68) Another name for the International Bank for Reconstruction and Development is ________. 68) ______ A) the World Bank B) the Recon Bank C) the Marshall Plan D) the European Monetary System 69) The International Monetary Fund (IMF) 69) ______I A) in recent years has provided large loans to Russia, South Korea, and Brazil. B) aids countries with balance of payment and exchange rate problems. C) was created as a result of the Bretton Woods Agreement. D) is all of the above. 70) Which of the following led to the eventual demise of the fixed currency exchange rate regime worked out at Bretton Woods? 70) ______I A) Differential rates of inflation across member nations. B) Widely divergent national monetary and fiscal policies among member nations. C) Several unexpected economic shocks to member nations. D) all of the above 26) ________ is the cross-border purchase of assets that are then managed in a way that hides the movement of money and its ownership. 26) ______ A) Capital flight B) Money laundering C) Irrational exuberance D) Capital mobility 27) Which of the following is NOT likely to occur in the quantity adjustment phase of the J-Curve adjustment path ? 27) ______ A) Exports become relatively less expensive. B) Imports become relatively more expensive. C) The balance of trade gets worse. D) All of the above are true. 28) The effect of an imbalance in the BOP is the same for countries on a fixed exchange rate regime as for those on a floating exchange rate regime. 28) ______ A) True B) False 29) Under a floating exchange rate system, the government bears the responsibility to ensure that the BOP is near zero. 29) ______ A) True B) False 30) Imports have the potential to lower a country's inflation rate because of each of the following EXCEPT: 30) ______ A) the higher prices of foreign goods spurs domestic competitors to cut prices. B) the import of lower priced services limits what domestic competitors can charge for services. C) the import of lower priced goods limits what domestic competitors can charge for goods. D) of all of the above 31) The BOP should always balance. 31) ______ A) True B) False 32) Which of the following statements about the balance of payments is NOT true? 32) ______ A) Although the BOP must always balance in theory, in practice there are substantial imbalances as a result of statistical errors and misreporting of current account and financial account flows. B) The BOP is the summary statement of all international transactions between one country and all other countries. C) The BOP is a flow statement, summarizing all international transactions that occur across the geographic borders over a period of time, typically a year. D) All of the above are true. 33) Significant amounts of United States Treasury issues are purchased by foreign investors, therefore the U.S. must earn foreign currency to repay this debt. 33) ______ A) True B) False 34) The financial account consists COMPLETELY of which three components? 34) ______ A) Direct investment, stock investment, and bond investment. B) Direct investment, portfolio investment, and other asset investment. C) Stock investment, bond investment, and mutual fund investment. D) Mutual fund investment, portfolio investment, and stock investment. 35) When categorizing investments for the financial account component of the balance of payments the ________ is an investment where the investor has no control whereas the ________ is an investment where the investor has control over the asset. 35) ______ A) direct investment; indirect investment B) portfolio investment; direct investment C) portfolio investment; indirect investment D) direct investment; portfolio investment 44) In 2007 the United States posted a current account deficit of -$731 billion. The bulk of the negative value came from 44) ______ A) a goods trade deficit. B) an income trade deficit. C) a net transfer deficit. D) an income balance deficit. 46) The BOP must be in balance but the current account need not be. 46) ______ A) True B) False 50) Which of the following would NOT be considered a typical BOP transaction? 50) ______ A) A U.S. tourist purchases gifts at a museum in London. B) The U.S. subsidiary of European financial giant, Credit Suisse, pays dividends to its parent in Zurich. C) Toyota U.S.A. is a U.S. distributor of automobiles manufactured in Japan by its parent company. D) All are example of BOP transactions. 55) Regime structures like the gold standard required no cooperative policies among countries, only the assurance that all would abide by the "rules of the game." 55) ______ A) True B) False 57) In the decade since 2000, the U.S. has experienced its largest bilateral trade deficits with the countries of China and Japan. 57) ______ A) True B) False Comment