Question 1

Why do companies prefer not to use countertrade if it can be avoided?

Accepted Answer

Countertrade requires a company to set u

Question 2

Technical analysis draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.

Accepted Answer

A) True 
 B)False

Question 3

The inevitable result of excessive growth in money supply is called

Accepted Answer

A)  interest rate. 
B)  price inflation. 
C)  economic growth. 
D)  per capita savings. 
E)  wage increases 
A)  interest rate. 
B)  price inflation. 
C)  economic growth. 
D)  per capita savings. 
E)  wage increases

Question 4

The ______________ market school argues that companies can improve the foreign exchange market's estimate of future exchange rates by investing in forecasting services.

Accepted Answer

A)  inefficient 
B)  free 
C)  open 
D)  closed 
E)  efficient 
A)  inefficient 
B)  free 
C)  open 
D)  closed 
E)  efficient

Question 5

The majority of the countries in the world have currency that is freely convertible.

Accepted Answer

A) True 
 B)False

Question 6

When a tourist changes one currency into another,she is participating in currency speculation.

Accepted Answer

A) True 
 B)False

Question 7

A less extreme version of the PPP theory state that given _____________ the price of a "basket of goods" should be roughly equivalent in each country.

Accepted Answer

A)  tolerant markets 
B)  relatively efficient markets 
C)  classical markets 
D)  closed markets 
E)  free markets 
A)  tolerant markets 
B)  relatively efficient markets 
C)  classical markets 
D)  closed markets 
E)  free markets

Question 8

An exchange rate is simply the rate at which one currency is converted into another.

Accepted Answer

A) True 
 B)False

Question 9

The Canadian dollar has risen against the U.S.dollar.Many manufacturers are complaining that this rise may affect their U.S.export market.Explain.

Accepted Answer

The student should answer that increases

Question 10

What is the International Fisher Effect? (note: you do not need to provide the mathematical formula provided in the book)

Accepted Answer

The International Fisher Effect states t

Question 11

Because there is no theoretical rationale for assumptions of predictability,many economists compare ______________ to fortune telling.

Accepted Answer

A)  technical analysis 
B)  PPP 
C)  exchange rate analysis 
D)  inflation rates 
E)  currency speculation 
A)  technical analysis 
B)  PPP 
C)  exchange rate analysis 
D)  inflation rates 
E)  currency speculation

Question 12

What do many Canadian businesspeople NOT buy into with respect to the value of the Canadian dollar?

Accepted Answer

A)  A stronger dollar will result in more outbound tourism 
B)  A weaker dollar is good for tourists coming to Canada 
C)  A stronger dollar means that Canadian resources are more in demand 
D)  A weaker dollar will make imports more expensive 
E)  A stronger dollar will reduce demand for Canada's exports 
A)  A stronger dollar will result in more outbound tourism 
B)  A weaker dollar is good for tourists coming to Canada 
C)  A stronger dollar means that Canadian resources are more in demand 
D)  A weaker dollar will make imports more expensive 
E)  A stronger dollar will reduce demand for Canada's exports

Question 13

The variables in fundamental analysis models can include what?

Accepted Answer

A)  price 
B)  volume 
C)  investor psychology 
D)  the bandwagon effect 
E)  money supply 
A)  price 
B)  volume 
C)  investor psychology 
D)  the bandwagon effect 
E)  money supply

Question 14

The law of one price and purchasing power parity are two components of

Accepted Answer

A)  market psychology. 
B)  price and exchange rates. 
C)  interest rate. 
D)  prices inflation. 
E)  economic theory. 
A)  market psychology. 
B)  price and exchange rates. 
C)  interest rate. 
D)  prices inflation. 
E)  economic theory.

Question 15

A(n)_______________ has no impediments to the free flow of goods and services.

Accepted Answer

A)  classical market 
B)  efficient market 
C)  traditional market 
D)  inefficient market 
E)  free market 
A)  classical market 
B)  efficient market 
C)  traditional market 
D)  inefficient market 
E)  free market

Question 16

One feature of the London exchange market is _____________

Accepted Answer

A)  Lower exchange fees. 
B)  Higher margins. 
C)  New investment products. 
D)  The ability to short the market. 
E)  Its geography between the Tokyo and New York Markets. 
A)  Lower exchange fees. 
B)  Higher margins. 
C)  New investment products. 
D)  The ability to short the market. 
E)  Its geography between the Tokyo and New York Markets.

Question 17

In the context of forecasting exchange rate movements,describe the difference between fundamental analysis and technical analysis.Which approach is preferred by economists? Why?

Accepted Answer

Fundamental analysis draws on economic t

Question 18

The ______________ is the market that enables companies based in countries that use different currencies to trade with each other.

