Quiz8 - Quiz 8 1. A devaluation is when a country: a....

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Quiz 8 1. A devaluation is when a country: a. allows its currency’s value to float. b. raises the fixed value of its currency. c. lowers the fixed value of its currency. d. allows its currency value to be set by the market. Answer: c 2. Suppose that on the gold standard, the U.S. fixes the price of an ounce of gold at $25. Great Britain fixes the price of gold at £16 per ounce. What is the implied exchange rate between the dollar and the pound? A) £1.5625 / $ B) $0.65 / £ C) $1.5625 / £ D) £0.65 / $ E) none of the above Ans: c 3. The organization that was founded to lend reserves to member countries experiencing a temporary shortage in foreign exchange reserves is the A) International Monetary Fund. B) International Bank for Reconstruction and Development. C) Bank of International Settlements. D) World Trade Organization. E) Bretton Woods Organization. Ans: A 4. Which exchange-rate system involves a "leaning against the wind" strategy in which short-term fluctuations in exchange rates are reduced without adhering to any
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This note was uploaded on 02/23/2010 for the course BUSINESS intb 3353 taught by Professor Prodon during the Spring '10 term at University of Houston.

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Quiz8 - Quiz 8 1. A devaluation is when a country: a....

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