Question 1

Helping finance the building of Europe's economy after World War II by providing low-interest loans was the initial mission of

Accepted Answer

A)  The World Trade Organization.
B)  The World Bank.
C)  The European National Bank.
D)  The International Monetary Fund.
E)  United States TreasuryF) D) and E)
G) C) and D)

Question 2

The Bretton Woods system of fixed exchange rates collapsed in 1973, and since then most countries have practiced a

Accepted Answer

A)  stepwise fixed rate exchange system.
B)  more rigid and enforceable fixed exchange rate system.
C)  managed-float system.
D)  combination of managed float systems and fixed exchange rate systems.
E)  pegged exchange rate systemF) D) and E)
G) A) and B)

Question 3

The official name of the World Bank is the International Bank for Reconstruction and Development.

Accepted Answer

A) True 
 B)False

Question 4

The Oil crisis of 1979 is one reason for the volatility of exchange rates since March of 1973.

Accepted Answer

A) True 
 B)False

Question 5

Under the exchange rate system established by the Bretton Woods agreement, the value of most currencies in terms of ______________ was fixed for long periods and was allowed to change only under a specific set of circumstances.

Accepted Answer

A)  British pound
B)  Japanese yen
C)  U.S.dollars
D)  German deutsche mark
E)  European EuroF) A) and D)
G) A) and E)

Question 6

According to our textbook, those in favour of floating exchange rates argue that floating rates

Accepted Answer

A)  discourage speculation.
B)  help confuse trade imbalances.
C)  decrease uncertainty
D)  have no effect on trade imbalances.
E)  help adjust trade imbalances.F) All of the above
G) D) and E)

Question 7

Under the _______________, money is raised through bond sales in the international capital market.

Accepted Answer

A)  International Monetary Fund
B)  World Bank
C)  World Trade Organization
D)  International Bank for Reconstruction and Development
E)  International Development AgencyF) A) and E)
G) A) and D)

Question 8

Most economists trace the break-up of the fixed exchange rate system to

Accepted Answer

A)  the U.S.macroeconomic policy package of 1965-1968.
B)  a worldwide recession.
C)  Japanese economic policy in the mid 1970s.
D)  European economic policy in the 1960s and 1970s.
E)  Japanese and German trade surpluses with the U.S.F) D) and E)
G) A) and B)

Question 9

The great strength claimed for the gold standard was that it contained a powerful mechanism for simultaneously achieving balance-of-trade equilibrium by all countries.

Accepted Answer

A) True 
 B)False

Question 10

It is argued that a floating exchange rate regime gives countries monetary policy autonomy.

Accepted Answer

A) True 
 B)False

Question 11

"Free float" exchange rates are determined by

Accepted Answer

A)  the IMF.
B)  market forces.
C)  governments.
D)  the World Bank.
E)  national banksF) B) and E)
G) B) and D)

Question 12

Describe what happened at the 1944 Bretton Woods conference.Are the monetary principles established by the Bretton Woods conference still in effect today?

Accepted Answer

In 1944, at the height of World War II, ...

Question 13

______________ are seen as a mechanism for controlling inflation and imposing economic discipline on countries.

Accepted Answer

A)  Fixed exchange rates
B)  Floating exchange rates
C)  Global exchange rates
D)  Transnational exchange rates
E)  Managed float systemsF) A) and E)
G) A) and B)

Question 14

Market forces have produced a volatile dollar exchange under a floating exchange rate regime.

Accepted Answer

A) True 
 B)False

Question 15

The IMF Articles of Agreement were heavily influenced by all of the following except

Accepted Answer

A)  the worldwide financial boom.
B)  competitive devaluations.
C)  trade wars.
D)  high unemployment.
E)  hyperinflationF) B) and E)
G) All of the above

Question 16

A ___________ occurs when a country cannot service its foreign debt obligations.

