Question 1

Government projects were a factor behind the investment boom in most Southeast Asian economies.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following arguments is against the use of fixed exchange rates?

Accepted Answer

A)   Monetary discipline is the most important determinant of a strong economy.
B)   Each country has the freedom to choose its own inflation rate.
C)   Market speculation can cause fluctuations in exchange rates.
D)   Governments are likely to expand the monetary supply far too rapidly due to political pressures.E) C) and D)
F) B) and D)

Question 3

Recent policies of the IMF have drawn a lot of criticism.Discuss these criticisms.

Accepted Answer

The IMF's policies designed to cool overheated economies by reining in inflation and reducing government spending have been highly criticized.One criticism is that the IMF's "one-size-fits-all" approach to macroeconomic policy is inappropriate for many countries.The IMF has also been accused of intensifying moral hazard through its rescue packages.Finally,it has been suggested that the IMF has become too powerful for an institution that lacks any real mechanism for accountability.

Question 4

The great virtue claimed for a pegged exchange rate is that it imposes monetary discipline on a country and leads to low inflation.

Accepted Answer

A) True 
 B)False

Question 5

The agreement reached at Bretton Woods established _____.

Accepted Answer

A)   International Monetary Fund
B)   World Economic Forum
C)   United Nations
D)   International Atomic Energy AgencyE) A) and C)
F) B) and C)

Question 6

Moral hazard arises when people behave recklessly because they know they will be saved if things go wrong.

Accepted Answer

A) True 
 B)False  True

Question 7

The agreement reached at Bretton Woods established the International Monetary Fund (IMF)and the World Bank.

Accepted Answer

A) True 
 B)False

Question 8

The international monetary system refers to the institutional arrangements that govern _____.

Accepted Answer

A)   microeconomic parameters
B)   exchange rates
C)   gross domestic produce
D)   foreign direct investmentE) A) and B)
F) B) and C)

Question 9

The international monetary system refers to the institutional arrangements that govern exchange rates.

Accepted Answer

A) True 
 B)False

Question 10

The IMF's original function was to provide a pool of money from which members could borrow in the short term.

Accepted Answer

A) True 
 B)False

Question 11

Advocates of a floating exchange rate regime argue that removal of the obligation to maintain exchange rate parity would restore monetary control to a government.

Accepted Answer

A) True 
 B)False  True

Question 12

The monetary autonomy argument holds that _____.

Accepted 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 standardsE) B) and D)
F) C) and D)

Question 13

The gold standard called for fixed exchange rates against the U.S.dollar.

Accepted Answer

A) True 
 B)False

Question 14

Identify the currency that was convertible to gold under the Bretton Woods system.

Accepted Answer

A)   Pound
B)   Yen
C)   Euro
D)   DollarE) B) and D)
F) A) and C)

Question 15

A country that introduces a currency board commits itself to converting its domestic currency on demand into _____.

Accepted Answer

A)   another currency at a fixed exchange rate
B)   gold or silver at a fixed exchange rate
C)   gold or silver at a floating exchange rate
D)   another currency at a floating exchange rateE) C) and D)
F) B) and C)

Question 16

Which of the following is a function of World Bank?

Accepted Answer

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

Question 17

Which of the following is a common criticism against IMF?

Accepted 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.E) B) and D)
F) C) and D)

Question 18

Most of the loans issued by the IMF are unconditional loans.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is true of pegged exchange rates?

Accepted 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.E) A) and D)
F) A) and B)

Question 20

The Asian economic crisis was caused by high inflation rates.

Accepted Answer

A) True 
 B)False

Exam 11: The International Monetary System

Government projects were a factor behind the investment boom in most Southeast Asian economies.

Correct Answer
verified

Which of the following arguments is against the use of fixed exchange rates?

Correct Answer
verified

Recent policies of the IMF have drawn a lot of criticism.Discuss these criticisms.

The great virtue claimed for a pegged exchange rate is that it imposes monetary discipline on a country and leads to low inflation.

Correct Answer
verified

The agreement reached at Bretton Woods established _____.

Correct Answer
verified

Moral hazard arises when people behave recklessly because they know they will be saved if things go wrong.

Correct Answer
verified
True

The agreement reached at Bretton Woods established the International Monetary Fund (IMF)and the World Bank.

Correct Answer
verified

The international monetary system refers to the institutional arrangements that govern _____.

Correct Answer
verified

The international monetary system refers to the institutional arrangements that govern exchange rates.

Correct Answer
verified

The IMF's original function was to provide a pool of money from which members could borrow in the short term.

Correct Answer
verified

Advocates of a floating exchange rate regime argue that removal of the obligation to maintain exchange rate parity would restore monetary control to a government.

Correct Answer
verified
True

The monetary autonomy argument holds that _____.

Correct Answer
verified

The gold standard called for fixed exchange rates against the U.S.dollar.

Correct Answer
verified

Identify the currency that was convertible to gold under the Bretton Woods system.

Correct Answer
verified

A country that introduces a currency board commits itself to converting its domestic currency on demand into _____.

Correct Answer
verified

Which of the following is a function of World Bank?

Correct Answer
verified

Which of the following is a common criticism against IMF?

Correct Answer
verified

Most of the loans issued by the IMF are unconditional loans.

Correct Answer
verified

Which of the following statements is true of pegged exchange rates?

Correct Answer
verified

The Asian economic crisis was caused by high inflation rates.

Correct Answer
verified

Exam 11: The International Monetary System

Government projects were a factor behind the investment boom in most Southeast Asian economies.

Correct AnswerverifiedShow Answer

Which of the following arguments is against the use of fixed exchange rates?

Correct AnswerverifiedShow Answer

Recent policies of the IMF have drawn a lot of criticism.Discuss these criticisms.

The great virtue claimed for a pegged exchange rate is that it imposes monetary discipline on a country and leads to low inflation.

Correct AnswerverifiedShow Answer

The agreement reached at Bretton Woods established _____.

Correct AnswerverifiedShow Answer

Moral hazard arises when people behave recklessly because they know they will be saved if things go wrong.

Correct AnswerverifiedTrue

The agreement reached at Bretton Woods established the International Monetary Fund (IMF)and the World Bank.

Correct AnswerverifiedShow Answer

The international monetary system refers to the institutional arrangements that govern _____.

Correct AnswerverifiedShow Answer

The international monetary system refers to the institutional arrangements that govern exchange rates.

Correct AnswerverifiedShow Answer

The IMF's original function was to provide a pool of money from which members could borrow in the short term.

Correct AnswerverifiedShow Answer

Advocates of a floating exchange rate regime argue that removal of the obligation to maintain exchange rate parity would restore monetary control to a government.

Correct AnswerverifiedTrue

The monetary autonomy argument holds that _____.

Correct AnswerverifiedShow Answer

The gold standard called for fixed exchange rates against the U.S.dollar.

Correct AnswerverifiedShow Answer

Identify the currency that was convertible to gold under the Bretton Woods system.

Correct AnswerverifiedShow Answer

A country that introduces a currency board commits itself to converting its domestic currency on demand into _____.

Correct AnswerverifiedShow Answer

Which of the following is a function of World Bank?

Correct AnswerverifiedShow Answer

Which of the following is a common criticism against IMF?

Correct AnswerverifiedShow Answer

Most of the loans issued by the IMF are unconditional loans.

Correct AnswerverifiedShow Answer

Which of the following statements is true of pegged exchange rates?

Correct AnswerverifiedShow Answer

The Asian economic crisis was caused by high inflation rates.

Correct AnswerverifiedShow Answer

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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True

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
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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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