Question 1

An MNC can

Accepted Answer

A) be a factor that increases the opportunities of the citizens of less developed countries. 
B) be a factor that increases the opportunity set of domestic investors. 
C) increase economic efficiency. 
D) all of the above 
A) be a factor that increases the opportunities of the citizens of less developed countries. 
B) be a factor that increases the opportunity set of domestic investors. 
C) increase economic efficiency. 
D) all of the above

Question 2

When corporate governance breaks down

Accepted Answer

A) shareholders are unlikely to receive fair returns on their investments. 
B) managers may be tempted to enrich themselves at shareholder expense. 
C) the board of directors is not doing its job. 
D) all of the above 
A) shareholders are unlikely to receive fair returns on their investments. 
B) managers may be tempted to enrich themselves at shareholder expense. 
C) the board of directors is not doing its job. 
D) all of the above

Question 3

Consider a dentist and a 14-year old boy.The dentist can make $100 per hour drilling teeth and the 14-year old boy can make $2 per hour picking up used aluminum cans.The dentist is a manly man and can mow his half-acre lot in one hour.The 14-year old boy can mow the lawn in two hours.If the dentist hires the boy to mow his lawn at any price less than $100,but more than $4

Accepted Answer

A) both he and the boy are better off. 
B) the dentist would be exploiting the boy. 
C) the boy would be exploiting the dentist. 
D) all of the above 
A) both he and the boy are better off. 
B) the dentist would be exploiting the boy. 
C) the boy would be exploiting the dentist. 
D) all of the above

Question 4

The common monetary policy for the euro zone is now formulated by

Accepted Answer

A) the Bundesbank in Germany. 
B) the Federal Reserve Bank. 
C) the World Bank. 
D) the European Central Bank. 
A) the Bundesbank in Germany. 
B) the Federal Reserve Bank. 
C) the World Bank. 
D) the European Central Bank.

Question 5

If one country is twice the size of another country and is better at making almost everything than the benighted citizens of the smaller county,

Accepted Answer

A) the bigger country enjoys an absolute advantage. 
B) the bigger country enjoys a relative advantage. 
C) the bigger country enjoys a comparative advantage. 
D) there is not enough information to make a determination. 
A) the bigger country enjoys an absolute advantage. 
B) the bigger country enjoys a relative advantage. 
C) the bigger country enjoys a comparative advantage. 
D) there is not enough information to make a determination.

Question 6

Nestlé,a well-known Swiss corporation,

Accepted Answer

A) has been a paragon of virtue in its opposition to all forms of political risk. 
B) at one time placed restrictions on foreign ownership of its stock.When it relaxed these restrictions, the total market value of the firm fell. 
C) at one time placed restrictions on foreign ownership of its stock.When it relaxed these restrictions, there was a major transfer of wealth from foreign shareholders to Swiss shareholders. 
D) none of the above 
A) has been a paragon of virtue in its opposition to all forms of political risk. 
B) at one time placed restrictions on foreign ownership of its stock.When it relaxed these restrictions, the total market value of the firm fell. 
C) at one time placed restrictions on foreign ownership of its stock.When it relaxed these restrictions, there was a major transfer of wealth from foreign shareholders to Swiss shareholders. 
D) none of the above

Question 7

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

Accepted Answer

A) Country A is relatively more efficient than Country B in the production of food. 
B) Country B is relatively more efficient than Country A in the production of textiles. 
C) Country A has an absolute advantage over Country B in the production of food and textiles. 
D) Country B has an absolute advantage over Country A in the production of food and textiles. 
A) Country A is relatively more efficient than Country B in the production of food. 
B) Country B is relatively more efficient than Country A in the production of textiles. 
C) Country A has an absolute advantage over Country B in the production of food and textiles. 
D) Country B has an absolute advantage over Country A in the production of food and textiles.

Question 8

In countries like France and Germany,

Accepted Answer

A) managers have often made business decisions with regard to maximizing market share to the exclusion of other goals. 
B) managers have often viewed shareholders as one of the "stakeholders" of the firm, others being employees, customers, suppliers, banks and so forth. 
C) managers have often regarded the prosperity and growth of their combines, or families of related firms, as their critical goal. 
D) managers have traditionally embraced the maximization of shareholder wealth as the only worthy goal. 
A) managers have often made business decisions with regard to maximizing market share to the exclusion of other goals. 
B) managers have often viewed shareholders as one of the "stakeholders" of the firm, others being employees, customers, suppliers, banks and so forth. 
C) managers have often regarded the prosperity and growth of their combines, or families of related firms, as their critical goal. 
D) managers have traditionally embraced the maximization of shareholder wealth as the only worthy goal.

Question 9

Since its inception the euro has brought about revolutionary changes in European finance.For example,

Accepted Answer

A) by redenominating corporate bonds and stocks from 12 different currencies into one common currency, the euro has precipitated the emergence of continent wide capital markets in Europe that are comparable to U.S.markets in depth and liquidity. 
B) Swiss bank accounts are all denominated in euro. 
C) the European banking sector has become much more important as a source of financing for European firms. 
D) there have actually not been any revolutionary changes. 
A) by redenominating corporate bonds and stocks from 12 different currencies into one common currency, the euro has precipitated the emergence of continent wide capital markets in Europe that are comparable to U.S.markets in depth and liquidity. 
B) Swiss bank accounts are all denominated in euro. 
C) the European banking sector has become much more important as a source of financing for European firms. 
D) there have actually not been any revolutionary changes.

