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Page 41
DATE MODIFIED:
6/22/2016 3:27 PM
100. Under managed-floating exchange rates, market forces are allowed to determine exchange rates in the short run while
central bank intervention is used to stabilize exchange rates in the long run.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Floating Exchange Rates
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:27 PM
DATE MODIFIED:
6/22/2016 3:27 PM
101. Under managed floating exchange rates, central bank intervention is used to offset temporary fluctuations in
exchange rates that contribute to uncertainty in carrying out transactions in international trade and finance.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Floating Exchange Rates
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:27 PM
DATE MODIFIED:
6/22/2016 3:27 PM
102. To offset an appreciation in the dollar’s exchange value, the Federal Reserve can nudge interest rates down in the
United States which results in net investment outflows.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
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Page 42
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Managed Floating Rates
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:27 PM
DATE MODIFIED:
6/22/2016 3:27 PM
103. When pursued over the long run, a policy of increasing the domestic money supply to offset an appreciation of the
home country’s currency results in inflation and a decrease in home-country competitiveness in key industries.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Managed Floating Rates
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:27 PM
DATE MODIFIED:
6/22/2016 3:27 PM
104. Which nations use multiple exchange rates the most and why?
ANSWER:
Multiple exchange rates are used primarily by the developing nations who wish to ensure that
necessary goods are imported and less essential goods are discouraged.
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Choosing an Exchange Rate System: Constraints Imposed by Free Capital Flows
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:27 PM
DATE MODIFIED:
6/22/2016 3:27 PM
105. What is an SDR?
ANSWER:
The SDR is a currency basket composed of five currencies established by the International
Monetary Fund. Nations desiring exchange-rate stability are attracted to the SDR as a
currency basket against which to anchor their currency values.
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange-Rate System
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:27 PM
DATE MODIFIED:
6/22/2016 3:27 PM
106. What is the difference between the crawling peg and adjustable pegged exchange rates?
ANSWER:
Under the adjustable peg, currencies are tied to a par value that changes infrequently but
suddenly, usually in large jumps. The crawling peg allows a nation to make small changes in
par values, perhaps several times a year, so that they creep along slowly in response to
evolving market conditions.
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Essay
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Crawling Peg
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:27 PM
DATE MODIFIED:
6/22/2016 3:27 PM
107. How can currency boards and dollarization prevent currency crises?
ANSWER:
A currency board is a monetary authority that issues notes and coins convertible into a foreign
currency at a fixed exchange rate. The most vital contribution a currency board can make to
exchange-rate stability is to impose discipline on the process of money creation. This results
in greater stability on domestic prices which, in turn, stabilizes the value of the domestic
currency. Dollarization occurs when residents of a county use the U.S. dollar alongside or
instead of their own currency. Dollarization is seen as a way to protect a country’s growth and
prosperity from bouts of inflation, currency depreciation, and speculative attacks against the
local currency.
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Essay
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Currency Crises
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:27 PM
DATE MODIFIED:
6/22/2016 3:27 PM
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Page 44
b.
c.
d.
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:25 AM
DATE MODIFIED:
7/5/2016 8:29 AM
109. The Bretton Woods System of 1944-1973 was essentially a system of
a.
freely fluctuating exchange rates
b.
crawling pegged exchange rates
c.
managed floating exchange rates
d.
adjustable pegged exchange rates
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:30 AM
DATE MODIFIED:
7/5/2016 8:37 AM
110. The Bretton Woods System of 1944-1973 was based upon
a.
the international silver standard
b.
the international gold standard
c.
freely fluctuating exchange rates
d.
relatively stable exchange rates
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
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Page 45
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:38 AM
DATE MODIFIED:
7/5/2016 8:41 AM
111. The result of devaluations of the dollar in the early 1970s was to
a.
increase the price of U.S. exports
b.
decrease the price of U.S. exports
c.
decrease the price of U.S. imports
d.
increase the U.S. balance of payments surplus
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 8:41 AM
DATE MODIFIED:
7/5/2016 8:43 AM
112. According to the Bretton Woods System of 1944-1973, the United States was designated as the
a.
par value country
b.
floating exchange rate country
c.
reserve currency country
d.
liquidity deficit country
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 8:44 AM
DATE MODIFIED:
7/5/2016 8:46 AM
113. Under the Bretton Woods System of 1944-1973
a.
member countries set the par value of their currencies in terms of gold
b.
market exchange rates were almost fixed
c.
currency devaluations or revaluations could be used to adjust the par value of a currency when it became
overvalued or undervalued.
d.
all of the above
ANSWER:
d
POINTS:
1
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Page 46
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:46 AM
DATE MODIFIED:
7/5/2016 8:48 AM
114. Under the Bretton Woods System of 1944-1973, member countries could re-peg their currencies up to _____,
without permission of the International Monetary Fund
a.
