Question 1

The________ is an exchange rate system that is relatively free from central bank and other government-type interventions.

Accepted Answer

A)  managed float
B)  clean float
C)  dirty float
D)  target-zone arrangement

Question 2

Under which one of the following would a country that followed policies leading to a lower inflation rate than that experienced by its trading partners would come under pressure to expand its money supply?

Accepted Answer

A)  fixed-rate currency system
B)  freely-floating currency system
C)  managed float
D)  currency board

Question 3

________ is nonconvertible paper money backed only by faith in the monetary authorities.

Accepted Answer

A)  Specie
B)  Fiat money
C)  Seignorage
D)  Par value

Question 4

The current exchange rate system can best be characterized as a ___ system.

Accepted Answer

A)  free float
B)  managed float
C)  fixed-rate
D)  hybrid

Question 5

A gold standard ensures a long-run tendency toward price stability because

Accepted Answer

A)  gold is desirable
B)  gold is durable and storable
C)  the cost of producing an ounce of gold stays relatively constant overtime
D)  gold supply is directly related to consumer satisfaction

Question 6

Which of the following produced a valuable lesson about exchange-rate stability and target-zone arrangements?

Accepted Answer

A)  European Monetary System
B)  European Community
C)  European Common Market
D)  European Union

Question 7

The Bretton Woods system fell apart because

Accepted Answer

A)  of the oil crisis
B)  U.S.monetary policy was too expansionary
C)  the United States ran a large trade deficit
D)  the United States no longer supported a pegged gold standard

Question 8

In a fixed-rate system central banks would NOT maintain currency values by

Accepted Answer

A)  increasing the money supplies of nations with overvalued currencies
B)  boosting the money supplies of nations with undervalued currencies
C)  buying up overvalued currencies in the foreign exchange market
D)  selling undervalued currencies in the foreign exchange market

Question 9

The characteristic of gold that is most important to the success of a gold standard is that it is

Accepted Answer

A)  portable
B)  storable
C)  easily standardized
D)  expensive to produce as well as universally acceptable

Question 10

In order to boost the value of the DM relative to the dollar

Accepted Answer

A)  the Fed should sell dollars for DM and the Bundesbank should buy DM with dollars
B)  the Fed should sell dollars for DM and the Bundesbank should buy dollars with DM
C)  the Fed should sell DM for dollars and the Bundesbank should sell dollars for DM
D)  the Fed should sell DM for dollars and the Bundesbank should buy DM with dollars

Question 11

The European Monetary System is best described as a

Accepted Answer

A)  clean float
B)  target-zone arrangement
C)  dirty float
D)  managed float

Exam 3: The International Monetary System

The Bretton Woods system fell apart because

Correct Answer
verified

In order to boost the value of the DM relative to the dollar

Correct Answer
verified

A gold standard ensures a long-run tendency toward price stability because

Correct Answer
verified

In a fixed-rate system central banks would NOT maintain currency values by

Correct Answer
verified

The current exchange rate system can best be characterized as a ___ system.

Correct Answer
verified

The European Monetary System is best described as a

Correct Answer
verified

The characteristic of gold that is most important to the success of a gold standard is that it is

Correct Answer
verified

The________ is an exchange rate system that is relatively free from central bank and other government-type interventions.

Correct Answer
verified

________ is nonconvertible paper money backed only by faith in the monetary authorities.

Correct Answer
verified

Which of the following produced a valuable lesson about exchange-rate stability and target-zone arrangements?

Correct Answer
verified

Under which one of the following would a country that followed policies leading to a lower inflation rate than that experienced by its trading partners would come under pressure to expand its money supply?

Correct Answer
verified

Exam 3: The International Monetary System

The Bretton Woods system fell apart because

Correct AnswerverifiedShow Answer

In order to boost the value of the DM relative to the dollar

Correct AnswerverifiedShow Answer

A gold standard ensures a long-run tendency toward price stability because

Correct AnswerverifiedShow Answer

In a fixed-rate system central banks would NOT maintain currency values by

Correct AnswerverifiedShow Answer

The current exchange rate system can best be characterized as a ___ system.

Correct AnswerverifiedShow Answer

The European Monetary System is best described as a

Correct AnswerverifiedShow Answer

The characteristic of gold that is most important to the success of a gold standard is that it is

Correct AnswerverifiedShow Answer

The________ is an exchange rate system that is relatively free from central bank and other government-type interventions.

Correct AnswerverifiedShow Answer

________ is nonconvertible paper money backed only by faith in the monetary authorities.

Correct AnswerverifiedShow Answer

Which of the following produced a valuable lesson about exchange-rate stability and target-zone arrangements?

Correct AnswerverifiedShow Answer

Under which one of the following would a country that followed policies leading to a lower inflation rate than that experienced by its trading partners would come under pressure to expand its money supply?

Correct AnswerverifiedShow Answer

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