Economists use the word “money” to refer to

those assets regularly used to buy goods and services.

income generated by the production of goods and services.

the value of a person’s assets.

the ease with which an asset is converted to the medium of exchange.

a measurement of the intrinsic value of commodity money.

the suitability of an asset to serve as a store of value.

how many time a dollar circulates in a given year.

Which of the following is included in M2 but not in M1?

All of the above are included in both M1 and M2

smaller but more liquid than M2.

smaller and less liquid than M2.

larger than and less liquid than M2.

larger than but more liquid than M2.

have led to wider use of currency.

are used as a method of payment.

are equivalent to credit cards.

When the Fed wants to change the money supply, it most frequently

conducts open market operations.

changes the reserve requirement.

When the Federal Reserve conducts open market transactions, it

buys or sells government bonds from the public.

increases its lending to member banks.

When the Fed conducts open market purchases,

it buys Treasury securities, which increases the money supply.

it buys Treasury securities, which decreases the money supply.

it borrows from member banks, which increases the money supply.

it lends money to member banks, which decreases the money supply.

When the Fed conducts open market sales,

it sells Treasury securities, which decreases the money supply.

it sells Treasury securities, which increases the money supply.

it borrows from member banks, which increases the money supply.

it lends money to member banks, which decreases the money supply.

When the Fed conducts open market purchases,

it buys Treasury securities, which increases the money supply.

it buys Treasury securities, which decreases the money supply.

it sells Treasury securities, which increases the money supply.

it sells Treasury securities, which decreases the money supply.

The Fed can increase the money supply by conducting open market

purchases and lowering the discount rate.

sales and raising the discount rate.

sales and lowering the discount rate.

purchases and raising the discount rate.

The Fed can increase the price level by conducting open market

purchases and lowering the discount rate.

sales and raising the discount rate.

sales and lowering the discount rate.

purchases and raising the discount rate.

Which list contains only actions that increase the money supply?

lower the discount rate, make open market purchases

raise the discount rate, make open market purchases

raise the discount rate, make open market sales

lower the discount rate, make open market sales

Which list contains only actions that increase the money supply?

make open market purchases, lower the reserve requirement ratio

make open market purchases, raise the reserve requirement ratio

make open market sales, raise the reserve requirement ratio

make open market sales, lower the reserve requirement ratio

Which list contains only actions that decrease the money supply?

raise the discount rate, raise the reserve requirement ratio

lower the discount rate, raise the reserve requirement ratio

lower the discount rate, lower the reserve requirement ratio

raise the discount rate, lower the reserve requirement ratio

Which list contains only actions that decrease the money supply?

raise the discount rate, make open market sales

raise the discount rate, make open market purchases

lower the discount rate, make open market purchases

lower the discount rate, make open market sales

Which list contains only actions that decrease the money supply?

make open market sales, raise the reserve requirement ratio

make open market purchases, raise the reserve requirement ratio

make open market purchases, lower the reserve requirement ratio

make open market sales, lower the reserve requirement ratio

China's yuan is presently:

allowed to fluctuate but with central bank intervention.

allowed to fluctuate freely without any central bank intervention.

Assume a central bank exchanges its currency for other foreign currencies in the foreign exchange market, but does not adjust for the resulting change in the money supply. This is an example of:

pegged intervention AND sterilized intervention

Which of the following is an example of direct intervention in foreign exchange markets?

exchanging dollars for foreign currency

imposing barriers on international trade

The euro is the currency

adopted in all western European countries as of 1999

adopted in all eastern European countries as of 1999.

adopted in all European countries as of 1999.

Under a fixed exchange rate system

central bank intervention in the foreign exchange market is often necessary.

a foreign exchange market does not exist.

central bank intervention in the foreign exchange market is not allowed.

central bank intervention in the foreign exchange market is not necessary.

Which of the following could reduce agency problems for an MNC?

All of these are forms of corporate control that could reduce agency problems for an MNC

stock options as managerial compensation

Due to the risks involved in international business, firms should:

maintain international business to no more than 20% of total business

only consider international business in major countries.

maintain international business to no more than 35% of total business.

The agency costs of an MNC are likely to be lower if it:

uses a centralized management style

scatters its subsidiaries across many foreign countries AND increases its volume of international business.

increases its volume of international business.

scatters its subsidiaries across many foreign countries.

For an MNC, agency costs are typically:

larger than agency costs of a small purely domestic firm.

the same as agency costs of a small purely domestic firm

smaller than agency costs of a small purely domestic firm

Four MNCs generate the same level of sales. The MNC that ______________________would likely have the most direct foreign investment

acquires a foreign firm that produces most of its products to be sold in that foreign country

imports products from unrelated firms in other countries and sells them locally

produces and sells its products locally

The commonly accepted goal of an MNC is to:

aximize short-term earnings AND minimize risk.

Which of the following theories identifies the non-transferability of resources as a reason for international business?

theory of comparative advantage

tcqt mcq

Quiz

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Financial Education

•

University

•

Practice Problem

•

Hard

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77 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The real interest rate adjusts the nominal interest rate for:

exchange rate movements

income growth

inflation

government controls

None of these are correct.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

____ are not a factor that causes currency supply and demand schedules to change.

relative inflation rates

relative interest rates

relative income levels

expectations

All of these are factors that cause currency supply and demand schedules to change.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If the Fed announces that it will decrease U.S. interest rates, and the European Central Bank takes no action, then the value of the euro will ____ against the value of U.S. dollar (holding other factors constant).

be unchanged

depreciate

appreciate

depreciate but only briefly

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Assume that British corporations begin to purchase more supplies from the United States as a result of several labor strikes by British suppliers. This action reflects:

an increased demand for British pounds.

a decrease in the demand for British pounds.

an increase in the supply of British pounds for sale.

a decrease in the supply of British pounds for sale.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If U.S. inflation suddenly increased while European inflation stayed the same, there would be:

a decreased U.S. demand for euros and a decreased supply of euros for sale.

an increased U.S. demand for euros and an increased supply of euros for sale.

a decreased U.S. demand for euros and an increased supply of euros for sale.

an increased U.S. demand for euros and a decreased supply of euros for sale.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Mia puts money into a piggy bank so she can spend it later. What function of money does this illustrate?

store of value

medium of exchange

unit of account

None of the above is correct.

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following best illustrates the medium of exchange function of money?

You keep some money hidden in your shoe.

You keep track of the value of your assets in terms of currency.

You pay for your double latte using currency.

None of the above is correct.

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77 questions

The real interest rate adjusts the nominal interest rate for:

____ are not a factor that causes currency supply and demand schedules to change.

If the Fed announces that it will decrease U.S. interest rates, and the European Central Bank takes no action, then the value of the euro will ____ against the value of U.S. dollar (holding other factors constant).

Assume that British corporations begin to purchase more supplies from the United States as a result of several labor strikes by British suppliers. This action reflects:

If U.S. inflation suddenly increased while European inflation stayed the same, there would be:

Mia puts money into a piggy bank so she can spend it later. What function of money does this illustrate?

Which of the following best illustrates the medium of exchange function of money?

Economists use the word “money” to refer to

Liquidity refers to

Which list ranks assets from most to least liquid?

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