SOLUTION MANUAL AND TEST BANK
MULTINATIONAL BUSINESS FINANCE
,Table Of Contents
Part i: global financial environment
1. Multinational financial management: challenges and opportunities
2. International monetary system
3. The balance of payments
4. Financial goals, corporate governance and the market for corporate control
part ii: foreign exchange theory & markets
5. The foreign exchange market
6. International parity conditions
• Appendix: an algebraic primer to international parity conditions
7. Foreign currency derivatives: futures & options
• Appendix: currency option pricing theory
8. Interest rate risk and swaps
9. Foreign exchange rate determination & intervention
part iii: foreign exchange exposure
10. Transaction exposure
• Appendix a: complex option hedges
• Appendix b: the optimal hedge ratio and hedge effectiveness
11.translation exposure
12. Operating exposure
Part iv: financing the global firm
13. Global cost and availability of capital
14. Funding the multinational firm
15.multinational tax management
16.international trade finance
Part v: foreign investments and investment analysis
17. Foreign direct investment & political risk
18. Multinational capital budgeting & cross-border acquisitions
,Multinational business finance, 16e (eiteman/stonehill/moffett)
chapter 1 multinational financial management: opportunities
and challenges
18.1 The global financial marketplace
1) Financial globalization has not resulted in:
A) Continuing imbalances of balance of payments.
B) An increase in quantity and speed in the flow of capital across the world.
C) Capital markets less open and a decrease in the availability of capital for many
organizations.
D) Uniform ways of ownership, control, and governance across the
world. Answer: d
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
2) Financial globalization has not resulted in:
A) Continuing imbalances of balance of payments.
B) An increase in quantity and speed in the flow of capital across the world.
C) Capital markets more open and an increase in the availability of capital for
many organizations.
D) An increase in the flow of capital into and out of industrialized
markets. Answer: c
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
3) The institutions of global finance are:
A) Central banks.
B) Commercial banks.
C) Investment banks.
D) All of the above are institutions of global
finance. Answer: d
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
,4) A major cost avoided in the eurocurrency markets is the payment of deposit
insurance fees, such as:
A) Federal deposit insurance corporation — fdic.
B) Office of the comptroller of the currency — occ.
C) International monetary fund — imf.
D) World bank — wb.
Answer: a
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
5) The modern eurocurrency market was born shortly after:
A) World war ii.
B) World war i.
C) Korean war.
D) Bosnian
war. Answer:
A diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
6) The reference rate of interest in the eurocurrency market is the:
A) London interbank offered rate.
B) Prima rate.
C) Federal funds rate.
D) Treasury
rate. Answer:
A diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
7) Interest spreads in the eurocurrency market are small for many reasons except:
A) Eurocurrency loans are secured loans.
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an
unsecured basis.
C) The eurocurrency is a wholesale market.
D) Borrowers are usually large corporations or government
entities. Answer: a
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
,8) Multinational enterprises (mnes) are firms, both for-profit companies and not-for-
profit organizations, that have operations in more than one country, and conduct their
business through foreign subsidiaries, branches, or joint ventures with host country firms.
Answer: true
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
9) Ownership, control, and governance changes radically across the world. The publicly
traded company is not the dominant global business organization—the privately held or
family-owned business is the prevalent structure—and their goals and measures of
performance differ dramatically.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
10) The securities at the heart of the global capital markets are the mortgage backed
securities (mbs). The health and security of the global financial system rely on the
quality of these securities.
Answer: false
diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
11) The u.s. Dollar has been the focal point of currency trading since the 1940s. As a
result, most of the world's currencies are quoted against the dollar.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
12) Several of the world's major currency exchange rates follow a specific quotation
convention that is the result of tradition and history. The exchange rate between the u.s.
Dollar and the euro is always quoted as "dollars per euro."
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
,13) Several of the world's major currency exchange rates follow a specific quotation
convention that is the result of tradition and history. The exchange rate between the u.s.
Dollar and the british pound is always quoted as "dollars per pound."
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
14) Several of the world's major currency exchange rates follow a specific quotation
convention that is the result of tradition and history. The exchange rate between the u.s.
Dollar and the japanese yen is always quoted as "dollars per japanese yen."
