BUS 200 GMU Final Exam 2026
Questions and Answers
Floating exchange rate - Correct answer-determined by supply and demand, less
predictable than fixed or pegged
Fixed/Pegged exchange rate - Correct answer-value of currency is fixed/pegged to
another country's, common in developing countries, usually pegged to USD
Which works better? - Correct answer-Fixed/Pegged
can expand and contract money supply easier than floating
o Forces govt to have monetary discipline, behave more responsibly
o Reduces speculation
o Less uncertainty b/c you have a better idea of what's going to happen to the value
of the currency
o Only 20% of IMF members float
Gold Standard - Correct answer-practice of pegging currencies to gold
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, Gold par value - Correct answer-what one unit of currency was defined as to grains
of gold
When did the global financial order emerge? - Correct answer-late 1800s to early
1900s
balance of trade equilibrium - Correct answer-value of imports always = value of
exports when on the gold standard
Bretton Woods - Correct answer-USD tied to gold, everyone else tied to USD.
collapsed b/c US detatched from gold standard.
US detatched from gold standard b/c US spending was increasing faster than our
supply of gold
Jamaica Agreement - Correct answer-Replaced Bretton Woods.
allowed every country to float their currency if they wanted to
World Bank - Correct answer-created during Bretton Woods.
Goal: to promote general economic development, makes low interest loans to poor
countries to help with infrastructure
IMF - Correct answer-created during Bretton Woods.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 2
Questions and Answers
Floating exchange rate - Correct answer-determined by supply and demand, less
predictable than fixed or pegged
Fixed/Pegged exchange rate - Correct answer-value of currency is fixed/pegged to
another country's, common in developing countries, usually pegged to USD
Which works better? - Correct answer-Fixed/Pegged
can expand and contract money supply easier than floating
o Forces govt to have monetary discipline, behave more responsibly
o Reduces speculation
o Less uncertainty b/c you have a better idea of what's going to happen to the value
of the currency
o Only 20% of IMF members float
Gold Standard - Correct answer-practice of pegging currencies to gold
©COPYRIGHT 2025, ALL RIGHTS RESERVE 1
, Gold par value - Correct answer-what one unit of currency was defined as to grains
of gold
When did the global financial order emerge? - Correct answer-late 1800s to early
1900s
balance of trade equilibrium - Correct answer-value of imports always = value of
exports when on the gold standard
Bretton Woods - Correct answer-USD tied to gold, everyone else tied to USD.
collapsed b/c US detatched from gold standard.
US detatched from gold standard b/c US spending was increasing faster than our
supply of gold
Jamaica Agreement - Correct answer-Replaced Bretton Woods.
allowed every country to float their currency if they wanted to
World Bank - Correct answer-created during Bretton Woods.
Goal: to promote general economic development, makes low interest loans to poor
countries to help with infrastructure
IMF - Correct answer-created during Bretton Woods.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 2