Accepted Answer

A)  banking crisis
B)  currency crisis
C)  monetary crisis
D)  foreign debt crisis
E)  liquidity crisisF) A) and B)
G) A) and C)

Question 17

Describe the difference between fixed and floating exchange rates.Which is better? Explain your answer.

Accepted Answer

Under a fixed rate system the value of a...

Question 18

Although monetary discipline was a central objective of the Bretton Woods agreement, it was recognized that a _______________ of fixed exchange rates would be too inflexible.

Accepted Answer

A)  relaxed policy
B)  rigid policy
C)  lending policy
D)  balanced policy
E)  managed policyF) B) and E)
G) A) and E)

Question 19

During the oil crisis in 1971, the Organization of Petroleum Exporting Countries increased the price of oil by ______.

Accepted Answer

A)  2 times
B)  2.5 times
C)  3 times
D)  4 times
E)  5 timesF) A) and B)
G) None of the above

Question 20

The Bretton Woods system called for fixed exchange rates against the U.S.dollar.

Accepted Answer

A) True 
 B)False

Exam 10: The Global Monetary System

Under the _______________, money is raised through bond sales in the international capital market.

Correct AnswerverifiedShow Answer

During the oil crisis in 1971, the Organization of Petroleum Exporting Countries increased the price of oil by ______.

Correct AnswerverifiedShow Answer

The IMF Articles of Agreement were heavily influenced by all of the following except

Correct AnswerverifiedShow Answer

"Free float" exchange rates are determined by

Correct AnswerverifiedShow Answer

Describe what happened at the 1944 Bretton Woods conference.Are the monetary principles established by the Bretton Woods conference still in effect today?

Correct AnswerverifiedIn 1944, at the height of World War II, ...View AnswerShow Answer

The great strength claimed for the gold standard was that it contained a powerful mechanism for simultaneously achieving balance-of-trade equilibrium by all countries.

Correct AnswerverifiedShow Answer

Helping finance the building of Europe's economy after World War II by providing low-interest loans was the initial mission of

Correct AnswerverifiedShow Answer

A ___________ occurs when a country cannot service its foreign debt obligations.

Correct AnswerverifiedShow Answer

Market forces have produced a volatile dollar exchange under a floating exchange rate regime.

Correct AnswerverifiedShow Answer

The Bretton Woods system of fixed exchange rates collapsed in 1973, and since then most countries have practiced a

Correct AnswerverifiedShow Answer

Describe the difference between fixed and floating exchange rates.Which is better? Explain your answer.

Correct AnswerverifiedUnder a fixed rate system the value of a...View AnswerShow Answer

It is argued that a floating exchange rate regime gives countries monetary policy autonomy.

Correct AnswerverifiedShow Answer

Although monetary discipline was a central objective of the Bretton Woods agreement, it was recognized that a _______________ of fixed exchange rates would be too inflexible.

Correct AnswerverifiedShow Answer

Under the exchange rate system established by the Bretton Woods agreement, the value of most currencies in terms of ______________ was fixed for long periods and was allowed to change only under a specific set of circumstances.

Correct AnswerverifiedShow Answer

Most economists trace the break-up of the fixed exchange rate system to

Correct AnswerverifiedShow Answer

The official name of the World Bank is the International Bank for Reconstruction and Development.

Correct AnswerverifiedShow Answer

The Bretton Woods system called for fixed exchange rates against the U.S.dollar.

Correct AnswerverifiedShow Answer

According to our textbook, those in favour of floating exchange rates argue that floating rates

Correct AnswerverifiedShow Answer

______________ are seen as a mechanism for controlling inflation and imposing economic discipline on countries.

Correct AnswerverifiedShow Answer

The Oil crisis of 1979 is one reason for the volatility of exchange rates since March of 1973.

Correct AnswerverifiedShow Answer

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In 1944, at the height of World War II, ...
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Under a fixed rate system the value of a...
View Answer

Correct Answer
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