Question 1

What is often the effect of austerity measures in a country?

Accepted Answer

A) An immediate increase in imports by the population 
B) A recession or depression 
C) A surge in support for the government 
D) An increase in overall spending by the population 
A) An immediate increase in imports by the population 
B) A recession or depression 
C) A surge in support for the government 
D) An increase in overall spending by the population

Question 2

What aspect of foreign investment led to President Donald Trump threatening to impose border taxes on multinational corporations?

Accepted Answer

A) Outsourcing to developing countries 
B) Sovereign lending to Eurozone countries 
C) Concessional finance from the International Monetary Fund to U.S.corporations 
D) Foreign companies building factories in the United States 
A) Outsourcing to developing countries 
B) Sovereign lending to Eurozone countries 
C) Concessional finance from the International Monetary Fund to U.S.corporations 
D) Foreign companies building factories in the United States

Question 3

What event caused the European sovereign debt crisis?

Accepted Answer

A) The Great Depression 
B) The Latin American debt crisis 
C) The global financial crisis 
D) The Internet bubble bursting 
A) The Great Depression 
B) The Latin American debt crisis 
C) The global financial crisis 
D) The Internet bubble bursting

Question 4

What is the Bank for International Settlements?

Accepted Answer

A) The official name of the World Bank 
B) The branch of the International Monetary Fund that lends money directly to developing countries 
C) An international organization created in the 1930s to cooperate on financial matters 
D) The international bank that lends money to central banks around the world to make monetary relations less chaotic 
A) The official name of the World Bank 
B) The branch of the International Monetary Fund that lends money directly to developing countries 
C) An international organization created in the 1930s to cooperate on financial matters 
D) The international bank that lends money to central banks around the world to make monetary relations less chaotic

Question 5

Why do multinational corporations decide to invest abroad rather than relying solely on exporting their products?

Accepted Answer

Answers will vary.Students may note that

Question 6

What type of international investment is the World Bank involved in?

Accepted Answer

A) Portfolio investment 
B) Foreign direct investment 
C) Austerity finance 
D) Concessional finance 
A) Portfolio investment 
B) Foreign direct investment 
C) Austerity finance 
D) Concessional finance

Question 7

Which of the following is a reason international finance is controversial?

Accepted Answer

A) International organizations cannot require restrictions or standards on governments that borrow money. 
B) Sovereign states are beholden to foreign investors and international organizations. 
C) Lenders in capital-rich countries rarely make sufficient profit on loans,because interest rates are too low. 
D) Borrowers in developing countries rarely pay back their loans. 
A) International organizations cannot require restrictions or standards on governments that borrow money. 
B) Sovereign states are beholden to foreign investors and international organizations. 
C) Lenders in capital-rich countries rarely make sufficient profit on loans,because interest rates are too low. 
D) Borrowers in developing countries rarely pay back their loans.

Question 8

Which of the following is an austerity measure?

Accepted Answer

A) The United States lowered interest rates in response to the financial crisis. 
B) Brazil increased spending on health care for the poor. 
C) Mexico raised interest rates to 50 percent in 1994. 
D) Venezuela reduced the price of bus fares. 
A) The United States lowered interest rates in response to the financial crisis. 
B) Brazil increased spending on health care for the poor. 
C) Mexico raised interest rates to 50 percent in 1994. 
D) Venezuela reduced the price of bus fares.

Question 9

Why did investors lend little money to developing countries before 1965?

Accepted Answer

A) In general,there was little available international investment money. 
B) Most countries had not repaid their debts during the Great Depression. 
C) Investors wanted to lend money only to democracies,and most developing countries were dictatorships. 
D) Until 1965,repayment guarantees applied only to loans made to developed countries. 
A) In general,there was little available international investment money. 
B) Most countries had not repaid their debts during the Great Depression. 
C) Investors wanted to lend money only to democracies,and most developing countries were dictatorships. 
D) Until 1965,repayment guarantees applied only to loans made to developed countries.

Question 10

How does Heckscher-Ohlin explain why banks,corporations,and individuals invest abroad?

Accepted Answer

Answers will vary.Students should discus

Question 11

Why is borrowing foreign capital controversial in the borrowing countries?

Accepted Answer

A) International investment often inhibits growth in developing countries. 
B) The repayment of loans may require policies that reduce the incomes of those who did not directly benefit from the loans. 
C) Taxpayers in borrowing countries have to bail out their own banks. 
D) The people who bear the burden of repayment are usually the wealthy industrialists who borrowed the money. 
A) International investment often inhibits growth in developing countries. 
B) The repayment of loans may require policies that reduce the incomes of those who did not directly benefit from the loans. 
C) Taxpayers in borrowing countries have to bail out their own banks. 
D) The people who bear the burden of repayment are usually the wealthy industrialists who borrowed the money.

Question 12

Which of the following is an example of the clash of interests between borrowers and lenders?

Accepted Answer

A) The Chilean government demanded that the Anaconda Copper Company share more of its profits with the government,which its shareholders resisted. 
B) Mexico borrowed money from the United States during the 1994 Peso Crisis and then paid it back. 
C) Because international companies show little interest in the country,Ghana encourages investment in its textile industries through its Ghana Investment Promotion Centre. 
D) Since Botswana had little infrastructure when it became independent,the country paid foreign companies to build highways and railroads. 
A) The Chilean government demanded that the Anaconda Copper Company share more of its profits with the government,which its shareholders resisted. 
B) Mexico borrowed money from the United States during the 1994 Peso Crisis and then paid it back. 
C) Because international companies show little interest in the country,Ghana encourages investment in its textile industries through its Ghana Investment Promotion Centre. 
D) Since Botswana had little infrastructure when it became independent,the country paid foreign companies to build highways and railroads.

