Question

1. What is a floating exchange rate system?

a. A monetary system in which the exchange rates of major currencies retain nearly the same value with respect to the U.S. dollar, but are allowed to fluctuate during crises.

b. A monetary system in which exchange rates are allowed to change according to their market price.

c. A monetary system in which the exchange rates of currencies are set at a permanent price in terms of gold.

d. A monetary system in which the exchange rates of major currencies retain nearly the same value with respect to gold, but are periodically adjusted currency crises.

2. Considering the roles of interests, interaction, and institutions in the politics of trade policy, when are we most likely to observe protectionism?

a. When factors of production are sector-specific and political institutions magnify the influence of small groups.

b. Under proportional representation electoral systems with geographically large and diverse districts.

c. When consumers are able to lobby politicians effectively.

d. In non-democracies when factors of production are mobile across sectors of the economy.

3. What was the original role of the IMF under the Bretton Woods International Monetary System?

a. To lend to countries experiencing temporary balance of payments disequilibria so that they could maintain their fixed exchange rates.

b. To finance reconstruction after World War II.

c. To regulate financial derivatives and manage levels of systemic risk.

d. To promote free trade.

4. What is export Oriented industrialization (EOI)?

a. government policy of obtaining foreign technology as a means of encouraging industrialization

b. a policy of encouraging trade as a means of industrializing

c. a policy of encouraging the use of alternative resources necessary to fuel industrialization

d. a policy of promoting industrialization through tariffs, subsidies and other incentives in order to replace foreign goods with domestically produced goods

5. What is import substitution industrialization (ISI)?

a. a policy of promoting industrialization through tariffs, subsidies and other incentives in order to replace foreign goods with domestically produced goods

b. a policy of encouraging trade as a means of industrializing

c. a policy of encouraging the use of alternative resources necessary to fuel industrialization

d. government policy of obtaining foreign technology as a means of encouraging industrialization

Answer 1

Answers-

Q 1)

The correct Option is b. A monetary system in which exchange rates are allowed to change according to their market price or demand and supply mechanisms of the foreign exchange exchange.

The Option a is incorret. A Currency does not retain the same value with respect to the U S dollar but the values of currencies keep on fluctuating with respect to the U S currency.
The Option c is incorrect. The fixed exchange rates is a exchange rate which is  a currency's value is fixed or pegged by a monetary authority with respect to other currencies or gold.
The Option d is incorrect. The exchange rates are not set at permanent prices with respect to gold.

Q 2)

The correct Option is b. Under proportional representation electoral systems with geographically large and diverse districts. In such a situation the protectionism measures are bound to happen to protect small geographical areas.
The Option a is incorrect. If the factors of production are sector-specific and political institutions increase the influence of small groups this is like monopoly.
The Option c is incorrect. The consumers lobbying with politicians do not lead to protectionism.
The Option d is incorrect. When the  factors of production are mobile across sectors of the economy there is no need for protectionism.

Q 3)

The correct Option is a. The role of Bretton Woods Internationally Monetary system was lend to countries experiencing temporary balance of payments disequilibrim so that they could maintain their fixed exchange rates.
The Option b is incorrect.
The Option is c is incorrect. The regulation of  financial derivatives and manage levels of systemic risk is not in the ambit of Bretton Woods.
The Option d is incorrect. The North American Free Trade Agreement (NAFTA) is responsible of promoting free trade.

Q 4)

The correct Option is b. Export-oriented industrialization (EOI) is a policy of encouraging trade as a means of industrializing. It encourages export-led growth in trade industrialization and exporting goods that have a competitive advantage.
The Option a is incorrect. The foreign trade in industrialization is a policy of obtaining foreign technology as a means of encouraging industrialization.
The Option c is incorrect. The policy of EOI is not to encourage the use of alternative resources to increase industralization.
The Option d is incorrect. The import substitution industrialization (ISI)  is a policy of promoting industrialization through tariffs, subsidies and other incentives in order to replace foreign goods with local goods.

Q 5)

The correct Option is a. The Import substitution industrialization (ISI) a policy of promoting industrialization through tariffs, subsidies and other incentives in order to replace foreign goods with domestically produced goods.
The Option b is incorrect.. The Export-oriented industrialization (EOI) is a policy of encouraging trade as a means of industrializing.
The Option c is incorrect. The Renewable energy policy is encouraging the use of alternative resources necessary to fuel industrialization.
The Option d is incorrect. The foreign trade in industrialization is a policy of obtaining foreign technology as a means of encouraging industrialization.