International Monetary System Quiz

Which of the following investment strategies will allow me to make a profit if I anticipate that the value of the Euro, a currency that I do not own, is going to fall over the next 90 days and I am correct in my prediction?

• Buy Euros

• Hold Euros

• Sell Euros short

• Invest in Euros

The post WWII international monetary agreement that was developed in 1944 is known as the ________.

• Bretton Woods Agreement

• World Trade Organization

• International Monetary Fund

• United Nations

Another name for the International Bank for Reconstruction and Development is ________.

• World Bank

• European Central Bank

• Federal Reserve

• International Monetary Fund

The International Monetary Fund (IMF) ________.

• Provides financial assistance to developing countries

• Promotes international monetary cooperation

• Offers policy advice and technical assistance

• Is all of the above

Under the terms of Bretton Woods countries tried to maintain the value of their currencies within a fixed exchange rate margin of 1% around their par value, but the reference to a 'hybrid security' made up of different currencies is incorrect.

• True

• False

• Not mentioned

• Cannot be determined

Members of the International Monetary Fund may settle transactions among themselves by transferring Special Drawing Rights (SDRs).

• True

• False

• Not mentioned

• Cannot be determined

Today, the United States has not been ejected from the International Monetary Fund for refusal to pay annual dues.

• True

• False

• Not mentioned

• Cannot be determined

Which of the following led to the eventual demise of the fixed currency exchange rate regime worked out at Bretton Woods?

• Global financial crisis

• Oil price shocks

• Speculative attacks on currencies

• All of the above

The IMF's exchange rate regime classification identifies ________ as the most rigidly fixed, and ________ as the least fixed.

• Fixed exchange rate, Floating exchange rate

• Crawling peg, Managed float

• Exchange arrangements with no separate legal tender, Independent floating

• Currency board arrangement, Pegged exchange rate

Which of the following correctly identifies exchange rate regimes from less fixed to more fixed?

• Fixed exchange rate, Crawling peg, Independent floating

• Managed float, Currency board arrangement, Pegged exchange rate

• Independent floating, Crawling pegs, Exchange arrangements with no separate legal tender

• Floating exchange rate, Pegged exchange rate, Currency board arrangement