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Chapter 11: Cooperation, Conflict and Crisis in the Contemporary International Monetary System Multiple Choice Questions 1. The determination to set macroeconomic policy independent of foreign considerations has generated a) small current-account imbalances. b) small cross-border capital flows. c) substantial financial stability. d) calm exchange rate movements. e) episodes of financial instability. Answer: e 2. After 1980, the largest current account deficit in the global economy was held by a) United States. b) Germany. c) Japan. d) United Kingdom. e) China. Answer: a 3. By 1990, the U.S. current account deficit had declined since its high in 1987 to approximately a) $ 50 billion. b) $ 75 billion. c) $ 100 billion. d) $ 125 billion e) $ 150 billion Answer: b 4. The current account imbalances in the United States during the Reagan administration were due to a) cutting taxes and military spending. b) raising taxes and military spending. c) cutting taxes and raising military spending. d) raising taxes and cutting military spending. e) cutting taxes and greater exports. Answer: c 5. A change in fiscal policy will affect the current account so long as
