International Macroeconomics and Currency Dynamics Quiz
Test your knowledge on fixed vs. floating exchange rates, PPP theory, IMF, Bretton Woods, WTO & more. Learn key concepts in currency dynamics.
#1
Which of the following is an example of a fixed exchange rate system?
Bretton Woods system
Gold standard
Floating exchange rate
Managed float system
#2
What does PPP (Purchasing Power Parity) theory primarily explain?
Changes in interest rates
Inflation differentials between countries
Exchange rate movements
Government fiscal policies
#3
What is the main purpose of the International Monetary Fund (IMF)?
Promoting international trade agreements
Providing financial assistance to developing countries
Regulating global stock markets
Setting international interest rates
#4
Which country is not part of the Eurozone as of 2024?
#5
What is the main objective of currency intervention by central banks?
To stabilize interest rates
To control inflation
To influence exchange rates
To regulate fiscal policy
#6
Under a floating exchange rate system, currency values are primarily determined by:
Central bank interventions
Supply and demand in the foreign exchange market
Government regulations
Gold reserves
#7
Which of the following is a drawback of a fixed exchange rate system?
Exchange rate uncertainty
Speculative attacks
Economic stability
Increased trade imbalances
#8
What is a 'currency peg'?
A policy where a country's currency value is tied to another country's currency or a basket of currencies
A financial instrument used in currency trading
An agreement between central banks to stabilize exchange rates
An index measuring a country's economic performance
#9
What does the term 'currency appreciation' refer to?
A decrease in the value of a currency relative to others
An increase in the value of a currency relative to others
A stable exchange rate
The elimination of currency denominations
#10
What is a 'carry trade' in the context of currency trading?
A strategy to exploit interest rate differentials between currencies
A method to hedge against currency fluctuations
An agreement between central banks to stabilize exchange rates
A policy to peg a currency to another currency
#11
What is the Trilemma in international macroeconomics?
The impossibility to maintain fixed exchange rates, free capital movement, and an independent monetary policy simultaneously
The correlation between inflation and unemployment
The impact of government spending on economic growth
The theory of comparative advantage
#12
What is the Bretton Woods Agreement?
An international agreement establishing the World Bank
An agreement to return to the gold standard after World War II
An accord creating a fixed exchange rate system
A treaty establishing the European Union
#13
What is the significance of the Plaza Accord?
An agreement to establish the Eurozone
A pact to stabilize exchange rates among major economies
A treaty to abolish tariffs on agricultural products
An accord to regulate global oil prices
#14
What is the 'impossible trinity' in international economics?
The concept that a country cannot have stable exchange rates, free capital movement, and an independent monetary policy simultaneously
The theory that all countries can achieve economic growth through specialization
The principle that government intervention always leads to market inefficiency
The idea that a country can simultaneously achieve low inflation and full employment
#15
What is 'competitive devaluation'?
A situation where multiple countries devalue their currencies to gain a competitive advantage in international trade
A policy to stabilize exchange rates
A strategy to increase interest rates
An agreement between countries to peg their currencies to gold
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