tb02 - Kirt C. Butler, Multinational Finance, 3rd edition...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Kirt C. Butler, Multinational Finance , 3 rd edition Chapter 2 World Trade and the International Monetary System True/False 1. Markets are integrated when an asset sells for the same price wherever it is traded. ANS: True. 2. The world’s financial markets are becoming increasingly segmented as large international commercial banks achieve more and more economic power. ANS: False. They are becoming increasingly integrated (that is, less segmented). 3. Prices in the world’s financial markets are becoming increasingly segmented as local political forces work to dismantle many of the world’s largest countries, such as Czechoslovakia and Soviet Union (USSR). ANS: False. Markets are becoming more integrated (less segmented). Indeed, the breakup of the Soviet Union hastened the integration of these developing markets. 4. The international monetary system refers to the global network of governmental and commercial institutions within which currency exchange rates are determined. ANS: True. 5. The International Monetary Fund’s principal mission is to provide funds for economic development in third-world countries. ANS: False. The IMF’s role is to help countries defend their currencies against temporary balance-of-payments imbalances and to promote cross-border trade. 6. The Basle Accord established the International Monetary Fund and the World Bank. ANS: False. These institutions were established by the Bretton Woods Agreement of 1946. 7. The “financial account” of the IMF’s Balance-of-Payments Statistics measures the total financial wealth of citizens in each reporting country. ANS: False. The financial account measures cross-border transactions associated with changes in ownership of financial assets and liabilities. 8. The “trade balance” of the IMF’s Balance-of-Payments Statistics is the net balance (exports minus imports) on merchandise trade. ANS: True.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

tb02 - Kirt C. Butler, Multinational Finance, 3rd edition...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online