Topic 1

Question 1

The Breton Woods system was in place for the years

A. 1812 – 1999
B. 1917 – 1945
C. 1945 – 1972
D. 1945 – 1985

Answer 1

C. 1945 – 1972

Question 2

Fixed exchange rates are safer than floating because

A. Fixed exchange rates provide certainty
B. Fixed exchange rates are make the “math” easier
C. The is no reason to hedge fixed exchange rates
D. None of the above

Answer 2

D. None of the above

Question 3

With regard to the current exchange rate arrangement between the U.S. and the U.K., it is best characterized as

A. independent floating (market determined).
B. managed float.
C. currency board.
D. pegged exchange rate within a horizontal band.

Answer 3

A. independent floating (market determined).

Question 4

With regard to the current exchange rate arrangement between Italy and Germany, it is best characterized as

A. independent floating (market determined).
B. managed float.
C. currency board.
D. an exchange arrangement with no separate legal tender.

Answer 4

D. an exchange arrangement with no separate legal tender.