Exam 19: Fixed Versus Floating: International Monetary Experience

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The gold standard was the historical anchor for nearly every traded currency. Explain how it worked as nations traded domestically and internationally at fixed exchange rates.

(Essay)

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Question 41

In a noncooperative pegged situation, when the home country devalues in response to an external shock the:

(Multiple Choice)

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Question 42

The difference between asymmetric and symmetric shocks is that:

(Multiple Choice)

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Question 43

In economics, another term for seigniorage is:

(Multiple Choice)

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Question 44

Suppose that country A pegs its currency to that of country B. Now suppose that there is an adverse demand shock in country A. Country B is more likely to cooperate and increase its money supply in response to country A's adverse demand shock when:

(Multiple Choice)

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Question 45

After World War II, many currencies were:

(Multiple Choice)

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Question 46

An important factor in the choice of an exchange rate regime in low-income nations is:

(Multiple Choice)

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Question 47

Home's currency is the peso and trades at 2 pesos per dollar. Home has external assets of $100 billion, all of which are denominated in dollars. It has external liabilities of $250 billion, 50% of which are denominated in dollars. What happens to net wealth (in pesos) if the peso depreciates to 3 pesos per dollar?

(Short Answer)

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Question 48

Studies cited in the text indicate that prices in countries with _ exchange rate systems tend to more rapidly than prices in countries with ____ exchange rate systems.

(Multiple Choice)

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Question 49

After a depreciation of the home currency, what is the situation with a nation's external wealth?

(Multiple Choice)

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Question 50

What is the most powerful argument against a fixed exchange rate?

(Multiple Choice)

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Question 51

If there is a center country to which other nations peg under a noncooperative arrangement, which nation(s) have monetary policy authority?

(Multiple Choice)

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Question 52

A cooperative outcome in a situation where one nation pegs to another would be that the:

(Multiple Choice)

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Question 53

During Britain's brief alignment with the ERM from 1990-1992, the trilemma tells us that monetary policy authority no longer existed in Britain. Why?

(Multiple Choice)

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Question 54

The recognition that _____ plays a profound role in many developing nations has led to more attention to this factor when choosing an exchange rate regime.

(Multiple Choice)

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Question 55

In a reserve currency system (such as the Bretton Woods system or the European ERM), currencies peg to a reserve currency. As a result:

(Multiple Choice)

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Question 56

The authors of your textbook cite one study that estimated that currency unions __ trade among member countries by approximately .

(Multiple Choice)

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Question 57

Why do symmetric shocks not disturb fixed exchange rate systems?

(Multiple Choice)

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Question 58

Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What might the U.S. Federal Reserve do to offset the macroeconomic effect of the leftward shift in the U.S. IS curve?

(Multiple Choice)

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Question 59

Which of the following does NOT describe why Britain adopted the pegged system (the Exchange Rate Mechanism [ERM]) in 1990?

(Multiple Choice)

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Question 60

Showing 41 - 60 of 182

Exam 19: Fixed Versus Floating: International Monetary Experience

The gold standard was the historical anchor for nearly every traded currency. Explain how it worked as nations traded domestically and internationally at fixed exchange rates.

In a noncooperative pegged situation, when the home country devalues in response to an external shock the:

The difference between asymmetric and symmetric shocks is that:

In economics, another term for seigniorage is:

Suppose that country A pegs its currency to that of country B. Now suppose that there is an adverse demand shock in country A. Country B is more likely to cooperate and increase its money supply in response to country A's adverse demand shock when:

After World War II, many currencies were:

An important factor in the choice of an exchange rate regime in low-income nations is:

Studies cited in the text indicate that prices in countries with _______ exchange rate systems tend to __________more rapidly than prices in countries with ________ exchange rate systems.

After a depreciation of the home currency, what is the situation with a nation's external wealth?

What is the most powerful argument against a fixed exchange rate?

If there is a center country to which other nations peg under a noncooperative arrangement, which nation(s) have monetary policy authority?

A cooperative outcome in a situation where one nation pegs to another would be that the:

During Britain's brief alignment with the ERM from 1990-1992, the trilemma tells us that monetary policy authority no longer existed in Britain. Why?

The recognition that _____ plays a profound role in many developing nations has led to more attention to this factor when choosing an exchange rate regime.

In a reserve currency system (such as the Bretton Woods system or the European ERM), currencies peg to a reserve currency. As a result:

The authors of your textbook cite one study that estimated that currency unions ________ trade among member countries by approximately ______.

Why do symmetric shocks not disturb fixed exchange rate systems?

Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What might the U.S. Federal Reserve do to offset the macroeconomic effect of the leftward shift in the U.S. IS curve?

Which of the following does NOT describe why Britain adopted the pegged system (the Exchange Rate Mechanism [ERM]) in 1990?

Trade in the Global Economy

Trade and Technology: The Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Offshoring of Goods and Services

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

Export Subsidies in Agriculture and High-Technology Industries

International Agreements: Trade, Labor, and the Environment

The Global Macroeconomy

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Exchange Rates II: the Asset Approach in the Short Run

National and International Accounts: Income, Wealth, and the Balance of Payments

Balance of Payments I: the Gains From Financial Globalization

Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run

Exchange Rate Crises: How Pegs Work and How They Break

The Euro

Topics in International Macroeconomics

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Studies cited in the text indicate that prices in countries with _ exchange rate systems tend to more rapidly than prices in countries with ____ exchange rate systems.

The authors of your textbook cite one study that estimated that currency unions __ trade among member countries by approximately .