Answer: false
diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
15) Your authors suggest that one way to characterize the global financial marketplace is
through its assets, institutions, and linkages.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
16) Eurocurrencies are domestic currencies of one country on deposit in a second
country. Answer: true
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
17) A eurodollar deposit is a demand
deposit. Answer: false
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
,18) Eurocurrency markets serve two valuable purposes: 1) eurocurrency deposits are an
efficient and convenient money market device for holding excess corporate liquidity; and
2) The eurocurrency market is a major source of short-term bank loans to finance
corporate working capital needs, including the financing of imports and exports.
Answer: true
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
conceptual
Aacsb: application of knowledge
19) The key factor attracting both depositors and borrowers to the eurocurrency loan
market is the narrow interest rate spread within that market.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
conceptual
Aacsb: application of knowledge
20) The eurocurrency market continues to thrive because it is a large international money
market relatively free from governmental regulation and interference. Recent events may
lead to greater regulation.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
21) The theme dominating global financial markets today is the complexity of risks
associated with financial globalization. List and explain examples of the complexity of
risks affecting the leading and managing of multinational firms in the rapidly moving
marketplace.
Answer: the following is a sampling of this complexity of risks: 1) the international
monetary system is under constant scrutiny. The rise of the chinese renminbi is changing
much of the world's outlook on currency exchange, reserve currencies, and the roles of the
dollar and the euro. 2) large fiscal deficits, including the current eurozone crisis, plague
most of the major trading countries of the world, complicating fiscal and monetary policies,
and ultimately, interest rates and exchange rates. 3) many countries experience continuing
balance of payments imbalances, and in some cases, dangerously large deficits and
surpluses. 4) ownership, control, and governance vary radically across the world. 5)
global capital markets that normally provide the means to lower a firm's cost of capital,
and even more critically, increase the availability of capital, have in many ways shrunk in
size and have become less open and accessible to many of the world's organizations. 6)
financial globalization has resulted in the ebb and flow of capital in and out of both
industrial and emerging markets, greatly complicating financial management.
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
conceptual
,Aacsb: application of knowledge
22) Business involves the interaction of individuals and individual organizations for the
exchange of products, services, and capital through markets. The global capital markets
are critical for the conduct of this exchange. The authors suggest that one way to
characterize the global financial marketplace is through its assets, institutions, and
linkages. Explain how each of the three dimensions characterize the global financial
marketplace.
Answer: 1) the financial assets at the heart of the global capital markets are the debt
securities issued by governments. These low-risk or risk-free assets (e.g., u.s. Treasury
bonds) form the foundation for the creation, trading, and pricing of other financial assets
like bank loans, corporate bonds, and equities (stock). In recent years, a number of
additional securities have been created from existing securities-derivatives, whose value is
based on market value changes of the underlying securities. The health and security of the
global financial system relies on the quality of these assets. 2) the institutions of global
finance are the central banks, which create and control each country's money supply; the
commercial banks, which take deposits and extend loans to businesses, both local and
global; and the multitude of other financial institutions created to trade securities and
derivatives. These institutions take many shapes and are subject to many different
regulatory frameworks. The health and security of the global financial system relies on the
stability of these financial institutions. 3) the links between the financial institutions, the
actual fluid or medium for exchange, are the interbank networks using currency. The
ready exchange of currencies in the global marketplace is the first and foremost necessary
element for the conduct of financial trading, and the global currency markets are the
largest markets in the world. The exchange of currencies, and the subsequent exchange of
all other securities globally via currency, is the international interbank network.
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
conceptual
Aacsb: application of knowledge
18.2 The theory of comparative advantage
1) The theory that suggests specialization by country can increase worldwide production is:
A) The theory of comparative advantage.
B) The theory of foreign direct investment.
C) The international fisher effect.
D) The theory of working
capital management. Answer: a
Diff: 1
L.o.: 1.2 the theory of comparative advantage
skill: recognition
Aacsb: application of knowledge
,2) Which of the following is not a reason governments interfere with comparative
advantage?
A) Governments attempt to achieve full employment.
B) Governments promote economic development.
C) National self-sufficiency in defense-related industries
D) All are reasons governments interfere with comparative
advantage. Answer: d
Diff: 1
L.o.: 1.2 the theory of comparative advantage
skill: recognition
Aacsb: application of knowledge
3) Which of the following factors of production do not flow freely between countries?
