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FINAL EXAM
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Preguntas del test (47)
1During the time of the Bretton Woods monetary system the US dollar was
- Aa) floated against the market price of gold.
- Bb) floated against other majore currencies such as JPY, GBP and EUR.
- Cc) pegged to a fixed price for gold.
- Dd) pegged to a basket of competing currencies.
- Aa) floated against the market price of gold.
2
At present the US dollar is
- Aa) pegged to a fixed price for gold.
- Bb) floated against other major currencies such as JPY, GBP and EUR.
- Cc) pegged to a basket of competing currencies.
- Dd) floated against the market price of gold.
3In a fixed exchange rate system, if the USD falls below the fixed price for JPY, the US should
- Aa) use monetary policy to increase the money supply.
- Bb) print more USD.
- Cc) sell USD and buy JPY.
- Dd) sell JPY and buy USD.
4Which type of exchange rate system permits the greatest degree of monetary policy autonomy?
- Aa) balanced exchange rate systems.
- B
b) fixed echange rate systems. - Cc) floating exchange rate systems.
- Dd) fixed-but-adjustable echange rate systems.
5A key advantage of a fixed exchange rate system is
- Aa) currencies are more valuable than in other systems.
- Bb) predictability in the value of currencies.
- Cc) monetary policy autonomy.
- Dd) currency values get fixed without government intervention
6Foreign aid expenditures by the US government would be counted in the
- Aa) trade account.
- Bb) unilateral transfers account.
- Cc) income account.
- Dd) capital account.
- Aa) trade account.
7The purchase of stock in a foreign company would be recorded in the
- Aa) income account.
- Bb) stock account.
- Cc) unilateral transfers account.
- Dd) captial account.
8The current account is comprised of the
- Aa) trade account.
- Bb) service account.
- Cc) unilateral transfers account.
- Dd) All of the above.
9In a fixed exchange rate system, balance of payments adjustments occur naturally by
- Aa) changes to domestic prices.
- Bb) restricting government intervention in currency markets.
- Cc) careful use of industrial policy.
- Dd) changes to the value of currency
10In a floating exchange rate system, balance of payments adjustments occur naturally by
- Aa) careful use of monetary policy.
- Bb) changes to domestic prices.
- Cc) changes to the value of currency.
- Dd) restricting government intervention in currency markets.
- Aa) careful use of monetary policy.
11When a country's money supply increases there is likely to be
- Aa) inflation or an increase in prices.
- Bb) a fundamental disequilibrium.
- Cc) deflation or a decrease in prices.
- Dd) stagflation meaning both increases and decreases in prices.
12International financial integration refers to financial transactions involving
- AA) currencies from different countries.
- BB) borrowers and savers from different countries.
- CC) companies from different countries.
- DD) All of the above
13The so-called "unholy trinity" includes the goal of
- Aa) autonomous monetary policy.
- Bb) fixed echange rates.
- Cc) capital mobility.
- Dd) All of the above.
14The country that came to dominate the European Currency System in the 1980s was
- Aa) France.
- Bb) United Kingdom.
- Cc) Luxembourg.
- Dd) Germany.
15Neoclassical economists prior to Keynes generally assumed
- Aa) an automatic equilibrium between supply and demand.
- Bb) excessive demand would decrease prices.
- Cc) excessive supply would increase prices.
- Dd) All of the above.
16Keynes proposed managing the economy's aggregate demand by
- Aa) increasing government spending while not raising taxes.
- Bb) increasing government spending while raising taxes.
- Cc) decreasing government spending while decreasing taxes.
- Dd) All of the above.
17The easiest and quickest to increase aggregate demand is to
- Aa) decrease interest rates.
- Bb) increase interest rates.
- Cc) decrease government expenditure.
- Dd) increase government expenditure.
- Aa) decrease interest rates.
18The instruments of fiscal policy include
- Aa) expenditures and interest rates.
- Bb) tax rates and money supply.
- Cc) interest rates and money supply.
