Question 1

GATT,the General Agreement on Tariffs and Trade,has been successful in:

Accepted Answer

A)  reducing import tariffs worldwide by an average of 98%. 
B)  reducing import tariffs worldwide by an average of 78%. 
C)  reducing import tariffs worldwide by an average of 58%. 
D)  reducing import tariffs worldwide by an average of 38%. 
A)  reducing import tariffs worldwide by an average of 98%. 
B)  reducing import tariffs worldwide by an average of 78%. 
C)  reducing import tariffs worldwide by an average of 58%. 
D)  reducing import tariffs worldwide by an average of 38%. D

Question 2

What is Political risk?

Accepted Answer

Political risk is the risk associated with the ability of a sovereign nation to change the "rules of the game".Such risk ranges from unexpected changes in tax rules to outright expropriation of assets held by foreigners.

Question 3

Political risk includes all of the following except:

Accepted Answer

A)  Expropriation 
B)  Unexpected changes in tax rules 
C)  Change in government 
D)  Unexpected changes in environmental rules 
A)  Expropriation 
B)  Unexpected changes in tax rules 
C)  Change in government 
D)  Unexpected changes in environmental rules C

Question 4

Assume that the world economy consists of two countries: Russia and Republic of Belarus. Each country can produce tomatoes and potatoes. Russia can produce 1000 tons of tomatoes or 3000 tons of potatoes or any linear combination of tomatoes and potatoes that satisfies potatoes + 3 × tomatoes = 3000. Republic of Belarus can produce 500 tons of tomatoes or 1000 tons of potatoes or any linear combination of tomatoes and potatoes that satisfies potatoes + 2 × tomatoes = 1000. Countries can freely trade with each other.
-Which country has comparative advantage in producing potatoes?

Accepted Answer

A)  Russia 
B)  Republic of Belarus 
C)  Both countries 
D)  Neither country 
A)  Russia 
B)  Republic of Belarus 
C)  Both countries 
D)  Neither country

Question 5

Country A can produce 10 yards of textiles and 6 pounds of food per unit of input.Compute the opportunity cost of producing food instead of textiles.

Accepted Answer

A)  1 yard of textiles per 1.67 pounds of food 
B)  1 pound of food per 1.67 yards of textiles 
C)  1 yard of textiles per 0.6 pounds of food 
D)  1 pound of food per 0.6 yards of textiles 
A)  1 yard of textiles per 1.67 pounds of food 
B)  1 pound of food per 1.67 yards of textiles 
C)  1 yard of textiles per 0.6 pounds of food 
D)  1 pound of food per 0.6 yards of textiles

Question 6

What is special about international finance?

Accepted Answer

The three major dimensions that set inte

Question 7

Recent trends in the globalization of the world economy include all of the following except:

Accepted Answer

A)  Emergence of global financial markets 
B)  Economic differentiation 
C)  Advent of the euro 
D)  Privatization 
A)  Emergence of global financial markets 
B)  Economic differentiation 
C)  Advent of the euro 
D)  Privatization

Question 8

The theory of comparative advantage:

Accepted Answer

A)  Claims that economic well-being is enhanced if each country's citizens produce only a single product 
B)  Claims that economic well-being is enhanced when all countries compare commodity prices after adjusting for exchange rate differences in order to standardize the prices charged all countries 
C)  Claims that economic well-being is enhanced if each country's citizens produce that which they have a comparative advantage in producing relative to the citizens of other countries, and then trade production 
D)  Claims that no country has an absolute advantage over another country in the production of any good or service 
A)  Claims that economic well-being is enhanced if each country's citizens produce only a single product 
B)  Claims that economic well-being is enhanced when all countries compare commodity prices after adjusting for exchange rate differences in order to standardize the prices charged all countries 
C)  Claims that economic well-being is enhanced if each country's citizens produce that which they have a comparative advantage in producing relative to the citizens of other countries, and then trade production 
D)  Claims that no country has an absolute advantage over another country in the production of any good or service

Question 9

The euro

Accepted Answer

A)  is the common currency of Europe. 
B)  is backed by gold. 
C)  is an electronic currency with no physical bills. 
D)  is the currency of Britain. 
A)  is the common currency of Europe. 
B)  is backed by gold. 
C)  is an electronic currency with no physical bills. 
D)  is the currency of Britain.

Question 10

What major dimension sets apart international finance from domestic finance?

Accepted Answer

A)  Lower Foreign exchange and political risks 
B)  Market perfections 
C)  Depleted opportunity set 
D)  Higher Foreign exchange and political risks 
A)  Lower Foreign exchange and political risks 
B)  Market perfections 
C)  Depleted opportunity set 
D)  Higher Foreign exchange and political risks

Question 11

Assume that the world economy consists of two countries: Russia and Republic of Belarus. Each country can produce tomatoes and potatoes. Russia can produce 1000 tons of tomatoes or 3000 tons of potatoes or any linear combination of tomatoes and potatoes that satisfies potatoes + 3 × tomatoes = 3000. Republic of Belarus can produce 500 tons of tomatoes or 1000 tons of potatoes or any linear combination of tomatoes and potatoes that satisfies potatoes + 2 × tomatoes = 1000. Countries can freely trade with each other.
-If the total world production of potatoes is 2000 tons,how much tomatoes will be produced in Russia?

