Question 1

The International Monetary Fund is part of the global financial system.

Accepted Answer

A) True 
 B)False

Question 2

Explain the duties of central banks. How do central banks, such as the Federal Reserve, implement national monetary policies?

Accepted Answer

As the official national bank of each co

Question 3

Global Finance Meeting (Scenario)
International finance experts are meeting in Tokyo for a weeklong conference to discuss the current state of global finance. At the conference are representatives from a variety of monetary and financial organizations. Expert A often works with international firms arranging capital in the form of shares. Expert B works for the Bank of Nova Scotia in the British Virgin Islands. Expert C advises international firms on corporate mergers.
-Expert A most likely works for which of the following?

Accepted Answer

A)  Union Bank in Switzerland 
B)  Bank of America 
C)  Arab-Malaysian Merchant Bank 
D)  Goldman Sachs 
A)  Union Bank in Switzerland 
B)  Bank of America 
C)  Arab-Malaysian Merchant Bank 
D)  Goldman Sachs

Question 4

Which of the following statements is true regarding the value of national currencies?

Accepted Answer

A)  They cannot be quantified. 
B)  They remain highly stable. 
C)  They fluctuate constantly. 
D)  They change occasionally. 
A)  They cannot be quantified. 
B)  They remain highly stable. 
C)  They fluctuate constantly. 
D)  They change occasionally.

Question 5

The IMF and the World Bank seldom work together.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following terms refers to the price of one currency expressed in terms of another?

Accepted Answer

A)  countertrade 
B)  monetization 
C)  credit derivative 
D)  exchange rate 
A)  countertrade 
B)  monetization 
C)  credit derivative 
D)  exchange rate

Question 7

Which of the following is a characteristic of a bond?

Accepted Answer

A)  It is a short-term loan from a commercial bank. 
B)  It refers to capital raised by selling corporate shares. 
C)  It refers to a debt security used to raise capital. 
D)  It is a debt instrument on which dividends are paid. 
A)  It is a short-term loan from a commercial bank. 
B)  It refers to capital raised by selling corporate shares. 
C)  It refers to a debt security used to raise capital. 
D)  It is a debt instrument on which dividends are paid.

Question 8

Which of the following would a firm considering a corporate merger consult for issues related to the merger?

Accepted Answer

A)  private bank 
B)  offshore bank 
C)  commercial bank 
D)  investment bank 
A)  private bank 
B)  offshore bank 
C)  commercial bank 
D)  investment bank

Question 9

High Inflation (Scenario)
Country X primarily exports coffee beans, and in the last two years the demand for coffee beans has caused economic growth in Country X. To accommodate the economic growth, the central bank of Country X increased the nation's money supply. Country X is now experiencing inflation of over 200 percent. A group of economic experts, government representatives, and business owners have gathered for a conference in Country X to discuss the situation.
-Which of the following questions would be more important to evaluate in determining the reason behind the inflation in Country X?

Accepted Answer

A)  Has momentum trading of agricultural commodities been occurring in Country X? 
B)  What is the exchange rate between Country X currency and the euro? 
C)  How quickly was the money supply increased by the central bank of Country X? 
D)  How many pounds of coffee beans are being imported annually to Country X? 
A)  Has momentum trading of agricultural commodities been occurring in Country X? 
B)  What is the exchange rate between Country X currency and the euro? 
C)  How quickly was the money supply increased by the central bank of Country X? 
D)  How many pounds of coffee beans are being imported annually to Country X?

Question 10

High Inflation (Scenario)
Country X primarily exports coffee beans, and in the last two years the demand for coffee beans has caused economic growth in Country X. To accommodate the economic growth, the central bank of Country X increased the nation's money supply. Country X is now experiencing inflation of over 200 percent. A group of economic experts, government representatives, and business owners have gathered for a conference in Country X to discuss the situation.
-Which of the following should be considered before the government takes any action to correct the high rate of inflation?

Accepted Answer

A)  What have been the historical consequences of trade barriers in Country X? 
B)  What is the current price of coffee in the United States and Europe? 
C)  What will be the long-term effects of currency depreciation to Country X? 
D)  What other industries in Country X could replace agriculture? 
A)  What have been the historical consequences of trade barriers in Country X? 
B)  What is the current price of coffee in the United States and Europe? 
C)  What will be the long-term effects of currency depreciation to Country X? 
D)  What other industries in Country X could replace agriculture?

Question 11

The largest proportion of government debt results from national pension and healthcare programs.

Accepted Answer

A) True 
 B)False

Question 12

The French franc is one of the European currencies which was taken out of circulation and replaced by the euro.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an effect caused by capital flight?

Accepted Answer

A)  It increases the need for domestic investment holdings. 
B)  It decreases the ability of the nation to service debt and pay for imports. 
C)  It reduces harmful currency restrictions. 
D)  It decreases the nation's supply of hard currencies. 
A)  It increases the need for domestic investment holdings. 
B)  It decreases the ability of the nation to service debt and pay for imports. 
C)  It reduces harmful currency restrictions. 
D)  It decreases the nation's supply of hard currencies.

Question 14

Describe the role of commercial banks in the global financial sector. Provide a brief description of the activities performed by three different types of commercial banks.

Accepted Answer

Banks are important players in the globa

Question 15

The recent global financial crisis was contained in part because some countries use fixed exchange regimes.

Accepted Answer

A) True 
 B)False

Question 16

The International Monetary Fund was created through the Bretton Woods Agreement as a way to monitor the foreign exchange systems and lend money to developing economies.