- Dd) tax rates and expenditures,
19A "sociotropic" voter is one who bases voting decisions on
- Aa) the economic policies of the candidates without regard to social issues.
- Bb) his or her own material well-beingat the time.
- Cc) the social policies of the candidates without regard to economic issues.
- Dd) the material well-being of the entire economy at the time.
20Parties of the left generally pursue policies to
- Aa) lower unemployment while tolerating inflation.
- Bb) lowering both inflation and unemployment.
- Cc) lowering inflation and raising employment.
- Dd) lower inflation while tolerating unemployment.
21The Phillips curve as originally proposed posits a trade-off between
- Aa) inflation and an autonomous monetary policy.
- Bb) fixed exchange rates and an autonomous monetary policy.
- Cc) unemployment and inflation.
- Dd) unemployment and fixed exchange rates.
- Aa) inflation and an autonomous monetary policy.
22Export-oriented and import-competing sectors of the economy are both likely to prefer
- Aa) a depreciating currency.
- Bb) an appreciating currency.
- Cc) an autonomous monetary policy.
- Dd) stable exchange rates.
23Parties of the right generally pursue policies to
- Aa)
lower inflation while tolerating high unemployment. - Bb)
lower unemployment while tolerating high inflation. - Cc)
raise inflation and lower employment. - Dd)
lower both inflation and unemployment.
- Aa)
24The natural rate of unemployment
- Aa) cannot be reduced over the long term by monetary policy.
- Bb) cannot be reduced over the short term by monetary policy.
- Cc) rises and falls with inflation.
- Dd) rises and falls with unemployment benefits.
25Most industrialized countries are now committed to controlling
- Aa) capital flows through monetary policy.
- Bb) unemployment through monetary policy.
- Cc) exchange rates through monetary policy.
- Dd) inflation through monetary policy.
26The increasing use of independent central banks is intended to keep
- Aa) monetary policy focused on exchange rates.
- Bb) exchange rates free from electoral politics.
- Cc) exchange rates fixed to their pegged value.
- Dd) monetary policy free from electoral politics.
27Official development assistance to developing countries includes
- Aa) commercial loans to developing countries.
- Bb) concessionary loans to developing countries.
- Cc) official government bonds sold by developing countries.
- Dd) All of the above
28Commercial lending to developing countries grew rapidly in the 1970s because there was
- Aa) rapid growth in the dollars available to lend.
- Bb) rapid growth in the number of commercial banks.
- Cc) a decline in oil prices making petrodollars available.
- Dd) All of the above
29The exogenous shocks precipitating the Latin American debt crisis included the
- A oil price increase of 1979.
- Brise in interest rates of commercial lenders.
- Crecession in the US and Europe.
- DAll of the above
30Structural adjustment reforms in Latin America usually involved
- Aa) implementing a rigorous industrial policy.
- Bb) stimulating the economy with a judicious fiscal policy.
- Cc) efforts to reduce import barriers and increase exports.
- Dd) a significant extension of import substitution industrialization.
31Structural adjustment reforms often had the unfortunate effect of
- Aa) lowering real wages.
- Bb) All of the above
- Cc) lowering consumption.
- D
d) raising unemployment.
32The best way to think of debt service capacity is as
- Aa) outstanding principal and interest as a percentage of government revenue.
- Bb) outstanding principal and interest as a percentage of export earnings.
- Cc) outstanding principal and interest as a percentage of GDP.
- Dd) outstanding principal and interest as a percentage of government expenditure.
33The main source of bargaining power by the coalition of debtor countries was
- Aa) the threat of collective default.
- Bb) the threat to boycott commercial banks.
- Cc) the threat to unilaterally reschedule payments.
- Dd) the threat to use their numbers to take over the IMF.
34A key implication of the 1980s Latin American debt crisis was that
- Aa) import substitution industrialization policies are doomed to fail.
- Bb) the IMF has little influence over economic policies of developing countries.
- Cc) borrowing petrodollars carries more risk than regular dollars.
- Dd) export oriented policies are doomed to fail.
