Question 1

The theory that suggests specialization by country can increase worldwide production is ________.

Accepted Answer

A)  the theory of comparative advantage
B)  the theory of foreign direct investment
C)  the international Fisher effect
D)  the theory of working capital management A

Question 2

Which of the following firms are NOT considered to be multinational enterprises (MNEs)even if they have operations in more than one country?

Accepted Answer

A)  for-profit companies
B)  not-for-profit organizations
C)  non-government organizations (NGOs) 
D)  all of the above may be considered MNEs D

Question 3

TABLE 1.1
Use the information in the table to answer the following question(s).
 
-Refer to Table 1.1.A production unit in Austria has a/an ________ over a production unit in Russia in ________.

Accepted Answer

A)  absolute disadvantage; digital cameras
B)  absolute disadvantage; snowboards
C)  absolute advantage; both cameras and snowboards
D)  none of the above C

Question 4

TABLE 1.1
Use the information in the table to answer the following question(s).
 
-Refer to Table 1.1.Assume no trade between Russia and Austria.If each country put 50% of their production units into each product,the total number of snowboards and digital cameras produced by the two countries combined are ________ and ________.

Accepted Answer

A)  15,000 snowboards; 3,000 digital cameras
B)  6,000 snowboards; 4,000 digital cameras
C)  2,750 digital cameras; 6,750 snowboards
D)  15,000 digital cameras; 1,000 snowboards

Question 5

Typically,a firm in its domestic stage of globalization has all financial transactions in its domestic currency.

Accepted Answer

A) True 
 B)False

Question 6

Despite the underlying advantages of the Theory of Comparative Advantage,countries do not appear to specialize in producing only those goods and services that could most efficiently be produced domestically.Provide at least three reasons why governments interfere with comparative advantage and the techniques they may use to enforce their objectives..

Accepted Answer

The answer of Despite the underlying advantages of the Theory...

Question 7

The phase of the globalization process characterized by imports from foreign suppliers and exports to foreign buyers is called the

Accepted Answer

A)  domestic phase.
B)  multinational phase.
C)  international trade phase.
D)  import-export banking phase.

Question 8

TABLE 1.1
Use the information in the table to answer the following question(s).
 
-Refer to Table 1.1.If trade takes place at Brazil's domestic price,________ snowboards will be required to obtain 1 digital camera.

Accepted Answer

A)  4
B)  2 and 2/3
C)  1.25
D)  0.25

Question 9

MNEs look to exploit ________ in national markets for products,factors of production,and/or financial assets.

Accepted Answer

A)  imperfections
B)  perfect capital markets
C)  corrupt governments
D)  none of the above

Question 10

________ are the largest markets in the world.

Accepted Answer

A)  United States equity markets
B)  European debt markets
C)  Global currency markets
D)  Chinese export markets

Question 11

TABLE 1.1
Use the information in the table to answer the following question(s).
 
-Refer to Table 1.1.If each country specializes in their production with Austria producing only digital cameras and Russia producing only snowboards,at a trading rate of three snowboards per digital camera,how many cameras and snowboards will be available to be consumed in Russia if they trade 9,000 snowboards to Austria?

Accepted Answer

A)  9,000 snowboards and 5,000 digital cameras
B)  3,000 snowboards and 3,000 digital cameras
C)  3,000 snowboards and 9,000 digital cameras
D)  There is not enough information to answer this question.

Question 12

The Eurocurrency loan market is characterized by narrow interest rate spreads between deposit and loan rates.This is due in part to which of the following factors?

Accepted Answer

A)  The Eurocurrency market is a "wholesale" market..
B)  Loan amounts are very large, often in excess of $500,000.
C)  Eurocurrency borrowers are typically large, low-risk corporations or government entities.
D)  All of the above are legitimate reasons for the narrow spread in the Eurocurrency market.

Question 13

Although the world is a long way from the classical trade model,the general principle of comparative advantage is still valid.

Accepted Answer

A) True 
 B)False

Question 14

Domestic currencies of one country on deposit in a second country are called ________.

Accepted Answer

A)  export deposits
B)  eurocurrencies
C)  import deposits
D)  forocurrencies

Question 15

Of the following,which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm?

Accepted Answer

A)  evaluation of the credit quality of foreign buyers and sellers
B)  foreign consumer method of payment preferences
C)  credit risk management
D)  evaluation of foreign exchange risk

Question 16

TABLE 1.1
Use the information in the table to answer the following question(s).
 
-Refer to Table 1.1.If each country specializes in their production with Austria producing only digital cameras and Russia producing only snowboards,at a trading rate of three snowboards per digital camera,how many cameras and snowboards will be available to be consumed in Austria if they trade 3,000 cameras to Russia?

