REVIEWER

3RD YEAR – 2ND SEMESTER

MIDTERM
Module 4: Role of Government – Quiz

1. Public goods deal with non-excludable like public waterways. TRUE

2. One of the root causes of government failure is regulatory capture. TRUE

3. Information also includes the truth of advertising policies. TRUE

4. One of the reasons for government intervention in the market is to provide information and assure

information flows. TRUE

5. Government changes the distribution of income and /or wealth through government transfer policies such

as Income taxes and Inheritance taxes. TRUE

6. Tax is a financial charge imposed upon a taxpayer by a state. TRUE

7. An externality is present when the activity of one entity directly affects the welfare of another entity in a

way that is inside the market mechanism. FALSE

Module 5: Foreign Direct Investment – Quiz

1. Mac Dougall Kemp Theory explain that capital moves freely from a capital abundant country to a capital

scare country. TRUE

2. Licensing: A business arrangement in which one company gives another company permission to

manufacture its product for a specified payment. TRUE

3. Greenfield Investment is a form of foreign direct investment where a parent company builds its operations

in foreign country from the ground up. TRUE

4. Exporting is a function of international trade whereby goods produced in one country are shipped to

another country for further sale or trade. TRUE

5. FDI it means an individual, a group of individuals, an incorporated or unincorporated entity, public or

private company investing his money in another country. TRUE

6. Outward FDI for an economy can be defined as the capital provided by the foreign direct investor. FALSE

7. An acquisition means a combination of two companies to form a new company. FALSE

 REVIEWER
3RD YEAR – 2ND SEMESTER
MIDTERM
Module 6: FEM – Quiz

1. An option is a contract that conveys its owner, the holder, the right, and the obligation, to buy or sell an
underlying asset or instrument at a specified strike price. FALSE

2. Foreign exchange involves central banks, companies, individuals, institutional investors, commercial banks,
and brokers. TRUE

3. The foreign exchange market is also known as below the counter marketplace that determines the
exchange rate for global currencies. FALSE

4. Forward transactions require delivery at a future value date of a specified amount of one currency for
another. TRUE

5. The interest rate will tell you what you pay for each month. TRUE

6. There is a vital relationship of high leverage to hedging risk as part of the advantages of FEM. TRUE

7. The spot rate of exchange is determined in the spot market. TRUE