ch.6+7

What is the purpose of the International Monetary System?

• To foster international trade

• To determine currency exchange rates

• All of the above

• To manage the flow of financial capital

When did the centers of international finance shift to the Greek city of Athens?

• Around 500 B.C.

• Around 100 B.C.

• In recent years

• During the 1500s

What was the international monetary system like before World War I?

• Focused on barter trade

• Operated under a fixed exchange rate system

• Based on a gold standard

• Dependent on digital currencies

When did the Bretton Woods Fixed Exchange Rate System operate?

• Before World War I

• 1973-Present

• 1915-1944

• 1945-1972

What is the European Union (EU) established for?

• To determine currency exchange rates

• To manage the flow of financial capital

• To foster international trade

• To promote trade and economic development among European countries

What is the official currency of the countries in the European Monetary Union?

• Dollar

• Yen

• Pound

• Euro

What is the value of one currency relative to another currency called?

• Exchange Rate

• Inflation Rate

• Interest Rate

• Foreign Exchange Rate

What is the formula for Purchasing Power Parity (PPP) model?

• FR1 = SR0[(1+InfRhc)/(1+InfRfc)]

• FR1 = SR0[(1+InfRfc)/(1+InfRhc)]

• FR1 = SR0[(1+IntRhc)/(1+IntRfc)]

• FR1 = SR0[(1+IntRfc)/(1+IntRhc)]

What is the main function of a Draft (Bill of Exchange)?

• To guarantee payment from one person to another

• To facilitate international trade

• To provide loans to individuals

• To insure against financial risks

What is the purpose of a Trust Receipt?

• To guarantee acceptance and payment of a draft

• To retain title to goods until paid for

• To provide insurance against political risks

• To facilitate foreign exchange transactions