Accepted Answer

A) True 
 B)False

Question 17

If last year one dollar equaled one euro, and then the exchange rate shifted so that today one dollar equals two euros, which of the following would most likely NOT occur?

Accepted Answer

A)  European firms would pay more for raw materials imported from the United States. 
B)  European consumers would purchase fewer U.S. products and services. 
C)  Fewer Europeans would travel to the U.S. or study at U.S. universities. 
D)  European firms would lower their prices on goods made with U.S. parts. 
A)  European firms would pay more for raw materials imported from the United States. 
B)  European consumers would purchase fewer U.S. products and services. 
C)  Fewer Europeans would travel to the U.S. or study at U.S. universities. 
D)  European firms would lower their prices on goods made with U.S. parts.

Question 18

Which of the following resolves the problem of making international payments and facilitates international investment and borrowing among firms, banks, and governments?

Accepted Answer

A)  foreign exchange 
B)  barter 
C)  capital flight 
D)  buyback 
A)  foreign exchange 
B)  barter 
C)  capital flight 
D)  buyback

Question 19

Which of the following statements is true of the global financial system?

Accepted Answer

A)  It consists of the institutional frameworks, rules, and procedures that govern how national currencies are exchanged for one another. 
B)  It includes key players such as finance ministries and national stock exchanges but excludes commercial banks and central banks. 
C)  It is built on the activities of firms, banks, and financial institutions engaged in ongoing international financial activity. 
D)  Since the 1960s, the volume and structure of the global financial system has been reducing. 
A)  It consists of the institutional frameworks, rules, and procedures that govern how national currencies are exchanged for one another. 
B)  It includes key players such as finance ministries and national stock exchanges but excludes commercial banks and central banks. 
C)  It is built on the activities of firms, banks, and financial institutions engaged in ongoing international financial activity. 
D)  Since the 1960s, the volume and structure of the global financial system has been reducing.

Question 20

Which of the following statements is true of trade surplus?

Accepted Answer

A)  It is a negative balance of trade. 
B)  It occurs when there is a net outflow of domestic currency to foreign markets. 
C)  It occurs when a nation imports as much as it exports. 
D)  It occurs when a nation's exports exceed its imports. 
A)  It is a negative balance of trade. 
B)  It occurs when there is a net outflow of domestic currency to foreign markets. 
C)  It occurs when a nation imports as much as it exports. 
D)  It occurs when a nation's exports exceed its imports.

The International Monetary Fund is part of the global financial system.

Explain the duties of central banks. How do central banks, such as the Federal Reserve, implement national monetary policies?

Which of the following statements is true regarding the value of national currencies?

The IMF and the World Bank seldom work together.

Which of the following terms refers to the price of one currency expressed in terms of another?

Which of the following is a characteristic of a bond?

Which of the following would a firm considering a corporate merger consult for issues related to the merger?

The largest proportion of government debt results from national pension and healthcare programs.

The French franc is one of the European currencies which was taken out of circulation and replaced by the euro.

Which of the following is an effect caused by capital flight?

Describe the role of commercial banks in the global financial sector. Provide a brief description of the activities performed by three different types of commercial banks.

The recent global financial crisis was contained in part because some countries use fixed exchange regimes.

The International Monetary Fund was created through the Bretton Woods Agreement as a way to monitor the foreign exchange systems and lend money to developing economies.

If last year one dollar equaled one euro, and then the exchange rate shifted so that today one dollar equals two euros, which of the following would most likely NOT occur?

Which of the following resolves the problem of making international payments and facilitates international investment and borrowing among firms, banks, and governments?

Which of the following statements is true of the global financial system?

Which of the following statements is true of trade surplus?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

Organizational Participants That Make International Business Happen

The Cultural Environment of International Business

Ethics and International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention in International Business

Regional Economic Integration

Understanding Emerging Markets

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Countertrade

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Global Sourcing

Marketing in the Global Firm

Human Resource Management in the Global Firm

Financial Management and Accounting in the Global Firm

Filters

Exam 11: The International Monetary and Financial Environment

The International Monetary Fund is part of the global financial system.

Explain the duties of central banks. How do central banks, such as the Federal Reserve, implement national monetary policies?

Which of the following statements is true regarding the value of national currencies?

The IMF and the World Bank seldom work together.

Which of the following terms refers to the price of one currency expressed in terms of another?

Which of the following is a characteristic of a bond?

Which of the following would a firm considering a corporate merger consult for issues related to the merger?

The largest proportion of government debt results from national pension and healthcare programs.

The French franc is one of the European currencies which was taken out of circulation and replaced by the euro.

Which of the following is an effect caused by capital flight?

Describe the role of commercial banks in the global financial sector. Provide a brief description of the activities performed by three different types of commercial banks.

The recent global financial crisis was contained in part because some countries use fixed exchange regimes.

The International Monetary Fund was created through the Bretton Woods Agreement as a way to monitor the foreign exchange systems and lend money to developing economies.

If last year one dollar equaled one euro, and then the exchange rate shifted so that today one dollar equals two euros, which of the following would most likely NOT occur?

Which of the following resolves the problem of making international payments and facilitates international investment and borrowing among firms, banks, and governments?

Which of the following statements is true of the global financial system?

Which of the following statements is true of trade surplus?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

Organizational Participants That Make International Business Happen

The Cultural Environment of International Business

Ethics and International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention in International Business

Regional Economic Integration

Understanding Emerging Markets

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Countertrade

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Global Sourcing

Marketing in the Global Firm

Human Resource Management in the Global Firm

Financial Management and Accounting in the Global Firm

Filters