Chapter 4 TB - Chapter 4 The International Monetary System...

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Chapter 4 The International Monetary System 1. Which of the following is not one of advantages for a flexible exchange rate system? A. countries can maintain independent monetary policy * B. exchange rates under a flexible system are unstable C. countries can maintain independent fiscal policy D. flexible exchange rates permit a smooth adjustment to external shocks E. Central banks do not need to maintain large reserves 2. Under the purely fluctuating exchange rate system, the balance of payments imbalances are automatically corrected by the following mechanism . A. speculation B. government intervention C. interest rate changes * D. supply and demand in exchange markets E. none of the above 3. Which of the following is not directly related to the Bretton Woods system? A. 1944 B. the fixed exchange rate system * C. the bank of England D. the International Monetary Fund E. the World Bank 4. Which of the following is not directly attributable to the collapse of the fixed exchange rate system? A. U.S. balance of payments deficits B. the decrease in the U.S. dollar value C. the decline of international reserves * D. Japan's trade surplus E. none of the above 5. The Group of Ten got together at the Smithsonian Institution to agree on a wider band system so that exchange rates can fluctuate . A. 5% above and below the central rate * B. 2.25% above and below the central rate C. 2% above and below the central rate D. 4% above and below the central rate E. 10% above and below the central rate
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6. The Jamaican Agreement was held to amend the Bretton Woods Agreement of the fixed
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This note was uploaded on 02/16/2012 for the course FIN 7023 taught by Professor Wald during the Spring '12 term at The University of Texas at San Antonio- San Antonio.

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Chapter 4 TB - Chapter 4 The International Monetary System...

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