FINA 4500 Exam Questions with 100% Correct
Answers
Put the following in correct date order: a) Louvre Accord, Jamaica Agreement, Plaza
Agreement. B)Plaza Agreement, Jamaica Agreement, Louvre Accord. C)Jamaica
Agreement, Louvre Accord, Plaza Agreement. D)Jamaica Agreement, Plaza
Agreement, Louvre Accord.
D
Gold was officially abandoned as an international reserve asset
in the January 1976 Jamaica Agreement.
Suppose Mexico is a major export market for your U.S.-based company and the
Mexican peso appreciates drastically against the U.S. dollar. This means
your firm will be able to charge more in dollar terms while keeping peso prices stable and
your domestic competitors will enjoy a period of facing lessened price competition from
Mexican imports.
Japan has experienced large trade surpluses. Japanese investors have responded to this
by
investing heavily in U.S. and other foreign financial markets.
Most sovereign nations make it difficult for people to cross their borders illegally. This
barrier to the free movement of labor is an example of
a market imperfection.
When money can move freely across borders, policy makers must choose between
exchange-rate stability and an independent monetary policy.
, The choice between the alternative exchange rate regimes (fixed or floating) is likely to
involve a trade-off between
national monetary policy autonomy and international economic integration.
The common monetary policy for the euro zone is now formulated by
the European Central Bank.
The Mexican Peso Crisis was touched off by
an unexpected announcement by the Mexican government to devalue the peso against the
dollar by 14 percent.
Privatization refers to the process of
a country divesting itself of the ownership and operation of a business venture by turning it
over to the free market system.
According to the "Trilemma" a country can attain only two of the following three
conditions: (1) A fixed exchange rate, (2) free international flows of capital, and (3) an
independent monetary policy. This difficulty is also known as
the incompatible trinity.
A currency board arrangement is
a monetary regime based on an explicit legislative commitment to exchange domestic
currency for a specified foreign currency at a fixed exchange rate, combined with restrictions
on the issuing authority to ensure the fulfillment of its legal obligation.
A "good" (or ideal) international monetary system should provide
liquidity, adjustments, and confidence.
Answers
Put the following in correct date order: a) Louvre Accord, Jamaica Agreement, Plaza
Agreement. B)Plaza Agreement, Jamaica Agreement, Louvre Accord. C)Jamaica
Agreement, Louvre Accord, Plaza Agreement. D)Jamaica Agreement, Plaza
Agreement, Louvre Accord.
D
Gold was officially abandoned as an international reserve asset
in the January 1976 Jamaica Agreement.
Suppose Mexico is a major export market for your U.S.-based company and the
Mexican peso appreciates drastically against the U.S. dollar. This means
your firm will be able to charge more in dollar terms while keeping peso prices stable and
your domestic competitors will enjoy a period of facing lessened price competition from
Mexican imports.
Japan has experienced large trade surpluses. Japanese investors have responded to this
by
investing heavily in U.S. and other foreign financial markets.
Most sovereign nations make it difficult for people to cross their borders illegally. This
barrier to the free movement of labor is an example of
a market imperfection.
When money can move freely across borders, policy makers must choose between
exchange-rate stability and an independent monetary policy.
, The choice between the alternative exchange rate regimes (fixed or floating) is likely to
involve a trade-off between
national monetary policy autonomy and international economic integration.
The common monetary policy for the euro zone is now formulated by
the European Central Bank.
The Mexican Peso Crisis was touched off by
an unexpected announcement by the Mexican government to devalue the peso against the
dollar by 14 percent.
Privatization refers to the process of
a country divesting itself of the ownership and operation of a business venture by turning it
over to the free market system.
According to the "Trilemma" a country can attain only two of the following three
conditions: (1) A fixed exchange rate, (2) free international flows of capital, and (3) an
independent monetary policy. This difficulty is also known as
the incompatible trinity.
A currency board arrangement is
a monetary regime based on an explicit legislative commitment to exchange domestic
currency for a specified foreign currency at a fixed exchange rate, combined with restrictions
on the issuing authority to ensure the fulfillment of its legal obligation.
A "good" (or ideal) international monetary system should provide
liquidity, adjustments, and confidence.
