7) 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.
9) Today, the United States has been ejected from the International Monetary Fund for refusal to pay annual dues.
6) Based on the premise that, other things equal, countries would prefer a fixed
exchange rate: Variable rates provide stability in international prices for the conduct of trade.
13) The euro is a somewhat unique currency in that it is a floating currency within the member nations but it is rigidly fixed relative to other international currencies. Answer: FALSE
14) Almost every nation today (over 90%) has a floating or perhaps a managed floating currency for the purposes of international currency exchange.
15) The global recession of 2009/2010 saw the major global economic players (USA,, China, and Europe) each choose the same international currency goals from the
"impossible trinity". Meaning each felt an independent monetary policy was the most important goal followed by free movement of capital, and third, a policy of free floating currencies.
1) The Euro currency is fixed against other currencies on the international currency exchange markets, but allows member country currencies to float against each other. Answer: FALSE
7) Because there is now a European Central Bank (ECB), the members of the European Monetary Union have done away with their individual central banks. Answer: FALSE
8) Since the launch of the euro in January of 1999, one nation has joined the original 11 members and three nations have dropped the euro as their official currency. Answer: FALSE
10) Since adopting the euro, all member nations have realized a significant reduction in unemployment rates.
3) The authors state that the current international monetary system is characterized by strict rules and high degrees of cooperation.
3) The time from 1971 to today has predominately used a regime of variable exchange rates. It has also seen a decrease in capital mobility.
10) China's "double surplus" in the current account and the financial account is typical