GEB MCQ: May 2017

Archive for May 2017

Which of the following would most likely help international businesspeople to forecast future changes in exchange rates?

Which of the following would most likely help international businesspeople to forecast future changes in exchange rates? A. swap transaction B. forward...

Rowland Enterprises wants to hedge the foreign-exchange risks involved in international transactions. Which of the following would be LEAST appropriate for Rowland?

Rowland Enterprises wants to hedge the foreign-exchange risks involved in international transactions. Which of the following would be LEAST appropriate...

Ross Manufacturing wants to sell foreign exchange on a spot basis and contracts with an international bank to handle the transaction. What is the most likely reason that Ross uses an international bank in this case?

Ross Manufacturing wants to sell foreign exchange on a spot basis and contracts with an international bank to handle the transaction. What is the most...

The foreign-exchange market is most likely shifting towards electronic trading for the purpose of ________.

The foreign-exchange market is most likely shifting towards electronic trading for the purpose of ________. A. discouraging speculators B. lowering...

The primary purpose of the foreign-exchange market is to ________.

The primary purpose of the foreign-exchange market is to ________. A. encourage globalization B. assist developing countries C. facilitate currency...

A ________ is a mutual fund that specializes in investing in a given country's firms.

A ________ is a mutual fund that specializes in investing in a given country's firms. A. country fund B. global equity fund C. high-risk fund D....

Which of the following is a characteristic of most offshore financial centers?

Which of the following is a characteristic of most offshore financial centers? A. political instability B. services for residents C. accounting expertise D....

Which of the following countries is not an important offshore financial center?

Which of the following countries is not an important offshore financial center? A. Switzerland B. Singapore C. South Korea D. Bermuda Answer:...

A bond that is issued by Nestle, a Swiss company, that is denominated in yen and sold to residents of Japan is most likely a ______.

A bond that is issued by Nestle, a Swiss company, that is denominated in yen and sold to residents of Japan is most likely a ______. A. Eurobond B....

_____ focus on offering banking and other financial services to nonresident customers.

_____ focus on offering banking and other financial services to nonresident customers. A. Subsidiary banks B. Branch banks C. Affiliated banks D....

A(n) ________ is a large, liquid financial asset that can be traded anywhere at any time.

A(n) ________ is a large, liquid financial asset that can be traded anywhere at any time. A. international stock B. global bond C. global equity D....

The international bond market is a major source of debt financing for all of the following EXCEPT ________.

The international bond market is a major source of debt financing for all of the following EXCEPT ________. A. foreign governments B. international...

On the basis of which interest rate are Euroloans often quoted?

On the basis of which interest rate are Euroloans often quoted? A. United States Prime Rate B. European Central Bank Offer Rate C. London Interbank...

Which of the following is the LEAST likely reason that the Euroloan market is the low-cost source of loans for large, credit worthy borrowers?

Which of the following is the LEAST likely reason that the Euroloan market is the low-cost source of loans for large, credit worthy borrowers? A....

What term refers to a currency on deposit outside its country of issue?

What term refers to a currency on deposit outside its country of issue? A. Eurocurrency B. Eurodollar C. Euroyen D. Europound Answer:...

What is a Eurodollar?

What is a Eurodollar? A. a euro held be an American B. a US dollar deposited in a European bank C. the euro deposited in a US bank D. any currency...

When an overseas banking operation is jointly owned by a parent bank and a local or foreign partner, what is it called?

When an overseas banking operation is jointly owned by a parent bank and a local or foreign partner, what is it called? A. subsidiary bank B. branch...

When an overseas banking operation is not separately incorporated from the parent bank, what is it called?

When an overseas banking operation is not separately incorporated from the parent bank, what is it called? A. subsidiary bank B. branch bank C. affiliated...

When an overseas banking operation is separately incorporated from the parent bank, what is it called?

When an overseas banking operation is separately incorporated from the parent bank, what is it called? A. subsidiary bank B. branch bank C. affiliated...

Which of the following is not a method of establishing an overseas banking operation?

Which of the following is not a method of establishing an overseas banking operation? A. subsidiary bank B. branch bank C. affiliated bank D. correspondent...

According to the Big Mac Index, ________.

According to the Big Mac Index, ________. A. the Euro is undervalued B. Russia's ruble is overvalued C. China's yuan is undervalued D. the peso is...

_______ suggests that national differences in expected inflation rates yield differences in nominal interest rates among countries.

_______ suggests that national differences in expected inflation rates yield differences in nominal interest rates among countries. A. two-point...

