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Dwnload Full International-Financial-Management-12th-Edition-Jeff-Madura-Test-Bank PDF
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2. A high home inflation rate relative to other countries would ____ the home country's current account
balance, other things equal. A high growth in the home income level relative to other countries would
____ the home country's current account balance, other things equal.
a. increase; increase
b. increase; decrease
c. decrease; decrease
d. decrease; increase
ANS: C PTS: 1 DIF: Moderate OBJ: INFM.MADU.15.02.03
NAT: BUSPROG.INFM.MADU.15.03 STA: DISC.INFM.MADU.15.02
KEY: Bloom's: Comprehension
3. If a country's government imposes a tariff on imported goods, that country's current account balance
will likely ____ (assuming no retaliation by other governments).
a. decrease
b. increase
c. remain unaffected
d. either A or C are possible
ANS: B PTS: 1 DIF: Moderate OBJ: INFM.MADU.15.02.03
NAT: BUSPROG.INFM.MADU.15.03 STA: DISC.INFM.MADU.15.02
KEY: Bloom's: Comprehension
4. ____ purchases more U.S. exports than the other countries listed here.
a. Italy
b. Spain
c. Mexico
d. Canada
ANS: D PTS: 1 DIF: Easy OBJ: INFM.MADU.15.02.02
NAT: BUSPROG.INFM.MADU.15.03 STA: DISC.INFM.MADU.15.02
KEY: Bloom's: Knowledge
5. An increase in the current account deficit will place ____ pressure on the home currency value, other
things equal.
a. upward
b. downward
c. no
d. upward or downward (depending on the size of the deficit)
ANS: B PTS: 1 DIF: Easy OBJ: INFM.MADU.15.02.03
NAT: BUSPROG.INFM.MADU.15.03 STA: DISC.INFM.MADU.15.02
KEY: Bloom's: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted
in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
10. Which of the following would likely have the least direct influence on a country's current account?
a. inflation.
b. national income.
c. exchange rates.
d. tariffs.
e. a tax on income earned from foreign stocks.
ANS: E PTS: 1 DIF: Easy OBJ: INFM.MADU.15.02.03
NAT: BUSPROG.INFM.MADU.15.03 STA: DISC.INFM.MADU.15.02
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted
in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
KEY: Bloom's: Knowledge
13. The U.S. typically has a balance of trade surplus in its trade with ____.
a. China
b. Japan
c. A and B
d. none of the above
ANS: D PTS: 1 DIF: Easy OBJ: INFM.MADU.15.02.02
NAT: BUSPROG.INFM.MADU.15.03 STA: DISC.INFM.MADU.15.02
KEY: Bloom's: Knowledge
14. The North American Free Trade Agreement (NAFTA) increased restrictions on:
a. trade between Canada and Mexico.
b. trade between Canada and the U.S.
c. direct foreign investment in Mexico by U.S. firms.
d. none of the above.
ANS: D PTS: 1 DIF: Easy OBJ: INFM.MADU.15.02.02
NAT: BUSPROG.INFM.MADU.15.03 STA: DISC.INFM.MADU.15.02
KEY: Bloom's: Knowledge
15. According to the text, international trade (exports plus imports combined) as a percentage of GDP is:
a. higher in the U.S. than in European countries.
b. lower in the U.S. than in European countries.
c. higher in the U.S. than in about half the European countries, and lower in the U.S. than the
others.
d. about the same in the U.S. as in European countries.
ANS: B PTS: 1 DIF: Easy OBJ: INFM.MADU.15.02.02
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted
in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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