Question 1

Hawalas make currency exchange and

Accepted Answer

A)  use the international currency exchange markets. 
B)  offer their clients nearly untraceable transactions. 
C)  transfer funds through the established banking system. 
D)  collect interest for their service. 
A)  use the international currency exchange markets. 
B)  offer their clients nearly untraceable transactions. 
C)  transfer funds through the established banking system. 
D)  collect interest for their service.

Question 2

When a country imports more than it exports,the currency might be expected to weaken.

Accepted Answer

A) True 
 B)False

Question 3

When a government requires a permit to purchase foreign currency,the exchange rates

Accepted Answer

A)  are market-driven. 
B)  can be negotiated by the firm. 
C)  are unpredictable. 
D)  are set by the government, often above the free market rate. 
A)  are market-driven. 
B)  can be negotiated by the firm. 
C)  are unpredictable. 
D)  are set by the government, often above the free market rate.

Question 4

Exchange rate fluctuations are

Accepted Answer

A)  not yet fully understood by economists. 
B)  well understood and supported by solid theory. 
C)  random phenomena. 
D)  the result of so many variables that they cannot be explained. 
A)  not yet fully understood by economists. 
B)  well understood and supported by solid theory. 
C)  random phenomena. 
D)  the result of so many variables that they cannot be explained.

Question 5

Monetary and fiscal policies have

Accepted Answer

A)  nothing to do with exchange rate movement. 
B)  influence interest rates and taxation, and so may influence exchange rates. 
C)  no predictable influence on inflation. 
D)  no influence on trade patterns. 
A)  nothing to do with exchange rate movement. 
B)  influence interest rates and taxation, and so may influence exchange rates. 
C)  no predictable influence on inflation. 
D)  no influence on trade patterns.

Question 6

Most FX exchanges are

Accepted Answer

A)  over the counter (OT
C) . 
B)  limited to reported amounts (over $10,000). 
C)  open only during established trading hours. 
D)  on the East Coast of the U.S. for trade with Europe. 
A)  over the counter (OT
C) . 
B)  limited to reported amounts (over $10,000). 
C)  open only during established trading hours. 
D)  on the East Coast of the U.S. for trade with Europe.

Question 7

The present floating exchange rate system is not a totally free float because

Accepted Answer

A)  free floating exists in theory only. 
B)  some governments refuse to manage their free float. 
C)  some central banks from time to time intervene in the market to buy or sell large amounts of currency to affect the supply and demand of a particular currency. 
D)  Free floating isn't free, given the exchange rate of 0.05 to 0.15. 
A)  free floating exists in theory only. 
B)  some governments refuse to manage their free float. 
C)  some central banks from time to time intervene in the market to buy or sell large amounts of currency to affect the supply and demand of a particular currency. 
D)  Free floating isn't free, given the exchange rate of 0.05 to 0.15.

Question 8

A nation whose currency is a reserve currency

Accepted Answer

A)  will have a deficit. 
B)  has trade advantages because the currency will be stronger. 
C)  will lose purchasing power. 
D)  has undue influence on international trading patterns. 
A)  will have a deficit. 
B)  has trade advantages because the currency will be stronger. 
C)  will lose purchasing power. 
D)  has undue influence on international trading patterns.

Question 9

The highest inflation rate recorded was in ______________.

Accepted Answer

Zimbabwe
Explanation

Question 10

____________ policies concern the collection and spending of money by the government.

Accepted Answer

The answer of ____________ policies concern the collection and spending...

Question 11

The current account on the BOP has three subaccounts:

Accepted Answer

A)  export, import, and capital. 
B)  tangible exports, tariff revenues, and capital. 
C)  fixed assets, current liabilities, and long-term debt. 
D)  merchandise, services, and unilateral transfers. 
A)  export, import, and capital. 
B)  tangible exports, tariff revenues, and capital. 
C)  fixed assets, current liabilities, and long-term debt. 
D)  merchandise, services, and unilateral transfers.

Question 12

The balance part of the BOP is explained by

Accepted Answer

A)  the accounts being double-entry, so they are always balanced. 
B)  imbalances showing immediately. 
C)  actions governments take to achieve the balance. 
D)  none of these options. 
A)  the accounts being double-entry, so they are always balanced. 
B)  imbalances showing immediately. 
C)  actions governments take to achieve the balance. 
D)  none of these options.

Question 13

The complexity of the gold standard was a part of its appeal.

Accepted Answer

A) True 
 B)False

Question 14

When a business pays in dollars for an import from Turkey,the dollars that leave the U.S.will eventually show up as a credit on the U.S.capital account.

Accepted Answer

A) True 
 B)False

Question 15

De Gaulle pushed Nixon to close the gold window at Treasury,and this one action moved the International Monetary Fund (IMF)immediately to establish a floating exchange rate system.

Accepted Answer

A) True 
 B)False

Question 16

In a _________ currency arrangement strategy,a currency is readjusted periodically at a fixed,preannounced rate or in response to changes in indicators.

Accepted Answer

The answer of In a _________ currency arrangement strategy,a currency...

Question 17

One possible current currency arrangement is a fixed peg,where the exchange rate of a currency is allowed to move (within a narrow band)with another currency.One example is the Canadian dollar to the U.S.dollar.

