Chapter 11 example #29009

In a floating exchange rate, the relative value of a currency:

Which of the following was an announcement made by U.S. President Nixon to enable the devaluation of the dollar during the increase in inflation in 1971 in the United States?

The 1944 Bretton Woods conference created two major international institutions that play a role in the international monetary system—the International Monetary Fund (IMF) and the _____.

In 1971, U.S. trade figures showed that for the first time since 1945, the United States was importing more than it was exporting. This set off massive purchases of _____ in the foreign market by speculators.

The major problem with the gold standard was that no multinational institution could stop countries from engaging in competitive devaluations.

Under the gold standard, a country in balance-of-trade equilibrium will experience a net flow of gold from other countries.

A pegged exchange rate means the value of the currency is fixed relative to a reference currency, and then the exchange rate between that currency and other currencies is determined by the reference currency exchange rate.

As the volume of international trade expanded in the wake of the Industrial Revolution, shipping large quantities of gold around the world to finance international trade became impractical.

A _____ means the value of the currency is fixed relative to a reference currency, and then the exchange rate between that currency and other currencies is determined by the reference currency exchange rate.

Given a common gold standard, the value of any currency in units of any other currency (the exchange rate) was easy to determine.

Certovia and Norkland are two neighboring countries that actively trade goods and services with each other. Under the gold standard, there will be a net flow of gold from Norkland to Certovia when:

Which of the following is an argument for a fixed exchange rate system?

Which of the following is a characteristic of the floating exchange rate regime?

Which of the following statements is true about the current monetary system?

Which of the following explains the rise of the dollar against most major currencies in the late 1990s, even though the United States was still running a significant balance-of-payments deficit?

A country that introduces a currency board commits itself to converting its domestic currency on demand into another currency at a fixed exchange rate.

Which of the following statements is true about the gold standard?

Under the Bretton Woods system, if a country developed a permanent deficit in its balance of trade that could not be corrected by domestic policy, this would require the:

The collapse of the fixed exchange rate system has been traced to the:

Which of the following was a reason that led to the collapse of the gold standard in 1939?

Under the fixed exchange rate system, the dollar could be devalued only if all countries agreed to simultaneously revalue against the dollar.

All International Monetary Fund (IMF) loan packages come with conditions attached. Which of the following is prevented due to these policies of the IMF?

Which of the following is a great strength of the gold standard?

How does a country that introduces a currency board make its commitment to converting its domestic currency on demand into another currency at a fixed exchange rate credible?

Which of the following observations about the International Monetary Fund (IMF) is true?

A(n) _____ system refers to an exchange rate system under which a country's exchange rate is allowed to fluctuate against other currencies within a target zone.

Which of the following holds true for a pegged exchange rate system?

Under the International Bank for Reconstruction and Development scheme, the World Bank offers low-interest loans to risky customers whose credit rating is often poor.

Which of the following has some aspects of the pre-1973 Bretton Woods exchange rate system?

Which of the following is a reason for the emergence of the gold standard?

Which of the following statements is true about the changes in the world monetary system since March 1973?

The architects of the Bretton Woods agreement built limited flexibility into the fixed exchange rate system in order to:

According to the _____ in 1944, all countries were to fix the value of their currency in terms of gold but were not required to exchange their currencies for gold.

Which of the following statements is true about the various exchange rate systems?

_____ 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.

In response to the global financial crisis of 2008-2009, the International Monetary Fund began to:

According to the noted economist Jeffrey Sachs, the International Monetary Fund should

Under the U.S. macroeconomic policy package of 1965-1968, President Lyndon Johnson backed an increase in U.S. government spending that was financed by an increase in the money supply. This resulted in _____.

The frequency of government intervention in the foreign exchange market explains why the current system is sometimes thought of as a(n) _____.

Without currency devaluation, a country in "fundamental disequilibrium" would experience:

An advantage of a pegged exchange rate system is that it imposes monetary discipline on a country and leads to low _____.

Jade, a working professional, began driving rashly ever since she got her car insured against damage. She believed that the insurance claim would cover her in case of any accidents. Jade's behavior is due to a situation known as _____.