Accepted Answer

A)  World Bank 
B)  foreign currency exchange 
C)  foreign exchange market 
D)  foreign monetary mart 
E)  foreign exchange mechanism 
A)  World Bank 
B)  foreign currency exchange 
C)  foreign exchange market 
D)  foreign monetary mart 
E)  foreign exchange mechanism

Question 19

The foreign exchange market serves two main functions.These are what?

Accepted Answer

A)  collect duties on imported products and convert the currency of one country into the currency of another. 
B)  insure companies against foreign exchange risk and set interest rates charged to foreign investors. 
C)  collect duties on imported products and set interest rates charged to foreign investors. 
D)  convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk. 
E)  reduce the trade imbalances between countries and convert the currency of one country into another. 
A)  collect duties on imported products and convert the currency of one country into the currency of another. 
B)  insure companies against foreign exchange risk and set interest rates charged to foreign investors. 
C)  collect duties on imported products and set interest rates charged to foreign investors. 
D)  convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk. 
E)  reduce the trade imbalances between countries and convert the currency of one country into another.

Question 20

Inflation is a(n)_____________ phenomenon.

Accepted Answer

A)  legal 
B)  political 
C)  monetary 
D)  social 
E)  economic 
A)  legal 
B)  political 
C)  monetary 
D)  social 
E)  economic

Why do companies prefer not to use countertrade if it can be avoided?

Technical analysis draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.

The inevitable result of excessive growth in money supply is called

The ______________ market school argues that companies can improve the foreign exchange market's estimate of future exchange rates by investing in forecasting services.

The majority of the countries in the world have currency that is freely convertible.

When a tourist changes one currency into another,she is participating in currency speculation.

A less extreme version of the PPP theory state that given _____________ the price of a "basket of goods" should be roughly equivalent in each country.

An exchange rate is simply the rate at which one currency is converted into another.

The Canadian dollar has risen against the U.S.dollar.Many manufacturers are complaining that this rise may affect their U.S.export market.Explain.

What is the International Fisher Effect? (note: you do not need to provide the mathematical formula provided in the book)

Because there is no theoretical rationale for assumptions of predictability,many economists compare ______________ to fortune telling.

What do many Canadian businesspeople NOT buy into with respect to the value of the Canadian dollar?

The variables in fundamental analysis models can include what?

The law of one price and purchasing power parity are two components of

A(n)_______________ has no impediments to the free flow of goods and services.

One feature of the London exchange market is _____________

In the context of forecasting exchange rate movements,describe the difference between fundamental analysis and technical analysis.Which approach is preferred by economists? Why?

The ______________ is the market that enables companies based in countries that use different currencies to trade with each other.

The foreign exchange market serves two main functions.These are what?

Inflation is a(n)_____________ phenomenon.

Globalization

Country Differences in Political Economy

The Cultural Environment

Ethics in International Business

International Trade Theories

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Global Monetary System

Global Strategy

Entering Foreign Markets

Exporting,Importing,and Countertrade

Global Marketing and Randd

Global Manufacturing and Materials Management

Global Human Resource Management

Filters

Exam 9: The Foreign Exchange Market

Why do companies prefer not to use countertrade if it can be avoided?

Technical analysis draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.

The inevitable result of excessive growth in money supply is called

The ______________ market school argues that companies can improve the foreign exchange market's estimate of future exchange rates by investing in forecasting services.

The majority of the countries in the world have currency that is freely convertible.

When a tourist changes one currency into another,she is participating in currency speculation.

A less extreme version of the PPP theory state that given _____________ the price of a "basket of goods" should be roughly equivalent in each country.

An exchange rate is simply the rate at which one currency is converted into another.

The Canadian dollar has risen against the U.S.dollar.Many manufacturers are complaining that this rise may affect their U.S.export market.Explain.

What is the International Fisher Effect? (note: you do not need to provide the mathematical formula provided in the book)

Because there is no theoretical rationale for assumptions of predictability,many economists compare ______________ to fortune telling.

What do many Canadian businesspeople NOT buy into with respect to the value of the Canadian dollar?

The variables in fundamental analysis models can include what?

The law of one price and purchasing power parity are two components of

A(n)_______________ has no impediments to the free flow of goods and services.

One feature of the London exchange market is _____________

In the context of forecasting exchange rate movements,describe the difference between fundamental analysis and technical analysis.Which approach is preferred by economists? Why?

The ______________ is the market that enables companies based in countries that use different currencies to trade with each other.

The foreign exchange market serves two main functions.These are what?

Inflation is a(n)_____________ phenomenon.

Globalization

Country Differences in Political Economy

The Cultural Environment

Ethics in International Business

International Trade Theories

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Global Monetary System

Global Strategy

Entering Foreign Markets

Exporting,Importing,and Countertrade

Global Marketing and Randd

Global Manufacturing and Materials Management

Global Human Resource Management

Filters