Globalization and the Multinational FirmTrue False Questions.doc
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1、Lecture 1 - Globalization and the Multinational Firm1-1 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on
2、a website, in whole or part.Lecture 1(Chapter 1) Globalization and the Multinational FirmTrue / False QuestionsThe first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or other product. The
3、last two columns give each countrys consumption without trade.1. Is Northern Ireland better off when it trades with Southern Ireland? True False2. Now suppose that Southern workers receive a raise to 2 per day. Will trade be possible at the exchange rate you found in the last question? True False3.
4、Now suppose that Southern workers are paid 1 per day but the Northern workers receive a raise to 2 per day. Will trade be possible at the exchange rate you found in the question before the last question? True FalseLecture 1 - Globalization and the Multinational Firm1-2 2012 by McGraw-Hill Education.
5、 This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Multiple Choice Questions4. What major dimension sets apar
6、t international finance from domestic finance? A. Foreign exchange and political risks B. Market imperfections C. Expanded opportunity set D. All of the above5. An example of a political risk is A. expropriation of assets. B. adverse change in tax rules. C. the opposition party being elected. D. bot
7、h answers a) and b) are correct.6. Production of goods and services has become globalized to a large extent as a result of A. natural resources being depleted in one country after another. B. skilled labor being highly mobile. C. multinational corporations efforts to source inputs and locate product
8、ion anywhere where costs are lower and profits higher. D. common tastes worldwide for the same goods and services.7. Recently, financial markets have become highly integrated. This development A. allows investors to diversify their portfolios internationally. B. allows minority investors to buy and
9、sell stocks. C. has increased the cost of capital for firms. D. answers a) and c) are both correct.8. Japan has experienced large trade surpluses. Japanese investors have responded to this by A. liquidating their positions in stocks to buy dollar denominated bonds. B. investing heavily in U.S. and o
10、ther foreign financial markets. C. lobbying the U.S. government to depreciate its currency. D. lobbying the Japanese government to allow the yen to appreciate.Lecture 1 - Globalization and the Multinational Firm1-3 2012 by McGraw-Hill Education. This is proprietary material solely for authorized ins
11、tructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.9. Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is $1.25 = 1.00. One y
12、ear later the exchange rate is the same, but the Italian government has expropriated your firms assets paying only 80,000 in compensation. This is an example of A. exchange rate risk. B. political risk. C. market imperfections. D. none of the above, since $100,000 = 80,000 $1.25/1.0010. Suppose you
13、start with $100 and buy stock for 50 when the exchange rate is 1 = $2. One year later, the stock rises to 60. You are happy with your 20 percent return on the stock, but when you sell the stock and exchange your 60 for dollars, you only get $45 since the pound has fallen to 1 = $0.75. This loss of v
14、alue is an example of A. exchange rate risk. B. political risk. C. market imperfections. D. weakness in the dollar.11. Suppose that Great Britain is a major export market for your firm, a U.S.-based MNC. If the British pound depreciates against the U.S. dollar, A. your firm will be able to charge mo
15、re in dollar terms while keeping pound prices stable. B. your firm may be priced out of the U.K. market, to the extent that your dollar costs stay constant and your pound prices will rise. C. to protect U.K. market share, your firm may have to cut the dollar price of your goods to keep the pound pri
16、ce the same. D. both b) and c) are correct12. Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This means A. your companys products can be priced out of the Mexican market, as the peso price of American imports
17、will rise following the pesos fall. B. your firm will be able to charge more in dollar terms while keeping peso prices stable. C. your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports. D. both b) and c) are correctLecture 1 - Globalization and the Mu
18、ltinational Firm1-4 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.13. Supp
19、ose Mexico is a major export market for your U.S.-based company and the Mexican peso depreciates drastically against the U.S. dollar, as it did in December 1994. This means A. your companys products can be priced out of the Mexican market, as the peso price of American imports will rise following th
20、e pesos fall. B. your firm will be able to charge more in dollar terms while keeping peso prices stable. C. your domestic competitors will enjoy a period of facing little price competition from Mexican imports. D. both b) and c) are correct14. Suppose that you are a U.S. producer of a commodity good
21、 competing with foreign producers. Your inputs of production are priced in dollars and you sell your output in dollars. If the U.S. currency depreciates against the currencies of our trading partners, A. your competitive position is likely improved. B. your competitive position is likely worsened. C
22、. your competitive position is unchanged.15. Undoubtedly, we are now living in a world where all the major economic functions consumption, production, and investment A. are still inherently local. B. are still regional in nature. C. are slowly becoming globalized. D. are highly globalized.16. Most g
23、overnments at least try to make it difficult for people to cross their borders illegally. This barrier to the free movement of labor is an example of A. information asymmetry. B. excessive transactions costs. C. racial discrimination. D. a market imperfection.Lecture 1 - Globalization and the Multin
24、ational Firm1-5 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.17. Although
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