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    Question

    International Monetary System is considered good if it fulfils which of the following objectives?

    i. maximizes the flow of foreign trade and foreign investments

    ii. leads to an equitable distribution of the gains form trade among the nations of the world

    iii. maintains as much foreign reserves to mitigate BoP (Balance of Payments)

    crisis of a nation without any Inflationary Pressure on the nations

    iv. minimizes the cost of BoP (Balance of Payments) and time adjustment for the nations

    A Only i & ii Correct Answer Incorrect Answer
    B Only i & iii Correct Answer Incorrect Answer
    C Only i, ii, & iii Correct Answer Incorrect Answer
    D Only i, iii, & iv Correct Answer Incorrect Answer
    E All of these Correct Answer Incorrect Answer

    Solution

    International Monetary Systems (IMS) are sets of internationally agreed rules, conventions and supporting institutions, that facilitate international trade, cross border investment and generally the reallocation of capital between nation states. A good IMS should fulfil all these objectives.

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