31. Which of the following is a way in which the U.S. Department of Commerce hel

Question

31.          Which of the following is a way in which the U.S. Department of Commerce helps potential exporters?

A.            It oversees volunteers with international trade experience and directs them to provide one-on-one counseling to active and new-to-export businesses.

B.            It assembles a "comparison shopping service" for 14 countries that are major markets for U.S. exports.

C.            It coordinates a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters.

D.            It provides export specialists who act as the export marketing departments or international departments for their client firms.

E.            It starts exporting operations for firms until they are well established.

14. Which of the following statements is true about the various exchange rate systems?

A. In a fixed exchange rate system, the value of a currency is adjusted according to the day to day market forces.

B. In a clean float, the central bank of a country will intervene in the foreign exchange market to try to maintain the value of its currency.

C. After the collapse of the Bretton Woods system of floating exchange rates in 1973, the world has operated with a fixed exchange rate system.

D. Under the Bretton Woods system, currency devaluations over 10 percent were allowed only with the approval of the IMF.

E. In dirty float, the exchange rate between a currency and other currencies is relatively fixed against a reference currency exchange rate.

Explanation / Answer

Ans 31=B

Ans 14=D

Bretton Woods agreement was a commitment not to use devaluation as a weapon of competitive trade policy. But, if a currency became too weak to defend, a devaluation of up to 10 percent would be allowed without any formal approval by the IMF. Larger devaluations required IMF approval

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