Which form of arbitrage is considered the most important in the foreign-exchange market?

Which form of arbitrage is considered the most important in the foreign-exchange market? A. two-point arbitrage B. three-point arbitrage C. covered...

What kind of arbitrage occurs when the difference between two countries' interest rates is not equal to the forward discount/premium on their currencies?

What kind of arbitrage occurs when the difference between two countries' interest rates is not equal to the forward discount/premium on their currencies? A....

The ________ is the primary third currency used in calculating cross rates.

The ________ is the primary third currency used in calculating cross rates. A. Euro B. US dollar C. Japanese yen D. Swiss franc Answer:...

The ________ is an exchange rate between two currencies calculated through the use of a third currency.

The ________ is an exchange rate between two currencies calculated through the use of a third currency. A. forward rate B. call rate C. cross rate D....

________ is profitable whenever the cost of buying a currency directly differs from the cross rate of exchange.

________ is profitable whenever the cost of buying a currency directly differs from the cross rate of exchange. A. two-point arbitrage B. three-point...

Two-point arbitrage is also known as ________.

Two-point arbitrage is also known as ________. A. equilibrium arbitrage B. forward arbitrage C. discount arbitrage D. geographic arbitrage Answer:...

Suppose £1 is trading for $2.00 in New York City and $1.80 in London. A foreign exchange trader could take $1.80 and buy £1 in London's financial exchange market and then sell it for $2.00 in New York's financial exchange market. What is this an example of?

Suppose £1 is trading for $2.00 in New York City and $1.80 in London. A foreign exchange trader could take $1.80 and buy £1 in London's financial exchange...

Which form of arbitrage involves profiting from price differences in two distinct markets?

Which form of arbitrage involves profiting from price differences in two distinct markets? A. geographic arbitrage B. three-point arbitrage C. covered...

Which of the following is not a common form of financial arbitrage?

Which of the following is not a common form of financial arbitrage? A. two-point arbitrage B. three-point arbitrage C. internet arbitrage D. geographic...

Euro Loans are quotes at which of the following rates?

Euro Loans are quotes at which of the following rates? A. LIBOR B. the euro rate C. prime plus 2% D. prime plus .5% Answer: ...

_______ suggests that arbitrage activities will continue until the price of the good is identical in both markets.

_______ suggests that arbitrage activities will continue until the price of the good is identical in both markets. A. Purchasing power parity B....

The theory of ________ states that the prices of tradable goods, when expressed in a common currency, will tend to equalize across countries as a result of exchange rate changes.

The theory of ________ states that the prices of tradable goods, when expressed in a common currency, will tend to equalize across countries as a result...

_______ is the riskless purchase of a product in one market for immediate resale in a second market in order to profit from a price discrepancy.

_______ is the riskless purchase of a product in one market for immediate resale in a second market in order to profit from a price discrepancy. A....

If a currency is selling at a forward discount it means that the foreign-exchange market most likely believes that the ________.

If a currency is selling at a forward discount it means that the foreign-exchange market most likely believes that the ________. A. currency will...

The currencies of countries enjoying BOP trade surpluses or low inflation rates are more likely to sell at a ________.

The currencies of countries enjoying BOP trade surpluses or low inflation rates are more likely to sell at a ________. A. spot discount B. spot premium C....

If a currency is selling at a forward premium it most likely means that the foreign-exchange market believes that the ________.

If a currency is selling at a forward premium it most likely means that the foreign-exchange market believes that the ________. A. currency will depreciate...

The currencies of countries suffering from balance of payment trade deficits or high inflation rates are more likely to sell at a ________.

The currencies of countries suffering from balance of payment trade deficits or high inflation rates are more likely to sell at a ________. A. spot...

The ________ represents the marketplace's aggregate prediction of the spot price of the currency rate in the future.

The ________ represents the marketplace's aggregate prediction of the spot price of the currency rate in the future. A. forward price B. spot price C....

What is a currency selling at if the forward price is higher than the spot price?

What is a currency selling at if the forward price is higher than the spot price? A. forward premium B. forward discount C. par value D. swap value...

Moffet Manufacturing wants the right to sell a foreign currency at a specified price at any time up to a specified date. Moffet most likely needs a ________.

Moffet Manufacturing wants the right to sell a foreign currency at a specified price at any time up to a specified date. Moffet most likely needs a...

Apex Enterprises wants the right to buy a foreign currency at a specified price at any time up to a specified date. Apex most likely needs a ________.

Apex Enterprises wants the right to buy a foreign currency at a specified price at any time up to a specified date. Apex most likely needs a ________. A....

