Student Center | Instructor Center | Information Center | Home

International Business : The Challenge of Global Competition, 8/e

Donald Ball
Wendell H. McCulloch, California State University Long Beach
Paul L. Frantz, California State University Long Beach
Michael Geringer, California Polytechnic State University
Michael S. Minor, University of Texas Pan American

Financial Forces: Influencing International Business

Multiple Choice Quiz


1	Which of the following is not an uncontrollable financial force that international businesses face?
		A)	Foreign currency exchange risk.
		B)	National balances of payments.
		C)	National monetary and fiscal policies.
		D)	None of the above.


2	The international monetary system established at Bretton Woods set the value of the US dollar in terms of gold at ____ per ounce.
		A)	$30
		B)	$35
		C)	$40
		D)	$45


3	One problem with the universal usage of the US dollar is:
		A)	currencies in other countries are not as strong as they might otherwise be.
		B)	the need by the US government to continually print more dollars.
		C)	the possibility of counterfeiting.
		D)	the possibility of inflation.


4	The United States government estimates that one third of the counterfeit money circulating in the United States was made in:
		A)	Colombia.
		B)	China.
		C)	Italy.
		D)	South Korea.


5	The spot rate is the exchange rate between two currencies for their immediate delivery within:
		A)	one business day.
		B)	two business days.
		C)	three business days.
		D)	four business days.


6	The forward rate is the exchange rate between two currencies for delivery in:
		A)	30 days.
		B)	60 days.
		C)	90 days.
		D)	all of the above.


7	The exchange rates for trading directly between non-US $ currencies are called:
		A)	direct rates.
		B)	indirect rates.
		C)	cross rates.
		D)	foreign rates.


8	When a government limits or prohibits the legal use of its currency in international transactions, it is imposing:
		A)	currency exchange controls.
		B)	monetary controls.
		C)	fiscal controls.
		D)	sovereign controls.


9	Export incentives are government incentives to make exporting easier or more profitable. Export incentives include:
		A)	tax breaks
		B)	lower-cost financing.
		C)	foreign aid.
		D)	all of the above.


10	Duties are:
		A)	official requirements of certain governmental offices.
		B)	taxes on imported goods.
		C)	taxes on exported goods.
		D)	taxes on foreign exchange.


11	A government's fiscal policies:
		A)	address the amount of money in circulation.
		B)	address the level of foreign exchange control.
		C)	address the collecting and spending money by governments.
		D)	none of the above.


12	High inflation rates:
		A)	make capital expenditure planning easier to manage.
		B)	encourage borrowing because the loan will be repaid with cheaper money.
		C)	encourage lending because of rising interest rates.
		D)	cause prices of goods and services to fall.


13	The term misery index refers to:
		A)	a country's unemployment rate.
		B)	a country's inflation rate.
		C)	both "a" and "b".
		D)	neither "a" nor "b".


14	Short-term solutions to the increasing indebtedness in developing countries include:
		A)	rescheduling of debts that countries are unable to pay as they came due.
		B)	market oriented strategies to encourage growth.
		C)	market oriented strategies to bring inflation under control.
		D)	the buying back of debt from creditor banks at a discount.


15	The Brady debt relief is provided by:
		A)	the exchange of old debt for new at a premium.
		B)	the exchange of old debt for new at a discount.
		C)	the exchange of old debt for new at a higher interest rate.
		D)	the exchange of old debt for new at a zero interest rate.


16	Since 1800, Ecuador has been through periods of default and rescheduling totaling:
		A)	107 years.
		B)	110 years.
		C)	113 years.
		D)	116 years.


17	Microloans are made to struggling entrepreneurs in developing countries at amounts ranging from:
		A)	$25 to $50.
		B)	$50 to several hundred dollars.
		C)	$500 to $1,000.
		D)	$500 to several thousand dollars.


18	The US foreign debt is:
		A)	the difference between the government's liabilities and its assets.
		B)	the value of overseas liabilities.
		C)	the difference between the value of all liabilities and overseas liabilities.
		D)	the difference between the value of overseas assets owned by Americans and the value of US assets owned by foreigners.


19	The most distinctive characteristic of US foreign debt is:
		A)	the amount.
		B)	its relationship to the debt of other nations.
		C)	its denomination in US dollars.
		D)	all of the above.


20	Total US debt amounts to ____ of US GDP.
		A)	6%
		B)	10%
		C)	12%
		D)	15%

2002 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.