1. The Japanese yen is subject to intervention only in certain circumstances. Which of the following types of? exchange-rate arrangements does this best? demonstrate?
   A.
   Soft peg
   B.
   Hard peg
   C.
   Floating
   D.
   Quota
   E.
   Conventional

C.
Floating

2. By? 1947, the United States held what percentage of the? world's official gold? reserves?
   A.
   90 percent
   B.
   50 percent
   C.
   100 percent
   D.
   20 percent
   E.
   70 percent

E.
70 percent

3. Which of the following is generally separate from a? country's central bank and is responsible for issuing domestic currency that is typically anchored to a foreign? currency?
   A.
   Currency Board
   B.
   Dollarization
   C.
   Soft peg
   D.
   Floating arrangement
   E.
   Firm strategy

A.
Currency Board

4. Each country has a? ________, like the U.S. Federal Reserve? System, which is responsible for the policies affecting the value of its currency.
   A.
   central bank
   B.
   hard peg
   C.
   quota system
   D.
   black market
   E.
   stock exchange

A.
central bank

5. Which of the following did the euro replace for European? nations?
   A.
   Investment strategy
   B.
   International currency
   C.
   National currency
   D.
   Currency strategy
   E.
   Exchange rate

C.
National currency

6. If the domestic inflation rate is lower than that in a foreign? country, which of the following is? correct?
   A.
   The domestic currency should be weaker than that of the foreign country.
   B.
   The cost of living will go up in the domestic country.
   C.
   The cost of living will go down in the foreign country.
   D.
   The domestic currency should be stronger than that of the foreign country.
   E.
   The domestic country will export more to the foreign country.

D.
The domestic currency should be stronger than that of the foreign country.

7. A forecaster repeats previous poor trading decisions. Given this? scenario, which of the following is? occurring?
   A.
   The forecaster is practicing unethical business.
   B.
   The forecaster is open to new developments.
   C.
   The forecaster is skewed by biases.
   D.
   The forecaster is practicing good business.
   E.
   The forecaster is unconcerned with exchange rates.

C.
The forecaster is skewed by biases.

8. The IMF Quota System performs which of the following? functions?
   A.
   Sets the amount of special drawing rights that can be issued
   B.
   Establishes global exchange rates
   C.
   Determines how much a country can borrow from the IMF
   D.
   Determines the voting rights of individual members
   E.
   Ensures the IMF hires an agreed percentage of member nationals

D.
Determines the voting rights of individual members

9. Ecuador does not have its own currency. It uses the dollar as its official currency. This type of arrangement is known? as:
   A.
   a quota
   B.
   soft peg
   C.
   hard peg
   D.
   Ecuadorian agreement
   E.
   floating

C.
hard peg

10. Which of the following is a fundamental mission of the? IMF?
    A.
    Avoidance of international monetary cooperation
    B.
    An ability to stabilize the international monetary system
    C.
    An ability to vary the international monetary system
    D.
    An inability to provide resources to assist with poverty reduction
    E.
    Promotion of? exchange-rate fluctuation

B.
An ability to stabilize the international monetary system