A ________ allows, but does not require, a firm to buy or sell a specified amount of foreign currency at a specified price at any time up to a specified date.

A ________ allows, but does not require, a firm to buy or sell a specified amount of foreign currency at a specified price at any time up to a specified...

What is a currency selling at if the forward price is less than the spot price?

What is a currency selling at if the forward price is less than the spot price? A. forward premium B. forward discount C. par value D. swap price...

A ________ is a contract for a standard amount on a standard delivery date.

A ________ is a contract for a standard amount on a standard delivery date. A. forward contract B. currency future C. currency option D. call option...

A swap transaction ________.

A swap transaction ________. A. is a foreign exchange transaction that is consummated immediately B. is a foreign exchange transaction that occurs...

A forward transaction ________.

A forward transaction ________. A. is a foreign exchange transaction that is consummated immediately B. is a foreign exchange transaction that occurs...

A spot transaction ________.

A spot transaction ________. A. is a foreign exchange transaction that is consummated immediately B. is a foreign exchange transaction that occurs...

What percentage of all foreign exchange transactions take place in the spot market?

What percentage of all foreign exchange transactions take place in the spot market? A. 10% B. 24% C. 33% D. 47% Answer: ...

In the world of spot markets, what is the meaning of immediately?

In the world of spot markets, what is the meaning of immediately? A. two days after the trade date B. four business days after the trade date C....

The ________ consists of foreign-exchange transactions that are to occur sometime in the future.

The ________ consists of foreign-exchange transactions that are to occur sometime in the future. A. soft currency market B. spot market C. hard currency...

The ________ consists of foreign-exchange transactions that are to be consummated immediately.

The ________ consists of foreign-exchange transactions that are to be consummated immediately. A. soft currency market B. spot market C. hard currency...

An inconvertible currency ________.

An inconvertible currency ________. A. is a foreign exchange transaction that is consummated immediately B. is a foreign exchange transaction that...

Which of the following is not considered a hard currency?

Which of the following is not considered a hard currency? A. Swiss franc B. Mexican peso C. Canadian dollar D. US dollar Answer: ...

Currencies that are freely tradable are called ________.

Currencies that are freely tradable are called ________. A. hard currencies B. soft currencies C. foreign currencies D. inconvertible currencies...

_______ attempt to exploit small differences in the price of a currency between markets by buying currencies in lower-priced markets and selling in higher-priced markets.

_______ attempt to exploit small differences in the price of a currency between markets by buying currencies in lower-priced markets and selling in...

_______ assume exchange rate risks by acquiring positions in a currency and hoping that they can correctly predict changes in the currency's market value.

_______ assume exchange rate risks by acquiring positions in a currency and hoping that they can correctly predict changes in the currency's market...

All of the following are common activities of a bank's commercial customers EXCEPT ________.

All of the following are common activities of a bank's commercial customers EXCEPT ________. A. exporting goods B. importing services C. receiving...

Which of the following is not a type of client of foreign-exchange departments of banks?

Which of the following is not a type of client of foreign-exchange departments of banks? A. commercial customers B. speculators C. arbitrageurs D....

What percentage of all foreign-exchange trading involves the U.S. dollar?

What percentage of all foreign-exchange trading involves the U.S. dollar? A. 25% B. 47% C. 70% D. 85% Answer: ...

The world's largest trading markets include all of the following except ________.

The world's largest trading markets include all of the following except ________. A. London B. Frankfurt C. Tokyo D. Singapore Answer:...

Worldwide volume of foreign exchange trading is about ________ per day.

Worldwide volume of foreign exchange trading is about ________ per day. A. $2 Billion B. $50 Billion C. $2 trillion D. $4 trillion Answer:...

Carol, an American banker, received a quote between the U.S. dollar and the Japanese yen of $.00924/¥1. Carol most likely received a(n) ________ quote.

Carol, an American banker, received a quote between the U.S. dollar and the Japanese yen of $.00924/¥1. Carol most likely received a(n) ________ quote. A....

A(n) ________ is the price of the home currency in terms of the foreign currency.

A(n) ________ is the price of the home currency in terms of the foreign currency. A. direct exchange rate B. indirect quote C. indirect exchange...

Tyler, a U.S. citizen, received a quote on the dollar/yen relationship of ¥108.21/$1. Tyler most likely received a(n) ________ quote.

Tyler, a U.S. citizen, received a quote on the dollar/yen relationship of ¥108.21/$1. Tyler most likely received a(n) ________ quote. A. indirect B....

