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(Solution document) Question 77 Special Drawing Rights (SDRs) Select one: constitute an international currency created by the International Monetary Fund.


Question 77

Special Drawing Rights (SDRs) Select one:

A. constitute an international currency created by the International Monetary Fund.

B. are considered as "paper gold", used as a substitute for gold in international exchange.

C. are used as part of the official reserves of central banks to settle international debt.

D. all of the above.

Question 78

The The International Monetary Fund (IMF):

I. Is considered to be the international lender of last resort.

II. Is primarily responsible for determining U.S. monetary policy and short-term interest rates.

III. Makes structural adjustment loans, which are often extended, to countries with a variety of debt- related problems.

Select one:

A. I and II only B. I and III only C. II and III only D. I, II, and III Question 79

Today's major industrialized nations are using a foreign exchange system known as Select one:

A. managed float

B. pegged rates

C. free float

D. fixed rates

Question 80

Under a system of floating exchange rates, which of the following conditions would the Canadian dollar tend to appreciate in value against the U.S. dollar?

Select one:

A. Canadian banks offer lower rates of interest than U.S. banks.

B. The rate of inflation in Canada is lower than in the U.S.

C. There is a rising demand for U.S. goods on the part of Canadian consumers.

D. Canadians perceive that the U.S. is about to experience higher economic growth.

Question 81

Which of the following was a managed float agreement signed by the major industrialized nations in 1987?

Select one:

A. The Greenspan Currency Control Act

B. The Western Currency Management Agreement

C. The Geneva Exchange Rate Accord

D. The Louvre Currency Stabilization Accord

Question 82

Faced with a continuing drain of U.S. gold reserves, the U.S. chose to

Select one:

A. allow interest rates to rise in order to attract gold back into U.S. vaults.

B. lower the exchange ratio of dollars to gold from 1/35 ounce to 1/70 ounce. C. eliminate the redemption of foreign-held U.S. dollars for gold.

D. end the military draft in an effort to boost U.S. productivity.

Question 83

Which of the following will lead to an inflow of U.S. dollars in the U.S. Balance of Payments account? I. Imports of foreign goods and services into the U.S.

II. Gifts (aid) received by the U.S. from foreign countries

III. Foreign investment in U.S. Treasury securities

Select one:

A. I and II only

B. I and III only

C. II and III only

D. I, II, and III

Question 84

Which of the following will lead an American to exchange U.S. dollars for British pounds?

Select one:

A. Importing a case of British salmon

B. Purchasing a cottage in the British countryside

C. Investing in a British manufacturing company

D. All of the above

Question 85

Which of the following can be considered as disadvantages of using a pegged exchange rate?

Select one:

A. The pegged currency's true value may not reflect underslying economic fundamentals.

B. It may not be possible to maintain the pegged currency's value over time.

C. Both of the above.

D. None of the above.

Question 86

Which of the following is true concerning multilateral financial institutions? Multilaterals:

Select one:

A. receive primary funding from the world's major industrialized nations.

B. offer official development assistance to developing countries.

C. have been criticized for driving countries further ito debt and financial vulnerability.

D. All of the above.

Question 87

The World Bank

Select one:

A. was founded as part of the Bretton Woods agreement.

B. consists of two organizations making loans to the world's poor and poorest nations.

C. makes loans typically used for agricultural and infrastructure development.

D. all of the above.

Question 88

Which of the following multilateral institutions often insists that a country follow "austerity measures" designed to restore financial solvency as a condition of receiving a loan?

Select one:

A. The BIS

B. The IMF

C. The World Bank

D. None of the above. Question 89

Which of the following, enacted in 1933 for the purpose of separating commercial and investment banking in the U.S., was repealed in 1999 by passage of the Gramm-Leach-Bliley Act?

Select one:

A. The Glass-Steagall Act

B. The Stevens-Seagal Act

C. The Morgan-Stanley Act

D. The Commercial Securities Act

Question 90

Which of the following is true concerning depository financial intermediaries?

I. They are important to the channeling of funds between lenders and borrowers.

II. They are chartered and regulated in an effort to protect depositors and the financial system. III. They are required to make loans to anyone with an adequate credit score.

Select one:

A. I and II only

B. I and III only C. II and III only D. I, II, and III Question 91

A large domestic bank with headquarters in New York City that provides international lending and payments services to large, multinational business firms is most likely to be a:

Select one:

A. Money Center bank

B. Regional bank

C. Mid-Market bank

D. Community bank

Question 92

Which of the following statements is true international banking?

I. The explosive growth in Eurodollar lending has led to an increase in the number of U.S. branch banks abroad

II. Due to trade restrictions, foreign banks have not been successful in the U.S., where they do very little banking

III. Stricter regulations abroad makes international banking more expensive for U.S. banks Select one:

A. I only

B. I and II only

C. I and III only D. II and III only E. I, II, and III Question 93

By law, credit unions are:

I. Not-for-profit depository intermediaries

II. Tax-exempt financial institutions

III. Disallowed from engaging in any business lending

Select one:

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II, and III

Question 94

Which of the following acts broke down the wall of separation between securities underwriting and commercial lending?

Select one:

A. Gramm-Leach-Bliley Financial Services Modernization Act

B. Riegle-Neal Interstate Banking and Branching Efficiency Act (IBBEA)

C. Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)

D. None of the above

Question 95

Credit unions:

I. Offer their members savings and checking services similar to those of commercial banks II. Are non-profit entities that typically pass cost savings on to members

III. Are insured by the Federal Deposit Insurance Corporation (FDIC)

Select one:

A. I and II only

B. I and III only

C. II and III only

D. I, II, and III

Question 96

Corporations with a controlling interest in one or more affiliated banks are known as

Select one:

A. commercial banks.

B. bank holding companies.

C. government sponsored enterprises.

D. mutual fund companies.

Question 97

Most domestic banks in the U.S. are

Select one:

A. nationally chartered.

B. state chartered.

C. members of the Federal Reserve System.

D. all of the above.

Question 98

Which of the following statements is true regarding bank charters?

I. National banks are chartered by the U.S. comptroller of the currency.

II. Banks may be chartered at either the national or state level.

III. Only nationally-chartered banks can be members of the Federal Reserve System Select one:

A. I and II only

B. I and III only

C. II and III only

D. I, II, and III

Question 99

Financial holding companies are:

I. Companies that hold a variety of different types of financial institutions

II. Are currently being regulated by the U.S. Office of the Comptroller of the Currency III. Cannot hold both depository and non-depository financial intermediaries

Select one:

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II, and III

Question 100

The difference between what a commercial bank pays for its deposits and what it earns on its loans is called the

Select one:

A. margin interest or lending spread. B. earnings before interest and taxes. C. return on shareholder's investment. D. underwriting spread. 

 







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