IMS 3300 quiz 2/sample quiz & exam questions

The Fisher effect states that the real interest rate

= nominal interest rate - the expected inflation rate

What is predicted to happen with the population of many developed countries?

Population levels will fall by mid-century due to low birthrates.

What benefit does population size provide when determining market potential?

Population size alone is a poor indicator of market potential

The International Monetary Fund would characterize a developing economy as one in which

Technology is not as developed

What is a characteristic of the FX markets?

The exchange rate between two currencies for delivery in the future, usually 30, 60, 90, or 180 days

__________________ uses market data to estimate future values.

Trend analysis

The fixed exchange rates set up at Bretton Woods were based on gold and

US dollar

A policy of hiring and promoting based on ability and experience without considering race or citizenship is

a geocentric policy.

The Bretton Woods system was in place from

after World War II (1945) to 1971

An actionable segment is one that

allows the marketing mix to operate.

When a government requires a permit to purchase foreign currency, the exchange rates

are set by the government, often above the free market rate

To avoid translation errors, the experienced advertising manager will use

back translation.

In a free trade area, members drop their tarts with one another

but each retains external tariffs

The basic assumption of standardization

can be seen to contradict the basic marketing principle.

The three factors that contribute to changes in labor costs include

compensation, productivity, exchange rates

When FTA members add shared external tariffs to their agreement, they have formed a

customs union.

The Japanese yen is an example of a convertible currency because it can be

exchanged for other currencies without restriction

The Big Mac Index is an example of economies of scale, an international measure of junk food consumption.

false

The international environment includes all the uncontrollable forces originating outside the home country that surround and influence the firm.

false

Jason wants to lock in today's exchange rate because he is worried rates might skyrocket in the next few months. He wants to lock in this rate for the shipments he has due in the next 60 days. What type of rate is Jason interested in

forward rate

As a general rule, the underground economy in a country will be bigger when

government red tape is oppressive

A measure of an economy's size based on the market value of goods and services produced within a nation in a year is

gross domestic product (GDP)

Immigrants from developing countries

have become essential contributors to the U.S. economy's health.

What does the international monetary system consists of?

institutions, rules, procedures, and processes

The ________ environment includes the interactions between domestic and foreign environmental forces, or between sets of foreign environmental forces when an affiliate in one country does business with customers in another.

international

If a nation's GNI is small, but a small percentage of its population receives a large percentage of that income, it may be a good market for

it may be a good market for low-volume, high-priced luxury products

A large international debt may cause a government to impose wage controls, which result in

limiting consumer purchasing power

Jeremiah works for an all-natural breakfast cereal company. He has recommended that the company market their high-cost Oats 'n More Cereal to parts of South America because there are millions of people there that have never heard of their products. Which socioeconomic factor is Jeremiah basing his recommendation on?

population size

The international Fisher effect says that interest rate differentials

predict exchange rate movement.

Historically, gold has been used as a way for people to store value because of its

purity and scarcity

A spot exchange rate is the

rate at which a foreign exchange dealer converts one currency into another currency on a particular day

In a managed float currency arrangement, the currency fluctuates while

the country's monetary authority intervenes on the currency market without making its goals and targets public

Channels of distribution are included in

the fifth screening.

Because of the importance of economic information to the control and planning functions at headquarters, the collection of data and preparation of reports are usually the responsibility of

the home office

IMF quotas are determined by the relative size of a nation in the global economy & are

the nation's "dues" to the IMF.

Disintermediation is

the unraveling of traditional distribution structures.

Discretionary income is the amount left after paying taxes.

true

In BOP accounting, a deficit in the current account is always accompanied by a surplus in the capital account.

true

Reductions in birthrates are occurring worldwide because

women are gaining an enhanced status

SDR refers to

An international reserve asset established by the IMF; the unit of account for the IMF and other international organizations