Which term refers to the price of the foreign currency in terms of the home currency?

Which term refers to the price of the foreign currency in terms of the home currency? A. direct exchange rate B. indirect quote C. indirect exchange...

A(n)________ shows the demand for a currency that is derived from foreigners' desire to acquire the country's goods, services, and assets.

A(n)________ shows the demand for a currency that is derived from foreigners' desire to acquire the country's goods, services, and assets. A. direct...

The price of foreign exchange is set by ________.

The price of foreign exchange is set by ________. A. the international monetary fund B. the gold standard C. demand and supply in the marketplace D....

If the British pound is selling at $1.7775 spot on September 3, and at a 90-day forward rate of $1.7661, then ________.

If the British pound is selling at $1.7775 spot on September 3, and at a 90-day forward rate of $1.7661, then ________. A. the pound is selling at...

_____ is a commodity that consists of currencies issued by countries other than one's own.

______ is a commodity that consists of currencies issued by countries other than one's own. A. Eurozone B. Foreign exchange C. Floating exchange D....

A call option _____.

A call option _____. A. is a privately traded currency vehicle available only through stockholders. B. grants the right to buy a specified amount...

Which of the following is NOT an example of a participant in the foreign exchange market?

Which of the following is NOT an example of a participant in the foreign exchange market? A. Pakistani tourists exchanging rupees for British pounds...

What most likely happens when the price of yen falls?

What most likely happens when the price of yen falls? A. The quantity of yen demanded goes down B. The demand curve slopes downward C. The demand...

The rising value of the Canadian dollar relative to the US dollar has all the following effects except that ____.

The rising value of the Canadian dollar relative to the US dollar has all the following effects except that ____. A. Canadian exports to the US are...

The International Bank for Reconstruction and Development is also known as the ____.

The International Bank for Reconstruction and Development is also known as the ____. A. World Bank B. IMF C. Bretton Woods D. None of the Above Answer:...

Which country controls the largest bloc of votes in the IMF?

Which country controls the largest bloc of votes in the IMF? A. None. All countries have the same vote. B. UK C. US D. Germany E. Japan Answer:...

Special Drawing Rights (SDRs) are sometimes called ____.

Special Drawing Rights (SDRs) are sometimes called ____. A. gold B. paper currency C. paper gold D. credit E. none of the above Answer:...

The value of _____ is currently calculated daily as a weighted average of the market value of four major currencies.

The value of _____ is currently calculated daily as a weighted average of the market value of four major currencies. A. IMF's quota B. special drawing...

Who was President of the United States when it was discovered that the US did not have enough gold on hand to meet demand?

Who was President of the United States when it was discovered that the US did not have enough gold on hand to meet demand? A. Kennedy B. Nixon C....

Which two countries are added to the Group of Five to make it the Group of Seven?

Which two countries are added to the Group of Five to make it the Group of Seven? A. US and Japan B. Italy and Canada C. Germany and France D. Russia...

How many countries are members of the Group of Ten?

How many countries are members of the Group of Ten? A. 10 B. 11 C. 20 D. 21 E.30 Answer: ...

Together, the Group of Ten make up approximately what percentage of the world GDP?

Together, the Group of Ten make up approximately what percentage of the world GDP? A. 10% B. 25% C. 50% D. 70% E. 75% Answer: ...

Which of the following is not one the four countries that, in addition to the Group of Seven countries, make up the Group of Ten?

Which of the following is not one the four countries that, in addition to the Group of Seven countries, make up the Group of Ten? A. Netherlands B....

At which conference did the Group of Ten agree to restore the fixed exchange rate system in 1971?

At which conference did the Group of Ten agree to restore the fixed exchange rate system in 1971? A. Bretton Woods B. Smithsonian C. Genoa D. Jamaica E....

What term recognizes that in to private sector market forces, exchange rates are also affected by central banks buying or selling currencies on the foreign exchange market?

What term recognizes that in to private sector market forces, exchange rates are also affected by central banks buying or selling currencies on the...

Dirty float is another term for ____.

Dirty float is another term for ____. A. flexible float B. managed float C. illegal exchange D. par value E. convertible currency Answer:...

Which agreement resulted in each country adopting its own exchange rate system?

Which agreement resulted in each country adopting its own exchange rate system? A. Bretton woods B. Smithsonian C. Jamaica D. Genoa E. Brussels Answer:...

The ____ was created to manage currency relationships within the European Union.

The ____ was created to manage currency relationships within the European Union. A. European Monetary System B. International Monetary System C. Louvre...

