IBUS 3001: Quiz 1+2+3 Review

A currency is said to be freely convertible when.....? A.) Both residents and nonresidents are allowed to purchase unlimited amounts of foreign currency with it B.) Residents alone are allowed to convert it into a foreign currency without ANY limits C.) Neither residents nor nonresidents are allowed to concvert into into a foreign currency D.) Its exchange rate with respect to other currencies is decided by the central bank of its country

A.)

A tariff is a tax levied on ___________. A.) Services sold within the country of origin B.) Imports or exports C.) Goods sold within the country of origin D.) Intellectual property

A.)

A(n) _____________ is a type of trade restriction that sets a physical limit on the quantity of a product that can be imported into the country in a set period of time. A.) Ad valorem tariff B.) Subsidy C.) Specific tariff D.) Import quota

A.)

According to David Ricardo's theory of comparative advantage, a country should focus on _______________. A.) The production of goods it produces least efficiently B.) Importing goods that incur the most costs C.) Importing goods that incur the least costs D.) The production of goods it produces most efficiently

A.)

Ethnocentrism is the belief in the superiority of...? A.) One's own group or culture B.) One's own self over another person C.) Another group or culture above theirs D.) One's business over another

A.)

If a lot of people want euros and they are in short supply, and a few people want Japanese yen's and yen are in plentiful supply, the yen is likely to _________ aganist the euro. A.) Appreciate B.) Remain stable C.) Depreciate D.) Strengthen

A.)

New trade theory implies that the first mover's ability to benefit from increasing returns _________ for other firms. A.) Facilitates competitive entry B.) Provides more options for entry C.) Creates a barrier to entry D.) Offers an opportunity for entry

A.)

New trade theory, which states that countries may have an advantage in exporting of first-mover advantages, is different from which theory that says countries have export advantages because of factor endowments? A.) Heckscher-Ohlin B.) Leontief paradox C.) Product Life Cycle D.) Ricardo

A.)

Subsidies are a form of payment that is provided by _____. A.) The domestic producers B.) Consumers C.) The government D.) A trading partner

A.)

What is a characteristic of a COMMAND ECONOMY? A.) Allowing prices to be set by the interplay of supply and demand B.) Restricted state ownership means of production C.) ProMotion of foreign direct investment (FDI) D.) Limited international trade

A.)

Which trade theory explains why countries are trade partners when they are trading similar goods and services? A.) Free trade B.) Fair trade C.) Mercantilism D.) New trade

A.)

2 main functions for the Foreign Exchange Market? A.) Insuring companies aganist interest rate risk and enabling imports and exports B.) Converting currency and providing some insurance against foreign exchange risk C.) Reducing currency volatility and setting interest rates D.) Trading foreign companies equities and converting currency

B.)

The PPP theory argues that the exchange rate will....? A.) Change if relative process change B.) Change even if relative prices remain unchanged C.) Increase if a country is experiencing deflation D.) Increase if a country is experiencing inflation

B.)

The _____ adjustment allows for a more direct comparison of living standards in different countries. A.) Value added B.) Purchasing power parity (PPP) C.) Gross national income (GNI) D.) Gross domestic product (GDP)

B.)

the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates is known as: A.) Basis risk B.) Spot exchange C.) Currency speculation

B.)

Which type of returns to specialization happen when MORE units of resources are required to produce each additional unit? A.) Increasing B.) Constant C.) Diminishing

C.

A key 🔑 feature of a _________ is that it allows the entry conducting the transaction to do so without incurring foreign exchange risk. A.) Currency Swap B.) Carry Trade C.) Arbitrage D.) Currency Pairing

C.)

The _______ helps consumers compare the relative price of goods and services in different countries. A.) GDP growth rate B.) Tariff rate C.) Interest rate D.) Exchange rate

C.)

____________ is required for a business environment to be conducive to innovation and entrepreneurial activity. A.) Barriers to foreign trade and investment B.) Government regulation of the market C.) Strong legal protection of property rights D.) State ownership of means of production

C.)

A ________ is an association of 2 or more individuals who have a shared sense of identities and who interact with each other in structured ways on the basis if a common set of expectations about each other's behavior A.) Social strata B.) Society C.) Association D.) Group

D.)

In a _______, the state owns all means of production. A.) Planned economy B.) Mixed economy C.) Market economy D.) Privatized economy

D.)

Milo is traveling to Ireland on vacation. When he arrives, goes to a bank to convert his US dollars into the local currency (the euro). What EXCHANGE RATE will be used to handle this transaction? A.) Forward rate B.) Carry Rate C.) Currency Swap Rate D.) Spot Exchange Rate

D.)

People who share a common set of values and norms form a .....? A.) Caste B.) Culture C.) Country D.) Society

D.)

What is the most popular vehicle currency by trade volume? A.) Euro B.) Yen C.) British pound D.) US dollar

D.)

What was developed by the United Nations to measure the quality of life in different nations? A.) Gross national income (GNI) B.) Gross domestic product (GDP) C.) Human development index (HDI) D.) PPP (purchasing power parity)

D.)

Which of the FOUR attributed defined by Porter would be evident in a country that has the necessary infrastructure to compete in a given industry? A.) Related and supporting industries B.) Demand conditions C.) Firm strategy and rivalry D.) Factor endowment

D.)

TRUE or FALSE: The product life-cycle theory suggests that mature industries tend to shift production out of the US and into low-cost assembly locations.

FALSE

TRUE or FALSE?: The concept of carry trade involves borrowing money in 1 currency where interest rates are high and then using the proceeds to invest in other currency where interest rates are low

TRUE

True or False: Many ethical issues in IBUS are rooted in the fact that political systems, the law, Econ development, and culture vary significantly from nation to nation

TRUE

True or False: Since the late 1980s', there has been a STRONG move away from a more free market economic model and toward more centrally planned mixed economies

TRUE