QUESTION In terms of the gold standard, the amount of currency needed to purchase one ounce of gold was referred to as the: A. gold to bond ratio. B. gold reserve ratio. C. gold mix ratio. D. gold par value. E. gold net value. ANSWER D
QUESTION How does the International Monetary Fund (IMF) provide loans to deficit-laden countries? A. It prints the required currencies, thereby increasing money supply in those countries. B. It acts as a market, buying goods from these countries and selling them to developed countries. C. A pool of gold and currencies contributed by its members provides […]
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. […]
QUESTION Which term was not defined in the International Monetary Fund’s Articles of Agreement but was intended to apply to countries that had suffered permanent adverse shifts in the demand for their products? A. Competitive disadvantage B. Capital flight C. Fundamental disequilibrium D. Break-even point E. Diseconomies of scale ANSWER C
QUESTION Which of the following statements is true about the gold standard? A. Given a common gold standard, the value of any currency in units of any other currency was easy to determine. B. Establishing a gold standard seemed impractical as the volume of international trade expanded in the wake of the Industrial Revolution. C. […]
QUESTION Which of the following observations about the International Development Association (IDA) scheme of the World Bank is true? A. Money is raised through bond sales in the international capital market. B. Borrowers have up to 50 years to repay at an interest rate of less than 1 percent a year. C. IDA loans go […]
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 […]
QUESTION Argonia Republic is in trade surplus with Kamboly. Under the gold standard, which of the following statements is true until a balance-of-trade equilibrium is achieved? A. There will be a net flow of gold from Argonia Republic to Kamboly. B. The money supply in Kamboly will be reduced due to the flow of gold […]
QUESTION In the 1930s, countries were devaluing their currencies at will in order to boost exports, thus shattering confidence in the: A. floating exchange rate system. B. gold standard system. C. fixed exchange system. D. Bretton Woods system. E. managed-float system. ANSWER B
QUESTION Which of the following refers to a system under which the exchange rate for converting one currency into another is continuously adjusted depending on the laws of supply and demand? A. Fixed exchange rate B. Floating exchange rate C. Forward exchange rate D. Pegged exchange rate E. Nominal exchange rate ANSWER B