)  increase the value of the dollar against the Japanese yen and the German mark by 7-8 percent.

Question 7

The ability to borrow large volumes at low interest rates credit conditions that typically generate

Accepted Answer

A)  asset bubbles. 
B)  trade bubbles. 
C)  tax bubbles. 
D)  cash hoarding in advanced industrial countries. 
E)  manufacturing unemployment in advanced industrial countries.

Question 8

According to Oatley,analysts seemed to agree that the financial turbulence which included "Black Monday" (October 19,1987)was a direct market response to the evident inability of the United States and Germany to find a cooperative solution to global current account imbalances.

Accepted Answer

A) True 
 B)False

Question 9

Since the late 1970s,European governments have desired more stable intra-European exchange rates

Accepted Answer

A)  in spite of the fact that exchange-rate costs are relatively inexpensive for most EU countries. 
B)  because the cost of floating in the EU is so high that European governments are more willing to sacrifice domestic autonomy. 
C)  because European governments are less willing to sacrifice domestic autonomy. 
D)  because EU governments were equally committed to fighting inflation. 
E)  because EU governments were required to maintain balanced budgets.

Question 10

In order to attract capital flows from current account surplus countries,the United States had to

Accepted Answer

A)  maintain relatively low interest rates. 
B)  cut government spending. 
C)  lower taxes. 
D)  maintain relatively high interest rates. 
E)  weaken the value of the dollar.

Question 11

The cost of floating exchange rates is so small that European governments have had no problem in sacrificing domestic autonomy to stabilize exchange rates.

Accepted Answer

A) True 
 B)False

Question 12

Governments recently have found themselves in fundamentally different types of distributive conflicts than those that brought down the Bretton Woods system in the early 1970s.

Accepted Answer

A) True 
 B)False

Question 13

The financial crisis of 2007-2009 acquired a global dimension

Accepted Answer

A)  because Asian financial institutions purchased mortgage-backed securities in large quantities. 
B)  in spite of debt-service problems caused by leveraged buying. 
C)  because of government budget deficit politics in advanced countries. 
D)  because Japan, France, Italy and Germany experienced their own real estate bubble bursts. 
E)  because European financial institutions purchased mortgage-backed securities in large quantities often with borrowed money.

Question 14

The 1970s had seen relatively small current-account imbalances in the major industrial countries generally adjust quickly.

Accepted Answer

A) True 
 B)False

Question 15

Discuss and analyze the contention that the US-German public squabbles over currency values and interest rates were responsible for "Black Monday" - (October 19,1987)the largest single day loss in percentage terms since WWI.

Accepted Answer

The answer of Discuss and analyze the contention that the...

Question 16

Foreign government holdings of American government debt rose from approximately

Accepted Answer

A)  $350 billion in 1999 to $1.3 trillion in 2008. 
B)  $500 billion in 1999 to $2.0 trillion in 2008. 
C)  $750 billion in 1999 to $2.5 trillion in 2008. 
D)  $1.5 trillion in 1999 to $3.0 trillion in 2008. 
E)  $750 billion in 1999 to $3.3 trillion in 2008.

Question 17

By the end of the 1980s,American foreign debt to the rest of the world had increased from

Accepted Answer

A)  $ 140 billion to more than $ 1 trillion. 
B)  $ 440 billion to more than $ 2 trillion. 
C)  $ 200 billion to more than $ 3 trillion. 
D)  $ 350 billion to more than $ 2 trillion. 
E)  $ 750 billion to more than $ 2 trillion.

Question 18

Explain why there has been more cooperation than conflict in EU's exchange-rate system since the late 1970s.Will the Greek crisis destroy the EMU?

Accepted Answer

The answer of Explain why there has been more cooperation...

Question 19

During the early 1980s protectionist pressure caused by the strength of the dollar led to policies that sought to

Accepted Answer

A)  eliminate Japanese barriers to American imports and ending what was perceived to be unfair Japanese industrial policy. 
B)  eliminate Japanese barriers to American imports and promoting a stronger pro-import American industrial policy. 
C)  accept Japanese barriers to American imports and ending what was perceived to be unfair Japanese industrial policy. 
D)  eliminate Japanese barriers to American imports and accepting what was perceived to be unfair Japanese industrial policy. 
E)  eliminate American barriers to Japanese imports and ending what was perceived to be unfair Japanese industrial policy.

Question 20

From a postwar low in 1979,by 1985 the dollar had appreciated by about

Accepted Answer

A)  10%. 
B)  20%. 
C)  30%. 
D)  50%. 
E)  70%.

Exam 11: Cooperation, conflict and Crisis in the Contemporary International Monetary System

China's emergence as a creditor country has placed an emerging market economy in the center of the international monetary system for the first time in its history

On October 19,1987,the single largest one day drop (in percentage terms) in world stock markets since WW I,the US Dow Jones Industrial Index fell by

In the past decade,the country with which the United States has had its largest bilateral trade deficit was

The Greek debt crisis has generated a discussion about

Discuss the issues and countries involved in the Plaza and Louvre Accords in mid 1980s.Were they successful?

In 1985,in a compact known as the Plaza accord,the US,German,British,French and Japanese governments agreed to

The ability to borrow large volumes at low interest rates credit conditions that typically generate

According to Oatley,analysts seemed to agree that the financial turbulence which included "Black Monday" (October 19,1987)was a direct market response to the evident inability of the United States and Germany to find a cooperative solution to global current account imbalances.

Since the late 1970s,European governments have desired more stable intra-European exchange rates

In order to attract capital flows from current account surplus countries,the United States had to

The cost of floating exchange rates is so small that European governments have had no problem in sacrificing domestic autonomy to stabilize exchange rates.

Governments recently have found themselves in fundamentally different types of distributive conflicts than those that brought down the Bretton Woods system in the early 1970s.

The financial crisis of 2007-2009 acquired a global dimension

The 1970s had seen relatively small current-account imbalances in the major industrial countries generally adjust quickly.

Discuss and analyze the contention that the US-German public squabbles over currency values and interest rates were responsible for "Black Monday" - (October 19,1987)the largest single day loss in percentage terms since WWI.

Foreign government holdings of American government debt rose from approximately

By the end of the 1980s,American foreign debt to the rest of the world had increased from

Explain why there has been more cooperation than conflict in EU's exchange-rate system since the late 1970s.Will the Greek crisis destroy the EMU?

During the early 1980s protectionist pressure caused by the strength of the dollar led to policies that sought to

From a postwar low in 1979,by 1985 the dollar had appreciated by about