Question 1

Exchange rate risk refers to

Accepted Answer

A) An expected drop in an exchange rate 
B) A highly variable exchange rate 
C) Lower profit due to an expected drop in an exchange rate 
D) Lower profits due to an unexpected change in exchange rates 
A) An expected drop in an exchange rate 
B) A highly variable exchange rate 
C) Lower profit due to an expected drop in an exchange rate 
D) Lower profits due to an unexpected change in exchange rates D

Question 2

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

Question 3

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 A

Question 4

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 5

What are some of major recent trends in globalization?

Accepted Answer

The major trends are (1)the em

Question 6

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 7

If people in both countries eat the same dish that requires 0.1kg or tomatoes and 1.4kg of potatoes to prepare,how much potatoes will be produced in Byelorussia?

Accepted Answer

A) None 
B) 333.33 tons 
C) 500 tons 
D) 666.67 tons 
A) None 
B) 333.33 tons 
C) 500 tons 
D) 666.67 tons

Question 8

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 .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 9

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

Question 10

What is special about international finance?

Accepted Answer

The three major dimensions that set inte

Question 11

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

Question 12

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

Accepted Answer

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

Question 13

Which of the following statements about the EU (European Union)is wrong?

Accepted Answer

A) All member countries of the EU have adopted the euro 
B) The EU recently enlarged to include some formerly socialist countries 
C) The EU was established to foster economic integration in Western Europe 
D) The EU is a direct descendent of the European Community 
A) All member countries of the EU have adopted the euro 
B) The EU recently enlarged to include some formerly socialist countries 
C) The EU was established to foster economic integration in Western Europe 
D) The EU is a direct descendent of the European Community

Question 14

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

Accepted Answer

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

Question 15

Which country has comparative advantage in producing potatoes?

Accepted Answer

A) Russia 
B) Byelorussia 
C) Both countries 
D) Neither country 
A) Russia 
B) Byelorussia 
C) Both countries 
D) Neither country

Question 16

If the price of potatoes is $300 per ton,with free trade the price of tomatoes can be any of the numbers below EXCEPT

Accepted Answer

A) $600 
B) $750 
C) $900 
D) All of these numbers can be the equilibrium price of tomatoes 
A) $600 
B) $750 
C) $900 
D) All of these numbers can be the equilibrium price of tomatoes

Question 17

Privatization refers to process of:

Accepted Answer

A) Having government operate businesses for the betterment of the public sector 
B) Government allowing the operation of privately owned business 
C) Prohibiting government operated enterprises 
D) A country divesting itself of the ownership and operation of a business venture by turning it over to the free market system 
A) Having government operate businesses for the betterment of the public sector 
B) Government allowing the operation of privately owned business 
C) Prohibiting government operated enterprises 
D) A country divesting itself of the ownership and operation of a business venture by turning it over to the free market system

Question 18

Which country has absolute advantage in producing potatoes?

Accepted Answer

A) Russia 
B) Byelorussia 
C) Both countries 
D) Neither country 
A) Russia 
B) Byelorussia 
C) Both countries 
D) Neither country

Question 19

If people in both countries eat the same dish that requires 0.1kg or tomatoes and 1.4kg of potatoes to prepare,and the price of potatoes is $1000 per ton,what is the GDP in Byelorussia?

Accepted Answer

A) $165,000 
B) $333,333 
C) $1,000,000 
D) None of these 
A) $165,000 
B) $333,333 
C) $1,000,000 
D) None of these

Question 20

What is the euro?

Accepted Answer

The Euro is the common currency of 12 of

Exam 1: Globalization and the Multinational Firm

Exchange rate risk refers to

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

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

The euro zone has

What are some of major recent trends in globalization?

A multinational firm can be defined as:

If people in both countries eat the same dish that requires 0.1kg or tomatoes and 1.4kg of potatoes to prepare,how much potatoes will be produced in Byelorussia?

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.

Political risk includes all of the following except:

What is special about international finance?

An example of a political risk is

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

Which of the following statements about the EU (European Union)is wrong?

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

Which country has comparative advantage in producing potatoes?

If the price of potatoes is $300 per ton,with free trade the price of tomatoes can be any of the numbers below EXCEPT

Privatization refers to process of:

Which country has absolute advantage in producing potatoes?

If people in both countries eat the same dish that requires 0.1kg or tomatoes and 1.4kg of potatoes to prepare,and the price of potatoes is $1000 per ton,what is the GDP in Byelorussia?

What is the euro?

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

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