Which of the following is not one of the major accounts in the BOP accounting system?

Which of the following is not one of the major accounts in the BOP accounting system? A. current account B. capital account C. debt account D. official...

The ____ records exports and imports as goods and services, investment income, and gifts.

The ____ records exports and imports as goods and services, investment income, and gifts. A. current account B. capital account C. debt account D....

The ____ records the levels of gold, convertible currencies, special drawing rights, and reserve positions at the IMF held by a national government.

The ____ records the levels of gold, convertible currencies, special drawing rights, and reserve positions at the IMF held by a national government. A....

The ____ records the purchases and sales of assets between residents of one country and those of another country.

The ____ records the purchases and sales of assets between residents of one country and those of another country. A. current account B. capital account C....

The _____ is used to make the BOP balance despite measurement errors.

The _____ is used to make the BOP balance despite measurement errors. A. current account B. capital account C. debt account D. official reserves...

All of the following are typical short-term portfolio investments included in the capital account except ____.

All of the following are typical short-term portfolio investments included in the capital account except ____. A. government bonds B. checking account...

All of the following are typical long-term portfolio investments included in the capital account except ____.

All of the following are typical long-term portfolio investments included in the capital account except ____. A. government bonds B. checking account...

The _____ measures the net balance resulting from merchandise trade, service trade, investment income, and unilateral transfers.

The _____ measures the net balance resulting from merchandise trade, service trade, investment income, and unilateral transfers. A. current account...

Which of the following is not a form of assets included in the official reserves account?

Which of the following is not a form of assets included in the official reserves account? A. gold B. convertible currencies C. special drawing rights D....

The ____ records the net impact of the central bank's interventions in the foreign exchange market in support of the local currency.

The ____ records the net impact of the central bank's interventions in the foreign exchange market in support of the local currency. A. official reserves...

Which balance listed below is the balance of payments?

Which balance listed below is the balance of payments? A. official reserves balance B. official settlements balance C. current accounts balance D....

What is the primary purpose of the International Finance Corporation?

What is the primary purpose of the International Finance Corporation? A. To make soft loans. B. To make hard loans. C. To promote private sector development...

What is the target audience for loans from the International Development Association?

What is the target audience for loans from the International Development Association? A. Highly-developed countries B. Least developed countries C....

The interest rates on soft loans is traditionally set at ____.

The interest rates on soft loans is traditionally set at ____. A. 0% B. 5% C. 10% D. 15% E. 20% Answer: ...

_____ are those that bear significant risk of not being repaid.

_____ are those that bear significant risk of not being repaid. A. Hard loans B. Soft loans C. High-risk loans D. Development loans E. Reconstruction...

Which organization is authorized to make soft loans to countries?

Which organization is authorized to make soft loans to countries? A. World Bank B. International Bank for Reconstruction and Development C. International...

Loans from the World Bank may not be used to finance ____.

Loans from the World Bank may not be used to finance ____. A. New railroads B. Harbor facilities C. National highways D. Trade deficits E. Loans...

What country hold the largest bloc of votes in the World Bank?

What country hold the largest bloc of votes in the World Bank? A. Japan B. The United Kingdom C. The United States D. Germany E. Russia Answer:...

How many affiliated organizations are a part of the World Bank?

How many affiliated organizations are a part of the World Bank? A. 0 B. 1 C. 2 D. 3 E. 4 Answer: ...

What was the initial goal of the World Bank?

What was the initial goal of the World Bank? A. To administer the gold standard B. To hold financial reserves for all countries C. To finance reconstruction...

The International Bank for Reconstruction and Development is also known as _____.

The International Bank for Reconstruction and Development is also known as _____. A. the World Bank B. the IMF C. the Organization of Economic Cooperation...

The Bretton Woods conference sought to do which of the following?

The Bretton Woods conference sought to do which of the following? A. Create a postwar economic environment that would promote peace B. Renew the...

Which of the following is not one of the possible references to Bretton Woods?

Which of the following is not one of the possible references to Bretton Woods? A. A resort in New Hampshire B. A meeting among 44 countries in 1944 C....

What did the Bretton Woods conferees agree to do in 1944?

What did the Bretton Woods conferees agree to do in 1944? A. To end WWII B. To renew the gold standard C. to adhere to the sterling standard D....

What situation contributed to political instability prior to WWII?

What situation contributed to political instability prior to WWII? A. Inflation B. Unemployment C. Costs of rebuilding after WWI D. Poor economic...

