FPII Unit 4 4.04/4.05

A strong U.S. dollar is an advantage to the U.S. economy because:

• it is indirectly correlated to the volume of imports and exports.

• it allows the United States to export more products and services.

• it allows the United States to import more products and services

• it means vacationing here will be cheaper for people from other countries

What is the main cause of business cycles?

• variations in money supply

• fluctuation in consumer spending

• major innovations in infrastructure

• population growth exceeding supply

business transactions from hackers

• limit the number of client transactions

• avoid encryption methods

• use intranet capabilities

• install firewalls

One factor that has stimulated financial globalization is an increase in:

• protectionism.

• foreign regulation.

• domestic competition

• domestic investment preferences

When an emerging market suffers an economic decline, foreign investors usually:

• help the emerging market recover economically

• pay less for each transaction in the emerging market.

• quickly withdraw their money from the emerging market.

• use the opportunity to invest more in the emerging market

One factor that contributed to financial globalization was the shift of many developed countries from one exchange rate to another. What specific exchange rates were switched?

• floating, fixed

• fixed, floating

• declining, pegged

• pegged, declining

Financial globalization tends to cause an increase in:

• herd behavior among investors.

• taxes on international transactions.

• investors' exposure to business cycle risks.

• limits on foreigners' access to domestic markets.

What is the difference between real GDP and nominal GDP?

• Real GDP only calculates the top 100 companies in the country for a given period

• Nominal GDP does not consider how inflation or deflation affects the price of goods over time

• Nominal GDP does not consider the production of companies that have existed for less than three years.

• Real GDP does not involve a calcuation of the oncrease in price that is the consequence of inflation or deflation in the economy

What date is today?

• 21

• 23

• 24

• 30

What month is it?

• April

• May

• June

• July