Accepted Answer

A)  1000 tons 
B)  500 tons 
C)  666.67 tons 
D)  333.33 tons 
A)  1000 tons 
B)  500 tons 
C)  666.67 tons 
D)  333.33 tons

Question 12

Market imperfections include all of the following except:

Accepted Answer

A)  Taxes on imported goods 
B)  Taxes on exported goods 
C)  Stock markets 
D)  Two different classes of shareholders for one company 
A)  Taxes on imported goods 
B)  Taxes on exported goods 
C)  Stock markets 
D)  Two different classes of shareholders for one company

Question 13

What are some of major recent trends in globalization?

Accepted Answer

The major trends are (1)the em

Question 14

What is the goal of sound financial management?

Accepted Answer

The goal of financial management is shar

Question 15

David Ricardo's theory of comparative advantage has the following policy implication:

Accepted Answer

A)  Liberalization of international trade will enhance the welfare of the world's citizens 
B)  International trade is a zero-sum game 
C)  One country will benefit from trade at the expense of another country 
D)  Restriction of international trade will enhance the welfare of the world's citizens 
A)  Liberalization of international trade will enhance the welfare of the world's citizens 
B)  International trade is a zero-sum game 
C)  One country will benefit from trade at the expense of another country 
D)  Restriction of international trade will enhance the welfare of the world's citizens

Question 16

The euro zone has

Accepted Answer

A)  a common fiscal policy. 
B)  a common monetary policy. 
C)  a common taxation policy. 
D)  a common immigration policy. 
A)  a common fiscal policy. 
B)  a common monetary policy. 
C)  a common taxation policy. 
D)  a common immigration policy.

Question 17

An example of a political risk is

Accepted Answer

A)  Expropriation of assets 
B)  Adverse change in tax rules 
C)  The opposition party being elected 
D)  Expropriation of assets and Adverse change in tax rules 
A)  Expropriation of assets 
B)  Adverse change in tax rules 
C)  The opposition party being elected 
D)  Expropriation of assets and Adverse change in tax rules

Question 18

A multinational firm can be defined as:

Accepted Answer

A)  A firm that invests short-term cash inflows in more than one currency 
B)  A firm that has sales affiliates in several countries 
C)  A firm that is incorporated in more than one country 
D)  A firm that incorporated in one country that has production and sales operations in several other countries 
A)  A firm that invests short-term cash inflows in more than one currency 
B)  A firm that has sales affiliates in several countries 
C)  A firm that is incorporated in more than one country 
D)  A firm that incorporated in one country that has production and sales operations in several other countries

Question 19

Multinational firms gain from their global presence in the following ways except:

Accepted Answer

A)  Rising marginal costs of production 
B)  Economies of Scale 
C)  Low-cost labour in foreign countries 
D)  Spreading R&D expenditures over global sales 
A)  Rising marginal costs of production 
B)  Economies of Scale 
C)  Low-cost labour in foreign countries 
D)  Spreading R&D expenditures over global sales

Question 20

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

Accepted Answer

A)  Country A is relatively more efficient than Country B in the production of food 
B)  Country B is relatively more efficient than Country A in the production of textiles 
C)  Country A has an absolute advantage over Country B in the production of food and textiles 
D)  Country B has an absolute advantage over Country A in the production of food and textiles 
A)  Country A is relatively more efficient than Country B in the production of food 
B)  Country B is relatively more efficient than Country A in the production of textiles 
C)  Country A has an absolute advantage over Country B in the production of food and textiles 
D)  Country B has an absolute advantage over Country A in the production of food and textiles

GATT,the General Agreement on Tariffs and Trade,has been successful in:

What is Political risk?

Political risk includes all of the following except:

Country A can produce 10 yards of textiles and 6 pounds of food per unit of input.Compute the opportunity cost of producing food instead of textiles.

What is special about international finance?

Recent trends in the globalization of the world economy include all of the following except:

The theory of comparative advantage:

The euro

What major dimension sets apart international finance from domestic finance?

Market imperfections include all of the following except:

What are some of major recent trends in globalization?

What is the goal of sound financial management?

David Ricardo's theory of comparative advantage has the following policy implication:

The euro zone has

An example of a political risk is

A multinational firm can be defined as:

Multinational firms gain from their global presence in the following ways except:

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

International Monetary System

Balance of Payments

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

International Banking and Money Market

International Bond Market

International Equity Markets

Futures and Options on Foreign Exchange

Interest Rate and Currency Swaps

International Portfolio Investment

Management of Economic Exposure

Management of Transaction Exposure

Management of Translation Exposure

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

Exports and Imports

International Tax Environment

Corporate Governance Around the World

Filters

Exam 1: Globalization and the Multinational Firm

GATT,the General Agreement on Tariffs and Trade,has been successful in:

What is Political risk?

Political risk includes all of the following except:

Country A can produce 10 yards of textiles and 6 pounds of food per unit of input.Compute the opportunity cost of producing food instead of textiles.

What is special about international finance?

Recent trends in the globalization of the world economy include all of the following except:

The theory of comparative advantage:

The euro

What major dimension sets apart international finance from domestic finance?

Market imperfections include all of the following except:

What are some of major recent trends in globalization?

What is the goal of sound financial management?

David Ricardo's theory of comparative advantage has the following policy implication:

The euro zone has

An example of a political risk is

A multinational firm can be defined as:

Multinational firms gain from their global presence in the following ways except:

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

International Monetary System

Balance of Payments

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

International Banking and Money Market

International Bond Market

International Equity Markets

Futures and Options on Foreign Exchange

Interest Rate and Currency Swaps

International Portfolio Investment

Management of Economic Exposure

Management of Transaction Exposure

Management of Translation Exposure

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

Exports and Imports

International Tax Environment

Corporate Governance Around the World

Filters