Question 1

Which agreement devalued the dollar approximately 9 percent while other currencies were revalued?

Accepted Answer

The Smithsonian Agreement was signed in 1971 with the aim of stabilizing exchange rates between major world currencies. As a part of this agreement, the US dollar was devalued by approximately 9 percent, while currencies of other countries were revalued upwards. This move was intended to address the issue of US trade deficits and the overvaluation of the dollar.

Question 2

To avoid or minimize international financial crises in the future,the IMF is taking which of the following measures?

Accepted Answer

Strengthening emerging markets' banking and financial systems is a measure taken by the IMF to avoid or minimize international financial crises in the future. This is because an effective and robust banking and financial system can prevent financial instability and contagion. Reducing transparency, discouraging private sector involvement, and increasing quantitative control over trade are not measures that the IMF is taking to address international financial crises.

Question 3

To avoid or minimize international financial crises in the future,the IMF is taking which of the following measures?

Accepted Answer

Increasing transparency in international monetary relations would help to identify potential problems early on and prevent crises from growing. This would involve more open communication and information sharing among countries and international organizations. Reducing regulations on emerging markets' banking and financial systems, discouraging private sector involvement, and increasing quantitative control over trade are not necessarily effective measures for avoiding financial crises and could have negative consequences.

Question 4

In the early 1970s in the face of destabilizing financial movements out of dollars,President Nixon was forced to do a number of things.Choose from the list below,the thing that he (US)did not do?

Accepted Answer

In the early 1970s, President Nixon took several measures in response to financial instability, but imposing a 10 percent export surcharge was not one of them. Instead, he imposed a 10 percent import surcharge to protect American industries and address the trade deficit.

Question 5

Which of the following is not considered as one of the three major trading blocs in the world?

Accepted Answer

The three major trading blocs in the world are NAFTA, EU, and Asian Bloc. Central American Trading Block is not considered as one of the major trading blocs.

Question 6

The Smithsonian Agreement resulted in which of the following?

Accepted Answer

The Smithsonian Agreement allowed exchange rates to fluctuate by +/- 2.25%, which was a change from the previous fixed exchange rate system.

Question 7

After 1958,which of the following was a measure undertaken by the United States to correct the rapidly growing balance-of-payments deficits?

Accepted Answer

The decrease in US military expenditure abroad was a measure undertaken by the United States to correct the rapidly growing balance-of-payments deficits after 1958. This allowed for more funds to be directed towards other areas that could help improve the US economy.

Question 8

The Smithsonian Agreement resulted in which of the following?

Accepted Answer

The Smithsonian Agreement led to a revaluation of other currencies, including the Japanese yen and the German mark, against the US dollar, but not a revaluation of the dollar itself.

Question 9

To overcome the stagnant growth it was experiencing for the past 10-15 years,Japan undertook which of the following measures?

Accepted Answer

Japan undertook all of the above measures to overcome stagnant growth. These measures included reducing interest rates to near 0%, investing in infrastructure that sometimes wasn't necessary, and undervaluing the yen to make their exports more competitive.

Question 10

After 1958,which of the following was a measure undertaken by the United States to correct the rapidly growing balance-of-payments deficits?

Accepted Answer

After 1958, the United States undertook a measure to tie foreign aid to countries' purchase of American goods as a way to correct the rapidly growing balance-of-payments deficits. This measure was known as "tying" foreign aid, and its purpose was to boost American exports and reduce the trade deficit. The other options (B, C, and D) would only worsen the balance-of-payments deficits.

Question 11

After 1958,which of the following was a measure undertaken by the United States to correct the rapidly growing balance-of-payments deficits?

Accepted Answer

Direct controls were placed on capital outflows, such as taxes on foreign investments, to prevent excessive outflow of capital and improve the balance of payments situation. Option A is incorrect because increasing unconditional foreign aid would have worsened the balance of payments situation. Option B is incorrect because increasing military spending would have increased the budget deficit and worsened the balance of payments situation. Option D is incorrect because discouraging exports and imports would have reduced international trade and worsened the balance of payments situation.

Question 12

Which of the following statements about the Uruguay Round is true?

Accepted Answer

The answer of Which of the following statements about the...

Question 13

What economic term represents the large amount of foreign-held dollars resulting from past US balance-of-payments deficits?

