1) with regard to creating money,
a.only central banks such as the federal reserve can create money
b.money is created when a bank customer invests in a time deposit
c.commercial banks can create money when a bank lends out funds borrowed from
another customer who invested in a time deposit
d.none of the above
2) the price elasticity of demand for commodity products tends to be
a.highly elastic
b.highly inelastic
c.both a and b
d.none of the above
3) generally speaking, any transaction that results in a payment to foreigners
a.will be recorded as a debit, with a negative sign, in the u.s. balance of payments
b.will be recorded as a debit, with a positive sign, in the u.s. balance of payments
c.will be recorded as a credit, with a negative sign, in the u.s. balance of payments
d.will be recorded as a credit, with a positive sign, in the u.s. balance of payments
4) over the last several years the u.s. has run persistent
a.balance-of-payments deficits
b.balance-of-payments surpluses
c.current account deficits
d.capital account deficits
5) benefits from adopting a common european currency include
a.reduced transaction costs
b.elimination of exchange rate risk
c.increased price transparency will promote europe-wide competition
d.all of the above
6) for european options, what of the effect of an increase in the strike price e?
a.decrease the value of calls and puts ceteris paribus
b.increase the value of calls and puts ceteris paribus
c.decrease the value of calls, increase the value of puts ceteris paribus
d.increase the value of calls, decrease the value of puts ceteris paribus
7) in the latter half of the 1980s, with a strong yen, japanese firms
a.faced difficulty exporting
b.could better afford to acquire u.s. assets that had become less expensive in terms of
yen
c.financed a sharp increase in japanese fdi in the united states
d.all of the above
8) the current account is divided into four finer categories:
a.merchandise trade, services, factor income, and statistical discrepancy
b.merchandise trade, services, factor income, and unilateral transfers
c.merchandise trade, services, portfolio investment, and unilateral transfers
d.merchandise trade, services, factor income, and direct investment
9) abc trading company of singapore purchases spices in bulk from around the world,
packages them into consumer size quantities and sells them through sales affiliates in
hong kong and the unites states. for a recent month, the following payments matrix of
interaffiliate cash flows, stated in singapore dollars, was forecasted.
which of the following is an accurate chart of their current situation?
a.
b.
c.
d.
10) the bretton woods system was named after
a.the treasury secretary of the united states in 1945, bretton woods
b.bretton woods, new hampshire, where the articles of agreement of the international
monetary fund (imf) were hammered out
c.none of the above
11) a swap bank makes the following quotes for 5-year swaps and aaa-rated firms:
a.the bank stands ready to pay $5.2% against receiving dollar libor on 5-year loans
b.the bank stands ready to receive 7% against receiving dollar libor on 5-year loans
c.the bank stands ready to pay 7% against receiving dollar libor on 5-year loans
d.none of the above