Which political leader did not gain leadership advantage from the political instability following the breakdown of the international monetary system and international trade after World War I?

Which political leader did not gain leadership advantage from the political instability following the breakdown of the international monetary system...

When the gold standard ended in 1931, what currency was used as the new standard?

When the gold standard ended in 1931, what currency was used as the new standard? A. British pound sterling B. US dollar C. French franc D. None...

The term ___ means that a currency's value is determined by the forces of supply and demand.

The term ___ means that a currency's value is determined by the forces of supply and demand. A. fixed exchange rate B. par value C. float D. market...

What caused some countries to switch from the gold standard to the "sterling area" in 1931?

What caused some countries to switch from the gold standard to the "sterling area" in 1931? A. The British pound sterling had become more valuable...

Why was the gold standard suspended during WWI?

Why was the gold standard suspended during WWI? A. It was no longer safe to transport gold. B. Economic pressures of war caused countries to suspend...

When did the sterling based gold standard begin to unravel?

When did the sterling based gold standard begin to unravel? A. during WWI B. during WWII C. during the Vietnam War D. during the Korean War E. during...

Which of the following british firms did not establish its international reputation and strength from the role the of the pound sterling in the 19th century gold standard?

Which of the following british firms did not establish its international reputation and strength from the role the of the pound sterling in the 19th...

Which of the following countries was NOT ruled by the British Empire during the gold standard?

Which of the following countries was NOT ruled by the British Empire during the gold standard? A. Kenya B. Singapore C. New Zealand D. Hong Kong E....

Which of the following countries was ruled by the British Empire during the gold standard?

Which of the following countries was ruled by the British Empire during the gold standard? A. Canada B. Australia C. Pakistan D. Belize E. All of...

During the gold standard, what else was the international monetary system called?

During the gold standard, what else was the international monetary system called? A. a sterling-based gold standard B. a dollar-based gold standard C....

Which of the following was not a cost of accepting a payment in gold?

Which of the following was not a cost of accepting a payment in gold? A. transportation B. security C. insurance D. lost interest payment E. all of...

When firms had faith in a country's pledge to exchange its currency for gold, how did they prefer to be paid?

When firms had faith in a country's pledge to exchange its currency for gold, how did they prefer to be paid? A. in gold B. in paper currency C....

A _____ refers to the official price of a currency in terms of gold.

A _____ refers to the official price of a currency in terms of gold. A. fixed exchange rate B. pegged value C. par value D. currency value E. none...

Under the _____ the price a given currency does not change relative to another currency.

Under the _____ the price a given currency does not change relative to another currency. A. free trade agreement B. currency union C. fixed exchange...

In addition to the United Kingdom, what other important trading country adopted the gold standard?

In addition to the United Kingdom, what other important trading country adopted the gold standard? A. Russia B. Germany C. France D. The United States E....

Of what system is the gold standard essentially the opposite?

Of what system is the gold standard essentially the opposite? A. mercantilism B. silver standard C. econometrics D. Heckscher-Ohlin theory E. relative...

What is the international monetary system's accounting system called?

What is the international monetary system's accounting system called? A. IMF B. balance of payments C. international accounting standards D. gold...

The ____ provides a mechanism for correcting imbalances between a country's international payments and receipts.

The ____ provides a mechanism for correcting imbalances between a country's international payments and receipts. A. International accounting standards B....

Why is the international monetary system necessary for international business?

Why is the international monetary system necessary for international business? A. Because it is a historically significant institution B. Because...

What changes in the international business environment can BOP statistics identify?

What changes in the international business environment can BOP statistics identify? A. governmental trade restrictions B. higher interest rates C....

The ____ supplies vital information about the health of national economies.

The ____ supplies vital information about the health of national economies. A. IMF B. exchange rate C. international accounting standards D. gold...

What precious metal was used in ancient times as an international medium of exchange?

What precious metal was used in ancient times as an international medium of exchange? A. platinum B. sterling silver C. steel D. gold E. all of the...

Which was the most important currency in international commerce from 1821 t0 1918?

Which was the most important currency in international commerce from 1821 t0 1918? A. US dollar B. British pound sterling C. gold D. German deutschmark E....

A(n) ____ is the price of one currency in terms of the second currency.

A(n) ____ is the price of one currency in terms of the second currency. A. export rate B. exchange rate C. excise tax rate D. monetary value Answer:...

What determines a country's borrowing power from the IMF?

What determines a country's borrowing power from the IMF? A. country size B. loan size C. a quota D. the World Bank E. Aggregated demand Answer:...

