POS 486 FINAL UPDATED Exam
Questions and CORRECT Answers
The Current Account Includes - CORRECT ANSWER - Imports and Exports
Since the 1970s, in regard to the current account, the United States has generally had -
CORRECT ANSWER - A deficit
The Financial Account includes - CORRECT ANSWER - portfolio investment
Orthodox liberals advise governments to deal with balance of payments deficits with -
CORRECT ANSWER - Currency Devaluation
When a state lowers the official value of its currency, it is engaging in - CORRECT
ANSWER - Devaluation
In the interwar period (between World Wars I and II), the world had - CORRECT
ANSWER - A gold standard and floating exchange rates
The type of monetary regime arranged at the Bretton Woods conference is best described as: -
CORRECT ANSWER - A gold exchange standard
Which country has the most votes in the IMF? - CORRECT ANSWER - Japan
The Triffin Dilemma in regard to reserve assets refers to conflict between - CORRECT
ANSWER - The liquidity and confidence functions.
The emergence of the Eurocurrency market is linked to what event: - CORRECT
ANSWER - the détente period of the Cold War.
, SDRs (Special Drawing Rights): - CORRECT ANSWER - are allocated in proportion to a
country's IMF quota.
The "Unholy Trinity" today involves a trade-off between: - CORRECT ANSWER - fixed
exchange rates and policy autonomy.
Misalignment refers to exchange rates that have: - CORRECT ANSWER - moved from
their market value.
Eurocurrencies are: - CORRECT ANSWER - national currencies located in banks outside
the home country.
The origins of the European Union date from what decade: - CORRECT ANSWER -
1950s.
True or False: The financial account of the balance of payments includes income from all exports
and imports. - CORRECT ANSWER - False
True or False: Depreciation refers to the market-driven decrease in a currency's price. -
CORRECT ANSWER - True
True or False: IMF votes on most important decisions such as changing the IMF quotas give an
effective veto to the United States, China, and Japan. - CORRECT ANSWER - False
True or False: The Triffin Dilemma refers to the problem that the liquidity and adjustment
functions of the key currency in a monetary regime eventually come into conflict. - CORRECT
ANSWER - False
True or False: The Group of 24 includes finance ministers or central bank governors from 24
major DCs and LDCs. - CORRECT ANSWER - True
Questions and CORRECT Answers
The Current Account Includes - CORRECT ANSWER - Imports and Exports
Since the 1970s, in regard to the current account, the United States has generally had -
CORRECT ANSWER - A deficit
The Financial Account includes - CORRECT ANSWER - portfolio investment
Orthodox liberals advise governments to deal with balance of payments deficits with -
CORRECT ANSWER - Currency Devaluation
When a state lowers the official value of its currency, it is engaging in - CORRECT
ANSWER - Devaluation
In the interwar period (between World Wars I and II), the world had - CORRECT
ANSWER - A gold standard and floating exchange rates
The type of monetary regime arranged at the Bretton Woods conference is best described as: -
CORRECT ANSWER - A gold exchange standard
Which country has the most votes in the IMF? - CORRECT ANSWER - Japan
The Triffin Dilemma in regard to reserve assets refers to conflict between - CORRECT
ANSWER - The liquidity and confidence functions.
The emergence of the Eurocurrency market is linked to what event: - CORRECT
ANSWER - the détente period of the Cold War.
, SDRs (Special Drawing Rights): - CORRECT ANSWER - are allocated in proportion to a
country's IMF quota.
The "Unholy Trinity" today involves a trade-off between: - CORRECT ANSWER - fixed
exchange rates and policy autonomy.
Misalignment refers to exchange rates that have: - CORRECT ANSWER - moved from
their market value.
Eurocurrencies are: - CORRECT ANSWER - national currencies located in banks outside
the home country.
The origins of the European Union date from what decade: - CORRECT ANSWER -
1950s.
True or False: The financial account of the balance of payments includes income from all exports
and imports. - CORRECT ANSWER - False
True or False: Depreciation refers to the market-driven decrease in a currency's price. -
CORRECT ANSWER - True
True or False: IMF votes on most important decisions such as changing the IMF quotas give an
effective veto to the United States, China, and Japan. - CORRECT ANSWER - False
True or False: The Triffin Dilemma refers to the problem that the liquidity and adjustment
functions of the key currency in a monetary regime eventually come into conflict. - CORRECT
ANSWER - False
True or False: The Group of 24 includes finance ministers or central bank governors from 24
major DCs and LDCs. - CORRECT ANSWER - True
