Question 1

What is the relative price of a gun in terms of butter in South Carolina?

Accepted Answer

A) 1 gun costs 3 butters 
B) 3 guns cost 1 butter 
C) 1 gun costs 2 butters 
D) 2 gun costs 1 butter 
A) 1 gun costs 3 butters 
B) 3 guns cost 1 butter 
C) 1 gun costs 2 butters 
D) 2 gun costs 1 butter

Question 2

Since the end of World War I,the dominant global currency has been the

Accepted Answer

A) British pound. 
B) Japanese yen. 
C) Euro. 
D) U.S.dollar. 
A) British pound. 
B) Japanese yen. 
C) Euro. 
D) U.S.dollar.

Question 3

Which state has a comparative advantage in wheat production in Case I?

Accepted Answer

A) South Dakota 
B) North Dakota 
C) Neither state 
A) South Dakota 
B) North Dakota 
C) Neither state

Question 4

What is the increased amount of goods available in Northern Ireland after trade?

Accepted Answer

A) 400 more bottles of whiskey and 200 more kegs of beer 
B) 1,000 more bottles of whiskey and 500 more kegs of beer 
C) 200 more bottles of whiskey and 400 more kegs of beer 
A) 400 more bottles of whiskey and 200 more kegs of beer 
B) 1,000 more bottles of whiskey and 500 more kegs of beer 
C) 200 more bottles of whiskey and 400 more kegs of beer

Question 5

Suppose that you are a U.S.producer of a commodity good competing with foreign producers.Your inputs of production are priced in dollars and you sell your output in dollars.If the U.S.currency depreciates against the currencies of our trading partners,

Accepted Answer

A) your competitive position is likely improved. 
B) your competitive position is likely worsened. 
C) your competitive position is unchanged. 
A) your competitive position is likely improved. 
B) your competitive position is likely worsened. 
C) your competitive position is unchanged.

Question 6

What major dimension sets apart international finance from domestic finance?

Accepted Answer

A) Foreign exchange and political risks 
B) Market imperfections 
C) Expanded opportunity set 
D) All of the above 
A) Foreign exchange and political risks 
B) Market imperfections 
C) Expanded opportunity set 
D) All of the above

Question 7

Which state has an absolute advantage in producing beer in Case II?

Accepted Answer

A) South Dakota 
B) North Dakota 
C) Neither state 
A) South Dakota 
B) North Dakota 
C) Neither state

Question 8

The euro

Accepted Answer

A) is the common currency of Europe. 
B) is divisible into 100 cents, just like the U.S.dollar. 
C) may eventually have a transaction domain larger than the U.S.dollar. 
D) all of the above. 
A) is the common currency of Europe. 
B) is divisible into 100 cents, just like the U.S.dollar. 
C) may eventually have a transaction domain larger than the U.S.dollar. 
D) all of the above.

Question 9

Privatization

Accepted Answer

A) has spurred a tremendous increase in cross-border investment. 
B) has allowed many governments to have the funds to nationalize important industries. 
C) has guaranteed that new ownership will be limited to the local citizens. 
D) has generally decreased the efficiency of the enterprise. 
A) has spurred a tremendous increase in cross-border investment. 
B) has allowed many governments to have the funds to nationalize important industries. 
C) has guaranteed that new ownership will be limited to the local citizens. 
D) has generally decreased the efficiency of the enterprise.

Question 10

Comparative advantage

Accepted Answer

A) is also known as relative efficiency. 
B) can lead to trade even in the face of absolute efficiency. 
C) exists when one party can produce a good or service at a lower opportunity cost than another party. 
D) all of the above 
A) is also known as relative efficiency. 
B) can lead to trade even in the face of absolute efficiency. 
C) exists when one party can produce a good or service at a lower opportunity cost than another party. 
D) all of the above

Question 11

Counties A and B currently consume 400 units of food and 400 units of textiles each and currently do not trade with one another.The citizens of country A have to give up one unit of food to gain two units of textiles,while the citizens of country B have to give up one unit of textiles to gain two units of food.Their production possibilities curves are shown.   Under the theory of comparative advantage,if free trade is allowed,the market clearing price (or exchange rate if you will)between food and textiles will be

Accepted Answer

A) one unit of food for one unit of textiles. 
B) somewhere between one unit of food for two units of textiles and two units of food for one unit of textiles. 
C) one unit of food for two units of textiles. 
D) two units of food for one unit of textiles. 
A) one unit of food for one unit of textiles. 
B) somewhere between one unit of food for two units of textiles and two units of food for one unit of textiles. 
C) one unit of food for two units of textiles. 
D) two units of food for one unit of textiles.

Question 12

In David Ricardo's theory of comparative advantage,

Accepted Answer

A) international trade is a zero-sum game in which one trading partner's gain comes at the expense of another's loss. 
B) liberalization of international trade will enhance the welfare of the world's citizens. 
C) is a short-run argument, not a long-run argument. 
D) has been superseded by the now-orthodox view of mercantilism. 
A) international trade is a zero-sum game in which one trading partner's gain comes at the expense of another's loss. 
B) liberalization of international trade will enhance the welfare of the world's citizens. 
C) is a short-run argument, not a long-run argument. 
D) has been superseded by the now-orthodox view of mercantilism.

