Question : 41._____ refers to a system under which a country’s currency nominally : 1299393

 

41._____ refers to a system under which a country’s currency is nominally allowed to float freely against other currencies, but in which the government will intervene, buying and selling currency, if it believes that the currency has deviated too far from its fair value.  

A. Fixed float

B. Clean float

C. Pegged float

D. Dirty float

E. Capital float

42.Which of the following statements is true about the various exchange rate systems?  

A. In a fixed exchange rate system, the value of a currency is adjusted according to the day to day market forces.

B. In a clean float, the central bank of a country will intervene in the foreign exchange market to try to maintain the value of its currency.

C. After the collapse of the Bretton Woods system of floating exchange rates in 1973, the world has operated with a fixed exchange rate system.

D. According to the Bretton Woods system, the value of most currencies in terms of U.S. dollars was allowed to change only under a specific set of circumstances.

E. In dirty float, the exchange rate between a currency and other currencies is relatively fixed against a reference currency exchange rate.

43.The ____ refers to a system to regulate fixed exchange rates before the introduction of the euro. 

A. European Free Trade Association

B. European Monetary System

C. international monetary system

D. International Finance Corporation

E. European Federation of Accountants

44.The values of a set of currencies are set against each other at some mutually agreed on exchange rate in a _____ exchange rate system. 

A. clean float

B. floating

C. fixed

D. dirty float

E. pegged

45.The 1944 Bretton Woods conference created two major international institutions that play a role in the international monetary system—the International Monetary Fund (IMF) and the _____.  

A. United Nations

B. European Union

C. World Trade Organization

D. World Bank

E. G20

46.The 1944 Bretton Woods system called for _____ exchange rates against the U.S. dollar.  

A. flexible

B. floating

C. fixed

D. dirty float

E. pegged

47.Which of the following refers to the gold standard? 

A. Pegging currencies to gold and guaranteeing convertibility

B. Conducting international trade by physically exchanging gold

C. The most valuable currency in the world at any given point in time

D. The common global standard of gold quality to be maintained

E. The quality of merchandise to be maintained for it to be exportable

48.Which of the following is a reason for the emergence of the gold standard? 

A. Expansion in the volume of international trade due to the Industrial Revolution

B. Inability of governments to convert gold into paper currency on demand at a fixed rate

C. Widening gap between the developed and the developing nations

D. Failure of the Bretton Woods fixed exchange rate system

E. Failure of the U.S. dollar to act as a reference currency

49.In terms of the gold standard, the amount of currency needed to purchase one ounce of gold was referred to as the _____.  

A. gold to bond ratio

B. gold reserve ratio

C. gold mix ratio

D. gold par value

E. gold net value

50.A country is said to be in _____ when the income its residents earn from exports is equal to the money its residents pay to other countries for imports. 

A. a currency crisis

B. balance-of-trade equilibrium

C. balance-of-payments deficit

D. a banking crisis

E. free trade area

 

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