1) most foreign exchange trading occurs between banks and:
a.national governments
b.other banks
c.corporations
d.household investors
2) bilateral agreements between central banks, which provide for an exchange of
currencies to help finance temporary balance-of-payments disequilibriums, are referred
to as:
a.imf drawings
b.special drawing rights
c.buffer stock facility
d.swap agreements
3) market expectations include news about market fundamentals, speculative opinion
about future exchange rates, and profitability and riskiness of investments.
a.true
b.false
4) multinational enterprises may provide benefits to their source (home) countries
because they may:
a.secure raw materials for the source country
b.shift source country technology overseas via licensing
c.export products which reflect source-country comparative disadvantage
d.result in lower wages for source-country workers
5) given favorable elasticity conditions, an appreciation of the yen results in
a.a smaller japanese trade deficit
b.a larger japanese trade surplus
c.decreased prices for imported products for japan
d.increased prices for imported products for japan
6) a rise in the price of imports or a fall in the price of exports will:
a.improve the terms of trade
b.worsen the terms of trade
c.expand the production possibilities curve
d.contract the production possibilities curve
7) the world trade organization brings into the multilateral trading system manufactured
goods and agricultural products, but not trade in services, intellectual property
protection, and investment.
a.true
b.false
8) if a nation has an open economy, it means that the nation:
a.allows private ownership of capital
b.has flexible exchange rates
c.has fixed exchange rates
d.conducts trade with other countries
9) international trade is based on the idea that:
a.exports should exceed imports
b.imports should exceed exports
c.resources are more mobile internationally than are goods
d.resources are less mobile internationally than are goods
10) a compound tariff permits a specified amount of goods to be imported at one tariff
rate while any imports above this amount are subjected to a higher tariff rate.
a.true
b.false
11) economic interdependence occurs through
a.trade
b.labor migratin
c.capital flows
d.all of these