Question 1

The levels of supply and demand for a currency in a free market vary ________ with its price.

Accepted Answer

A) rarely 
B) occasionally 
C) directly 
D) inversely 
A) rarely 
B) occasionally 
C) directly 
D) inversely

Question 2

Which of the following statements is true about currencies?

Accepted Answer

A) The British pound is an example of a nonconvertible currency. 
B) Hard currencies are highly unstable currencies. 
C) Currencies that are used for international transactions are called nonconvertible. 
D) Convertible currencies can be readily exchanged for other currencies. 
A) The British pound is an example of a nonconvertible currency. 
B) Hard currencies are highly unstable currencies. 
C) Currencies that are used for international transactions are called nonconvertible. 
D) Convertible currencies can be readily exchanged for other currencies.

Question 3

Which of the following does the central bank perform in order to accommodate a nation's economic growth?

Accepted Answer

A) enforce strict regulations on foreign direct investment 
B) increase the nation's money supply 
C) establish a voluntary export restraint 
D) restrict innovation and entrepreneurship 
A) enforce strict regulations on foreign direct investment 
B) increase the nation's money supply 
C) establish a voluntary export restraint 
D) restrict innovation and entrepreneurship

Question 4

All else being equal, the greater the demand for a currency, the lower its price; the lower the demand for a currency, the higher its price.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following should be considered closely before Chisholm recommends increasing production to take advantage of the current exchange rate?

Accepted Answer

A) What is the expected outcome of Plas-Tex negotiations with an Asian manufacturer? 
B) How much revenue did Plas-Tex generate from European sales last year? 
C) What will be the effect on Plas-Tex if the euro depreciates more than the U.S. dollar? 
D) What has been the historic impact of capital flight on Plas-Tex revenues? 
A) What is the expected outcome of Plas-Tex negotiations with an Asian manufacturer? 
B) How much revenue did Plas-Tex generate from European sales last year? 
C) What will be the effect on Plas-Tex if the euro depreciates more than the U.S. dollar? 
D) What has been the historic impact of capital flight on Plas-Tex revenues?

Question 6

The floating exchange rate system is also called a pegged exchange rate system.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following best characterizes the functions of the World Bank?

Accepted Answer

A) monitor interest rates in emerging economies 
B) provide loans and technical assistance to developing countries 
C) offer financial assistance to small businesses 
D) initiate trading for impoverished nations 
A) monitor interest rates in emerging economies 
B) provide loans and technical assistance to developing countries 
C) offer financial assistance to small businesses 
D) initiate trading for impoverished nations

Question 8

The purpose of the Bretton Woods Agreement was to ________.

Accepted Answer

A) enable the U.S. Government to monetarily recover after WWII 
B) control the fluctuating price of gold used for global trading 
C) oversee the importing and exporting of international traders 
D) govern the exchange rates of major international currencies 
A) enable the U.S. Government to monetarily recover after WWII 
B) control the fluctuating price of gold used for global trading 
C) oversee the importing and exporting of international traders 
D) govern the exchange rates of major international currencies

Question 9

Expert C most likely works for which of the following?

Accepted Answer

A) Merrill Lynch 
B) Banco General in Panama 
C) Federal Reserve Bank 
D) International Monetary Fund 
A) Merrill Lynch 
B) Banco General in Panama 
C) Federal Reserve Bank 
D) International Monetary Fund

Question 10

The Bretton Woods Agreement was brought into existence in the late 1960s when the U.S. needed to finance government programs and the Vietnam War.

Accepted Answer

A) True 
 B)False

Question 11

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.

Question 12

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 13

Which of the following, originally known as the International Bank for Reconstruction and Development, was founded to fund construction of Japan and Europe after World War II?

Accepted Answer

A) The International Monetary Fund 
B) The Financial Stability Board 
C) The World Bank 
D) Bank for International Settlements 
A) The International Monetary Fund 
B) The Financial Stability Board 
C) The World Bank 
D) Bank for International Settlements

Question 14

Merchant banks provide capital to firms in the form of shares rather than loans.

