Question 1

The World Trade Organization,WTO,

Accepted Answer

A) has the power to enforce the rules of international trade. 
B) covers agriculture and physical goods, but not services or intellectual property rights. 
C) recently expelled China for human rights violations. 
D) ruled that NAFTA is to be the model for world trade integration. 
A) has the power to enforce the rules of international trade. 
B) covers agriculture and physical goods, but not services or intellectual property rights. 
C) recently expelled China for human rights violations. 
D) ruled that NAFTA is to be the model for world trade integration.

Question 2

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 3

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 4

A country like North Korea

Accepted Answer

A) probably rejects the notion of increased opportunity presented by free trade. 
B) engages in free trade. 
C) lies on a production possibilities curve superior to South Korea, since North Korea protects its domestic producers. 
D) none of the above 
A) probably rejects the notion of increased opportunity presented by free trade. 
B) engages in free trade. 
C) lies on a production possibilities curve superior to South Korea, since North Korea protects its domestic producers. 
D) none of the above

Question 5

A true MNC,with operations in dozens of different countries

Accepted Answer

A) must effectively manage foreign exchange risk. 
B) can ignore foreign exchange risk since it is diversified. 
C) will pay taxes in only its home county. 
D) none of the above 
A) must effectively manage foreign exchange risk. 
B) can ignore foreign exchange risk since it is diversified. 
C) will pay taxes in only its home county. 
D) none of the above

Question 6

Recently,financial markets have become highly integrated.This development

Accepted Answer

A) allows investors to diversify their portfolios internationally. 
B) allows minority investors to buy and sell stocks. 
C) has increased the cost of capital for firms. 
D) answers a and c are both correct. 
A) allows investors to diversify their portfolios internationally. 
B) allows minority investors to buy and sell stocks. 
C) has increased the cost of capital for firms. 
D) answers a and c are both correct.

Question 7

A firm with concentrated ownership

Accepted Answer

A) may give rise to conflicts of interest between dominant shareholders and small outside shareholders. 
B) may enjoy more accounting transparency than firms with diffuse ownership structures. 
C) is a partnership, never a corporation. 
D) tends to exist overseas but not in the U.S. 
A) may give rise to conflicts of interest between dominant shareholders and small outside shareholders. 
B) may enjoy more accounting transparency than firms with diffuse ownership structures. 
C) is a partnership, never a corporation. 
D) tends to exist overseas but not in the U.S.

Question 8

A purely domestic firm sources its products,sells its products,and raises its funds domestically

Accepted Answer

A) can face stiff competition from a multinational corporation that can source its products in one country, sell them in several countries, and raise its funds in a third country. 
B) can be more competitive than an MNC on its home turf due to superior knowledge of the local market. 
C) can still face exchange rate risk, just like an MNC. 
D) all of the above are true 
A) can face stiff competition from a multinational corporation that can source its products in one country, sell them in several countries, and raise its funds in a third country. 
B) can be more competitive than an MNC on its home turf due to superior knowledge of the local market. 
C) can still face exchange rate risk, just like an MNC. 
D) all of the above are true

Question 9

Which state is better at making guns?

Accepted Answer

A) South Carolina 
B) North Carolina 
C) neither 
A) South Carolina 
B) North Carolina 
C) neither

Question 10

Which state has an absolute advantage in producing wheat in Case I?

Accepted Answer

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

Question 11

Countries 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

Accepted Answer

A) The citizens of country A should make food and trade with the citizens of country B for textiles. 
B) The citizens of country A should make textiles and trade with the citizens of country B for food. 
C) There are no gains from trade in this example. 
D) A is twice as good as B at making food and B is twice as good as A at making textiles. 
A) The citizens of country A should make food and trade with the citizens of country B for textiles. 
B) The citizens of country A should make textiles and trade with the citizens of country B for food. 
C) There are no gains from trade in this example. 
D) A is twice as good as B at making food and B is twice as good as A at making textiles.

Question 12

The ascendance of the dollar the dominant global currency reflects several key factors such as

Accepted Answer

A) the size of the U.S.population. 
B) the mature and open capital markets of the U.S.economy. 
C) exchange rate stability. 
D) all of the above. 
A) the size of the U.S.population. 
B) the mature and open capital markets of the U.S.economy. 
C) exchange rate stability. 
D) all of the above.

Question 13

The common monetary policy for the euro zone is now formulated by

Accepted Answer

A) the Bundesbank in Germany. 
B) the Federal Reserve Bank. 
C) the World Bank. 
D) the European Central Bank. 
A) the Bundesbank in Germany. 
B) the Federal Reserve Bank. 
C) the World Bank. 
D) the European Central Bank.

Question 14

Under the theory of comparative advantage,liberalization of international trade will

Accepted Answer

A) enhance the welfare of the world's citizens. 
B) create unemployment and displacement of workers permanently. 
C) result in higher prices in the long run as monopolists are able to charge higher prices after eliminating their competitors. 
D) all of the above 
A) enhance the welfare of the world's citizens. 
B) create unemployment and displacement of workers permanently. 
C) result in higher prices in the long run as monopolists are able to charge higher prices after eliminating their competitors. 
D) all of the above

Question 15

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 16

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 17

If you can make a good at a low opportunity cost,

Accepted Answer

A) you would be well served to produce that good and trade for other goods. 
B) you should make something else that has a higher value. 
C) you should make something else that has a higher opportunity cost. 
D) none of the above 
A) you would be well served to produce that good and trade for other goods. 
B) you should make something else that has a higher value. 
C) you should make something else that has a higher opportunity cost. 
D) none of the above

Question 18

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

Accepted Answer

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

Question 19

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 20

Privatization is often seen as a cure for bureaucratic inefficiency and waste; some economists estimate that privatization improves efficiency and reduces operating costs by as much as

Accepted Answer

A) 5 percent. 
B) 10 percent. 
C) 15 percent. 
D) 20 percent. 
A) 5 percent. 
B) 10 percent. 
C) 15 percent. 
D) 20 percent.

The World Trade Organization,WTO,

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

A country like North Korea

A true MNC,with operations in dozens of different countries

Recently,financial markets have become highly integrated.This development

A firm with concentrated ownership

A purely domestic firm sources its products,sells its products,and raises its funds domestically

Which state is better at making guns?

Which state has an absolute advantage in producing wheat in Case I?

The ascendance of the dollar the dominant global currency reflects several key factors such as

The common monetary policy for the euro zone is now formulated by

Under the theory of comparative advantage,liberalization of international trade will

The euro

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

If you can make a good at a low opportunity cost,

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

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.

Privatization is often seen as a cure for bureaucratic inefficiency and waste; some economists estimate that privatization improves efficiency and reduces operating costs by as much as

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

The World Trade Organization,WTO,

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

A country like North Korea

A true MNC,with operations in dozens of different countries

Recently,financial markets have become highly integrated.This development

A firm with concentrated ownership

A purely domestic firm sources its products,sells its products,and raises its funds domestically

Which state is better at making guns?

Which state has an absolute advantage in producing wheat in Case I?

The ascendance of the dollar the dominant global currency reflects several key factors such as

The common monetary policy for the euro zone is now formulated by

Under the theory of comparative advantage,liberalization of international trade will

The euro

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

If you can make a good at a low opportunity cost,

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

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.

Privatization is often seen as a cure for bureaucratic inefficiency and waste; some economists estimate that privatization improves efficiency and reduces operating costs by as much as

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