What was created by the gold standard?

What was created by the gold standard? A. A fixed exchange rate system B. A floating exchange rate system C. An accounting system D. An export system E....

What was the par value of the US dollar under Bretton Woods?

What was the par value of the US dollar under Bretton Woods? A. $17 per ounce of gold B. $35 per ounce of gold C. $57 per ounce of gold D. $400 per...

A country can borrow ____ percent of its quota from the IMF?

A country can borrow ____ percent of its quota from the IMF? A. 25 B. 40 C. 70 D. 90 Answer: ...

Under the gold standard ______.

Under the gold standard ______. A. currency values were determined by supply and demand B. countries agreed to buy and sell their paper currencies...

The _____ refers to an international monetary system in which countries agreed to buy or sell their paper currencies in exchange for gold on the request of any individual or firm and to allow the free export of gold.

The _____ refers to an international monetary system in which countries agreed to buy or sell their paper currencies in exchange for gold on the request...

Which country was the first to adopt the gold standard?

Which country was the first to adopt the gold standard? A. UK B. Russia C. France D. Germany Answer: ...

Which of the following is not true of the balance of payments?

Which of the following is not true of the balance of payments? A. It provides information about likely fiscal and monetary policy changes B. It supplies...

The ____ records international transactions.

The ____ records international transactions. A. Balance of payments accounting system B. International accounting standards C. Gold standard procedure D....

The international monetary system provides a mechanism for ____.

The international monetary system provides a mechanism for ____. A. Establishing global account standards B. Enforcing the payment of importing tariffs...

The ____ establishes the rules by which countries value and exchange their currencies.

The ____ establishes the rules by which countries value and exchange their currencies. A. International monetary system B. OECD C. World Bank D. Federal...

Why does the international monetary system exist?

Why does the international monetary system exist? A. Because most countries have their own currencies B. To control the interest rates on international...

Which of the following best accounts for the reason why Swiss pharmaceutical companies are choosing to invest in smaller US biogenetical companies?

Which of the following best accounts for the reason why Swiss pharmaceutical companies are choosing to invest in smaller US biogenetical companies? A....

Why do US firms use places like the Bahamas as offshore financial centers?

Why do US firms use places like the Bahamas as offshore financial centers? A. It is easier to set up transfers for foreign investors. B. It is more...

All of the following EXCEPT ______ can be used to explain international investment between the US and the UK.

All of the following EXCEPT ______ can be used to explain international investment between the US and the UK. A. Ownership Advantage Theory B. Internalization...

Which of the following is NOT a demand factor that affects the foreign direct investment (FDI) decision?

Which of the following is NOT a demand factor that affects the foreign direct investment (FDI) decision? A. Logistics B. Customer mobility C. Marketing...

Most FDI is either made by or goes to the world's richest nations.

Most FDI is either made by or goes to the world's richest nations. A. True B. False Answer: ...

Which of the following would occur in stage 3 in the international product life cycle in an innovating firm's country?

Which of the following would occur in stage 3 in the international product life cycle in an innovating firm's country? A. Exports of the product parts...

Which of the following factors is considered by Porter to be an "advanced factor"?

Which of the following factors is considered by Porter to be an "advanced factor"? A. Capital B. Unclaimed land that can be used for agriculture C....

Which of the following would be an example of the experience curve?

Which of the following would be an example of the experience curve? A. An advantage that a company gets with factory workers who have experience...

Which of the following is FALSE regarding the product life cycle theory?

Which of the following is FALSE regarding the product life cycle theory? A. Domestic production begins in stage 1, peaks in stage 2, and slumps in...

Which of the following is NOT a reason for the development of modern firm-based theories?

Which of the following is NOT a reason for the development of modern firm-based theories? A. The failure of Leontief and other researchers to empirically...

Which theory states that success in international trade comes from the interaction of four country- and firm-specific elements?

Which theory states that success in international trade comes from the interaction of four country- and firm-specific elements? A. Absolute advantage B....

Which theory traces the roles of innovation, market expansion, comparative advantage, and strategic responses of global rivals in international production, trade, and investment decisions?

Which theory traces the roles of innovation, market expansion, comparative advantage, and strategic responses of global rivals in international production,...

Which of the following terms describes when a firm's average cost decreases as the number of different products it sells increases?

Which of the following terms describes when a firm's average cost decreases as the number of different products it sells increases? A. Economies of...

Which of the following is particularly useful in explaining trade in differentiated goods such as automobiles, expensive electronics equipment, and personal care products, for which brand names and product reputations play an important role in consumer decision-making?