Accepted Answer

A) True 
 B)False

Question 15

Investment banks underwrite (guarantee the sale of)stock and bond issues and advise on mergers.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is characteristic of the fixed exchange rate system?

Accepted Answer

A) utilized by most advanced economies 
B) rates based on supply and demand forces 
C) value of currency is set relative to the value of another 
D) allows for monetary policy flexibility 
A) utilized by most advanced economies 
B) rates based on supply and demand forces 
C) value of currency is set relative to the value of another 
D) allows for monetary policy flexibility

Question 17

The global financial system establishes the rules and procedures for exchanging national currencies in international business transactions.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is the most likely underlying reason for the demise of the Bretton Woods system?

Accepted Answer

A) U)S. trade deficits 
B) creation of the EU 
C) gold depreciation 
D) WTO restrictions 
A) U)S. trade deficits 
B) creation of the EU 
C) gold depreciation 
D) WTO restrictions

Question 19

If demand for the dollar is low, the price of the dollar is most likely to ________.

Accepted Answer

A) rise 
B) remain stable 
C) fall, then rise 
D) fall 
A) rise 
B) remain stable 
C) fall, then rise 
D) fall

Question 20

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

The levels of supply and demand for a currency in a free market vary ________ with its price.

Which of the following statements is true about currencies?

Which of the following does the central bank perform in order to accommodate a nation's economic growth?

All else being equal, the greater the demand for a currency, the lower its price; the lower the demand for a currency, the higher its price.

Which of the following should be considered closely before Chisholm recommends increasing production to take advantage of the current exchange rate?

The floating exchange rate system is also called a pegged exchange rate system.

Which of the following best characterizes the functions of the World Bank?

The purpose of the Bretton Woods Agreement was to ________.

Expert C most likely works for which of the following?

The Bretton Woods Agreement was brought into existence in the late 1960s when the U.S. needed to finance government programs and the Vietnam War.

Which of the following statements is true of trade surplus?

Which of the following should be considered before the government takes any action to correct the high rate of inflation?

Which of the following, originally known as the International Bank for Reconstruction and Development, was founded to fund construction of Japan and Europe after World War II?

Merchant banks provide capital to firms in the form of shares rather than loans.

Investment banks underwrite (guarantee the sale of)stock and bond issues and advise on mergers.

Which of the following is characteristic of the fixed exchange rate system?

The global financial system establishes the rules and procedures for exchanging national currencies in international business transactions.

Which of the following is the most likely underlying reason for the demise of the Bretton Woods system?

If demand for the dollar is low, the price of the dollar is most likely to ________.

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

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters

Exam 9: The International Monetary and Financial Environment

The levels of supply and demand for a currency in a free market vary ________ with its price.

Which of the following statements is true about currencies?

Which of the following does the central bank perform in order to accommodate a nation's economic growth?

All else being equal, the greater the demand for a currency, the lower its price; the lower the demand for a currency, the higher its price.

Which of the following should be considered closely before Chisholm recommends increasing production to take advantage of the current exchange rate?

The floating exchange rate system is also called a pegged exchange rate system.

Which of the following best characterizes the functions of the World Bank?

The purpose of the Bretton Woods Agreement was to ________.

Expert C most likely works for which of the following?

The Bretton Woods Agreement was brought into existence in the late 1960s when the U.S. needed to finance government programs and the Vietnam War.

Which of the following statements is true of trade surplus?

Which of the following should be considered before the government takes any action to correct the high rate of inflation?

Which of the following, originally known as the International Bank for Reconstruction and Development, was founded to fund construction of Japan and Europe after World War II?

Merchant banks provide capital to firms in the form of shares rather than loans.

Investment banks underwrite (guarantee the sale of)stock and bond issues and advise on mergers.

Which of the following is characteristic of the fixed exchange rate system?

The global financial system establishes the rules and procedures for exchanging national currencies in international business transactions.

Which of the following is the most likely underlying reason for the demise of the Bretton Woods system?

If demand for the dollar is low, the price of the dollar is most likely to ________.

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

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters