FI472Test1 - FI 472 Test I _ Spring 2008 Clay Moffett Name:...

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FI 472 – Test I Name: _____________________________- _______________________ Spring 2008 Clay Moffett NOTE: Write all your answers on the answer sheet attached to the back of this test. You may keep the test, but put your name on the answer sheet and turn it in. Write neatly, anything I cannot read, is wrong . Show your work if you wish partial credit. Each multiple choice question is worth 3 points, each short answer is worth 5. 1 Historically, the primary motive for U.S. multinationals to produce abroad has been to a. lower costs b. respond more quickly to the marketplace c. avoid trade barriers d. gain tax benefits 2 Which one of the following provides strong evidence that internationalization continues to grow in the world economy? a. import restrictions by the Bush Administration on foreign steel b. efforts suggested by politicians to restrict the sourcing of foreign products by locally headquartered multinationals c. the growing volume of foreign direct investment by U.S. as well as other multinational companies d. pressure on governments to embargo unfriendly nations 3. According to Shapiro, if you were the CEO of a multinational corporation, which of the following would be MOST important to you in hiring a manager? One that a. Avoids risk at any price b. Manages effectively the political environment of the subsidiary country c. Anticipates every future disturbance related to the supply chain d. Makes decisions that anticipates problems and provides solutions that enhances the firm’s prospects for growth 4. The most likely explanation for the rise of the U.S. dollar during the early 1980s is that a. the U.S. budget deficit raised U.S. interest rates b. the U.S. trade deficit held down U.S. inflation c. the U.S. economy improved dramatically d. all of the above 5. Of the following, exchange rates depend the most on a. relative inflation rates b. relative interest rates c. relative trade deficits d. a and b 6. 2.5 To some U.S. manufacturers and labor unions, a cheap yuan value gives China’s __________ an unfair advantage in the global economy. a. imports b. subsidies c. bankers d. exporters 7. On Friday, September 13, 1992, the lira was worth DM 0.0013. Over the weekend the lira devalued against the DM to DM 0.0012. By how much had the lira devalued against the DM? a. 7.69% b. 8.33%
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c. 5.21% d. 9.27% 8. The price of foreign goods in terms of domestic goods is called a. the real exchange rate b. the balance of trade c. the trade-weighted exchange rate d. purchasing parity 9. Large government budget deficits will a. raise the value of a nation's currency by raising domestic interest rates b. raise the value of a nation's currency by stimulating the domestic economy
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FI472Test1 - FI 472 Test I _ Spring 2008 Clay Moffett Name:...

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