International Finance Management Theories
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Questions and Answers

What was the name of the conference that established the new international monetary system in 1944?

  • The United Nations Financial Conference
  • The New Hampshire Conference
  • The US Dollar Convertibility Conference
  • The Bretton Woods Conference (correct)

    • What was the key feature of the Bretton Woods system?

  • Currencies had flexible exchange rates determined by the market.
  • Only governments could convert their currencies into gold.
  • All currencies were backed by gold convertibility.
  • The US dollar was the only currency backed by gold. (correct)

    • Why did the Bretton Woods system collapse in 1971?

  • The US could not maintain the fixed value of the dollar to gold. (correct)
  • The US wanted to switch to a flexible exchange rate system.
  • The US experienced high inflation and trade surplus.
  • The US experienced high inflation and trade deficit.

    • What was the key feature of the flexible exchange rate system that replaced the Bretton Woods system?

    <p>Exchange rates were determined by the market forces of demand and supply.</p> Signup and view all the answers

    How many countries attended the Bretton Woods conference?

    <p>44</p> Signup and view all the answers

    What was the official name of the Bretton Woods conference?

    <p>The United Nations Monetary and Financial Conference</p> Signup and view all the answers

    What is the primary function of the International Finance Corporation (IFC)?

    <p>Providing loans and loan guarantees to private investors in developing countries</p> Signup and view all the answers

    What is the primary function of the Multilateral Investment Guarantee Agency (MIGA)?

    <p>Providing political risk insurance (guarantees) for projects in developing countries</p> Signup and view all the answers

    What is the primary function of the International Centre for Settlement of Investment Disputes (ICSID)?

    <p>Settling investment disputes between foreign investors and host developing countries</p> Signup and view all the answers

    Which of the following is a primary function of the World Bank?

    <p>Helping war-devastated countries and underdeveloped countries by granting them loans for reconstruction and development</p> Signup and view all the answers

    Which of the following is NOT a function of the World Bank?

    <p>Settling investment disputes between foreign investors and host developing countries</p> Signup and view all the answers

    How does the World Bank help underdeveloped countries increase their economic growth and reduce poverty?

    <p>By providing extensive experience and financial resources to help underdeveloped countries increase their economic growth, reduce poverty, and improve their standard of living</p> Signup and view all the answers

    What is the focus of international finance?

    <p>Global economy</p> Signup and view all the answers

    Which theory suggests that certain regions would benefit from adopting a single currency?

    <p>Optimum Currency Area Theory</p> Signup and view all the answers

    What does the International Fischer Effect (IFE) theory assume about nominal interest rates?

    <p>They mirror fluctuations in spot exchange rates</p> Signup and view all the answers

    Which factor refers to the potential negative outcomes for a business due to changes in government policies or political instability?

    <p>Political Risks</p> Signup and view all the answers

    What does Interest Rate Parity (IRP) describe?

    <p>Equilibrium state in foreign exchange rates</p> Signup and view all the answers

    Why is an understanding of foreign exchange important for investors and managers?

    <p>To deal with unforseen changes in exchange rates</p> Signup and view all the answers

    What does the WTO Agreements provide for in terms of the trade facilitation agreement?

    <p>Practical support for implementation</p> Signup and view all the answers

    How should environmental protection measures be applied by WTO members?

    <p>Equally to national and foreign businesses</p> Signup and view all the answers

    What is one goal of the WTO regarding trading system inclusivity?

    <p>Allowing more women and small businesses to participate in trade</p> Signup and view all the answers

    With whom does the WTO maintain regular dialogue to enhance cooperation and build partnerships?

    <p>Civil society, labour unions, universities, and the business community</p> Signup and view all the answers

    What does the WTO provide a platform for through initiatives like the trade dialogues initiative and annual public forum?

    <p>To discuss developments in world trade and propose ways of enhancing the multilateral trading system</p> Signup and view all the answers

    What aspect of trade does the WTO recognize as growing in importance according to the text?

    <p>Ecommerce</p> Signup and view all the answers

    When was the Asian Development Fund established?

    <p>1974</p> Signup and view all the answers

    Who was the first President of the Asian Development Bank?

    <p>Takeshi Watanabe</p> Signup and view all the answers

    What did ADB increase its support for after the world's first oil price shock?

    <p>Energy projects</p> Signup and view all the answers

    Which region did ADB aim to serve initially with its assistance programs?

    <p>Rural areas</p> Signup and view all the answers

    In what year did ADB open its first field office in Bangladesh?

    <p>1982</p> Signup and view all the answers

    What set back Asia's economic gains in mid-1997 according to the text?

    <p>A financial crisis</p> Signup and view all the answers

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