Exam 8: The International Monetary System and Financial Forces

Currency exchange controls are found most frequently in:

What are currency exchange controls, why are they used, and how might they influence the international manager located in an exchange-controlled environment?

Monetary and fiscal policies:

In order to strengthen the U.S. dollar, the Federal Reserve might sell yen and buy dollars, in which case the yen functions as:

As a result of Bretton Woods and the dollar's use as a proxy for gold, the United States ran up a balance-of-payments deficit of around $56 billion, which led to the United States going off the gold exchange standard in 1971.

Exchange rate forecasting is:

The spot rate is the rate for exchange within two days in the currency market.

De Gaulle pushed Nixon to close the gold window at the Treasury, and this one action moved the IMF toward a floating exchange rate system.

One attribute of the U.S. tariff schedule is:

If freely floating currencies are allowed to fluctuate against one another, at times the fluctuations might be quite large.

When the law of one price is applied to interest rates, it suggests that:

A purchase of foreign goods from the United States (requiring importing) will:

A vehicle currency is a currency:

The Bretton Woods meeting in 1944 established a fixed-rate exchange system among Allied governments that was imposed on the Axis governments.

The SDR is:

Historically, gold has been used as a way for people to store value because of its:

The Triffin paradox suggests that:

Sir Isaac Newton established the price of gold in 1717 and de facto put England on the gold standard.

Currency exchange rate movements are well understood by economists and can be accurately forecast, which eliminates risk for the international seller operating with exposure outside the home currency.

The Bank for International Settlements is like a central bank for central bankers.