A) Raw materials
B) Financial capital
C) (non-military) technology
D) All of the above factors of production flow freely among
countries. Answer: a
Diff: 1
L.o.: 1.2 the theory of comparative advantage
skill: recognition
Aacsb: application of knowledge
4) Which of the following would not be a way to implement comparative advantage?
A) Ibm exports computers to egypt.
B) Computer hardware is designed in the united states but manufactured and
assembled in korea.
C) Water of the greatest purity is obtained from wells in oregon, bottled, and
exported worldwide.
D) All of the above are examples of ways to implement comparative
advantage. Answer: d
Diff: 2
L.o.: 1.2 the theory of comparative advantage
skill: conceptual
Aacsb: application of knowledge
5) Of the following, which would not be considered a way that government interferes
with comparative advantage?
A) Tariffs
B) Managerial skills
C) Quotas
D) Other non-tariff
restrictions answer: b
diff: 1
L.o.: 1.2 the theory of comparative advantage
skill: recognition
Aacsb: application of knowledge
, 6) the concept of absolute comparative advantage's origins lie in:
A) adam smith's work of 1776.
B) david ricardo's work of 1776.
C) the wealth of nations book, published in 1887.
D) on the principles of political economy and taxation book, published in
1817. answer: a
diff: 3
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
7) the concept of relative comparative advantage's origins lie in:
A) adam smith's work of 1776.
B) david ricardo's work of 1776.
C) the wealth of nations book, published in 1887.
D) on the principles of political economy and taxation book, published in
1817. answer: d
diff: 3
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
8) comparative advantage is one of the underlying principles driving the growth of
global business.
answer: true diff:
1
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
9) the theory of comparative advantage owes it origins to ben bernanke as described in his
book
the wealth of
bankers. answer:
false diff: 1
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
10) international trade might have approached the comparative advantage model in
the 19th century, and it does so even more today.
answer: false diff:
2
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
MULTINATIONAL BUSINESS FINANCE
,Table Of Contents
Part i: global financial environment
1. Multinational financial management: challenges and opportunities
2. International monetary system
3. The balance of payments
4. Financial goals, corporate governance and the market for corporate control
part ii: foreign exchange theory & markets
5. The foreign exchange market
6. International parity conditions
• Appendix: an algebraic primer to international parity conditions
7. Foreign currency derivatives: futures & options
• Appendix: currency option pricing theory
8. Interest rate risk and swaps
9. Foreign exchange rate determination & intervention
part iii: foreign exchange exposure
10. Transaction exposure
• Appendix a: complex option hedges
• Appendix b: the optimal hedge ratio and hedge effectiveness
11.translation exposure
12. Operating exposure
Part iv: financing the global firm
13. Global cost and availability of capital
14. Funding the multinational firm
15.multinational tax management
16.international trade finance
Part v: foreign investments and investment analysis
17. Foreign direct investment & political risk
18. Multinational capital budgeting & cross-border acquisitions
,Multinational business finance, 16e (eiteman/stonehill/moffett)
chapter 1 multinational financial management: opportunities
and challenges
18.1 The global financial marketplace
1) Financial globalization has not resulted in:
A) Continuing imbalances of balance of payments.
B) An increase in quantity and speed in the flow of capital across the world.
C) Capital markets less open and a decrease in the availability of capital for many
organizations.
D) Uniform ways of ownership, control, and governance across the
world. Answer: d
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
2) Financial globalization has not resulted in:
A) Continuing imbalances of balance of payments.
B) An increase in quantity and speed in the flow of capital across the world.
C) Capital markets more open and an increase in the availability of capital for
many organizations.
D) An increase in the flow of capital into and out of industrialized
markets. Answer: c
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
3) The institutions of global finance are:
A) Central banks.
B) Commercial banks.
C) Investment banks.
D) All of the above are institutions of global
finance. Answer: d
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
,4) A major cost avoided in the eurocurrency markets is the payment of deposit
insurance fees, such as:
A) Federal deposit insurance corporation — fdic.
B) Office of the comptroller of the currency — occ.
C) International monetary fund — imf.
D) World bank — wb.
Answer: a
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
5) The modern eurocurrency market was born shortly after:
A) World war ii.
