Question 1

The adoption of the Marshall Plan redirected the efforts of the World Bank and it then turned its focus on

Accepted Answer

A)   helping European nations rebuild after the war.
B)   creating a balance-of-trade in Latin America.
C)   creating the gold standard.
D)   lending money to third-world nations.
E)   eliminating inflation rates.F) B) and D)
G) A) and D)

Question 2

All International Monetary Fund (IMF)  loan packages come with conditions attached which limits

Accepted Answer

A)   trade liberalization.
B)   elimination of restrictive import licensing.
C)   excessive government spending and debt.
D)   privatization of state-owned assets.
E)   deregulation of the economy to increase competition.F) None of the above
G) C) and D)

Question 3

Under a currency board system, the government has the absolute authority to set interest rates.

Accepted Answer

A) True 
 B)False

Question 4

During the 1990s, some Western banks were far too willing to lend large amounts to companies that were already overleveraged. The banks knew the government would save them if these loans were foreclosed. What type of activity does this represent?

Accepted Answer

A)   cognitive dissonance
B)   conflict of interest
C)   systemic risk
D)   moral hazard
E)   tragedy of the commonsF) B) and C)
G) B) and E)

Question 5

One aspect of the Bretton Woods agreement was a commitment not to use ________ as a measure to fix the value of currencies.

Accepted Answer

A)   a planned economy
B)   devaluation
C)   isolationism
D)   government loans
E)   the U.S. dollarF) D) and E)
G) A) and B)

Question 6

In terms of the gold standard, the amount of currency needed to purchase one ounce of gold was referred to as the

Accepted Answer

A)   gold to bond ratio.
B)   gold reserve ratio.
C)   gold mix ratio.
D)   gold par value.
E)   gold net value.F) C) and D)
G) D) and E)

Question 7

What is a result of a banking crisis?

Accepted Answer

A)   It leads to individuals and companies withdrawing their deposits from banks.
B)   It results in a sharp appreciation in the value of the currency.
C)   It creates an uptick in domestic borrowing.
D)   It leads to price deflation.
E)   It results in low government deficits.F) None of the above
G) A) and E)

Question 8

A country that has an exchange rate system under which its exchange rate is allowed to fluctuate against other currencies within a target zone is using a(n)  ________ system.

Accepted Answer

A)   free float
B)   fixed peg
C)   adjustable peg
D)   pure float
E)   capital floatF) All of the above
G) A) and B)

Question 9

Critics argue that a floating exchange rate system can be affected by uncertainty and the bandwagon effect.

Accepted Answer

A) True 
 B)False

Question 10

The collapse of the fixed exchange rate system has been traced to the

Accepted Answer

A)   U.S. macroeconomic policy package of 1965-1968.
B)   establishment of the gold standard.
C)   Marshall Plan, under which the United States lent money to European nations.
D)   failure of the International Monetary Fund to impose monetary discipline.
E)   increased U.S. tax rate financing Great Depression-era programs.F) D) and E)
G) A) and C)

Question 11

One attribute of a pegged exchange rate is that it leads to

Accepted Answer

A)   a planned economy.
B)   low inflation.
C)   greater supply and demand.
D)   a lack of monetary discipline.
E)   a quick recession.F) A) and C)
G) A) and B)

Exam 11: The International Monetary System

Under a currency board system, the government has the absolute authority to set interest rates.

Correct Answer
verified

All International Monetary Fund (IMF) loan packages come with conditions attached which limits

Correct Answer
verified

A country that has an exchange rate system under which its exchange rate is allowed to fluctuate against other currencies within a target zone is using a(n) ________ system.

Correct Answer
verified

During the 1990s, some Western banks were far too willing to lend large amounts to companies that were already overleveraged. The banks knew the government would save them if these loans were foreclosed. What type of activity does this represent?

Correct Answer
verified

One attribute of a pegged exchange rate is that it leads to

Correct Answer
verified

What is a result of a banking crisis?

Correct Answer
verified

One aspect of the Bretton Woods agreement was a commitment not to use ________ as a measure to fix the value of currencies.

Correct Answer
verified

The collapse of the fixed exchange rate system has been traced to the

Correct Answer
verified

The adoption of the Marshall Plan redirected the efforts of the World Bank and it then turned its focus on

Correct Answer
verified

In terms of the gold standard, the amount of currency needed to purchase one ounce of gold was referred to as the

Correct Answer
verified

Critics argue that a floating exchange rate system can be affected by uncertainty and the bandwagon effect.

Correct Answer
verified

Exam 11: The International Monetary System

Under a currency board system, the government has the absolute authority to set interest rates.

Correct AnswerverifiedShow Answer

All International Monetary Fund (IMF) loan packages come with conditions attached which limits

Correct AnswerverifiedShow Answer

A country that has an exchange rate system under which its exchange rate is allowed to fluctuate against other currencies within a target zone is using a(n) ________ system.

Correct AnswerverifiedShow Answer

During the 1990s, some Western banks were far too willing to lend large amounts to companies that were already overleveraged. The banks knew the government would save them if these loans were foreclosed. What type of activity does this represent?

Correct AnswerverifiedShow Answer

One attribute of a pegged exchange rate is that it leads to

Correct AnswerverifiedShow Answer

What is a result of a banking crisis?

Correct AnswerverifiedShow Answer

One aspect of the Bretton Woods agreement was a commitment not to use ________ as a measure to fix the value of currencies.

Correct AnswerverifiedShow Answer

The collapse of the fixed exchange rate system has been traced to the

Correct AnswerverifiedShow Answer

The adoption of the Marshall Plan redirected the efforts of the World Bank and it then turned its focus on

Correct AnswerverifiedShow Answer

In terms of the gold standard, the amount of currency needed to purchase one ounce of gold was referred to as the

Correct AnswerverifiedShow Answer

Critics argue that a floating exchange rate system can be affected by uncertainty and the bandwagon effect.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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