Chapter 3

Chapter 3 The International Monetary System Multiple Choices 3.1 History of the International Monetary System 1) Under the gold standard of currency exchange that existed from 1879 to 1914, an ounce of gold cost $20.67 in U.S. dollars and 4.2474 in British pounds. Therefore, the exchange rate of pounds per dollar under this fixed exchange regime was A) 4.8665/$. B) 0.2055/$. C) always changing because the price of gold was always changing. D) unknown because there is not enough information to answer this question. 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. 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. 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 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. 6) Which of the following led to the eventual demise of the fixed currency exchange rate regime worked out at Bretton Woods