Which international organization provides financial assistance to countries facing balance of payments problems?
World Trade Organization (WTO)
International Monetary Fund (IMF)
World Bank
European Central Bank (ECB)
#2
What is the meaning of the term 'exchange rate' in international economics?
The rate at which countries exchange goods and services
The rate at which a country's currency can be exchanged for another currency
The rate at which central banks exchange reserves
The rate at which inflation affects the value of money
#3
What is the concept of the Big Mac Index?
An index measuring the affordability of fast food in different countries
An index comparing the prices of a Big Mac burger across different countries to assess exchange rate misalignment
An index tracking the sales of McDonald's Corporation worldwide
An index measuring the impact of inflation on consumer spending
#4
What is the primary goal of the International Monetary Fund (IMF)?
To promote international trade agreements
To maintain a stable global financial system and prevent financial crises
To regulate global commodity prices
To provide subsidies for developing countries
#5
Which economic theory suggests that a country should specialize in producing goods and services in which it has a comparative advantage?
Absolute Advantage
Comparative Advantage
Keynesian Economics
Monetarism
#6
What is the balance of payments?
The difference between total exports and total imports of a country
The total amount of money in a country's economy
The government's budget surplus or deficit
The total debt of a country
#7
What is the Purchasing Power Parity (PPP) theory?
A theory explaining the impact of inflation on exchange rates
A theory stating that exchange rates should move towards the rate that would equalize the prices of an identical basket of goods and services in any two countries
A theory describing the relationship between interest rates and exchange rates
A theory focusing on the role of government intervention in the foreign exchange market
#8
Which economic indicator measures the average prices of goods and services in a country over a specific period?
Gross Domestic Product (GDP)
Consumer Price Index (CPI)
Unemployment Rate
Exchange Rate
#9
What is the purpose of the Special Drawing Right (SDR) in the International Monetary Fund (IMF)?
To encourage member countries to increase their gold reserves
To provide a supplementary international reserve asset
To stabilize global commodity prices
To promote fair trade practices
#10
What is the significance of the Phillips Curve in international macroeconomics?
It illustrates the relationship between inflation and unemployment
It explains the impact of fiscal policy on exchange rates
It measures the balance of payments of a country
It predicts the level of interest rates in the global market
#11
What is the Triffin dilemma in international economics?
A situation where a country's currency is overvalued
The conflict of interest between national and international objectives of a reserve currency
A trade imbalance between two countries
The inability of a country to participate in international trade
#12
What is the Marshall-Lerner condition in international trade?
A condition for a country's trade balance to improve after a currency depreciation
A condition stating that all countries will benefit equally from free trade
A condition for achieving perfect competition in the global market
A condition describing the relationship between inflation and unemployment
#13
What is the concept of the Impossible Trinity in international finance?
The idea that it is impossible for a country to have both a fixed exchange rate and a trade surplus simultaneously
The idea that it is impossible for a country to have independent monetary policy, free capital movement, and a fixed foreign exchange rate simultaneously
The idea that it is impossible for a country to participate in international trade without facing trade barriers
The idea that it is impossible for a country to achieve economic growth without foreign aid
#14
What does the term 'currency peg' mean in the context of international finance?
A country's decision to allow its currency to float freely in the foreign exchange market
A country's commitment to maintain its currency's value relative to another currency or a basket of currencies
The official exchange rate set by the International Monetary Fund (IMF)
A strategy to devalue a country's currency for competitive advantage
#15
What is the Plaza Accord?
An agreement to establish a common currency for European countries
An agreement to stabilize exchange rates among major industrialized countries
An accord to reduce greenhouse gas emissions globally