Question 1

Identify the countries worst affected by the Southeast Asian crisis of 1997.

Accepted Answer

A)  Indonesia,Thailand,and South Korea
B)  Malaysia,Singapore,and the Philippines
C)  Japan,Indonesia,and Vietnam
D)  Singapore,Vietnam,and MalaysiaE) None of the above
F) B) and D)

Question 2

According to the Bretton Woods agreement of 1944,which currency remained convertible to gold?

Accepted Answer

A)  Dollar
B)  Pound
C)  Yen
D)  MarkE) None of the above
F) A) and B)

Question 3

Financial crises tend to have common underlying macroeconomic causes: low relative price inflation rates,a narrowing current account deficit,and an excessive expansion of domestic borrowing.

Accepted Answer

A) True 
 B)False

Question 4

Which country's positive experience with the currency board during the 1997 Asian currency crisis added a new dimension to the debate over how to manage a pegged exchange rate?

Accepted Answer

A)  Japan
B)  Taiwan
C)  Hong Kong
D)  IndonesiaE) A) and B)
F) A) and C)

Question 5

The Bretton Woods system could work only as long as the U.S.inflation rate remained low and the United States did not run a balance-of-payments deficit.

Accepted Answer

A) True 
 B)False

Question 6

According to the Plaza Accord of 1985,the Group of Five major industrial countries pledged to:

Accepted Answer

A)  intervene in the foreign exchange markets to sell dollars.
B)  let their currencies depreciate against the U.S.dollar.
C)  revert to a system of fixed exchange rates.
D)  donate more funds to the IDA scheme of the World Bank.E) B) and D)
F) B) and C)

Question 7

A floating exchange rate is a system under which the exchange rate for converting one currency into another is continuously adjusted depending on the laws of supply and demand.

Accepted Answer

A) True 
 B)False

Question 8

The Jamaica meeting in 1976 revised the IMF's Articles of Agreement to reflect the new reality of floating exchange rates.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true of the exchange rate system followed in countries that were part of the Southeast Asian crisis of 1997?

Accepted Answer

A)  They followed a currency board system.
B)  They followed a clean float system.
C)  They had their currencies pegged to the dollar.
D)  They had no separate legal tender.E) C) and D)
F) A) and D)

Question 10

Which of the following is the policy adopted by the Chinese since 2005?

Accepted Answer

A)  Pegged exchange rate
B)  Clean float
C)  Dirty float
D)  Fixed exchange rateE) A) and B)
F) A) and C)

Question 11

Many of the world's most developed nations peg their currencies,primarily to the dollar or the euro.

Accepted Answer

A) True 
 B)False

Question 12

All of the following contributed to the Asian crisis of 1997 except:

Accepted Answer

A)  the investment boom in commercial and residential property and infrastructure.
B)  the debt bomB.
C)  excess capacity that led to plunging output prices.
D)  production driven by domestic demanD.E) B) and C)
F) All of the above

Question 13

Between 1965 and 1968,President Lyndon Johnson backed an increase in U.S.government spending that was financed by:

Accepted Answer

A)  sales of gold reserves.
B)  IMF loans.
C)  an increase in the money supply.
D)  an increase in taxes.E) None of the above
F) B) and C)

Question 14

The Bretton Woods conference of 1944 established the basic framework for the:

Accepted Answer

A)  World Trade Organization.
B)  post-World War II international monetary system.
C)  General Agreement on Tariffs and Trade.
D)  floating exchange rate system.E) A) and B)
F) B) and C)

Question 15

Since the early 1970s,developed countries such as Great Britain and the United States have financed their deficits by:

Accepted Answer

A)  borrowing from the World Bank.
B)  borrowing private money.
C)  selling their gold reserves.
D)  drawing on IMF funds.E) All of the above
F) B) and C)

Question 16

The rise in the value of the dollar between 1980 and 1985 occurred when the United States was running a large and growing trade deficit.Explain the factors that led to this rise.

