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Mixed Quiz
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1

Which of the following is not a major trading currency?
A)the Swiss franc
B)the U.S. dollar
C)the European Union euro
D)the Japanese yen
E)the British pound
2

When a currency's relative value is determined by the foreign exchange market, the country follows a _________ exchange rate regime.
A)foreign
B)pegged
C)spot
D)floating
E)market
3

When countries fix currencies against each other at some mutually agreed upon exchange rate the countries follow a ________ system.
A)dirty float
B)fixed exchange rate
C)pegged exchange rate
D)floating exchange rate
E)market exchange rate
4

Under the ________ countries pegged their currencies to gold and guaranteed convertibility.
A)Bretton Woods Agreement
B)Smithsonian Agreement
C)Gold Standard
D)fixed exchange rate system
E)pegged exchange rate system
5

The organization established at Bretton Woods to maintain order in the international monetary system was
A)the World Bank
B)the IMF
C)the Gold Standard
D)the OECD
E)the International bank for Reconstruction and Development
6

Advocates of fixed exchange rates suggest all of the following except
A)a fixed exchange rate system would ensure that governments would not cave to political pressure, expand the money supply to quickly, and cause high inflation
B)a country has more monetary autonomy under a fixed exchange rate system
C)speculation in a floating exchange rate system can cause fluctuations in exchange rates
D)the unpredictability of a floating system makes business planning difficult
E)a floating exchange rate will not improve trade imbalances
7

Since 2003, most member states of the IMF have a _________ exchange rate policy.
A)fixed peg
B)free float
C)adjustable peg
D)currency board
E)managed float
8

When a country introduces a ___________ the country commits itself to converting its domestic currency on demand into another currency at a fixed exchange rate.
A)fixed exchange rate system
B)pegged exchange rate system
C)floating exchange rate system
D)currency board
E)adjustable peg system
9

A loss of confidence in a country's banking system that leads to a run on banks is a
A)currency crisis
B)currency board
C)banking crisis
D)confidence speculation
E)foreign debt crisis
10

Which of the following factors did not contribute to the currency crisis in South East Asia?
A)excess capacity
B)debt
C)expanding imports
D)boom in investment
E)devaluation of the peso
11

Critics of China's policy of pegging the yuan to the U.S. dollar have suggested that the policy amounts to a kind of neomercantilism.
A)True
B)False
12

The institutional arrangements that countries adopt to govern exchange rates make up the international monetary system.
A)True
B)False
13

A country that intervenes in the market to hold the value of its currency within some range to a reference currency follows a fixed exchange rate system.
A)True
B)False
14

A floating exchange rate system is considered best.
A)True
B)False
15

When the income a country's residents earn from exports equals the money residents pay for imports the country has reached balance-of-trade equilibrium.
A)True
B)False
16

The Bretton Woods Agreement was a strict fixed exchange rate system designed to allow for monetary discipline.
A)True
B)False
17

Thanks to a strong international monetary system, exchange rates have become more stable and predictable since 1973 than they were from 1945 to 1973.
A)True
B)False
18

Recently, the dollar's value has been determines by a combination of market forces and government intervention.
A)True
B)False
19

The IMF has been criticized for its "one-size-fits-all" approach to macroeconomic policy.
A)True
B)False
20

A moral hazard arises when people behave recklessly because they don't know they will be saved if things go wrong.
A)True
B)False





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