STUDY UNIT 1
1. According to the Heckscher-Ohlin theory, nations heavily endowed with labor will:
import more labor intensive goods.
export more labor intensive goods.
have an absolute advantage in labor intensive goods.
have a comparative advantage in ca
Study Unit 6
1. Which of the following is false?
o Accounting errors are reported net of taxes before net income
o Unusual or infrequent items are reported before taxes above net income from
o A change in accounting principle
Study Unit 4
1. Which of the following situations would create a deferred tax asset?
o Not replacing assets past the midpoint of their estimated life.
o Owning financial instruments that generate tax-exempt interest revenue.
o Using estimated warra
Study Unit 2
1. In a common-size balance sheet, all items in the financial statement are displayed as
o Total sales
o Total liabilities
o Total assets
o Total equity
2. Common-size financial statements allows a research analyst to:
Study Unit 3
1. The choice of accounting method for inventory can affect a firms:
o Balance sheet only
o Income statement only
o Cash conversion cycle
o All of the above
2. From an analysts perspective, accounting for inventories based on:
o LIFO i
Study Unit 1
1. Accounting income could be best described as being on:
o Matching of expenses with the revenues generated by those expenses
o A type of economic income
o Present value of all future cash flows
o A companys current and probable futur
Additional Notes for Study Unit 4 on PPPBigMac
Absolute purchasing power parity theory assumes that equilibrium in exchange rate (Links
to an external site.) between 2 currencies will force their purchasing powers (Links to an
external site.) to be equal.
STUDY UNIT 5
1. A nation's demand curve for foreign exchange is derived from the:
foreign demand curve for the nations' exports
nation's supply curve of exports
demand and supply curves for the nations imports in terms of the
demand and s
STUDY UNIT 2
1. If import-competing firms expect the income of domestic consumers to increase
and they also the demand for their product to increase they would prefer:
An import quota.
An import tariff.
2. In the tariff figur
STUDY UNIT 3
1. With free trade, the supply curve faced by a small importing country will be:
2. A customs union is more likely to lead to trade creation:
the lower are the pre-union tr
STUDY UNIT 6
1. Which of the following would not be advised for a nation that has experienced
difficulty in controlling inflation?
Flexible exchange rates.
A currency board.
Contractionary monetary policy.
Fixed exchange rates.
2. Flexible exchange rates
STUDY UNIT 4
1. A _ involves an agreement today to buy or sell a specified amount of
a foreign currency, for delivery at a specified future date, at a rate agreed upon
foreign discount with
Study Unit 5
1. The following instruments are carried at fair value on the balance sheet except for:
o Trading securities
o Available-for-sale securities
o Held-to-maturity securities
2. Which of the following is not a basic risk asso