Question 1

What was the Brady Plan?

Accepted Answer

The Brady Plan, which came about in 1989...

Question 2

Unilateral transfers are recorded in the capital account of the balance of payments.

Accepted Answer

A) True 
 B)False

Question 3

How would you record earnings of a Pakistani-born resident of Kuwait that are sent home to relatives in the balance of payments?

Accepted Answer

The transaction would be recor...

Question 4

Todd, an analyst for the U.S. government, has been given the task of assessing the economic performance of Country X in the international marketplace. Todd will most likely review the ________ of Country X.

Accepted Answer

A)   BOP statistics
B)   IMF quotas
C)   portfolios
D)   FDIE) B) and C)
F) None of the above

Question 5

Japan holds the largest bloc of votes in the World Bank.

Accepted Answer

A) True 
 B)False

Question 6

Do you think the breakdown of the international monetary system and international trade after World War I influenced the occurrence of World War II? Why or why not?

Accepted Answer

It created inflation and unemp...

Question 7

What was the initial goal of the World Bank?

Accepted Answer

A)   administer the gold standard
B)   hold financial reserves for all countries
C)   finance reconstruction of war-torn economies
D)   provide capital for corporate expansion activitiesE) All of the above
F) A) and B)

Question 8

Which of the following is not a form of asset included in the official reserves account?

Accepted Answer

A)   government bonds
B)   convertible currencies
C)   special drawing rights
D)   reserve positions at the IMFE) None of the above
F) A) and B)

Question 9

Assume you are an American exporter in 1895. What currency would you most likely want to receive for business transactions?

Accepted Answer

A)   U.S. dollar
B)   British pound sterling
C)   German deutschmark
D)   French francE) A) and C)
F) B) and C)

Question 10

Platinum was used as a medium of international exchange in ancient times because of its strength and value.

Accepted Answer

A) True 
 B)False

Question 11

The balance of payments is useful to international business people for all of the following reasons except ________.

Accepted Answer

A)   warning of new policies that could affect a country's business climate
B)   indicating reductions in a country's foreign exchange reserves
C)   signaling increased riskiness of lending to countries
D)   predicting future exchange ratesE) B) and D)
F) All of the above

Question 12

A country's BOP provides detailed information on the nation's debt payments and associated interest rates that can be used when making economic policy changes.

Accepted Answer

A) True 
 B)False

Question 13

A member country of the IMF may borrow up to 25 percent of its quota from the IMF.

Accepted Answer

A) True 
 B)False

Question 14

What was the Baker Plan?

Accepted Answer

The 1985 Baker Plan was an effort to res...

Question 15

Under a ________, the price of a given currency does not change relative to other currency.

Accepted Answer

A)   free trade agreement
B)   fixed exchange rate system
C)   floating exchange rate system
D)   balance of payment systemE) A) and D)
F) B) and D)

Question 16

Under the gold standard ________.

Accepted Answer

A)   currency values were determined by supply and demand
B)   countries agreed to buy or sell their paper currencies for gold
C)   countries were free to adopt any nation's exchange rate system
D)   the dollar's value was allowed to fall on currency marketsE) All of the above
F) A) and C)

Question 17

What is the primary purpose of the International Finance Corporation?

Accepted Answer

A)   make soft loans
B)   make hard loans
C)   promote private sector development in developing countries
D)   provide political risk insurance to MNEs operating in emerging economiesE) C) and D)
F) All of the above

Question 18

The Bretton Woods conference sought to do all of the following EXCEPT ________.

Accepted Answer

A)   renew the gold standard
B)   create the International Monetary Fund
C)   create the International Bank for Reconstruction and Development
D)   provide no-interest capital loans to emerging economies around the worldE) A) and D)
F) A) and C)

Question 19

The international monetary system provides a mechanism for ________.

Accepted Answer

A)   establishing global accounting standards
B)   enforcing the payment of importing tariffs and fees
C)   correcting imbalances between a country's international payments and receipts
D)   increasing a country's paper currency value in comparison to the global gold standardE) A) and D)
F) A) and C)

Question 20

The Bank of England no longer redeemed British paper currency for gold at par value ________.

Accepted Answer

A)   in the 1920s
B)   in the 1850s
C)   before 1821
D)   after 1931E) B) and D)
F) B) and C)

Exam 7: The International Monetary System and the Balance of Payments

Which of the following is not a form of asset included in the official reserves account?

Correct AnswerverifiedShow Answer

A country's BOP provides detailed information on the nation's debt payments and associated interest rates that can be used when making economic policy changes.

Correct AnswerverifiedShow Answer

A member country of the IMF may borrow up to 25 percent of its quota from the IMF.

Correct AnswerverifiedShow Answer

Japan holds the largest bloc of votes in the World Bank.

Correct AnswerverifiedShow Answer

Do you think the breakdown of the international monetary system and international trade after World War I influenced the occurrence of World War II? Why or why not?

Correct AnswerverifiedIt created inflation and unemp...View AnswerShow Answer

The balance of payments is useful to international business people for all of the following reasons except ________.

Correct AnswerverifiedShow Answer

The Bank of England no longer redeemed British paper currency for gold at par value ________.

Correct AnswerverifiedShow Answer

Unilateral transfers are recorded in the capital account of the balance of payments.

Correct AnswerverifiedShow Answer

Under the gold standard ________.

Correct AnswerverifiedShow Answer

What was the Baker Plan?

Correct AnswerverifiedThe 1985 Baker Plan was an effort to res...View AnswerShow Answer

Platinum was used as a medium of international exchange in ancient times because of its strength and value.

Correct AnswerverifiedShow Answer

What is the primary purpose of the International Finance Corporation?

Correct AnswerverifiedShow Answer

Assume you are an American exporter in 1895. What currency would you most likely want to receive for business transactions?

Correct AnswerverifiedShow Answer

What was the Brady Plan?

Correct AnswerverifiedThe Brady Plan, which came about in 1989...View AnswerShow Answer

The international monetary system provides a mechanism for ________.

Correct AnswerverifiedShow Answer

Under a ________, the price of a given currency does not change relative to other currency.

Correct AnswerverifiedShow Answer

Todd, an analyst for the U.S. government, has been given the task of assessing the economic performance of Country X in the international marketplace. Todd will most likely review the ________ of Country X.

Correct AnswerverifiedShow Answer

How would you record earnings of a Pakistani-born resident of Kuwait that are sent home to relatives in the balance of payments?

Correct AnswerverifiedThe transaction would be recor...View AnswerShow Answer

What was the initial goal of the World Bank?

Correct AnswerverifiedShow Answer

The Bretton Woods conference sought to do all of the following EXCEPT ________.

Correct AnswerverifiedShow Answer

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It created inflation and unemp...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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The 1985 Baker Plan was an effort to res...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The Brady Plan, which came about in 1989...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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The transaction would be recor...
View Answer

Correct Answer
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Correct Answer
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