Book Title; Author

Chapter 07 - Multiple Choice Quiz

1.
It is a _____ and a _____ that are the subjects of trade (p.236).
A.
country; buyer
B.
country; market
C.
firm; buyer
D.
market; buyer
E.
firm; country


2.
When a country restricts imports of competitive products in order to allow smaller, less competitive domestic firms to grow and prosper, it is called:
A.
tariffs.
B.
import enhancement law.
C.
non-tariffs.
D.
import substitution policy.
E.
none of the above.


3.
When a firm chooses to produce abroad it must make the conscious trade-off between:
A.
cost versus control.
B.
competitiveness versus control.
C.
opportunities versus benefits.
D.
profits versus joint ventures.
E.
exporting versus importing.


4.
Historically, SOEs in most developing countries have traditionally focused on __________ markets, although this trend has been changing.
A.
emerging
B.
domestic
C.
developed
D.
industrialising
E.
western


5.
Two major subaccounts of the balance of payments (BOP) are:
A.
current account and past account.
B.
financial account and debt account.
C.
current account and financial account.
D.
debt account and equity account.
E.
current account and portfolio account.


6.
The balance of payments (BOP):
A.
is a balance sheet.
B.
is a cash flow statement.
C.
adds up the value of all assets and liabilities.
D.
is similar to a balance sheet for a firm.
E.
b and c only.


7.
The two types of business transactions that dominate the balance of payments (BOP) are:
A.
real assets and real claims.
B.
financial claims and financial liabilities.
C.
real assets and financials assets.
D.
assets and liabilities.
E.
none of the above.


8.
Which of the following is not part of the current account?
A.
Portfolio investment
B.
Goods trade
C.
Services trade
D.
Income
E.
Current transfers


9.
The major categories of service include all of these EXCEPT:
A.
travel and passenger fares.
B.
transportation services.
C.
expenditures by U.S students abroad.
D.
telecommunications services.
E.
goods trade.


10.
The rapid withdrawal of capital from the country results in the ______, creating a severe deficit in the country's overall BOP.
A.
gain of the capital account surplus
B.
loss of the capital account surplus
C.
gain of the financial account surplus
D.
loss of the financial account surplus
E.
gain of the current account surplus

 

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