International Monetary System

What is the Gold Standard in the international monetary system?

• Platinum Standard

• Silver Standard

• Gold Standard

• Bronze Standard

Explain the Bretton Woods System and its significance in the global economy.

• The Bretton Woods System was a trade agreement between European countries

• The Bretton Woods System was a monetary system that fixed exchange rates to the US dollar, promoting economic stability post-World War II, but collapsed in the early 1970s.

• The Bretton Woods System was a military alliance formed after World War II

• The Bretton Woods System was a social welfare program implemented in the 1950s

How do Floating Exchange Rates impact the global economy?

• Floating exchange rates only affect local businesses and have no impact on the global economy

• Floating exchange rates have no relevance to the global economy as they are just for show

• Floating exchange rates are currency values that fluctuate based on the foreign exchange market, influencing the global economy by affecting costs, competitiveness, and trade imbalances.

• Floating exchange rates are fixed values set by international organizations, limiting the global economy

Discuss the role and functions of the International Monetary Fund (IMF) in the context of a global financial crisis.

• The International Monetary Fund (IMF) plays a crucial role in promoting global monetary cooperation, financial stability, international trade, economic growth, and poverty reduction. Its functions include providing financial assistance, monitoring the global economy, offering policy advice, and providing technical assistance and training.

• The IMF only provides financial assistance to developed countries

• The IMF's main goal is to increase global poverty

• The IMF is primarily focused on military interventions

What are the macroeconomic policy goals in an open economy?

• Maintaining stable exchange rates, promoting economic growth, controlling inflation, achieving a sustainable balance of payments

• Encouraging imports over exports

• Increasing interest rates

• Reducing government spending

How can policy options be analyzed to achieve internal and external balance in a country's economy?

• By analyzing the impact of policy options on social welfare only

• By randomly selecting policy options without analysis

• By focusing solely on external balance and ignoring internal balance

• By evaluating the impact of policy options on internal balance (inflation and unemployment) and external balance (exchange rates and trade balance) through analyzing their effects on aggregate demand, supply-side factors, exchange rates, and trade flows.

Explain how the recent economic downturn in Country X impacted Country Y under a floating exchange rate system.

• Changes in one country's economy have no impact on others under a floating exchange rate system.

• Macroeconomic interdependence under a floating exchange rate system highlights how changes in one country's economy can affect others due to exchange rate fluctuations driven by market forces.

• Macroeconomic interdependence is only relevant in fixed exchange rate systems.

• Exchange rate fluctuations are solely determined by government intervention in a floating exchange rate system.

What caused the downfall of the Bretton Woods System?

• Implementation of the Marshall Plan

• Signing of the Plaza Accord

• Abandonment of the gold standard by the United States

• Introduction of the Euro currency

Discuss the challenges faced by a multinational corporation in managing its global supply chain.

• A multinational corporation faces challenges in managing its global supply chain due to issues such as logistics, inventory management, and supplier relationships.

• A multinational corporation faces challenges in managing its global supply chain due to employee training, office politics, and marketing strategies.

• Challenges in managing a global supply chain arise from legal regulations, environmental concerns, and customer demands.

• Managing a global supply chain is difficult due to lack of communication, cultural differences, and technological disruptions.

Explain how changes in the value of the US dollar impact the prices of imported goods and exports, affecting international trade.

• Changes in the US dollar value have no effect on international trade

• Changes in the US dollar value lead to adjustments in import and export prices, influencing international trade through competitiveness, inflation, and trade balances.

• Changes in the US dollar value only impact domestic trade and not international trade

• Changes in the US dollar value are only relevant in fixed exchange rate systems