2 percent
b.
5 percent
c.
10 percent
d.
25 percent
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:48 AM
DATE MODIFIED:
7/5/2016 8:50 AM
115. When the United States abandoned the Bretton Woods System in 1973, it adopted a system of
a.
managed floating exchange rates
b.
freely fluctuating exchange rates
c.
adjustable pegged exchange rates
d.
crawling pegged exchange rates
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Managed Floating Rates
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:50 AM
DATE MODIFIED:
7/5/2016 8:52 AM
116. Under a system of fixed exchange rates, the purpose of currency devaluation is to cause the exchange value of a
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Page 47
currency to ______, thus counteracting a balance-of-payments ______.
a.
depreciate; deficit
b.
depreciate; surplus
c.
appreciate; deficit
d.
appreciate; surplus
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Monetary and fiscal policy
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:52 AM
DATE MODIFIED:
7/5/2016 10:26 AM
117. Under a system of fixed exchange rates, the purpose of currency revaluation is to cause the exchange value of a
currency to ______, thus counteracting a balance-of-payments ______.
a.
depreciate; deficit
b.
depreciate; surplus
c.
appreciate; deficit
d.
appreciate; surplus
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Monetary and fiscal policy
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:57 AM
DATE MODIFIED:
7/5/2016 10:28 AM
118. In recent years, members of the International Monetary Fund have adopted exchange rate systems including
a.
currency board arrangements
b.
fixed exchange rates
c.
crawling pegged exchange rates
d.
all of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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Page 48
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Exchange Rate Practices
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 8:59 AM
DATE MODIFIED:
7/5/2016 9:03 AM
119. In recent years, members of the International Monetary Fund have adopted exchange rate systems including
a.
independently floating exchange rates
b.
managed floating exchange rates
c.
crawling pegged exchange rates
d.
all of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Exchange Rate Practices
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 9:04 AM
DATE MODIFIED:
7/5/2016 9:11 AM
120. Countries tend to be less served by a fixed exchange rate system when
a.
they are small, open economies
b.
their inflation differentials are modest
c.
they are highly exposed to international capital movements
d.
their wages are quite flexible to changing market conditions
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Exchange Rate Practices
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 9:12 AM
DATE MODIFIED:
7/5/2016 9:30 AM
121. Members of the International Monetary Fund agree that
a.
their exchange rate systems should not be manipulated to gain unfair competitive advantages over other
members
b.
their exchange rate systems should not be manipulated to prevent effective balance-of-payments adjustments
c.
members countries can act to counter short-term disorderly conditions in foreign exchange markets
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Page 49
d.
all of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Exchange Rate Practices
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 9:40 AM
DATE MODIFIED:
7/7/2016 6:23 AM
122. The “impossible trinity” should the relationship between
a.
free movements of international capital
b.
independent monetary policies of countries
c.
fixed exchange rate systems of countries
d.
all of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Choosing an Exchange Rate System: Constraints Imposed by Free Capital Flows
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 9:56 AM
DATE MODIFIED:
7/5/2016 9:58 AM
123. Hong Kong essentially has fixed the exchange value of its currency to the
a.
euro
b.
British pound
c.
U.S. dollar
d.
