EXAM_III - University of Houston INTB 3353 Economics of Globalization Fall 2007 Professor Ruxandra Prodan Exam#3 Name 1 Which of the following was

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University of Houston Fall 2007 INTB 3353: Economics of Globalization Professor Ruxandra Prodan Exam #3 Name:_________________________________________________________________ 1. Which of the following was not created at the conclusion of World War II? a) the Bretton Woods system b) the International Monetary Fund c) the International Bank for Reconstruction and Development d) the General Agreement on Tariffs and Trade e) the International Trade Organization e 2. Which of the following provides short term loans of foreign currency to governments? a) IMF b) WTO c) World Bank d) GATT e) Grameen Bank a 3. Which of the following is not among the specific goals of the World Bank? a) eradicate extreme poverty and hunger b) achieve universal primary education c) promote gender equality and empower women d) establish full employment policies and practices for every country e) reduce child mortality d 4. When anticipated inflation increases in a country, investors will: a. Invest more in that country and push the currency up b. Pull out their investments from that country and cause the currency to devaluate c. Be indifferent towards inflation d. Expect higher returns on their existing investments b
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5. The third generation financial crises occurred in a. Germany b. Asia c. Italy d. United Kingdom b 6. Which of the following is not a central feature in first generation models of currency crises? a) budget deficits b) reduction of the money supply c) high inflation d) depletion of a country’s foreign exchange reserves e) capital outflows b 7. Second generation models of currency crises can most reliably explain a) the dollar crisis of the 1960s b) Latin American currency crises in the 1970s and 1980s c) the 1992 crisis in the European Exchange Rate Mechanism (ERM) d) the Asian crisis of the 1990s e) none of the above c 8. The principal currency to which others were linked in the European Exchange Rate Mechanism (ERM) was a) the French franc b) the German Deutsche mark c) the British pound sterling d) the Italian lira e) the Euro b 9. All of the following are problems with IMF except: a. not being open to criticism b. “one-size-fits-all” policy c. Policies imposed all at once d. Technical assistance for developing countries d
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10. Which of the following is not valid statement regarding Fixed Exchange Rate Regimes? a) Fixed exchange rates are useful in the short run to achieve stabilizing the currency b) Fixed exchange rate regime can be designed to last forever c) Government can fix the exchange rate by buying and selling foreign reserves with the domestic credit (money) d) A country can achieve fixing the exchange rate whether by capital controls or conducting monetary policies to keep domestic interest rate equal to world interest rate b Scenario: Assume that there are only two countries in the world and flexible exchange
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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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EXAM_III - University of Houston INTB 3353 Economics of Globalization Fall 2007 Professor Ruxandra Prodan Exam#3 Name 1 Which of the following was

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