QUESTION Which of the following was abandoned as per the Jamaica agreement of 1976? A. Floating exchange rate system B. U.S. dollar as the reference currency C. Gold as a reserve asset D. Membership to the International Monetary Fund E. Granting International Monetary Fund loans to less developed countries ANSWER C
Date: September 3rd, 2020
QUESTION Which of the following statements is true about the changes in the world monetary system since March 1973? A. The value of the U.S. dollar has never seen a fall ever since. B. Exchange rates have become much more volatile. C. Exchange rates have become more predictable. D. The fixed rate system was adopted […]
Date: September 3rd, 2020
QUESTION Which of the following is one of the reasons for the rapid rise in the value of the dollar between 1980 and 1985 despite a large trade deficit? A. Political stability in all other parts of the world B. Heavy capital outflows from the United States C. Low real interest rates in the United […]
Date: September 3rd, 2020
QUESTION The fall in the value of the U.S. dollar between 1985 and 1988 was caused by: A. economic growth in the developed countries of Europe. B. a fall in prices of exported U.S. goods. C. a trade surplus in the United States during the previous years. D. a combination of government intervention and market […]
Date: September 3rd, 2020
QUESTION Under the Plaza Accord of 1985, the Group of Five major industrial countries concluded that it would be desirable if: A. the countries returned to a system of fixed exchange rates. B. the participating members reverted to the gold standard. C. the United States adopted protectionism to improve its trade balance. D. most major […]
Date: September 3rd, 2020
QUESTION From mid-2008 through early 2009, the value of the dollar moderately increased against major currencies, despite the fact that the American economy was suffering from a serious financial crisis. Which of the following was a reason for this phenomenon? A. High real interest rates in the United States compared to any other developed region […]
Date: September 3rd, 2020
QUESTION Which of the following is a characteristic of the floating exchange rate regime? A. It allows for automatic trade balance adjustments. B. The use of monetary policy by the government is restricted. C. It allows for greater monetary discipline. D. It limits the destabilizing effects of exchange rate speculation. E. It eliminates volatility and […]
Date: September 3rd, 2020
QUESTION Which of the following explains the rise of the dollar against most major currencies in the late 1990s, even though the United States was still running a significant balance-of-payments deficit? A. Reduced government intervention in the foreign exchange market B. Increased foreign investments in U.S. financial assets C. Low real interest rates in the […]
Date: September 3rd, 2020
QUESTION Which of the following is an argument for a fixed exchange rate system? A. Governments can contract their money supply without worrying about the need to maintain parity. B. Trade balance adjustments do not require the intervention of the International Monetary Fund. C. It ensures that governments do not expand the monetary supply too […]
Date: September 3rd, 2020
QUESTION Which of the following was a reason that led to the collapse of the gold standard in 1939? A. Difficulty and complexity in using the gold standard to determine the exchange rate B. Agreement by governments to convert paper currency into gold on demand at a fixed rate C. A cycle of competitive currency […]
Date: September 3rd, 2020
