8. Generally, a balance of payments deficit arises in a country with fixed exchange rates whenever: a. there is excess demand for domestic currency on the private Forex at the official fixed exchange rate. b. there is excess supply of foreign currency on the private Forex at the official fixed exchange rate. c. exports of goods and services exceed imports. d. the central bank does not intervene in the private Forex. e. there is excess demand for foreign currency on the private Forex at the official fixed exchange rate. 9. was the first major international system of fixed exchange rates. a. The Bimetallic standard b. The gold standard c. The crawling peg d. The reserve currency standard e. The currency board 10. Suppose Japan pegs its currency to the dollar. An addition to Japan's official reserves during a particular year implies: a. the Japanese central bank has purchased yen and sold dollars, indicating a balance of payments surplus. b. the Japanese central bank has sold yen and purchased dollars, indicating a balance of payments deficit. c. there is a surplus in Japan's financial account. d. the Japanese central bank has sold yen and purchased dollars, indicating a balance of payments surplus. e. there was a trade deficit in Japan during the year. 1 1. What are the two main conditions which give rise to a black market? a. Excess demand for a currency and a corresponding Forex market intervention by the central bank b. Flexible exchange rates and excess demand for a currency c. Fixed exchange rates and regular Forex market intervention by the central bank d. Excess demand for a currency and a willingness to pay a higher price for it e. Flexible exchange rates and regular Forex market intervention by the central bank 12. Which of the following statements is true regarding the Smithsonian Agreement reached in December 1971? a. The nonreserve countries did not accept the suggested 8 percent revaluation of their currencies to the dollar. b. It was declared that the 10 percent import surcharge would continue. c. The United States revalued the dollar with respect to gold, changing the price to $30 per ounce. d. The problem of the dollar overhang worsened. e. The Smithsonian Agreement extended the life of Bretton Woods for just over a year