Worksheetstcqt Quiz
Total questions: 44
Worksheet time: 22mins
Which of the following could reduce agency problems for an MNC?
stock options as managerial compensation
investor monitoring
hostile takeover threat
All of these are forms of corporate control that could reduce agency problems for an MNC.
Due to the risks involved in international business, firms should:
maintain international business to no more than 20% of total business.
None of these are correct.
only consider international business in major countries.
maintain international business to no more than 35% of total business.
Licensing obligates a firm to provide ____, while franchising obligates a firm to provide ____.
a specialized sales or service strategy; a specialized sales or service strategy
its technology; its technology
its technology; an initial investment
its technology; a specialized sales or service strategy
a specialized sales or service strategy; its technology
The agency costs of an MNC are likely to be lower if it:
scatters its subsidiaries across many foreign countries AND increases its volume of international business.
uses a centralized management style.
increases its volume of international business.
scatters its subsidiaries across many foreign countries.
Which of the following theories identifies specialization as a reason for international business?
imperfect markets theory
None of these are correct.
product cycle theory
theory of comparative advantage
For an MNC, agency costs are typically:
the same as agency costs of a small purely domestic firm.
nonexistent
smaller than agency costs of a small purely domestic firm.
larger 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.
imports products from unrelated firms in other countries and sells them locally
exports all of its products
produces and sells its products locally
acquires a foreign firm that produces most of its products to be sold in that foreign country
The commonly accepted goal of an MNC is to:
maximize international sales.
maximize shareholder wealth.
maximize short-term earnings.
maximize short-term earnings AND minimize risk.
minimize risk
Which of the following theories identifies the non-transferability of resources as a reason for international business?
imperfect markets theory
theory of comparative advantage
product cycle theory
None of these are correct
Which of the following theories suggests that firms seek to penetrate new markets over time?
product cycle theory
imperfect markets theory
theory of comparative advantage
None of these are correct.
The real interest rate adjusts the nominal interest rate for:
exchange rate movements
income growth
inflation
government controls
None of these are correct.
____ 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.
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
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.
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.
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.
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.
Economists use the word “money” to refer to
income generated by the production of goods and services.
those assets regularly used to buy goods and services.
the value of a person’s assets.
the value of stocks and bonds.
Liquidity refers to
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 list ranks assets from most to least liquid?
currency, fine art, stocks
currency, stocks, fine art
fine art, currency, stocks
fine art, stocks, currency
M1 includes
currency.
demand deposits.
travelers’ checks.
All of the above are correct.
Which of the following is not included in M1?
currency
demand deposits
savings deposits
travelers’ checks
Which of the following is included in M2 but not in M1?
currency
demand deposits
savings deposits
All of the above are included in both M1 and M2
M1 is
smaller and less liquid than M2.
smaller but more liquid than M2.
larger than and less liquid than M2.
larger than but more liquid than M2.
Savings deposits are included in
M1 but not M2.
M2 but not M1.
M1 and M2.
neither M1 nor M2.
Credit cards are
used as a method of payment.
part of the M1 money supply.
a method of deferring payment.
a unit of account.
Credit cards
defer payments.
are a store of value.
have led to wider use of currency.
are part of the money supply.
Debit cards M1
defer payments.
are equivalent to credit cards.
are included in M2.
are used as a method of payment.
When the Fed wants to change the money supply, it most frequently
changes the discount rate.
changes the reserve requirement.
conducts open market operations.
issues Federal Reserve notes.
When the Federal Reserve conducts open market transactions, it
issues Federal Reserve notes.
buys or sells government bonds from the public.
lowers the discount rate.
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 increases the money supply.
it sells 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 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
sales and raising the discount rate.
sales and lowering the discount rate.
purchases and raising the discount rate.
purchases and lowering the discount rate.
The Fed can increase the price level by conducting open market
sales and raising the discount rate.
sales and lowering the discount rate.
purchases and raising the discount rate.
purchases and lowering the discount rate.
As the reserve ratio increases, the money multiplier
increases.
does not change.
decreases.
could do any of the above.
If the central bank in some country lowered the reserve ratio, the money multiplier
would increase.
would not change.
would decrease.
could do any of the above.
If the reserve ratio is 10 percent, the money multiplier is
100.
10.
9/10.
1/10.
If the reserve ratio is 20 percent, the money multiplier is
2.
4.
5.
8.
Which list contains only actions that increase the money supply?
raise the discount rate, make open market purchases
raise the discount rate, make open market sales
lower the discount rate, make open market purchases
lower the discount rate, make open market sales
Which list contains only actions that increase the money supply?
make open market purchases, raise the reserve requirement ratio
make open market purchases, lower 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?
lower the discount rate, raise the reserve requirement ratio
lower the discount rate, lower the reserve requirement ratio
raise the discount rate, raise 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 purchases
raise the discount rate, make open market sales
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 purchases, raise the reserve requirement ratio
make open market purchases, lower the reserve requirement ratio
make open market sales, raise the reserve requirement ratio
make open market sales, lower the reserve requirement ratio
