Question

1.) _____________ float is the closest approximation to perfect competition, because there is no government intervention and because billions of units of currency are being traded by buyers and sellers.
Select one:
a. Horizontal
b. Managed (dirty)
c. Vertical
d. Free (clean)
e. Managed (clean)

2.) All of the following are purposes of the International Monetary Fund (IMF) EXCEPT
Select one:
a. To give confidence to members by making the general resources of the fund temporarily available to them under adequate safeguards
b. To develop a world currency by 2010
c. To promote exchange stability
d. To facilitate the expansion and balanced growth of international trade
e. To promote international monetary cooperation through a permanent institution

3.) Protecting oneself against potential loss is called
Select one:
a. hedging
b. devaluing
c. risk analysis
d. portfolio reduction strategy
e. factoring

4.) ________________ refers to the exchange of one country’s money for that of another country.
Select one:
a. Foreign control
b. Foreign float
c. Foreign reserve
d. Foreign exchange
e. Foreign dilution

5.) The World Bank was initially intended for
Select one:
a. financing postwar reconstruction and development in Japan
b. financing postwar reconstruction and development in France
c. financing postwar reconstruction and development in Italy
d. financing postwar reconstruction and development in Russia
e. financing postwar reconstruction and development in Europe

Answer 1

1)

Correct answer is d. Free (clean)

Free float is the closest approximation to perfect competition, because there is no government intervention and because billions of units of currency are being traded by buyers and sellers.

2)

Correct answer is b. To develop a world currency by 2010

Rest of all the options are purposes of the International Monetary Fund (IMF)

3)

Correct answer is a.hedging

Protecting oneself against potential loss is called hedging

4)

Correct answer is d. Foreign exchange

Foreign exchange refers to the exchange of one country’s money for that of another country.

5) The World Bank was initially intended for financing postwar reconstruction and development in Europe

Correct answer is e. financing postwar reconstruction and development in Europe