Accepted Answer

A) True 
 B)False

Question 18

In 1971,__________ took the U.S.off of the gold standard.

Accepted Answer

The answer of In 1971,__________ took the U.S.off of the...

Question 19

A currency exchange arrangement with no separate legal tender is essentially

Accepted Answer

A)  adopting the currency of another country. 
B)  allowing the currency to float freely. 
C)  giving up the possibility of holding reserves. 
D)  a stabilized arrangement for maximum monetary control. 
A)  adopting the currency of another country. 
B)  allowing the currency to float freely. 
C)  giving up the possibility of holding reserves. 
D)  a stabilized arrangement for maximum monetary control.

Question 20

Taxation is a financial force in that

Accepted Answer

A)  if the firm can achieve a lower tax burden than its competitors, it can generate higher revenues, and then lower its prices or pay higher wages and dividends. 
B)  governments that enact taxes are formal institutions that enforce tax law via force. 
C)  businesses are compelled by foreign governments to pay taxes. 
D)  it is not controlled by the firm. 
A)  if the firm can achieve a lower tax burden than its competitors, it can generate higher revenues, and then lower its prices or pay higher wages and dividends. 
B)  governments that enact taxes are formal institutions that enforce tax law via force. 
C)  businesses are compelled by foreign governments to pay taxes. 
D)  it is not controlled by the firm.

Hawalas make currency exchange and

When a country imports more than it exports,the currency might be expected to weaken.

When a government requires a permit to purchase foreign currency,the exchange rates

Exchange rate fluctuations are

Monetary and fiscal policies have

Most FX exchanges are

The present floating exchange rate system is not a totally free float because

A nation whose currency is a reserve currency

The highest inflation rate recorded was in ______________.

____________ policies concern the collection and spending of money by the government.

The current account on the BOP has three subaccounts:

The balance part of the BOP is explained by

The complexity of the gold standard was a part of its appeal.

When a business pays in dollars for an import from Turkey,the dollars that leave the U.S.will eventually show up as a credit on the U.S.capital account.

De Gaulle pushed Nixon to close the gold window at Treasury,and this one action moved the International Monetary Fund (IMF)immediately to establish a floating exchange rate system.

In a _________ currency arrangement strategy,a currency is readjusted periodically at a fixed,preannounced rate or in response to changes in indicators.

One possible current currency arrangement is a fixed peg,where the exchange rate of a currency is allowed to move (within a narrow band)with another currency.One example is the Canadian dollar to the U.S.dollar.

In 1971,__________ took the U.S.off of the gold standard.

A currency exchange arrangement with no separate legal tender is essentially

Taxation is a financial force in that

The Challenging Context of International Business

International Trade and Investment

Sociocultural Forces

Sustainability and Natural Resources

Political Forces That Affect Global Trade

Intellectual Property Rights and Other Legal Forces

Economic and Socioeconomic Forces

International Competitive Strategy

Organizational Design and Control

Global Leadership Issues and Practices

International Markets: Assessment and Entry Modes

Marketing Internationally

Managing Human Resources in an International Context

International Accounting and Financial Management

Appendix A: International Institutions From a Business Perspective

Appendix B: Export and Import Practices

Appendix C: Global Operations and Supply Chain Management

Filters

Exam 8: The International Monetary System and Financial Forces

Hawalas make currency exchange and

When a country imports more than it exports,the currency might be expected to weaken.

When a government requires a permit to purchase foreign currency,the exchange rates

Exchange rate fluctuations are

Monetary and fiscal policies have

Most FX exchanges are

The present floating exchange rate system is not a totally free float because

A nation whose currency is a reserve currency

The highest inflation rate recorded was in ______________.

____________ policies concern the collection and spending of money by the government.

The current account on the BOP has three subaccounts:

The balance part of the BOP is explained by

The complexity of the gold standard was a part of its appeal.

When a business pays in dollars for an import from Turkey,the dollars that leave the U.S.will eventually show up as a credit on the U.S.capital account.

De Gaulle pushed Nixon to close the gold window at Treasury,and this one action moved the International Monetary Fund (IMF)immediately to establish a floating exchange rate system.

In a _________ currency arrangement strategy,a currency is readjusted periodically at a fixed,preannounced rate or in response to changes in indicators.

One possible current currency arrangement is a fixed peg,where the exchange rate of a currency is allowed to move (within a narrow band)with another currency.One example is the Canadian dollar to the U.S.dollar.

In 1971,__________ took the U.S.off of the gold standard.

A currency exchange arrangement with no separate legal tender is essentially

Taxation is a financial force in that

The Challenging Context of International Business

International Trade and Investment

Sociocultural Forces

Sustainability and Natural Resources

Political Forces That Affect Global Trade

Intellectual Property Rights and Other Legal Forces

Economic and Socioeconomic Forces

International Competitive Strategy

Organizational Design and Control

Global Leadership Issues and Practices

International Markets: Assessment and Entry Modes

Marketing Internationally

Managing Human Resources in an International Context

International Accounting and Financial Management

Appendix A: International Institutions From a Business Perspective

Appendix B: Export and Import Practices

Appendix C: Global Operations and Supply Chain Management

Filters