Exam 11: The International Monetary System

A) fixed exchange rate regime
B) dirty-float system
C) floating exchange rate regime
D) pegged exchange rate regime

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) Implementing a rigid fixed exchange rate regime
B) Promoting the gold standard across the world
C) Lending money to governments for development
D) Implementing a flexible fixed exchange rate regime

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) A pegged exchange rate allows a country's currency to be determined by market forces.
B) A pegged exchange rate weakens the monetary discipline of a country.
C) Pegged exchange rates are popular among many of the world's smaller nations.
D) Adopting a pegged exchange rate regime increases inflationary pressures in a country.

Correct Answer

verified

Show Answer

A) each country should be allowed to choose its own inflation rate.
B) inflation is beneficial to a country's economy and growth.
C) inflation is detrimental to a country's economy and growth.
D) countries should restrict inflation based on the global standards.

Correct Answer

verified

Show Answer

A) Managed float
B) Fixed peg
C) Free float
D) Currency board

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) its exports are more than its imports.
B) it experiences negative inflation.
C) its exports equal the imports.
D) the prices of commodities are low in the country.

Correct Answer

verified

Show Answer

A) A country's ability to expand or contract its money supply should be limited by the need to maintain exchange rate parity.
B) Maintaining balance of trade equilibrium is not in the best interest of a country.
C) Countries can isolate themselves from uncertainties when they trade using a mutually agreed on exchange rate.
D) Governments can restore monetary control by removing the obligation to maintain exchange rate parity.

Correct Answer

verified

Show Answer

A) local inflation rates remain higher than the inflation rate in the country to which the currency is pegged.
B) the country to which the currency is pegged experiences a trade deficit.
C) local inflation rates are lower than the inflation rate in the country to which the currency is pegged.
D) the country to which the currency is pegged experiences a trade surplus.

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) It is likely to create high unemployment in some cases.
B) It will lead to inflationary economies across the world.
C) It is likely to bring about trade wars between nations.
D) It will instigate competitive devaluations and intense competition.

Correct Answer

verified

Show Answer

A) A dirty-float system
B) A managed-float system
C) The European Monetary System
D) A currency board system

Correct Answer

verified

Show Answer

A) IMF lacks any real mechanism for accountability.
B) It is hesitant to help banks when they are in crisis.
C) IMF has not intervened to resolve the Asian crisis.
D) It did not try to resolve the Mexican currency crisis.

Correct Answer

verified

Show Answer

A) External agencies should not interfere in the monetary policies of a country.
B) Trade deficits can be corrected through changes in exchange rates.
C) Changes in exchange rates will not impact the trade balance in a country.
D) Governments should act in ways to minimize the uncertainty in monetary markets.

Correct Answer

verified

Show Answer

A) pegged exchange rate
B) floating exchange rate
C) managed float system
D) fixed exchange rate

Correct Answer

verified

Show Answer

A) ratio of the price of gold in a currency to price of gold in U.S. dollars.
B) amount of a currency needed to purchase one ounce of gold.
C) ratio of price of gold in a currency to price of gold in euros.
D) amount of gold required to equal the reference currency that a nation is using.

Correct Answer

verified

Show Answer