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The international unit of accounting used by the International Monetary Fund (IMF) is called:
OPTIONS:
the IMF dollar.
special drawing rights.
the Eurodollar.
the quota subscription.
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- If a small country, such as Argentina, attempts to fix its currency exchange rate with the United States, its inflation rate must be higher than the U.S. inflation rate. its interest rates will move together with the U.S. interest rates. its currency value relative to the U.S. dollar will fluctuate over time. its central bank will have full flexibility in monetary policy actions. it must restrict the flow of funds with the United States.Suppose Angola is experiencing an episode of hyperinflation. The currency in Angola is the second kwanza (which is actually the fourth currency called kwanza that has circulated since 1977). The currency code is (AOA). Select all choices below that are implied by the statement if parity conditions (PPP, IRP, FEP) hold: Nominal interest rates in Angola will exceed nominal interest rates in countries not experiencing hyperinflation. The value of the AOA is expected to drop to zero. Real interest rates in Angola will fall relative to countries without hyperinflation. The AOA is expected to depreciate against any currencies that are not experiencing hyperinflation.To prevent an appreciation of the British pound, the U.S. Federal Reserve has to: Sell U.S. currency Buy British currency Sell British currency Devalue the U.S. dollar
- Which of the following is NOT one of the charges of the International Monetary Fund? The IMF is charged with balance of payments management. The IMF is charged with promoting economic development by lending. The IMF is charged with overseeing international payments. The IMF is charged with overseeing exchange rates. All of these are charges of the International Monetary Fund.Under a gold standard, countries should Group of answer choices keep the supply of their domestic money constant. keep the supply of their domestic money fixed in proportion to their gold holdings. keep the supply of foreign exchange less than their domestic money supply. restrict the demand for foreign goods. outlaw speculation.Analyze the effects of a temporary increase in the European money supply on the dollar/euroexchange rate using both the Australian money market and the foreign exchange market
- Assess the validity of the following statement: A country that manages its currency by intervening on foreign exchange markets can use a counteracting open-market operation on bond markets to sterilize or prevent any change in its money supply.hard currency implies a strong currency that is well supported by reserves. that coins are minted using a hard metal. a currency whose exchange rate cannot move above a hard ceiling. a stable currency that is hard to move.Identify firms’ strategic responses that managers adopt in order to deal with foreign currency exchange rate movements.
- Discuss THREE monetary strategies currently implemented in the commonwealth of Dominica.Based on the table, which of these currency devaluations would result in the largest proportional impact on purchasing power? A Brazilian currency drop of 0.1% in value against American currency for Brazilian consumers. An American currency drop of 0.1% in value against Japanese currency for American consumers. A Thai currency drop of 0.1% in value against Brazilian currency for Thai consumers. A Mexican currency drop of 0.1% in value against Thai currency for Mexican consumers.Discuss whether SDRs or another Global Currency created by the IMF should replace the US Dollar as the International reserve currency.