International Business Opportunities and Challenges Study Set 1

Business

Quiz 6 :

International Monetary System

Quiz 6 :

International Monetary System

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

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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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True False
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False

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

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SDRs can be exchanged between countries along with currencies.
True False
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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.
True False
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The gold standard dramatically reduced the risk in exchange rates because it established fixed exchange rates between currencies.
True False
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One of the advantages of the gold standard is that countries were forced to observe strict monetary policies.
True False
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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.
True False
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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.
True False
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The global economic crisis of 2008 began with the 2007 collapse of mortgage lending in the United States.
True False
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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.
True False
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The value of an SDR consists of the value of five of the IMF's biggest members' currencies, which hold equal weight.
True False
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The adoption of the gold standard led to trade imbalances in the world market.
True False
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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.
True False
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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.
True False
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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.
True False
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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.
True False
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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.
True False
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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.
True False
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Over the past two decades, many governments in Latin America have opted to stabilize their countries' economies by replacing their national currency with the US dollar.
True False
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