Chap002 11 - B. all currencies of member states were fully...

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39. Under the Bretton Woods system each country established a par value for its currency in relation to the dollar. And the U.S. dollar was pegged to gold at A. $1 per ounce. B. $35 per ounce. C. $350 per ounce. D. $900 per ounce. 40. Under the Bretton Woods system, each country was responsible for maintaining its exchange rate within ± 1 percent of the adopted par value by A. buying or selling foreign exchanges as necessary. B. buying or selling gold as necessary. C. expanding or contracting the supply of loanable funds as necessary. D. increasing or decreasing their money supply as necessary. 41. Under the Bretton Woods system, A. the U.S. dollar was the only currency that was fully convertible to gold; other currencies were not directly convertible to gold.
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Unformatted text preview: B. all currencies of member states were fully convertible to gold. C. all currencies of member states were fully convertible to gold or silver. D. none of the above. 42. In 1963, President John Kennedy imposed the Interest Equalization Tax (IET) on U.S. purchases of foreign securities. The IET was designed to A. decrease the cost of foreign borrowing in the U.S. bond market. B. increase the cost of foreign borrowing in the U.S. bond market. 43. The growth of the Eurodollar market, which is a transnational, unregulated fund market A. was encouraged by U.S. legislation designed to stem the outflow of dollars from the U.S. B. was discouraged by U.S. legislation designed to stem the outflow of dollars from the U.S....
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