forward exchange rate is the exchange rate settled today for a payment or delivery that will be consummated in a future date.

Standby Arrangements are one of the main instruments of the Financial Assistance mission of the IMF. Therefore, the correct choice is A.

World Bank is a group composed of five associated institutions: The International Bank for Reconstruction and Development, The International Development Association, The International Finance Cooperation, The Multilateral Investment Guarantee Agency and The International Center for Settlement of Investment Disputes. As also understood from the information given, the correct answer is E.

One of the pillars of the Bretton Woods Conference was a development bank that would aid the re-construction of the economies wounded by the war. In this respect, World Bank was founded in 1944. Therefore, the correct choice is C. 

The discipline of international economics is composed of two main parts: International trade and international money. International trade refers to the real side of international economics while international money refers to the monetary side of international economics. Barter, on the otner hand, refers to an exchange of a commodity for another.

The most important development between the two world wars is that the United States has turned into a net international creditor country from the net international debtor position. Great Depression of 1929 caused a sharp decline in foreign trade and international capital movements because of the chaos in international payments, tariffs and restrictions on international trade and foreign exchange.

Bound tariff: It represents the tariff ceiling that is committed. Once a tariff is bound, it cannot be increased over its ceiling.

Dumping: Dumping happens when a commodity is sold at a price less than its normal value at the foreign market. In other words, there is dumping when a commodity is exported with a price that is lower than its production cost.

Subsidies: Subsidies are usually classified under two groups: Export subsidies and domestic subsidies. Export subsidies are subsidies that are given to an exporting firm by the government. Domestic subsidies do not require a contingency on exportation.

Anti-dumping duty: A country exposed to dumping can charge an anti-dumping duty from the exporter country in order to compensate its loss.

Countervailing duty: A country that is exposed to an export subsidy can charge a countervailing duty from the exporter country in order to compensate its loss.

As also understood from the information given, the definitions in the options I, II and III are correct, so the correct answer is C. The definitions in the options IV and V are not correct because of the fact that a country exposed to dumping can charge an anti-dumping duty from the exporter country in order to compensate its loss and a country that is exposed to an export subsidy can charge a countervailing duty from the exporter country in order to compensate its loss.

Financial Account: The net value of financial assets and similar claims that a country bought and sold (except the official international reserve changes) with the rest of the world states the private finance account balance in the balance of payments. The values recorded in the financial account are the principal values of the financial assets bought and sold; revenues obtained or paid to the holders of these types of assets are recorded in the capital account. Therefore, the correct option is B.

Factors that cause a change in the equilibrium exchange rate are the factors which are accepted as constant other than the current exchange rate. In macroeconomics, these factors include the real GDP, relative productivity, relative price level, barriers for international trade (like tariffs and quotas) and preferences between imported and domestically produced goods. However,  the theory, known as purchasing power parity, however, claims that the foreign exchange rate will solely be determined by the price level changes in both countries.

Direct investments (or its widely used name, Foreign Direct Investments – FDI) are the financial flows that stem from ownership transferring of a foreign company or lending to a foreign company that is widely controlled by the investor. The correct answer is B.

Effects of technological differences on international trade are best explained by the Product Cycle Model. This model regards technological innovation as the key determinant of the pattern of trade within the manufactured commodities trade.

The WTO was established on 1 January 2005 upon the decisions taken at the Uruguay Round. The WTO is an international organization that deals with the multilateral trading system and its rules. The WTO operates as the successor of the GATT without terminating its existence. The GATT or as it is usually referred as, the GATT 1994, has still been the most comprehensive agreement with the WTO structure.

As also understood from the information given, all of the statements in the options about the World Trade Organization (WTO) are correct, so the correct answer is E.

Statistical Discrepancy: This balancing item is also called as net errors and omissions in the balance of payments literature and it is the most skeptical (or more accurately the cause of polemic) item among the balance of payments entries. If the double sides of flows caused by the international transactions are accurately recorded, there will be no statistical discrepancy at all. Therefore, the correct option is E.

In order to buy a unit of currency, the amount that must be foregone in the other currency is the foreign exchange rate. In other words, the foreign exchange rate is the price of one unit of currency in terms of the other. Therefore, the correct option is B.

Fundamental economic variables (like general price levels and real outputs) of two countries are the basic factors affecting the level of an exchange rate.

One tool of foreign exchange restriction is foreign exchange control, which is used in quantity restrictions. It is intended to restrict foreign exchange transactions. Thus, the exchange can only be understood with the condition of being filled. Normally, governments instruct central banks about buying and selling of foreign exchange transactions.

Opportunity cost of a choice is the highest valued alternative that is given up. It is the quantity ratio of the production decrease in the commodity to the production increase in the other commodity as the production moves along the production possibilities frontier.

Dumping is a sale of goods abroad at low a price, below their cost and price in the home market. Voluntary export restraint is a restriction set by a government on the volume of products that can be exported to other countries during a specified period of time. A domestic production subsidy is a payment made by a government to a particular industry based on the output or production. Export subsidies are also payments made by a government in order to inspire the export of specified goods. An international cartel is an arrangement to avoid some or all forms of competition, the parties to which are business enterprise domiciled under more than one government and trading across national frontiers.

There are four basic groups (accounts) summarizing a nation’s balance of payments: current account, capital account, financial account and reserve assets. There is an additional balancing item known as statistical discrepancy. The correct answer is E.

Factors that cause a change in the equilibrium exchange rate are the factors which are accepted as constant other than the current exchange rate (the variable on the vertical axis of the figure). The correct answer is " A ".