Accepted Answer

Dollar overhang refers to the large amount of foreign-held dollars resulting from past US balance-of-payments deficits. It represents a potential risk for the US economy as the holders of these dollars may decide to sell them, causing a depreciation of the dollar and increasing inflation.

Question 14

Which of the following are international economic problems facing the world today?

Accepted Answer

All three options are significant international economic problems facing the world today. Trade protectionism in industrialized countries can create barriers to trade and limit economic growth. High structural unemployment and slow growth in Europe and stagnation in Japan impact not only those regions but also have ripple effects on the global economy. Job insecurity from restructuring and downsizing in the U.S. also has implications beyond the country's borders as it can lead to decreased consumer spending and affect global markets.

Question 15

In 1971 with the Smithsonian Agreement,representatives from the Group of Ten nations agreed to increase the dollar price for an ounce of gold to what amount?

Accepted Answer

The Smithsonian Agreement in 1971 resulted in the revaluation of the dollar, setting the price of gold at $38 per ounce, a change from the previous $35 per ounce set by the Bretton Woods Agreement.

Question 16

The excess supply of dollars in the hands of foreign monetary authorities is referred to as what?

Accepted Answer

The answer of The excess supply of dollars in the...

Question 17

After the recent global financial crisis,which group or bloc essentially replaced the Group of Seven (G-7)as the steering committee of the world economy?

Accepted Answer

The Group of Twenty (G-20) essentially replaced the Group of Seven (G-7) as the steering committee of the world economy after the 2008 global financial crisis. The G-20 includes both developed and emerging economies, making it a more representative and inclusive forum for international economic cooperation.

Question 18

Which agreement,ratified in 1978,recognized the managed float and abolished the official price of gold?

Accepted Answer

The Jamaica Accords were ratified in 1978 and recognized the shift to a managed float system of exchange rates, which allowed for greater flexibility in currency values. It also abolished the official price of gold, which had previously anchored the value of currencies. The Smithsonian Agreement was signed in 1971 and adjusted exchange rates, but did not include these changes. The European Cooperation Agreements and General Agreement to Borrow are unrelated to this topic.

Question 19

Which of the following statements about the Uruguay Round is true?

Accepted Answer

The answer of Which of the following statements about the...

Question 20

During which decades did 'dollar glut' develop?

Accepted Answer

The 'dollar glut' primarily developed in the late 1950s and early 1960s, as the United States ran balance of payments deficits, leading to an excess supply of dollars held outside the US.

Quiz 16: The International Monetary System: Past, present, and Future

Which agreement devalued the dollar approximately 9 percent while other currencies were revalued?

To avoid or minimize international financial crises in the future,the IMF is taking which of the following measures?

To avoid or minimize international financial crises in the future,the IMF is taking which of the following measures?

In the early 1970s in the face of destabilizing financial movements out of dollars,President Nixon was forced to do a number of things.Choose from the list below,the thing that he (US) did not do?

Which of the following is not considered as one of the three major trading blocs in the world?

The Smithsonian Agreement resulted in which of the following?

After 1958,which of the following was a measure undertaken by the United States to correct the rapidly growing balance-of-payments deficits?

The Smithsonian Agreement resulted in which of the following?

To overcome the stagnant growth it was experiencing for the past 10-15 years,Japan undertook which of the following measures?

After 1958,which of the following was a measure undertaken by the United States to correct the rapidly growing balance-of-payments deficits?

After 1958,which of the following was a measure undertaken by the United States to correct the rapidly growing balance-of-payments deficits?

Which of the following statements about the Uruguay Round is true?

What economic term represents the large amount of foreign-held dollars resulting from past US balance-of-payments deficits?

Which of the following are international economic problems facing the world today?

In 1971 with the Smithsonian Agreement,representatives from the Group of Ten nations agreed to increase the dollar price for an ounce of gold to what amount?

The excess supply of dollars in the hands of foreign monetary authorities is referred to as what?

After the recent global financial crisis,which group or bloc essentially replaced the Group of Seven (G-7) as the steering committee of the world economy?

Which agreement,ratified in 1978,recognized the managed float and abolished the official price of gold?

Which of the following statements about the Uruguay Round is true?

During which decades did 'dollar glut' develop?