MCQ Class2 Chap2

Fundamentals of Multinational Finance, 5e (Moffett et al.)
Chapter 2 The International Monetary System

Multiple Choice and True/False Questions

2.1 History of the International Monetary System

2) World War I caused the suspension of the gold standard for fixed international exchange rates because the war
A) cost too much money.
B) interrupted the free movement of gold.
C) lasted too long.
D) used gold as the main ingredient in armament plating.
Answer: B
Diff: 1
Topic: 2.1 History of the International Monetary System
Skill: Conceptual

3) The post WWII international monetary agreement that was developed in 1944 is known as the
A) United Nations.
B) League of Nations.
C) Yalta Agreement.
D) Bretton Woods Agreement.
Answer: D
Diff: 1
Topic: 2.1 History of the International Monetary System
Skill: Recognition

4) Another name for the International Bank for Reconstruction and Development is
A) the Recon Bank.
B) the European Monetary System.
C) the Marshall Plan.
D) the World Bank.
Answer: D
Diff: 1
Topic: 2.1 History of the International Monetary System
Skill: Recognition
5) The International Monetary Fund (IMF)
A) in recent years has provided large loans to Russia, South Korea, and Brazil.
B) was created as a result of the Bretton Woods Agreement.
C) aids countries with balance of payment and exchange rate problems.
D) is all of the above.
Answer: D
Diff: 1
Topic: 2.1 History of the International Monetary System
Skill: Recognition

6) A special Drawing Right is a unit of account established by
A) the Federal Reserve Bank.
B) the World Bank.
C) the International Monetary Fund.
D) the European Central Bank.
Answer: C
Diff: 1
Topic: 2.1 History of the International Monetary System
Skill: Recognition

8) Under the terms of Bretton Woods countries tried to maintain the value of their currencies to within 1% of a hybrid security made up of the U.S. dollar, British pound, and Japanese yen.
Answer: FALSE
Diff: 1
Topic: 2.1 History of the