35A common feature among the financial crises of the 1990s was
- Aa) an overreliance on petrodollar loans from Saudi Arabia.
- Bb) floating exchange rates on open currency markets.
- Cc) highly stable political situations.
- Dd) some form of fixed exchange rate.
36One implication of the Mexican peso crisis of 1994-95 was that
- Aa) increasing demand for pesos lead to severe depreciation.
- Bb) crawling band exchange rates are immune from speculative attack.
- Cc) the economy can be seriously affected by exogenous political shocks.
- Dd) the economy is highly insulated from exogenous political shocks.
37Following the assassination of PRI presidential candidate Luis Donaldo Colosio in March of 1994 the peso
- A
a) quickly appreciated against the US dollar. - Bb) remained remarkably stable against the US dollar.
- Cc) quickly depreciated against the US dollar.
- Dd) was devalued by the government outside the upper limit of the crawling band.
- A
38Among the risks of intermediated loans undertaken by East Asian banks was
- Aa) the possibility of renewed capital controls imposed by governments.
- Bb) appreciation of domestic currency against the international loan currency.
- Cc) depreciation of domestic currency against the international loan currency.
- Dd) the moral hazard of believing governments would protect them from losses.
39The IMF extended loans to the East Asian governments in financial crisis on condition that they
a) significantly widen the crawling band used by their exchange rate.
- Aa) significantly widen the crawling band used by their exchange rate.
- Bb) open their economies to competition from foreign financial institutions.
- C
c) reform their political systems to include free and fair democratic elections. - Dd) have more dilegence in keeping exchange rates firmly fixed.
- Aa) significantly widen the crawling band used by their exchange rate.
40The East Asian financial crises and implementation of IMF reforms resulted in short-term
- Aa) economic expansion and rising unemployment and poverty rates.
- Bb) economic contraction and falling unemployment and poverty rates.
- Cc) economic expansion and falling unemployment and poverty rates.
- Dd) economic contraction and rising unemployment and poverty rates.
41The IMF has been criticized for its handling of the East Asian financial crisis on grounds that
- Aa) it failed to develop sufficiently detailed financial sector reforms to prevent another crisis.
- Bb) macroeconomic stabilization policies were inappropriate given the economic conditions.
- Cc) it should have required higher interest rates to stop depreciation of currencies.
- Dd) it failed to impose sufficient macroeconomic stabilization measures given the econmic conditions.
42Intermediated bank loans can be risky because
- Aa) intermediation requires government collusion to manage exchange rates.
- Bb) depreciation of the lender's domestic currency might raise the cost of servicing debt.
- Cc) intermediation is illegal in some countries.
- Dd) depreciation of the borrower's domestic currency might
raise the cost of servicing debt.
43The debt servicing crisis of the world's poorest countries was overlooked until the 1990s because
- Aa) loans were from official sources such as governments and multilateral agencies rather than private commercial banks.
- Bb) loans were kept confidential to protect the integrity of the development projects being financed.
- Cc) everyone knew the loans would never be paid back anyway.
- Dd) All of the above
44The Heavily Indebted Poor Countries debt relief initiative
- Aa) was initiated by the IMF and World Bank.
- Bb) covered multilateral debt as well as bilateral debt.
- Cc) required a debt sustainability study to determine how much debt could be maintained.
- Dd) All of the above
- Aa) was initiated by the IMF and World Bank.
45Debt relief of 100% to qualifying countries was made available through the
- Aa) Paris Club.
- Bb) HIPC Initiative
- Cc) Multilateral Debt Relief Initiative.
- Dd) All of the above
46What is meant by the "dollar overhang" at the end of the Bretton Woods System around 1970 or so?
- Ait is when there is an excess amount of currency in other countries
- Bthere is no other answer
47Why do export-oriented producers prefer a weak currency to a strong one?
- Aidk
- Bidkkk
Información
- Descripción
- Test sobre FINAL EXAM, creado por Melissa Cooper el 13/11/2014.
- Autor
- Melissa Cooper
- Idioma
- English
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