Accepted Answer

A)  9,000 snowboards and 5,000 digital cameras
B)  3,000 snowboards and 3,000 digital cameras
C)  3,000 snowboards and 9,000 digital cameras
D)  There is not enough information to answer this question.

Question 17

Once established abroad,large MNEs internal information networks typically fail to help implement market opportunities compared to their purely domestic counterparts.

Accepted Answer

A) True 
 B)False

Question 18

The twin agency problems limiting financial globalization are caused by these two groups acting in their own self-interests rather than the interests of the firm.

Accepted Answer

A)  rulers of sovereign states and unsavory customs officials
B)  corporate insiders and attorneys
C)  corporate insiders and rulers of sovereign states
D)  attorneys and unsavory customs officials

Question 19

The exposure to foreign exchange risk known as Translation Exposure may be defined as

Accepted Answer

A)  changes in reported owners' equity in consolidated financial statements caused by a change in exchange rates.
B)  the impact of settling outstanding obligations entered into before change in exchange rates but to be settled after change in exchange rates.
C)  the change in expected future cash flows arising from an unexpected change in exchange rates.
D)  all of the above.

Question 20

The global financial marketplace consists of assets,institutions,and linkages.Explain how these factors come together to form the marketplace we know today.

Accepted Answer

The answer of The global financial marketplace consists of assets,institutions,and...

Exam 1: Current Multinational Challenges and the Global Economy

The theory that suggests specialization by country can increase worldwide production is ________.

Which of the following firms are NOT considered to be multinational enterprises (MNEs) even if they have operations in more than one country?

TABLE 1.1 Use the information in the table to answer the following question(s) . -Refer to Table 1.1.A production unit in Austria has a/an over a production unit in Russia in .

Typically,a firm in its domestic stage of globalization has all financial transactions in its domestic currency.

The phase of the globalization process characterized by imports from foreign suppliers and exports to foreign buyers is called the

TABLE 1.1 Use the information in the table to answer the following question(s) . -Refer to Table 1.1.If trade takes place at Brazil's domestic price,________ snowboards will be required to obtain 1 digital camera.

MNEs look to exploit ________ in national markets for products,factors of production,and/or financial assets.

________ are the largest markets in the world.

The Eurocurrency loan market is characterized by narrow interest rate spreads between deposit and loan rates.This is due in part to which of the following factors?

Although the world is a long way from the classical trade model,the general principle of comparative advantage is still valid.

Domestic currencies of one country on deposit in a second country are called ________.

Of the following,which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm?

Once established abroad,large MNEs internal information networks typically fail to help implement market opportunities compared to their purely domestic counterparts.

The twin agency problems limiting financial globalization are caused by these two groups acting in their own self-interests rather than the interests of the firm.

The exposure to foreign exchange risk known as Translation Exposure may be defined as

The global financial marketplace consists of assets,institutions,and linkages.Explain how these factors come together to form the marketplace we know today.

Exam 1: Current Multinational Challenges and the Global Economy

The theory that suggests specialization by country can increase worldwide production is ________.

Which of the following firms are NOT considered to be multinational enterprises (MNEs) even if they have operations in more than one country?

TABLE 1.1 Use the information in the table to answer the following question(s) . -Refer to Table 1.1.A production unit in Austria has a/an ________ over a production unit in Russia in ________.

Typically,a firm in its domestic stage of globalization has all financial transactions in its domestic currency.

The phase of the globalization process characterized by imports from foreign suppliers and exports to foreign buyers is called the

TABLE 1.1 Use the information in the table to answer the following question(s) . -Refer to Table 1.1.If trade takes place at Brazil's domestic price,________ snowboards will be required to obtain 1 digital camera.

MNEs look to exploit ________ in national markets for products,factors of production,and/or financial assets.

________ are the largest markets in the world.

The Eurocurrency loan market is characterized by narrow interest rate spreads between deposit and loan rates.This is due in part to which of the following factors?

Although the world is a long way from the classical trade model,the general principle of comparative advantage is still valid.

Domestic currencies of one country on deposit in a second country are called ________.

Of the following,which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm?

Once established abroad,large MNEs internal information networks typically fail to help implement market opportunities compared to their purely domestic counterparts.

The twin agency problems limiting financial globalization are caused by these two groups acting in their own self-interests rather than the interests of the firm.

The exposure to foreign exchange risk known as Translation Exposure may be defined as

The global financial marketplace consists of assets,institutions,and linkages.Explain how these factors come together to form the marketplace we know today.

TABLE 1.1 Use the information in the table to answer the following question(s) . -Refer to Table 1.1.A production unit in Austria has a/an over a production unit in Russia in .