Question

Which of the following is NOT one of the rules for a gold standard? a. Each country should fix the value of its currency in terms of gold. b. Capital controls should be used to conserve each country's gold holdings. c. There should be an unrestricted flow of gold between countries d. The central bank in each country should hold gold reserves in a direct relationship to the currency it issues. Which of the following best describes a situation in which a country buys domestic currency in order to defend a pegged exchange rate, and also uses a policy in the domestic economy in to prevent the domestic money supply from changing? a. Official intervention b. Sterilized interventiorn c. Maintaining a crawling peg d. Deficit without tears Which of the following is true of capital controls? a. They cannot be used to maintain a fixed exchange rate. b. They are socially inefficient methods of maintaining a fixed exchange rate. c. They can be optimal when a disequilibrium is fundamental. d. They are key to the success of a fixed exchange rate regime. Which of the following is currently a main function of the International Monetary Fund (IMF)? a. To loan reserves to countries that are attempting to finance temporary payments deficits b. To loan money to developing countries to allow them to carry out programs that will improve the standard of living To house the world's gold supply To set bilateral exchange rate values c. d.