1. Of the following situations, the one that does NOT usually cause an increased interest rate is
A. Political uncertainty
B. When people are saving more and borrowing less.
C. When inflation is increasing
D. When people are saving less and borrowing more
2. Interest rates are affected by
A. Money supply and demand, risk, inflation
B. Money supply and demand, balance of payments, unfavorable payments.
C. Money supply only
D. Unfavorable payments, risk, and political stability.
3. An exchange rate is the amount of money one currency can be traded for one unit of another currency.
A. True
B. False
4. The exchange rate for a nation's currency will usually remain constant or increase if
A. The supply of currency increases, but the demand does not.
B. The balance of payments is favorable.
C. The balance of payments is unfavorable.
D. Inflation increases
5. The exchange rate for a stable country
A. Remains the same unless there is political change.
B. Changes based on supply and demand.
C. Is based on the U.S. dollar
D. Is based on gold
6. While in India you purchased a hat for $15 U.S.. How many rupees would you have to pay if each rupee was .032 U.S. dollars?
A. 48 rupees
B. 213.33
C. 450.48
D. 468.75
7. Methods of short term financing include
A. Trade credit and business loans
B. Accounts payable, accounts receivable, and bonds.
C. Bonds
D. A bill of exchange
8. The primary purpose of the World Bank is to maintain an orderly system of world trade and exchange rates.
A. True
B. false
9. A monetary unit that is freely and easily converted into other currencies is
A. A hard currency
B. A soft currency
C. An exchange control
D. A trade credit
10. A country's currency usually declines in value if the country's debt increases significantly.
A. True
B. False
11. Salt was used as money once but would not work well today because
A. It would be difficult to persuade someone to accept salt as money
B. Salt is not durable
C. Salt is not scarce
D. All of these
12. All of the following are examples of a capital project EXCEPT
A. Installing a new computer network system
B. Buying a six-month supply of packaging materials to take advantage of a limited discount.
C. Purchasing ships to transport goods overseas.
D. Purchasing a supplier company.
13. If you purchased a camera in Britain for 100 pounds, what would be the price in U.S. dollars if one pound is worth $1.40?
A. $71
B. $100
C. $140
D. $1,400
14. An example of an exchange control is when the government limits the amount of money a tourist may take out of the country.
A. True
B. False
15. When a country has favorable trade balances, its currency is usually stable or rising.
A. True
B. False
2 answers
1. D
2. A
3. A
4. B
5. B
6. D
7. A
8. B
9. A
10. A
11. D
12. B
13. C
14. A
15. A
0 answers