Canadian dollar
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Choosing an Exchange Rate System: Constraints Imposed by Free Capital Flows
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 9:59 AM
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Page 50
DATE MODIFIED:
7/5/2016 10:10 AM
124. With fixed exchange rates, assume that the home currency becomes overvalued. To maintain the fixed exchange rate,
the home country’s central bank must
a.
purchase the currency, and as a result it loses international reserves
b.
purchase the currency, and as a result it gains international reserves
c.
sell the currency, and as a result it loses international reserves
d.
sell the currency, and as a result it gains international reserves
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:28 AM
DATE MODIFIED:
7/7/2016 12:30 AM
125. With fixed exchange rates, assume that the home currency becomes undervalued. To maintain the fixed exchange
rate, the home country’s central bank must
a.
purchase the currency, and as a result it loses international reserves
b.
purchase the currency, and as a result it gains international reserves
c.
sell the currency, and as a result it loses international reserves
d.
sell the currency, and as a result it gains international reserves
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/7/2016 12:31 AM
DATE MODIFIED:
7/7/2016 12:33 AM
126. With fixed exchange rates, assume that the home currency becomes undervalued, that is, above its par value. To
maintain the fixed exchange rate, the home country’s central bank must
a.
sell the home currency and purchasing foreign currencies
b.
sell the home currency and sell foreign currencies
c.
purchase the home currency and sell foreign currencies
d.
purchase the home currency and purchase foreign currencies
ANSWER:
a
POINTS:
1
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Page 51
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:34 AM
DATE MODIFIED:
7/7/2016 12:36 AM
127. Under a system of fixed exchange rates, if the exchange rate of a country is overvalued, then its central bank’s effort
to prevent the currency from ______ will lead to a (an) ______.
a.
depreciating; increase in international reserves
b.
depreciating; decrease in international reserves
c.
appreciating; increase in international reserves
d.
appreciating; decrease in international reserves
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:37 AM
DATE MODIFIED:
7/7/2016 12:39 AM
128. Under a system of fixed exchange rates, if the exchange rate of a country is undervalued, then its central bank’s effort
to prevent the currency from ______ will lead to a (an) ______.
a.
depreciating; increase in international reserves
b.
depreciating; decrease in international reserves
c.
appreciating; increase in international reserves
d.
appreciating; decrease in international reserves
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:40 AM
DATE MODIFIED:
7/7/2016 12:43 AM
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Page 52
129. Under a system of fixed exchange rates, if the international reserves of a country’s central bank become exhausted, it
cannot keep its currency
a.
from appreciating, and a devaluation must take place in which the official exchange rate is set at a lower value
b.
from appreciating, and a devaluation must take place in which the official exchange rate is set at a higher value
c.
from depreciating, and a devaluation must take place in which the official exchange rate is set at a lower value
d.
from depreciating, and a revaluation must take place in which the official exchange rate is set at a higher value
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:43 AM
DATE MODIFIED:
7/7/2016 12:45 AM
130. Under a system of fixed exchange rates, if the international reserves of a country’s central bank become exhausted, it
can no longer prevent its currency from
a.
undergoing price inflation
b.
undergoing price deflation
c.
appreciating
d.
depreciating
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Fixed Exchange Rate System
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:45 AM
DATE MODIFIED:
7/7/2016 12:47 AM
131. With a system of fixed exchange rates, a country that exhausts its international reserves in an attempt to keep its
currency from _____ will have to ______ its currency
a.
depreciating; devalue
b.
depreciating; revalue
c.
appreciating; devalue
d.
appreciating; revalue
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
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Page 53
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Currency Crises
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:47 AM
DATE MODIFIED:
7/7/2016 12:49 AM
132. A central bank that desires a (an) ______ of its currency would likely implement a ______ monetary policy.
a.
depreciation; contractionary
b.
depreciation; neutral
c.
appreciation; contractionary
d.
appreciation; expansionary
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Monetary and fiscal policy
TOPICS:
Managed Floating Rates
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:49 AM
DATE MODIFIED:
7/7/2016 12:51 AM
133. A central bank that desires a (an) ______ of its currency would likely implement a ______ monetary policy.
a.
depreciation; expansionary
b.
depreciation; neutral
c.
appreciation; neutral
d.
appreciation; expansionary
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Monetary and fiscal policy
TOPICS:
Managed Floating Rates
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/7/2016 12:52 AM
DATE MODIFIED:
7/7/2016 4:00 AM
134. If a central bank was to prevent its currency from depreciating, it would likely adopt a (an) ______ monetary policy
to ______ the domestic interest rate, thus strengthening its currency.
a.
contractionary; decrease
b.
contractionary; increase