QUESTION Which of the following was the weakness of the Bretton Woods system? A. It could be wrecked by heavy borrowings from the World Bank and the International Monetary Fund. B. It could not work if the U.S. dollar was under speculative attack. C. The inflexibility of the system resulted in high unemployment. D. It […]
QUESTION In January 1976, which one of the followed revised the International Monetary Fund’s Articles of Agreement to reflect the new reality of floating exchange rates? A. Jamaica agreement B. Bretton Woods agreement C. Marshall Plan D. General agreement on Tariffs and Trade E. Plaza Accord ANSWER A
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
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
QUESTION Which of the following is a reason for the emergence of the gold standard? A. Expansion in the volume of international trade due to the Industrial Revolution B. Inability of governments to convert gold into paper currency on demand at a fixed rate C. Widening gap between the developed and the developing nations D. […]