Question 13

Why is there no international institution that regulates foreign direct investment?

Accepted Answer

Answers will vary.Students may note that

Question 14

What does it mean for a country to default?

Accepted Answer

A) A government takes ownership of foreign investments in that country. 
B) A government fails to make payments on its sovereign debt. 
C) A government runs a budget deficit too frequently. 
D) A country runs out of foreign reserves. 
A) A government takes ownership of foreign investments in that country. 
B) A government fails to make payments on its sovereign debt. 
C) A government runs a budget deficit too frequently. 
D) A country runs out of foreign reserves.

Question 15

Where did the 2008 financial crisis originate?

Accepted Answer

A) The United States 
B) Mexico 
C) Japan 
D) Greece 
A) The United States 
B) Mexico 
C) Japan 
D) Greece

Question 16

Which of the following is an example of how the U.S.government responded to the global financial crisis?

Accepted Answer

A) Enacting tariffs on foreign imports 
B) Using billions of dollars to bail out banks 
C) Defaulting on debt held by Chinese and Japanese banks 
D) Raising taxes to pay off debt 
A) Enacting tariffs on foreign imports 
B) Using billions of dollars to bail out banks 
C) Defaulting on debt held by Chinese and Japanese banks 
D) Raising taxes to pay off debt

Question 17

Sovereign lending is when:

Accepted Answer

A) a ruler of a country lends money to his or her subjects. 
B) the king or queen of a constitutional monarchy receives loans from parliament. 
C) monarchs borrow money from public financial institutions. 
D) governments borrow money from private financial institutions. 
A) a ruler of a country lends money to his or her subjects. 
B) the king or queen of a constitutional monarchy receives loans from parliament. 
C) monarchs borrow money from public financial institutions. 
D) governments borrow money from private financial institutions.

Question 18

What is foreign direct investment?

Accepted Answer

A) A loan from the International Monetary Fund made directly to a country's central bank 
B) A loan intended to bypass corrupt local officials by going straight to a targeted industry 
C) An investment in which a company maintains control of its assets in another country 
D) Investments in other countries in which investors have no role in managing the assets 
A) A loan from the International Monetary Fund made directly to a country's central bank 
B) A loan intended to bypass corrupt local officials by going straight to a targeted industry 
C) An investment in which a company maintains control of its assets in another country 
D) Investments in other countries in which investors have no role in managing the assets

Question 19

How do international financial institutions contribute to global cooperation between investors and borrowers?

Accepted Answer

Answers will vary.Students may discuss h

Question 20

How does the Heckscher-Ohlin theory explain why there is international immigration?

Accepted Answer

A) Countries that recognize the logic of comparative advantage reduce barriers to international migration. 
B) Protectionism,which benefits the abundant factor,forces the scarce factor to leave a country in search of greater profits. 
C) Differences in factor endowment lead to the export of goods,capital,or people associated with a country's scarce factor. 
D) Differences in factor endowment lead to the export of goods,capital,or people associated with a country's abundant factor. 
A) Countries that recognize the logic of comparative advantage reduce barriers to international migration. 
B) Protectionism,which benefits the abundant factor,forces the scarce factor to leave a country in search of greater profits. 
C) Differences in factor endowment lead to the export of goods,capital,or people associated with a country's scarce factor. 
D) Differences in factor endowment lead to the export of goods,capital,or people associated with a country's abundant factor.

What is often the effect of austerity measures in a country?

What aspect of foreign investment led to President Donald Trump threatening to impose border taxes on multinational corporations?

What event caused the European sovereign debt crisis?

What is the Bank for International Settlements?

Why do multinational corporations decide to invest abroad rather than relying solely on exporting their products?

What type of international investment is the World Bank involved in?

Which of the following is a reason international finance is controversial?

Which of the following is an austerity measure?

Why did investors lend little money to developing countries before 1965?

How does Heckscher-Ohlin explain why banks,corporations,and individuals invest abroad?

Why is borrowing foreign capital controversial in the borrowing countries?

Which of the following is an example of the clash of interests between borrowers and lenders?

Why is there no international institution that regulates foreign direct investment?

What does it mean for a country to default?

Where did the 2008 financial crisis originate?

Which of the following is an example of how the U.S.government responded to the global financial crisis?

Sovereign lending is when:

What is foreign direct investment?

How do international financial institutions contribute to global cooperation between investors and borrowers?

How does the Heckscher-Ohlin theory explain why there is international immigration?

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Trade

International Monetary Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Introduction

Foundations, War, and Peace

International Political Economy, Transnational Politics, and Looking Ahead

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Exam 8: International Financial Relations

What is often the effect of austerity measures in a country?

What aspect of foreign investment led to President Donald Trump threatening to impose border taxes on multinational corporations?

What event caused the European sovereign debt crisis?

What is the Bank for International Settlements?

Why do multinational corporations decide to invest abroad rather than relying solely on exporting their products?

What type of international investment is the World Bank involved in?

Which of the following is a reason international finance is controversial?

Which of the following is an austerity measure?

Why did investors lend little money to developing countries before 1965?

How does Heckscher-Ohlin explain why banks,corporations,and individuals invest abroad?

Why is borrowing foreign capital controversial in the borrowing countries?

Which of the following is an example of the clash of interests between borrowers and lenders?

Why is there no international institution that regulates foreign direct investment?

What does it mean for a country to default?

Where did the 2008 financial crisis originate?

Which of the following is an example of how the U.S.government responded to the global financial crisis?

Sovereign lending is when:

What is foreign direct investment?

How do international financial institutions contribute to global cooperation between investors and borrowers?

How does the Heckscher-Ohlin theory explain why there is international immigration?

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Trade

International Monetary Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Introduction

Foundations, War, and Peace

International Political Economy, Transnational Politics, and Looking Ahead

Filters