Exam 2: The Global Economy

Portfolio investments are long-term ownership interests,such as business capital outlays in foreign subsidiaries,in which the purchaser holds complete management control.

An average Italian worker produces 500 shirts per year or 1,000 bottles of perfume per year and an average Spanish worker produces 300 shirts per year or 1,500 bottles of perfume per year.The Italian worker has an absolute advantage over the Spanish worker in the production of perfume.

In customs unions,a supranational policymaking committee decides common tariffs for member countries.

The ____________________ is an accounting record of the transactions between the residents of one country and the residents of the rest of the world over a given period of time.

The strengthening of the U.S.dollar against the Japanese yen has a negative effect on

Adam Smith's theory of specializing in what you are best at producing is known as absolute advantage.

Egypt's exports of cotton and imports of computers would be included in the ____ part of Egypt's current account.

The volume of international trade has been steadily decreasing over the last few decades.

An accounting record of the transactions between the residents of one country and the residents of the rest of the world over a given period of time is called balance of transactions.

The ratio that measures the value of one currency in terms of another is called the

Tariffs are imposed to protect local industries and to generate revenue for the government.

As a member of NAFTA,Mexico must coordinate its domestic tax rate with Canada and United States.

The theory of ____ focuses on the importance of country factors such as domestic demand and domestic rivalry in explaining a nation's dominance in the production and export of particular products.

The International Monetary Fund was originally established by the U.S.government to assist U.S.multinational corporations to expand to Europe after World War II.

India's exports of telecommunications services and imports of management consulting services would be included in the ____ part of India's current account.

Which was not a founding principal of GATT?

Quotas on imported goods help consumers by increasing their choices and lowering prices.

Exchange rates for the Bolivian currency are determined by the market forces of supply and demand.Therefore,the Bolivian currency is an example of a ____ currency.

A good example of a country that enjoys a competitive advantage in digital products is

Country X maintains a managed currency.Its currency is most likely pegged to the currency of the country that County X ____.