Tag: international experience of exchange rate systems

Questions Related to international experience of exchange rate systems

_____________ exchange rate regime prevailed between 1870 to 1914.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. Smithsonian

  2. Gold standard

  3. Brettonwoods

  4. Dollar-based

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Correct Option: B

The problem with the Bretton Woods exchange rate system was identified by Robert Triffin and was termed as _____________.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. Triffin dilemma

  2. Triffin paradox

  3. Triffin rigidity

  4. none of the above

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Correct Option: A

_____________ established an exchange rate system in 1971.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. Bretton woods conference

  2. Smithsonian agreement

  3. Triffin paradox

  4. None of the above

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Correct Option: B

The Bretton Woods exchange rate system was established as a fixed exchange rate system, in the conference held at Bretton Woods in __________.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. 1925

  2. `1912

  3. 1944

  4. 1933

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Correct Option: C

Which of the following is/are the reasons for the collapse of Bretton Woods system?
$1$. The refusal by the US Treasury to convert short-term liability into gold.
$2$. The US move to make dollar inconvertible.
$3$. The devaluation of US dollar in 1973.
Select the correct answer using the code given.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. $1$ only

  2. $1$ and $2$

  3. $2$ and $3$

  4. $1, 2$ and $3$

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Correct Option: A

The breakdown of the Bretton Woods System was in _________.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. 1990

  2. 1969

  3. 1971

  4. 1981

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Correct Option: C

The National Stock Exchange recently launched Interest Rate Futures (IRF). IRF in fact is a ______________.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. new mode of trading specifically for SME sector

  2. financial mode of trading

  3. electronic mode of transferring money from one account to another

  4. safest and fastest mode of trading at all the stock exchanges of India simultaneously

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Correct Option: B
Explanation:

The National Stock Exchange recently launched Interest Rate Futures (IRF).

IRF in fact is a financial mode of trading as investors can buy and sell interest rate futures contracts from different locations in the country through registered NSE brokers in the same manner as they buy and sell equities and derivatives today. The financial settlement of all the trades is guaranteed by National Securities and Clearing Corporations Ltd (NSCCL).

The Smithsonian Agreement was a temporary agreement negotiated in ____________.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. 1971

  2. 1976

  3. 1970

  4. 1980

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Correct Option: A

Many times we read about 'PPP' in economic literature. What is PPP?

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. Tells us the exchange rates between currencies are in equilibrium when their purchasing power is the same in both the countries

  2. It tells us the exchange rates between currencies are in equilibrium when they are adjusted for differences in purchasing power.

  3. PPP means the current exchange rate of a currency against US$

  4. A measure of income inequality in developing countries

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Correct Option: B
Explanation:

The acronym PPP stands for, "Purchasing Power Parity". It is a method of currency valuation that tells us that the exchange rate between two countries must be equal to the ratio of the currencies' respective purchasing power. ie. two identical goods should eventually cost the same in different countries once adjusted for purchasing power parity.

The Bretton Woods Conference set up the ________________.

international experience of exchange rate systems open economy macroeconomics international economics economics

  1. World Bank

  2. IMF

  3. Asian Development Bank

  4. WTO

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Correct Option: B