Which of the following is particularly useful in explaining trade in differentiated goods such as automobiles, expensive electronics equipment, and...

The value of a good equals the value of what is given up to have that good. The previous statement describes which of the following?

The value of a good equals the value of what is given up to have that good. The previous statement describes which of the following? A. Theory of...

Which factors of production did Leontief focus on?

Which factors of production did Leontief focus on? A. capital and labor B. labor and technology C. land and labor D. capital and technology E. land...

Which of the following does mercantilism not state?

Which of the following does mercantilism not state? A. Exports should have more value than imports B. Encourage imports and discourage exports C....

Which group listed below is a modern supporter of mercantilist policies ?

Which group listed below is a modern supporter of mercantilist policies ? A. American federation of Labor-Congress of Industrial Organizations B....

Which of the following is an important component of a customer's purchase decision for differentiated goods?

Which of the following is an important component of a customer's purchase decision for differentiated goods? A. price B. brand name C. competition D....

Differentiated goods might include:

Differentiated goods might include: A. automobiles B. sugar C. lumber D. oil E. tobacco Answer: ...

What type of trade are firm-based theories of international trade most useful in understanding?

What type of trade are firm-based theories of international trade most useful in understanding? A. services B. differentiated goods C. commodities D....

When did firm-based theories of international trade begin to develop?

When did firm-based theories of international trade begin to develop? A. After World War 1 B. After the Great Depression C. After World War 2 D....

On what unit of analysis did the first theories of international trade focus?

On what unit of analysis did the first theories of international trade focus? a. Individual countries b. Country clusters c. Regions d. Continents...

The first theories of international trade are referred to as _____.

The first theories of international trade are referred to as _____. a. Country-based theories b. Firm-based theories c. Classic theories d. Investment...

Which theory incorporates the concept of opportunity cost?

Which theory incorporates the concept of opportunity cost? A. Absolute advantage B. Factor endowments C. Mercantilism theory D. Comparative advantage E....

Who is the father of free market economies?

Who is the father of free market economies? A. David Ricardo B. Michael Porter C. Adam Smith D. John Dunning E. Paul Krugman Answer: ...

In what century did the MNC rise to power?

In what century did the MNC rise to power? A. late 16th century B. mid 17th century C. early 18th century D. late 19th century E. mid 20th century...

According to Adam Smith, what is the primary, basic problem with mercantilism?

According to Adam Smith, what is the primary, basic problem with mercantilism? A. It believes gold is a treasure B. It confuses the acquisition of...

What country or region listed below does not support any neo mercantilist policies today?

What country or region listed below does not support any neo mercantilist policies today? A. Japan B. EU C. US D. China E. Nearly all countries have...

How did imperial governments use their colonies to support the goals of mercantilism?

How did imperial governments use their colonies to support the goals of mercantilism? A. Shipping restrictions B. Prohibition of exports that might...

Who supported the economic policies of mercantilism?

Who supported the economic policies of mercantilism? A. monarchs B. export-oriented manufactures C. domestic manufacturers D. employees E. all of...

Which of the following is not a supporter of modern mercantilist policies?

Which of the following is not a supporter of modern mercantilist policies? A. textile manufacturers B. steel companies C. sugar growers D. peanut...

What are the modern supporters of mercantilism called?

What are the modern supporters of mercantilism called? A. neo mercantilists B. protectionists C. cosmopolites D. Both A and B E. All of the above...

According to mercantilism, what should a country's primary goal be?

According to mercantilism, what should a country's primary goal be? A. to protect its borders from illegal aliens B. to encourage a high savings...

The theory of ____ maintains that a country's wealth is measured by its holdings of gold and silver.

The theory of ____ maintains that a country's wealth is measured by its holdings of gold and silver. A. mercantilism B. neomercantilism C. competitive...

All of the following are examples of differentiated products except:

All of the following are examples of differentiated products except: A. lumber B. cameras C. shampoo D. automobiles Answer: ...

What type of trade were the early country based theories of international trade most useful in understanding?

What type of trade were the early country based theories of international trade most useful in understanding? A. services B. brand name goods C....

The first theories of international trade used ____ as a unit of analysis.

The first theories of international trade used ____ as a unit of analysis. A. individual countries B. country clusters C. regions D. continents Answer:...

Ellis, a manager at an MNE, is studying international trade theories. In his current position, Ellis would most likely use the knowledge to ____.

Ellis, a manager at an MNE, is studying international trade theories. In his current position, Ellis would most likely use the knowledge to ____. A....