International Monetary System

Topic 1: Introduction & International Monetary System

In the tutorial we will work through the multiple choice questions. The extra questions at the end are extra practice for your own study.

MULTIPLE CHOICE QUESTIONS:

1. ___________ were the earliest multinationals.
(a) raw-material seekers
(b) market seekers
(c) cost minimizers
(d) oil companies
(e) the Federal Reserve System of the U.S.


2. World War I caused the suspension of the gold standard for fixed international exchange rates because the war
(a) cost too much money.
(b) interrupted the free movement of gold.
(c) lasted too long.
(d) used gold as the main ingredient in ...

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member nations.
(c) Several unexpected economic shocks to member nations.
(d) All of the above


5. On May 1, 2004 ________countries joined the European Union enlarging it to a total of _________ members.
(a) 5 15
(b) 2 17
(c) 10 25
(d) 20 30



6. The 10 members that joined the European Union in May 2004 automatically assumed the euro as their national currency upon joining.
(a) True
(b) False


7. The Euro currency is fixed against other currencies on the international currency exchange markets, but allows member country currencies to float against each other.
(a) True
(b) False


8. According to the authors, what is the single most important mandate of the European Central Bank?
(a) Promote international trade for countries within the European Union.
(b) Price, in Euros, all products for sale in the European Union.
(c) Promote price stability within the European Union.
(d) Establish an EMU trade ...

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have been hired as a consultant to the central bank for a country that has for many years suffered from repeated currency crises and depends heavily on the U.S. financial and product markets. Which of the following policies would have the greatest effectiveness for reducing currency volatility of the client country with the United States?
(a) Dollarization.
(b) An exchange rate pegged to the U. S. dollar.
(c) An exchange rate with a fixed price per ounce of gold.
(d) An internationally floating exchange rate.


13. Under a fixed exchange rate regime, the government of the country is officially responsible for
(a) intervention in the foreign ...

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PAPER DETAILS
Added: 9/30/2017 09:56:53 AM
Submitted By: bruno000
Category: Economics
Type: Premium Paper
Words: 2067
Pages: 8

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