International Monetary System

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Questions Bank

Introduction
International Trade and Foreign Direct Investment
Culture and Business
World Economies
Global and Regional Economic Cooperation and Integration
International Monetary System
Foreign Exchange and the Global Capital Markets
International Expansion and Global Market Opportunity Assessment
Exporting,Importing,and Global Sourcing
Strategy and International Business
Global Entrepreneurship and Intrapreneurship
Winning Through Effective,global Talent Management
Harnessing the Engine of Global Innovation
Competing Effectively Through Global Marketing,Distribution,and Supply-Chain Management
Understanding the Roles of Finance and Accounting in Global Competitive Advantage

All Questions

Question 1

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The gold standard dramatically reduced the risk in exchange rates because it established fixed exchange rates between currencies.

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Question 2

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The adoption of the gold standard led to trade imbalances in the world market.

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Question 3

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One of the advantages of the gold standard is that countries were forced to observe strict monetary policies.

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Question 4

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Under the gold standard,countries could not expand their money supply beyond what was allowed by the gold reserves held in their vaults.

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Question 5

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The devaluation of the dollar by the United States in 1934 forced U.S.firms to export less as the price of their goods and services were higher vis-à-vis other nations.

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Question 6

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The Bretton Woods Agreement was a new dollar-based monetary system,which did away with all the provisions of the gold standard.

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Question 7

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The Bretton Woods system tied the value of the currencies of all other countries to the U.S.dollar rather than directly to gold.

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Question 8

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Fixed exchange rates and pegged rates were the two different measures of the exchange rate,which were developed by the United States and the United Kingdom respectively.

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Question 9

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The Bretton Woods Agreement provided for the devaluation of a currency in order to enable countries to manage temporary but serious downturns.

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Question 10

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The Bretton Woods Agreement established a higher level of economic stability by having a formal set of rules,regulations,and guidelines for decision making.

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Question 11

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The collapse of the Bretton Woods system greatly reduced the influence of the Bretton Woods Institutions in the international market.

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Question 12

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The fall of the gold standard led countries to raise trade barriers,revalue their currencies to compete against one another for export markets,and curtail usage of foreign exchange by their citizens.

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Question 13

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SDRs were created in 1969 by the IMF in response to the Triffin Paradox.

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Question 14

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The value of an SDR consists of the value of four of the IMF's biggest members' currencies,which hold equal weight.

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Question 15

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The basket,or group of currencies that constitute an SDR,is reviewed every five years by the IMF executive board and is based on the currency's role in international trade and finance.

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Question 16

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The SDR is a currency,which constitutes a claim on the IMF.

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Question 17

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SDRs can be exchanged between countries along with currencies.

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Question 18

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The SDR serves as the unit of account of the IMF and countries borrow from the IMF in SDRs in times of economic need.

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Question 19

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The global economic crisis of 2008 began with the 2007 collapse of mortgage lending in the United States.

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Question 20

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Russia's renewed calls for the G20 to replace the U.S.dollar were due to the fact that as the largest holder of U.S.dollar financial assets,it is concerned about the potential inflationary risk of the U.S.Federal Reserve printing money.

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