Accepted Answer

A number of favorable factors overcame t...

Question 17

Under the Bretton Woods agreement,all countries were to fix the value of their currency in terms of gold but were not required to exchange their currencies for gold.

Accepted Answer

A) True 
 B)False

Question 18

What percentage of IMF member nations practice the free float system?

Accepted Answer

A)  28 percent
B)  26 percent
C)  8 percent
D)  14 percentE) A) and B)
F) None of the above

Question 19

What was the name conferred on the system of state support to a network of an estimated 300 businesses owned by Indonesian President Suharto's family and friends?

Accepted Answer

A)  "Mr.Ten percent"
B)  "Governance of nepotism"
C)  "Too big to fail league"
D)  "Crony capitalism"E) A) and C)
F) A) and B)

Question 20

Differentiate between a floating exchange rate and a pegged exchange rate.

Accepted Answer

When the foreign exchange market determi...

Exam 10: The International Monetary System

Under the Bretton Woods agreement,all countries were to fix the value of their currency in terms of gold but were not required to exchange their currencies for gold.

Correct AnswerverifiedShow Answer

Differentiate between a floating exchange rate and a pegged exchange rate.

Correct AnswerverifiedWhen the foreign exchange market determi...View AnswerShow Answer

What percentage of IMF member nations practice the free float system?

Correct AnswerverifiedShow Answer

The Bretton Woods system could work only as long as the U.S.inflation rate remained low and the United States did not run a balance-of-payments deficit.

Correct AnswerverifiedShow Answer

Which of the following is the policy adopted by the Chinese since 2005?

Correct AnswerverifiedShow Answer

Which country's positive experience with the currency board during the 1997 Asian currency crisis added a new dimension to the debate over how to manage a pegged exchange rate?

Correct AnswerverifiedShow Answer

According to the Bretton Woods agreement of 1944,which currency remained convertible to gold?

Correct AnswerverifiedShow Answer

A floating exchange rate is a system under which the exchange rate for converting one currency into another is continuously adjusted depending on the laws of supply and demand.

Correct AnswerverifiedShow Answer

Identify the countries worst affected by the Southeast Asian crisis of 1997.

Correct AnswerverifiedShow Answer

All of the following contributed to the Asian crisis of 1997 except:

Correct AnswerverifiedShow Answer

The Jamaica meeting in 1976 revised the IMF's Articles of Agreement to reflect the new reality of floating exchange rates.

Correct AnswerverifiedShow Answer

What was the name conferred on the system of state support to a network of an estimated 300 businesses owned by Indonesian President Suharto's family and friends?

Correct AnswerverifiedShow Answer

Since the early 1970s,developed countries such as Great Britain and the United States have financed their deficits by:

Correct AnswerverifiedShow Answer

Which of the following is true of the exchange rate system followed in countries that were part of the Southeast Asian crisis of 1997?

Correct AnswerverifiedShow Answer

According to the Plaza Accord of 1985,the Group of Five major industrial countries pledged to:

Correct AnswerverifiedShow Answer

The Bretton Woods conference of 1944 established the basic framework for the:

Correct AnswerverifiedShow Answer

Many of the world's most developed nations peg their currencies,primarily to the dollar or the euro.

Correct AnswerverifiedShow Answer

The rise in the value of the dollar between 1980 and 1985 occurred when the United States was running a large and growing trade deficit.Explain the factors that led to this rise.

Correct AnswerverifiedA number of favorable factors overcame t...View AnswerShow Answer

Between 1965 and 1968,President Lyndon Johnson backed an increase in U.S.government spending that was financed by:

Correct AnswerverifiedShow Answer

Financial crises tend to have common underlying macroeconomic causes: low relative price inflation rates,a narrowing current account deficit,and an excessive expansion of domestic borrowing.

Correct AnswerverifiedShow Answer

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When the foreign exchange market determi...
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A number of favorable factors overcame t...
View Answer

Correct Answer
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