WorksheetsHard Unit 3 Practice Quiz
Total questions: 17
Worksheet time: 9mins
If the U.S. dollar strengthens against the euro, what happens to the exchange rate?
It takes more dollars to buy euros
It takes fewer dollars to buy euros
Euros become more valuable than dollars
Trade stops between the regions
Which situation best describes a soft currency?
Low inflation and political stability
High global demand
Frequent devaluation and limited international use
Pegged to gold
Why might multinational companies prefer hard currencies for contracts?
They are easier to counterfeit
They reduce exchange-rate uncertainty
They are required by law
They increase inflation
How do currency futures help firms manage risk?
By increasing profits through speculation
By locking in future exchange rates
By eliminating all market uncertainty
By avoiding international trade
Which feature most distinguishes cryptocurrency from traditional money?
Durability
Government backing
Decentralization
Divisibility
Why was Bitcoin considered revolutionary?
It was the first online bank
It allowed peer-to-peer transactions without a central authority
It was backed by gold
It eliminated all financial risk
How do the IMF and World Bank differ most?
One focuses on private firms, the other on individuals
IMF focuses on short-term stability; World Bank focuses on long-term development
IMF manages stock markets; World Bank manages currencies
IMF only helps developed countries
Which exchange would most directly impact UK stock market performance?
Nikkei
NYSE
FTSE
NASDAQ
Why do global investors track indices like the Nikkei?
To predict currency exchange rates
To measure performance of a country’s stock market
To set interest rates
To evaluate trade balances
Why do companies use eurodollars?
To avoid paying wages
To access fewer regulations and global liquidity
To avoid all taxes
To eliminate exchange risk
Which is an example of currency risk for a U.S. exporter?
Domestic inflation rises
The foreign currency weakens before payment is received
Interest rates fall
Stock prices decline
Which method helps manage currency risk?
Offshoring
Hedging with forward or futures contracts
Outsourcing labor
Increasing tariffs
What is the purpose of the “Double Irish with a Dutch Sandwich”?
Encouraging foreign investment
Reducing labor costs
Minimizing corporate taxes through subsidiaries
Increasing trade efficiency
Which characteristic ensures that money can be easily divided into smaller units for transactions?
Uniformity
Portability
Divisibility
Durability
Why is portability considered an important feature of money?
It allows money to be easily transported and used in different locations
It makes money last longer
It prevents counterfeiting
It increases the value of money
Which accounting standard is primarily used by companies listed on U.S. stock exchanges?
IFRS
GAAP
FASB
IAS
Why might a multinational company need to prepare financial statements under both GAAP and IFRS?
To comply with regulations in different countries
To avoid paying taxes
To increase inflation
To eliminate all financial risk