Question 13

In modern times,it is not a country per se but rather a controller of capital and know-how that gives the country in which it is domiciled a comparative advantage over another country.These controllers of capital and technology are

Accepted Answer

A) the state. 
B) the multinational corporations (MNCs). 
C) portfolio managers of international mutual funds. 
D) none of the above 
A) the state. 
B) the multinational corporations (MNCs). 
C) portfolio managers of international mutual funds. 
D) none of the above

Question 14

If the international price of beer is one keg of beer = 1 bottle of whiskey,how much whiskey will Northern Ireland consume? Each country completely specializes and 500 kegs of beer are traded for 500 bottles of whiskey.

Accepted Answer

A) 1,000 bottles 
B) 1,200 bottles 
C) 500 bottles 
D) 600 bottles 
A) 1,000 bottles 
B) 1,200 bottles 
C) 500 bottles 
D) 600 bottles

Question 15

Now suppose that Southern workers receive a raise to €2 per day.Will trade be possible at the exchange rate you found in the last question?

Accepted Answer

A) True 
 B)False

Question 16

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Compute the opportunity cost of producing one additional unit of 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 .6 pounds of food 
D) 1 pound of food per .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 .6 pounds of food 
D) 1 pound of food per .6 yards of textiles

Question 17

What is the price of beer without trade in Southern Ireland?

Accepted Answer

A) 2 bottles of whiskey = 3 kegs of beer 
B) 5 bottles of whiskey = 12 kegs of beer 
C) 1 bottle of whiskey = 1 keg of beer 
A) 2 bottles of whiskey = 3 kegs of beer 
B) 5 bottles of whiskey = 12 kegs of beer 
C) 1 bottle of whiskey = 1 keg of beer

Question 18

Is Northern Ireland better off when it trades with Southern Ireland?

Accepted Answer

A) True 
 B)False

Question 19

Suppose that Great Britain is a major export market for your firm,a U.S.-based MNC.If the British pound depreciates against the U.S.dollar,

Accepted Answer

A) your firm will be able to charge more in dollar terms while keeping pound prices stable. 
B) your firm may be priced out of the U.K.market, to the extent that your dollar costs stay constant and your pound prices will rise. 
C) to protect U.K.market share, your firm may have to cut the dollar price of your goods to keep the pound price the same. 
D) both b) and c) are correct 
A) your firm will be able to charge more in dollar terms while keeping pound prices stable. 
B) your firm may be priced out of the U.K.market, to the extent that your dollar costs stay constant and your pound prices will rise. 
C) to protect U.K.market share, your firm may have to cut the dollar price of your goods to keep the pound price the same. 
D) both b) and c) are correct

Question 20

The doctrine of comparative advantage was first put forth by

Accepted Answer

A) Adam Smith. 
B) Adam Sandler. 
C) David Ricardo. 
D) Ricky Ricardo. 
E) none of the above 
A) Adam Smith. 
B) Adam Sandler. 
C) David Ricardo. 
D) Ricky Ricardo. 
E) none of the above

What is the relative price of a gun in terms of butter in South Carolina?

Since the end of World War I,the dominant global currency has been the

Which state has a comparative advantage in wheat production in Case I?

What is the increased amount of goods available in Northern Ireland after trade?

Suppose that you are a U.S.producer of a commodity good competing with foreign producers.Your inputs of production are priced in dollars and you sell your output in dollars.If the U.S.currency depreciates against the currencies of our trading partners,

What major dimension sets apart international finance from domestic finance?

Which state has an absolute advantage in producing beer in Case II?

The euro

Privatization

Comparative advantage

In David Ricardo's theory of comparative advantage,

In modern times,it is not a country per se but rather a controller of capital and know-how that gives the country in which it is domiciled a comparative advantage over another country.These controllers of capital and technology are

If the international price of beer is one keg of beer = 1 bottle of whiskey,how much whiskey will Northern Ireland consume? Each country completely specializes and 500 kegs of beer are traded for 500 bottles of whiskey.

Now suppose that Southern workers receive a raise to €2 per day.Will trade be possible at the exchange rate you found in the last question?

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

What is the price of beer without trade in Southern Ireland?

Is Northern Ireland better off when it trades with Southern Ireland?

Suppose that Great Britain is a major export market for your firm,a U.S.-based MNC.If the British pound depreciates against the U.S.dollar,

The doctrine of comparative advantage was first put forth by

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters

Exam 1: Globalization and the Multinational Firm

What is the relative price of a gun in terms of butter in South Carolina?

Since the end of World War I,the dominant global currency has been the

Which state has a comparative advantage in wheat production in Case I?

What is the increased amount of goods available in Northern Ireland after trade?

Suppose that you are a U.S.producer of a commodity good competing with foreign producers.Your inputs of production are priced in dollars and you sell your output in dollars.If the U.S.currency depreciates against the currencies of our trading partners,

What major dimension sets apart international finance from domestic finance?

Which state has an absolute advantage in producing beer in Case II?

The euro

Privatization

Comparative advantage

In David Ricardo's theory of comparative advantage,

In modern times,it is not a country per se but rather a controller of capital and know-how that gives the country in which it is domiciled a comparative advantage over another country.These controllers of capital and technology are

If the international price of beer is one keg of beer = 1 bottle of whiskey,how much whiskey will Northern Ireland consume? Each country completely specializes and 500 kegs of beer are traded for 500 bottles of whiskey.

Now suppose that Southern workers receive a raise to €2 per day.Will trade be possible at the exchange rate you found in the last question?

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

What is the price of beer without trade in Southern Ireland?

Is Northern Ireland better off when it trades with Southern Ireland?

Suppose that Great Britain is a major export market for your firm,a U.S.-based MNC.If the British pound depreciates against the U.S.dollar,

The doctrine of comparative advantage was first put forth by

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters