Question 1

The goal of shareholder wealth maximization

Accepted Answer

A) is not appropriate for non-U.S. business firms. 
B) means that all business decisions and investments that a firm makes are done for the purpose of making the owners of the firm better off financially. 
C) is a sub-objective the firm should attempt to achieve after the objective of customer satisfaction is met. 
D) is in conflict with the privatization process taking place in third-world countries. 
A) is not appropriate for non-U.S. business firms. 
B) means that all business decisions and investments that a firm makes are done for the purpose of making the owners of the firm better off financially. 
C) is a sub-objective the firm should attempt to achieve after the objective of customer satisfaction is met. 
D) is in conflict with the privatization process taking place in third-world countries.

Question 2

A country like North Korea

Accepted Answer

A) probably rejects the notion of increased opportunity presented by free trade. 
B) engages in free trade. 
C) lies on a production possibilities curve superior to South Korea, since North Korea protects its domestic producers. 
D) none of the above 
A) probably rejects the notion of increased opportunity presented by free trade. 
B) engages in free trade. 
C) lies on a production possibilities curve superior to South Korea, since North Korea protects its domestic producers. 
D) none of the above

Question 3

Which state has a comparative advantage in wheat production in Case I?

Accepted Answer

A) South Dakota 
B) North Dakota 
C) Neither state 
A) South Dakota 
B) North Dakota 
C) Neither state

Question 4

Under the theory of comparative advantage, liberalization of international trade will

Accepted Answer

A) enhance the welfare of the world's citizens. 
B) create unemployment and displacement of workers permanently. 
C) result in higher prices in the long run as monopolist are able to charge higher prices after eliminating their competitors. 
D) all of the above 
A) enhance the welfare of the world's citizens. 
B) create unemployment and displacement of workers permanently. 
C) result in higher prices in the long run as monopolist are able to charge higher prices after eliminating their competitors. 
D) all of the above

Question 5

In countries like France and Germany,

Accepted Answer

A) managers have often made business decisions with regard 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 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 6

What is the increased amount of goods available in Northern Ireland after trade?

Accepted Answer

A) 400 more bottles of whiskey and 200 more kegs of beer 
B) 1,000 more bottles of whiskey and 500 more kegs of beer 
C) 200 more bottles of whiskey and 400 more kegs of beer 
A) 400 more bottles of whiskey and 200 more kegs of beer 
B) 1,000 more bottles of whiskey and 500 more kegs of beer 
C) 200 more bottles of whiskey and 400 more kegs of beer

Question 7

For case II, in what range must the "international" price of wheat fall? i.e. if North and South Dakota trade only with each other, what is the range of prices possible?

Accepted Answer

A) Between 1 bushel of wheat = 4/3 bottles of beer and 1 bushel of wheat = 2 bottles of beer 
B) Between 1 bushel of wheat = 3/4 bottles of beer and 1 bushel of wheat = 2 bottles of beer 
C) Between 1 bushel of wheat = 3/4 bottles of beer and 1 bushel of wheat = ½ bottles of beer 
D) None of the above 
A) Between 1 bushel of wheat = 4/3 bottles of beer and 1 bushel of wheat = 2 bottles of beer 
B) Between 1 bushel of wheat = 3/4 bottles of beer and 1 bushel of wheat = 2 bottles of beer 
C) Between 1 bushel of wheat = 3/4 bottles of beer and 1 bushel of wheat = ½ bottles of beer 
D) None of the above

Question 8

While the corporate governance problem is not confined to the United States,

Accepted Answer

A) it can be a much more serious problem in many other parts of the world, where legal protection of shareholders is weak or nonexistent. 
B) it has reached its high point in the United States. 
C) the U.S. legal system, with lawsuits used only as a last resort, ensured that any conflicts of interest will soon be a thing of the past. 
D) none of the above 
A) it can be a much more serious problem in many other parts of the world, where legal protection of shareholders is weak or nonexistent. 
B) it has reached its high point in the United States. 
C) the U.S. legal system, with lawsuits used only as a last resort, ensured that any conflicts of interest will soon be a thing of the past. 
D) none of the above

Question 9

Japan has experienced large trade surpluses. Japanese investors have responded to this by

Accepted Answer

A) liquidating their positions in stocks to buy dollar denominated bonds. 
B) investing heavily in U.S. and other foreign financial markets. 
C) lobbying the U.S. government to depreciate its currency. 
D) lobbying the Japanese government to allow the yen to appreciate. 
A) liquidating their positions in stocks to buy dollar denominated bonds. 
B) investing heavily in U.S. and other foreign financial markets. 
C) lobbying the U.S. government to depreciate its currency. 
D) lobbying the Japanese government to allow the yen to appreciate.

Question 10

Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This means

Accepted Answer

A) your company's products can be priced out of the Mexican market, as the peso price of American imports will rise following the peso's fall. 
B) your firm will be able to charge more in dollar terms while keeping peso prices stable. 
C) your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports. 
D) both b and c are correct 
A) your company's products can be priced out of the Mexican market, as the peso price of American imports will rise following the peso's fall. 
B) your firm will be able to charge more in dollar terms while keeping peso prices stable. 
C) your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports. 
D) both b and c are correct

Question 11

The ultimate guardians of shareholder interest in a corporation, are the

Accepted Answer

A) rank and file workers. 
B) senior management. 
C) boards of directors. 
D) all of the above. 
A) rank and file workers. 
B) senior management. 
C) boards of directors. 
D) all of the above.

Question 12

Counties A and B currently consume 400 units of food and 400 units of textiles each and currently do not trade with one another. The citizens of country A have to give up one unit of food to gain two units of textiles, while the citizens of country B have to give up one unit of textiles to gain two units of food. Their production possibilities curves are shown.   Under the theory of comparative advantage, if free trade is allowed, the market clearing price (or exchange rate if you will) between food and textiles will be

Accepted Answer

A) one unit of food for one unit of textiles. 
B) somewhere between One unit of food for two units of textiles and two units of food for one unit of textiles. 
C) one unit of food for two units of textiles. 
D) two units of food for one unit of textiles. 
A) one unit of food for one unit of textiles. 
B) somewhere between One unit of food for two units of textiles and two units of food for one unit of textiles. 
C) one unit of food for two units of textiles. 
D) two units of food for one unit of textiles.

Question 13

Which state is better at making guns?

Accepted Answer

A) South Carolina 
B) North Carolina 
C) neither 
A) South Carolina 
B) North Carolina 
C) neither

Question 14

Undoubtedly, we are now living in a world where all the major economic functions-consumption, production, and investment

Accepted Answer

A) are still inherently local. 
B) are still regional in nature. 
C) are slowly becoming globalized. 
D) are highly globalized. 
A) are still inherently local. 
B) are still regional in nature. 
C) are slowly becoming globalized. 
D) are highly globalized.

Question 15

The Nestlé Corporation, a well-known Swiss MNC, used to issue two different classes of common stock, bearer shares and registered shares, and foreigners were allowed to hold only

Accepted Answer

A) registered shares. 
B) bearer shares. 
C) voting shares. 
D) convertible shares. 
A) registered shares. 
B) bearer shares. 
C) voting shares. 
D) convertible shares.

Question 16

Which state has an absolute advantage in producing wheat in Case I?

Accepted Answer

A) South Dakota 
B) North Dakota 
C) Neither state 
A) South Dakota 
B) North Dakota 
C) Neither state

Question 17

The ascendance of the dollar the dominant global currency reflects several key factors such as

Accepted Answer

A) the size of the U.S. population. 
B) the mature and open capital markets of the U.S. economy. 
C) exchange rate stability. 
D) all of the above. 
A) the size of the U.S. population. 
B) the mature and open capital markets of the U.S. economy. 
C) exchange rate stability. 
D) all of the above.

Question 18

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 19

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

Accepted Answer

A) Yes 
B) No 
A) Yes 
B) No

Question 20

Privatization refers to process of

Accepted Answer

A) having government operate businesses for the betterment of the public sector. 
B) government allowing the operation of privately owned business. 
C) prohibiting government operated enterprises. 
D) a country divesting itself of the ownership and operation of a business venture by turning it over to the free market system. 
A) having government operate businesses for the betterment of the public sector. 
B) government allowing the operation of privately owned business. 
C) prohibiting government operated enterprises. 
D) a country divesting itself of the ownership and operation of a business venture by turning it over to the free market system.

The goal of shareholder wealth maximization

A country like North Korea

Which state has a comparative advantage in wheat production in Case I?

Under the theory of comparative advantage, liberalization of international trade will

In countries like France and Germany,

What is the increased amount of goods available in Northern Ireland after trade?

For case II, in what range must the "international" price of wheat fall? i.e. if North and South Dakota trade only with each other, what is the range of prices possible?

While the corporate governance problem is not confined to the United States,

Japan has experienced large trade surpluses. Japanese investors have responded to this by

Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This means

The ultimate guardians of shareholder interest in a corporation, are the

Which state is better at making guns?

Undoubtedly, we are now living in a world where all the major economic functions-consumption, production, and investment

The Nestlé Corporation, a well-known Swiss MNC, used to issue two different classes of common stock, bearer shares and registered shares, and foreigners were allowed to hold only

Which state has an absolute advantage in producing wheat in Case I?

The ascendance of the dollar the dominant global currency reflects several key factors such as

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 receive a raise to €2 per day. Will trade be possible at the exchange rate you found in the last question?

Privatization refers to process of

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

The goal of shareholder wealth maximization

A country like North Korea

Which state has a comparative advantage in wheat production in Case I?

Under the theory of comparative advantage, liberalization of international trade will

In countries like France and Germany,

What is the increased amount of goods available in Northern Ireland after trade?

For case II, in what range must the "international" price of wheat fall? i.e. if North and South Dakota trade only with each other, what is the range of prices possible?

While the corporate governance problem is not confined to the United States,

Japan has experienced large trade surpluses. Japanese investors have responded to this by

Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This means

The ultimate guardians of shareholder interest in a corporation, are the

Which state is better at making guns?

Undoubtedly, we are now living in a world where all the major economic functions-consumption, production, and investment

The Nestlé Corporation, a well-known Swiss MNC, used to issue two different classes of common stock, bearer shares and registered shares, and foreigners were allowed to hold only

Which state has an absolute advantage in producing wheat in Case I?

The ascendance of the dollar the dominant global currency reflects several key factors such as

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 receive a raise to €2 per day. Will trade be possible at the exchange rate you found in the last question?

Privatization refers to process of

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