Chapter 11
A country is said to be in balance-of-trade equilibrium when
The income its residents earn from exports is equal to the money its residents pay for imports
A dirty float refers to a situation in which
A country tries to hold its currency against an important reference currency without a formal pegged rate
A currency crisis occurs due to
A speculative attack on the exchange value
Gold par value refers to the ______
Amount of a currency needed to purchase one ounce of gold
After WWII, world's major industrial nations arranged their currencies against each other at a mutually agreed on exchange rate. This is an example of a __________ system
Fixed exchange rate
A pegged exchange rate means that the value of a currency is
Fixed relative to a reference currency
______ exchange rates were declared as acceptable in the Jamaica agreement of IMF
Floating
Which of the following changes were made to IMF's Articles of Agreement in the Jamaica agreement?
IMF members were permitted to sell their gold reserves at the market price
Contracting out manufacturing allows companies to reduce economic exposure because
It allows companies to shift suppliers from country to country
Which of the following is a function of World Bank
Lending money to governments for development