Question 10

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

Accepted Answer

A) Country A is relatively more efficient than Country B in the production of food. 
B) Country B is relatively more efficient than Country A in the production of textiles. 
C) Country A has an absolute advantage over Country B in the production of food and textiles. 
D) Answers b) and c) are both correct 
A) Country A is relatively more efficient than Country B in the production of food. 
B) Country B is relatively more efficient than Country A in the production of textiles. 
C) Country A has an absolute advantage over Country B in the production of food and textiles. 
D) Answers b) and c) are both correct

Question 11

Production of goods and services has become globalized to a large extent as a result of

Accepted Answer

A) natural resources being depleted in one country after another. 
B) skilled labor being highly mobile. 
C) multinational corporations' efforts to source inputs and locate production anywhere where costs are lower and profits higher. 
D) common tastes worldwide for the same goods and services. 
A) natural resources being depleted in one country after another. 
B) skilled labor being highly mobile. 
C) multinational corporations' efforts to source inputs and locate production anywhere where costs are lower and profits higher. 
D) common tastes worldwide for the same goods and services.

Question 12

Since the end of World War I,the U.S.dollar has played the role of the dominant global currency,displacing the

Accepted Answer

A) German mark. 
B) French Franc. 
C) Japanese Yen. 
D) British pound. 
A) German mark. 
B) French Franc. 
C) Japanese Yen. 
D) British pound.

Question 13

Now suppose that Southern workers are paid €1 per day but the Northern workers receive a raise to £2 per day.Will trade be possible at the exchange rate you found in the question before the last question?

Accepted Answer

A) True 
 B)False

Question 14

As capital markets are becoming more integrated,the goal of shareholder wealth maximization

Accepted Answer

A) has been altered to include other goals as well. 
B) has lost out to other goals, even in the U.S. 
C) has been given increasing importance by managers in Europe. 
D) has been shown to be a deterrent to raising funds abroad. 
A) has been altered to include other goals as well. 
B) has lost out to other goals, even in the U.S. 
C) has been given increasing importance by managers in Europe. 
D) has been shown to be a deterrent to raising funds abroad.

Question 15

Deregulation of world financial markets

Accepted Answer

A) provided a natural environment for financial innovations, like currency futures and options. 
B) has promoted competition among market participants. 
C) has encouraged developing countries such as Chile, Mexico, and Korea to liberalize by allowing foreigners to directly invest in their financial markets. 
D) all of the above 
A) provided a natural environment for financial innovations, like currency futures and options. 
B) has promoted competition among market participants. 
C) has encouraged developing countries such as Chile, Mexico, and Korea to liberalize by allowing foreigners to directly invest in their financial markets. 
D) all of the above

Question 16

In which product does Northern Ireland have a comparative advantage?

Accepted Answer

A) Beer 
B) Whiskey 
C) Neither 
A) Beer 
B) Whiskey 
C) Neither

Question 17

For case II,let the international price be 1 bottle = 1 bushel.Derive South Dakota's "trading possibilities curve."

Accepted Answer

A) Option a 
B) Option b 
C) Option c 
D) Option d 
A) Option a 
B) Option b 
C) Option c 
D) Option d

Question 18

For case II,let the international price be 1 bottle = 1 bushel.Derive North Dakota's "trading possibilities curve."

Accepted Answer

A) Option a 
B) Option b 
C) Option c 
D) Option d 
A) Option a 
B) Option b 
C) Option c 
D) Option d

An MNC can

When corporate governance breaks down

The common monetary policy for the euro zone is now formulated by

If one country is twice the size of another country and is better at making almost everything than the benighted citizens of the smaller county,

Nestlé,a well-known Swiss corporation,

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

In countries like France and Germany,

Since its inception the euro has brought about revolutionary changes in European finance.For example,

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

Production of goods and services has become globalized to a large extent as a result of

Since the end of World War I,the U.S.dollar has played the role of the dominant global currency,displacing the

Now suppose that Southern workers are paid €1 per day but the Northern workers receive a raise to £2 per day.Will trade be possible at the exchange rate you found in the question before the last question?

As capital markets are becoming more integrated,the goal of shareholder wealth maximization

Deregulation of world financial markets

In which product does Northern Ireland have a comparative advantage?

For case II,let the international price be 1 bottle = 1 bushel.Derive South Dakota's "trading possibilities curve."

For case II,let the international price be 1 bottle = 1 bushel.Derive North Dakota's "trading possibilities curve."

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters

Exam 1: Globalization and the Multinational Firm

An MNC can

When corporate governance breaks down

The common monetary policy for the euro zone is now formulated by

If one country is twice the size of another country and is better at making almost everything than the benighted citizens of the smaller county,

Nestlé,a well-known Swiss corporation,

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

In countries like France and Germany,

Since its inception the euro has brought about revolutionary changes in European finance.For example,

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.

Production of goods and services has become globalized to a large extent as a result of

Since the end of World War I,the U.S.dollar has played the role of the dominant global currency,displacing the

Now suppose that Southern workers are paid €1 per day but the Northern workers receive a raise to £2 per day.Will trade be possible at the exchange rate you found in the question before the last question?

As capital markets are becoming more integrated,the goal of shareholder wealth maximization

Deregulation of world financial markets

In which product does Northern Ireland have a comparative advantage?

For case II,let the international price be 1 bottle = 1 bushel.Derive South Dakota's "trading possibilities curve."

For case II,let the international price be 1 bottle = 1 bushel.Derive North Dakota's "trading possibilities curve."

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters