WorksheetsInternational Monetary System
Total questions: 15
Worksheet time: 4mins
Which institution plays a key role in promoting cooperation and stability in the international monetary system?
International Monetary Fund (IMF)
World Bank
European Central Bank (ECB)
Federal Reserve System (Fed)
Under a floating exchange rate system, what determines the exchange rate for each currency?
answer choices
a currency's par value
the gold standard
its pegged value
the forces of supply and demand
Under a managed float _______________________.
currency values are determined only by private sector market force
central banks sometimes manipulated exchange rates
countries agree to buy or sell their paper currencies for gold
the dollar’s value was allowed to fall on currency markets
Platinum was used as a medium of international exchange in ancient times because of its strength and value.
True
False
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
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.
answer choices
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.
Advocates of flexible exchange rates claim that under flexible exchange rates, the central bank of_________________________.
an overheated economy could cool down activity by increasing the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.
a cooled economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.
an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.
an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve outflow would undermine its stabilization effort.
an overheated economy could cool down activity by decreasing employment and increasing output without worrying that this would undermine its stabilization
Which of the following currencies is currently linked to the price of gold?
answer choices
British Pound
US Dollar
Japanese yen
None of the above
What was the agreement for Bretton Woods System?
answer choices
Fixed Exchange Rate
US Dollar was the only currency that allowed to fully convertible to gold
US dollar was pegged to gold at $35 an ounce
All of the above
Which were the two institutions that were instituted during the Bretton Woods System era?
World Trade Organization and World Bank
International Monetary Fund and World Trade Organization
World Trade Organization and United Nations
International Monetary Fund and World Bank
A country has a(n) ___________ when the government keeps the exchange rate against some other currency at or near a particular target.
Fixed Exchange Rate
Exchange Rate Regime
Floating Exchange Rate
A country has a(n) ___________ when the government lets the exchange rate go wherever the market takes it.
Floating Exchange Rate
Exchange Rate Regime
Fixed Exchange Rate
Under the _____________, each country pegged the value of its currency to gold.
mercantilism
gold standard
econometrics
factor endowment theory
