617 #
© 2014 Pearson Canada Inc.#
To maintain fixed exchange rates when countries had balance of payments deficits and were
losing international reserves, the ____ would loan ____ countries international reserves
contributed by other members.
A) IMF; deficit
B) IMF; surplus
C) World Bank; deficit
D) World Bank; surplus
Answer: A
Diff: 2 Type: MC Page Ref: 503
Skill: Recall
Objective List: 20.3 Summarize the arguments for and against capital controls
Under the Bretton Woods system, the IMF could encourage ____ countries to pursue
____ monetary policies that would strengthen their currency or eliminate their balance of
payment deficits.
A) surplus; expansionary
B) surplus; contractionary
C) deficit; expansionary
D) deficit; contractionary
Answer: D
Diff: 2 Type: MC Page Ref: 503
Skill: Recall
Objective List: 20.3 Summarize the arguments for and against capital controls
Under the Bretton Woods system, the IMF could encourage deficit countries to pursue
contractionary monetary policies that would ____ their currency or eliminate their balance
of payment ____.
A) strengthen; surpluses
B) strengthen; deficits
C) weaken; surpluses
D) weaken; deficits
Answer: B
Diff: 2 Type: MC Page Ref: 503
Skill: Recall
Objective List: 20.3 Summarize the arguments for and against capital controls
A weakness of the Bretton Woods system was that the ____ had no way to force surplus
countries to either revalue their exchange rates upwards or pursue more expansionary policies.
A) IMF
B) World Bank
C) European Exchange Rate Mechanism (ERM)
D) Bank of International Settlements
Answer: A
Diff: 2 Type: MC Page Ref: 503
Skill: Recall
Objective List: 20.3 Summarize the arguments for and against capital controls