INTB 3355 MODULE 8 EXAM QUESTIONS WITH
CORRECT ANSWERS
/. An international (monetary/credit) system allows for the payments, currency
exchanges, and cross-border movements of capital required for international
transactions. - Answer-✅Monetary
/.Gold has long been the trusted way for governments to measure the value of money.
As trade increased, it became impractical to carry and store large amounts of gold. As a
result, the gold _________ was established as a system of valuing currency. - Answer-
✅Standard
/.The talks at Bretton Woods in 1944 were the basis for establishment of the
international _________ system. - Answer-✅monetary
/.Under the Bretton Woods system, par value was based on gold and the currency of
which country? - Answer-✅United States
/.Which of the following has been the most used central reserve asset in the world
following World War II? - Answer-✅U.S. dollar
/.What system is made up of institutions and processes that allow for the cross-border
movements of capital required for international transactions? - Answer-✅international
monetary system
/.A ______ exchange rate system allows currency values to fluctuate against one
another based on supply and demand. - Answer-✅floating
/.Under the _____ _____, each country set a number of units of its currency equal to an
ounce of gold, and the ratios of these units of gold equivalence established the
exchange rate between any two currencies. - Answer-✅Gold Standard
/.Select all that apply
The Bretton Woods system is also called the _________. (Check all that apply.) -
Answer-✅gold exchange standard
fixed-rate system
, /.What term is given to assets held by a nation's central bank that are used to back up
liabilities? - Answer-✅reserves
/.At the end of June 2018, roughly ____% of the world's reserve assets were held in
U.S. dollars. - Answer-✅62
/.True or false: In a floating exchange rate system, currency values are based on supply
and demand in the foreign exchange markets. - Answer-✅True
/.The adoption of the U.S. dollar in El Salvador, Panama, and Ecuador is an example of
which currency exchange arrangement? - Answer-✅exchange arrangement with no
separate legal tender
/.Which currency exchange arrangement is in use when a group of countries adopt a
common currency, such as the euro? - Answer-✅exchange arrangement with no
separate legal tender
/.Which currency exchange arrangement commits the country's government to holding
foreign reserves of a specific currency in an amount equal to its domestic currency
supply and to exchanging the two at a fixed rate? - Answer-✅currency board
arrangement
/.Which arrangement allows a currency's exchange rates with a basket of currencies to
fluctuate around a fixed rate within a narrow band of less than 1%? - Answer-
✅conventional fixed-peg arrangement
/.Another name for the currency exchange arrangement known as a pegged exchange
rate within a horizontal band is a __________. - Answer-✅stabilized arrangement
/.Hong Kong's government is committed to holding U.S. dollars in an amount equal to its
domestic currency supply and to exchanging the two at a fixed rate. This scenario is an
example of which currency exchange arrangement? - Answer-✅currency board
arrangement
/.Which currency exchange arrangement allows a currency to be readjusted periodically
at a fixed rate or in response to changes in indicators? - Answer-✅crawling peg
/.Which type of currency exchange arrangement readjusts the country's currency to
maintain fluctuation margins around a central rate? - Answer-✅crawling band
/.The currency exchange arrangement known as the conventional fixed-peg
arrangement allows for a fluctuation in fixed rates within (1% or 10%). - Answer-✅1%
CORRECT ANSWERS
/. An international (monetary/credit) system allows for the payments, currency
exchanges, and cross-border movements of capital required for international
transactions. - Answer-✅Monetary
/.Gold has long been the trusted way for governments to measure the value of money.
As trade increased, it became impractical to carry and store large amounts of gold. As a
result, the gold _________ was established as a system of valuing currency. - Answer-
✅Standard
/.The talks at Bretton Woods in 1944 were the basis for establishment of the
international _________ system. - Answer-✅monetary
/.Under the Bretton Woods system, par value was based on gold and the currency of
which country? - Answer-✅United States
/.Which of the following has been the most used central reserve asset in the world
following World War II? - Answer-✅U.S. dollar
/.What system is made up of institutions and processes that allow for the cross-border
movements of capital required for international transactions? - Answer-✅international
monetary system
/.A ______ exchange rate system allows currency values to fluctuate against one
another based on supply and demand. - Answer-✅floating
/.Under the _____ _____, each country set a number of units of its currency equal to an
ounce of gold, and the ratios of these units of gold equivalence established the
exchange rate between any two currencies. - Answer-✅Gold Standard
/.Select all that apply
The Bretton Woods system is also called the _________. (Check all that apply.) -
Answer-✅gold exchange standard
fixed-rate system
, /.What term is given to assets held by a nation's central bank that are used to back up
liabilities? - Answer-✅reserves
/.At the end of June 2018, roughly ____% of the world's reserve assets were held in
U.S. dollars. - Answer-✅62
/.True or false: In a floating exchange rate system, currency values are based on supply
and demand in the foreign exchange markets. - Answer-✅True
/.The adoption of the U.S. dollar in El Salvador, Panama, and Ecuador is an example of
which currency exchange arrangement? - Answer-✅exchange arrangement with no
separate legal tender
/.Which currency exchange arrangement is in use when a group of countries adopt a
common currency, such as the euro? - Answer-✅exchange arrangement with no
separate legal tender
/.Which currency exchange arrangement commits the country's government to holding
foreign reserves of a specific currency in an amount equal to its domestic currency
supply and to exchanging the two at a fixed rate? - Answer-✅currency board
arrangement
/.Which arrangement allows a currency's exchange rates with a basket of currencies to
fluctuate around a fixed rate within a narrow band of less than 1%? - Answer-
✅conventional fixed-peg arrangement
/.Another name for the currency exchange arrangement known as a pegged exchange
rate within a horizontal band is a __________. - Answer-✅stabilized arrangement
/.Hong Kong's government is committed to holding U.S. dollars in an amount equal to its
domestic currency supply and to exchanging the two at a fixed rate. This scenario is an
example of which currency exchange arrangement? - Answer-✅currency board
arrangement
/.Which currency exchange arrangement allows a currency to be readjusted periodically
at a fixed rate or in response to changes in indicators? - Answer-✅crawling peg
/.Which type of currency exchange arrangement readjusts the country's currency to
maintain fluctuation margins around a central rate? - Answer-✅crawling band
/.The currency exchange arrangement known as the conventional fixed-peg
arrangement allows for a fluctuation in fixed rates within (1% or 10%). - Answer-✅1%
