International Relations – MCQs

2005 questions. Click to practice.

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1.What is the official central banking institution of the United States called?

2.What makes it challenging to implement and uphold sanctions within the global system?

There is a lack of financial motivation to comply with the sanctionsWidespread international backing for sanctions often provokes the sanctioned party to resist themWhen a country uses economic pressure on another, it can negatively impact the economies of other nationsAvoiding mutually beneficial trade typically causes more harm to the enforcing country than to the target, unless all countries participate

3.Which organization is responsible for managing global currency exchange, overseeing the balance of international payments, and maintaining national accounts?

International Monetary FundAll of the aboveWorld BankWorld Exchange Organization

4.Which type of investment includes physical assets that cannot be easily traded or transported, unlike paper-based financial instruments?

Investment in a collection of securitiesInvestment managed on behalf of another partyInvestment involving ownership of tangible assets abroadInvestment in foreign money or exchangeInvestment in intangible assets

5.What does the term "autarky" refer to?

6.What is the term for a single country's action to lower the value of its currency by adjusting a fixed or official exchange rate?

7.Which of the following does NOT qualify as a type of standing wealth?

foreign currency holdingsresidential propertiesmanufacturing plantsAll of the above are types of standing wealth

9.Which country best demonstrates the challenges associated with economic self-sufficiency (autarky)?

ChinaUnited StatesSingaporeFrance

10.Besides the WTO, which types of international agreements primarily regulate global trade alongside bilateral trade deals?

worldwide trade treatiesmutual exchange agreementstrade agreements among regionseconomic reliance

11.What is the impact of a country devaluing its currency?

It raises the overall portfolio value for foreign investors holding that currency.It leads to a reduction in the demand for that currency.It boosts trust in the country's capacity to fulfill its financial obligations.It seldom provides an immediate solution to economic difficulties.

12.What is a potential consequence if existing regional free-trade agreements in Europe and North America grow stronger and additional ones are established?

The International Monetary Fund might take over the role of the WTOThe importance of the WTO will increase significantlyA global common market will be established shortlyThe influence of the WTO could be diminishedGlobal trade barriers will be completely eliminated

13.According to Keynesian economic theory, what is the recommended approach to boost economic activity?

Increasing government expenditure to raise inflation levelsCutting budget deficits to promote economic expansionUsing government borrowing and spending to encourage economic growthImplementing strict fiscal policies to reduce inflation

14.Which statement below does NOT correctly describe an attribute of the Special Drawing Right (SDR)?

Its value is determined by a combination of multiple major global currencies.Both governments and corporations can hold SDRs, but individuals cannot possess them.It is considered the nearest equivalent to a global currency available today.The International Monetary Fund issues SDRs in controlled quantities.It serves as an official reserve asset for IMF member countries.

15.Why do governments face disadvantages when intervening in global currency markets, even when acting collectively?

They are prohibited from utilizing public funds to trade currenciesTheir currency operations are strictly overseen by the International Monetary FundEmerging nations resist interference by advanced economies in currency marketsThey influence only a minor portion of the total currency transactions occurring in these markets