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| 1 | |
In the case with Turkey, like most IMF programs, the focus was: |
| | A) | to bring down the inflation rate. |
| | B) | to stabilize the currency. |
| | C) | to restructure the economy. |
| | D) | to reduce government debt. |
| | E) | all of these answers are correct |
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| 2 | |
A(n) _______ is 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) | pegged exchange rate |
| | B) | dirty-float system |
| | C) | international monetary system |
| | D) | fixed exchange rate |
| | E) | floating exchange rate |
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| 3 | |
Under _______, the value of most currencies in terms of U.S. dollar was fixed for long periods. |
| | A) | floating rate system |
| | B) | managed exchange rate system |
| | C) | fixed exchange rate system |
| | D) | dirty float system |
| | E) | constant rate system |
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| 4 | |
As for Turkey and the IMF involvement, several prominent critics said: |
| | A) | The IMF policy will have no effect. |
| | B) | The IMF policy will make things worse. |
| | C) | The IMF policy will have a positive effect. |
| | D) | The IMF policy will make things extremely bad. |
| | E) | The IMF policy will have a very big positive effect. |
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| 5 | |
Pegging currencies to gold and guaranteeing convertibility is known as the: |
| | A) | Convertibility standard of currency |
| | B) | Convertibility standard of precious metals |
| | C) | Gold standard |
| | D) | Gold convertibility |
| | E) | None of these answers is correct |
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| 6 | |
The ______ and the ______ are the two major international institutions created by the Bretton Woods conference. |
| | A) | WTO, GATT |
| | B) | IMF, World Bank |
| | C) | WTO, IMF |
| | D) | World Bank, WTO |
| | E) | GATT, IMF |
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| 7 | |
Which of these was a central objective of the Bretton Woods agreement for IMF? |
| | A) | To keep tight control on developing nations. |
| | B) | To create hyperinflation to boost world economy. |
| | C) | Building Europe's economy by providing low-interest loans. |
| | D) | Monetary discipline. |
| | E) | To promote development. |
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| 8 | |
Which of these represented the primary task of the World Bank? |
| | A) | Promote development. |
| | B) | Maintaining order in the international monetary system. |
| | C) | Monitor the gold standard. |
| | D) | Serve as intermediary between developing nations on the issue of convertibility. |
| | E) | Monetary discipline. |
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| 9 | |
Since 1973, exchange rates have become: |
| | A) | Less volatile and more predictable. |
| | B) | More volatile and less predictable. |
| | C) | Stabile in most countries. |
| | D) | Unstable in the OECD. |
| | E) | None of these answers is correct |
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| 10 | |
In recent history, the value of the U.S. dollar has been determined by: |
| | A) | external supply and internal demand. |
| | B) | trade deficits. |
| | C) | market forces and government intervention. |
| | D) | the unemployment rate and GDP. |
| | E) | WTO and IMF. |
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| 11 | |
_______ is a main element of the case for floating exchange rates. |
| | A) | Speculation |
| | B) | Monetary discipline |
| | C) | Uncertainty |
| | D) | Trade balance adjustments |
| | E) | Lack of connection between trade balance and exchange rates |
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| 12 | |
A body holding foreign currency reserves equal to the amount of domestic currency issued at a fixed exchange rate is called a(n): |
| | A) | currency board. |
| | B) | IAD. |
| | C) | internal audit agency. |
| | D) | Group of five (G5). |
| | E) | None of these answers is correct. |
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| 13 | |
Which of these events in 1997 had a major impact on the exchange rates? |
| | A) | The oil crisis. |
| | B) | The unexpected rise in the dollar. |
| | C) | The collapse of the European Monetary System. |
| | D) | The rapid fall of the U.S. dollar. |
| | E) | Asian currency crisis. |
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| 14 | |
The _______ has repeatedly lent money to nations experiencing financial crises, requesting that recipients enact certain policies. |
| | A) | WTO |
| | B) | UN |
| | C) | IMF |
| | D) | EU |
| | E) | NAFTA |
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| 15 | |
Which of the following crises occurs when a speculative attack on the exchange value of a currency results in a sharp depreciation in the value of the currency? |
| | A) | Market-based economy crisis |
| | B) | Currency crisis |
| | C) | Banking crisis |
| | D) | Foreign debt crisis |
| | E) | IMF crisis |
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| 16 | |
All of these financial crises have been of particular significance for the IMF except: |
| | A) | the third world debt crisis of the 1980s. |
| | B) | Russia as the country moved toward a market-based economic system. |
| | C) | the 1995 Mexican currency crisis. |
| | D) | the 1997 Asian financial crisis. |
| | E) | the 1999 EU collapse crisis. |
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| 17 | |
Giant diversified conglomerates from _______ refers to chaebol. |
| | A) | Philippines |
| | B) | Thailand |
| | C) | South Korea |
| | D) | Malaysia |
| | E) | Indonesia |
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| 18 | |
A criticism of IMF is its: |
| | A) | one-size-fits all approach. |
| | B) | relaxed monetary discipline. |
| | C) | lack of control over government. |
| | D) | funds spread over too many countries. |
| | E) | lack of focus on promoting development. |
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| 19 | |
“Moral hazard” arises when people behave recklessly and is a term associated with the circumstances of: |
| | A) | IMF involvement in a country’s economic planning. |
| | B) | World Bank involvement in a country’s economic planning. |
| | C) | the 1995 Mexican currency crisis. |
| | D) | the third world debt crisis of the 1980s. |
| | E) | NAFTA regulations. |
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| 20 | |
When people behave recklessly because they know they will be saved if things go wrong, _______ arises. |
| | A) | ethical problems |
| | B) | need for retraining |
| | C) | lack of accountability |
| | D) | moral hazard |
| | E) | need for employee evaluations |
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