Reference no: EM133331177

Questions

1. Mercantilists believed that nations should

A. lower import duties to establish a level playing field.

B. allow an export surplus so they can accumulate gold.

C. produce goods for which there's a comparative advantage.

D. import goods to raise the standard of living

2. Informal institutions are composed of sets of

A. mandatory agreements, a bit like the mind's software.

B. agreements that are for the most part written and taken for granted.

C. orthodox accords whose goal is to establish rigor.

D. voluntary agreements

3. Decision making in the international environment is _______ in a purely domestic environment.

A. about the same as

B. less demanding than

C. less complex than

D. more complex than

4. The international Fisher effect says that the interest rate differentials in any two currencies reflec

A. the expected change in their exchange rates.

B. arbitrary differences in the two economies.

C. the ratio of their inflation rates minus COL.

D. PPP differences in the two economies

5. An argument against using trade restrictions to punish an offending nation is that sanctions

A. decrease the cost of doing business.

B. are relatively harmful to the citizens of the offending country.

C. aren't condoned by the UN.

D. seldom achieve their goal of forcing change in the offending country.

6. Protecting economic activities is

A. a historical function of government.

B. a totalitarian characteristic.

C. a socialist characteristic.

D. a recent responsibility of government.

8. The idea that market forces, not government controls, should determine direction, volume, and the composition of international trade came from

A. the Ottoman Empire.

B. Adam Smith.

C. Salvador Allende.

D. Milton Friedman.

9. Treasury and Central Bank representatives met in _______ at the end of World War II and established the IMF, the World Bank, and the gold exchange standard.

A. Berlin

B. Jamaica

C. Bretton Woods

D. Diekirch

10. When market demand and supply regulate the exchange rate with intervention designed to moderate the rate of change, it's called a/an

A. independent float.

B. fixed peg.

C. crawling peg.

D. market method.

11. The three major taxes governments use to generate revenue are

A. income tax, property tax, and sales tax.

B. VAT, income tax, and withholding tax.

C. property tax, VAT, and sales tax.

D. sales tax, VAT, and income tax

12. The Association of Southeast Asian Nations was formed to provide members with a

A. free trade area.

B. way to join with China as a political force.

C. plan for mutual protection and peaceful relations.

D. common market.

13. The EU began as a common market for

A. the transportation industries.

B. all imported goods from beyond Europe.

C. the textile and dairy industries.

D. the coal and steel industries.

14. An international business manager who bases decisions solely on his or her own experience or preference is using

A. domestic standards.

B. internalization theory.

C. the self-reference criterion.

D. controllable forces

15. The major function of the World Bank is to serve as a/an

A. central bank for the world's central bankers.

B. nonprofit banking cooperative for its members to meet development needs.

C. nonprofit cooperative to finance the educational needs of its members.

D. investor of funds in global businesses in order to create value for its shareholders

16. Generally speaking, developed countries use exchange controls

A. secretly.

B. when needed to implement monetary policy.

C. rarely.

D. only to discourage foreign investment

17. The UN's International Court of Justice (ICJ) is also known a

A. the International Court of Peace.

B. the Court of International Law and Regulations (CILR).

C. the Court of Europe.

D. the World Court

18. Economies of scale and the experience curve

A. explain why many companies will engage in international trade.

B. explain how international trade in manufactured goods will be linked to gross national income.

C. allow developing countries to remain competitive in foreign trade.

D. state that a nation will trade goods that can be produced with the production factor that's most abundant.

19. Financial forces such as inflation and taxation are considered uncontrollable because they're

A. best ignored since there's nothing a manager can do to adjust to them.

B. external forces beyond the influence of the firm but around which a manager can manage.

C. external to the firm, and their influence is to be avoided.

D. unpredictable

20. When the law of one price is applied to interest rates, it suggests that

A. inflation and interest rates don't follow the law of one price.

B. inflation isn't affected by interest rates.

C. interest rates don't differ much across national borders.

D. varying interest rates take into account anticipated differences in inflation rates.

21. The primary motivation of tariffs is to

A. raise the price of imports to protect domestic goods.

B. encourage foreign consumption.

C. punish countries over political issues.

D. raise government revenue at the cost of importers.