D311 MIDTERM (QUESTIONS + ANSWERS) SOLVED 100% CORRECT!!
Which of the following is one of the major noneconomic rationales for government intervention in trade? -Answer- preserving national culture
represent(s) a form of direct assistance to local companies to boost their competitiveness. -Ans...
D311 MIDTERM (QUESTIONS +
ANSWERS) SOLVED 100%
CORRECT!!
Which of the following is one of the major noneconomic rationales for government
intervention in trade? -Answer- preserving national culture
represent(s) a form of direct assistance to local companies to boost their
competitiveness. -Answer- subsidies
A company's objection to protection of its own industry usually stems from its own
competitive advantage in all of the following areas EXCEPT -Answer- foreign direct
investments
According to the case on U.S. imports of prescription drugs from Canada,
pharmaceutical companies in the U.S. insist that they would have to greatly reduce their
research budgets if -Answer- they lost the ability to charge high prices in the U.S. when
they introduce new drugs
Which of the following is not among the reasons why the US government started to levy
high tariffs on Chinese products imported into the United States: -Answer- The high FDI
by Chinese companies in the US
According to the online articles from January 2020, the trade war between the US and
China has led to: -Answer- -Difficulties for farmers in the US
-Difficulties for manufacturers in the US
-Higher prices for consumers in the US
China's exports are surging despite US tariffs and the COVID-19 pandemic. According
to the New York Times article from August 31, which of the following is not among the
reasons for this surge? -Answer- The US suspended most of its tariffs on Chinese
products in March 2020.
Which term refers to money denominated in the currency of another nation or group of
nations? -Answer- Foreign exchange
What is the current USD/EUR exchange rate? Please provide four decimal places. -
Answer- .8223
In foreign-exchange markets, reporting dealers are -Answer- financial institutions that
actively participate in local and global foreign-exchange markets
, ________ involve the exchange of currency the second day after the date on which the
two foreign-exchange traders agree to the transaction. -Answer- spot transactions
In which of the following transactions is a currency switched with another on one date
and then switched back on a future date? -Answer- FX Swap
In the spot market, the ________ is the difference between the bid and offer rates and
is the trader's profit margin. -Answer- spread
Melissa, a foreign-exchange trader, wants to buy euros from Stephanie. Which of the
following is the price at which Melissa is willing to buy euros? -Answer- Bid
If a foreign currency is quoted in American terms (the direct quote) and the forward rate
for a foreign currency is less than the spot rate, the foreign currency is selling at a -
Answer- Forward discount
A(n) ________ is the right but not the obligation to buy or sell a foreign currency within a
certain time period or on a specific date at a specific exchange rate. -Answer- option
Anita, an employee at ABX Partners, a hedge fund firm, has purchased euros because
she believes that the euro will strengthen against other currencies. Which term best
describes Anita's activities? -Answer- speculation
The primary objective of the International Monetary Fund is to ________. -Answer-
promote exchange rate stability
The Bretton Woods Agreement established a system of fixed exchange rates under
which each IMF member country set a -Answer- par value
In order to join the IMF, a country must contribute a certain sum of money, called a
________ -Answer- quota
Which type of exchange rate arrangement is based on supply and demand? -Answer-
floating
Which of the following was part of the stability and growth pact that was required for
countries to be part of the European Monetary Union? -Answer- The annual inflation
rate must remain within 1.5% of the three best-performing EU countries.
The major objective of the European Central Bank is to ________. -Answer- set
monetary policy for EU countries that adopt the euro
If inflation in the United States is relatively higher than inflation in Japan, and the
Japanese government wants to keep the exchange rate fixed between the yen and the
dollar, it should most likely ________. -Answer- increase the supply of yen in the market
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