B) World war i.
C) Korean war.
D) Bosnian
war. Answer:
A diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
6) The reference rate of interest in the eurocurrency market is the:
A) London interbank offered rate.
B) Prima rate.
C) Federal funds rate.
D) Treasury
rate. Answer:
A diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
7) Interest spreads in the eurocurrency market are small for many reasons except:
A) Eurocurrency loans are secured loans.
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an
unsecured basis.
C) The eurocurrency is a wholesale market.
D) Borrowers are usually large corporations or government
entities. Answer: a
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
,8) Multinational enterprises (mnes) are firms, both for-profit companies and not-for-
profit organizations, that have operations in more than one country, and conduct their
business through foreign subsidiaries, branches, or joint ventures with host country firms.
Answer: true
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
9) Ownership, control, and governance changes radically across the world. The publicly
traded company is not the dominant global business organization—the privately held or
family-owned business is the prevalent structure—and their goals and measures of
performance differ dramatically.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
10) The securities at the heart of the global capital markets are the mortgage backed
securities (mbs). The health and security of the global financial system rely on the
quality of these securities.
Answer: false
diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
11) The u.s. Dollar has been the focal point of currency trading since the 1940s. As a
result, most of the world's currencies are quoted against the dollar.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
12) Several of the world's major currency exchange rates follow a specific quotation
convention that is the result of tradition and history. The exchange rate between the u.s.
Dollar and the euro is always quoted as "dollars per euro."
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
,13) Several of the world's major currency exchange rates follow a specific quotation
convention that is the result of tradition and history. The exchange rate between the u.s.
Dollar and the british pound is always quoted as "dollars per pound."
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
14) Several of the world's major currency exchange rates follow a specific quotation
convention that is the result of tradition and history. The exchange rate between the u.s.
Dollar and the japanese yen is always quoted as "dollars per japanese yen."
Answer: false
diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
15) Your authors suggest that one way to characterize the global financial marketplace is
through its assets, institutions, and linkages.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
16) Eurocurrencies are domestic currencies of one country on deposit in a second
country. Answer: true
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
17) A eurodollar deposit is a demand
deposit. Answer: false
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
,18) Eurocurrency markets serve two valuable purposes: 1) eurocurrency deposits are an
efficient and convenient money market device for holding excess corporate liquidity; and
2) The eurocurrency market is a major source of short-term bank loans to finance
corporate working capital needs, including the financing of imports and exports.
Answer: true
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
conceptual
Aacsb: application of knowledge
19) The key factor attracting both depositors and borrowers to the eurocurrency loan
market is the narrow interest rate spread within that market.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
conceptual
Aacsb: application of knowledge
20) The eurocurrency market continues to thrive because it is a large international money
market relatively free from governmental regulation and interference. Recent events may
lead to greater regulation.
Answer: true diff:
1
L.o.: 1.1 the global financial marketplace skill:
recognition
Aacsb: application of knowledge
21) The theme dominating global financial markets today is the complexity of risks
associated with financial globalization. List and explain examples of the complexity of
risks affecting the leading and managing of multinational firms in the rapidly moving
marketplace.
Answer: the following is a sampling of this complexity of risks: 1) the international
monetary system is under constant scrutiny. The rise of the chinese renminbi is changing
much of the world's outlook on currency exchange, reserve currencies, and the roles of the
dollar and the euro. 2) large fiscal deficits, including the current eurozone crisis, plague
most of the major trading countries of the world, complicating fiscal and monetary policies,
and ultimately, interest rates and exchange rates. 3) many countries experience continuing
balance of payments imbalances, and in some cases, dangerously large deficits and
surpluses. 4) ownership, control, and governance vary radically across the world. 5)
global capital markets that normally provide the means to lower a firm's cost of capital,
and even more critically, increase the availability of capital, have in many ways shrunk in
size and have become less open and accessible to many of the world's organizations. 6)
financial globalization has resulted in the ebb and flow of capital in and out of both
industrial and emerging markets, greatly complicating financial management.
Diff: 1
L.o.: 1.1 the global financial marketplace skill:
conceptual
,Aacsb: application of knowledge
22) Business involves the interaction of individuals and individual organizations for the
exchange of products, services, and capital through markets. The global capital markets
are critical for the conduct of this exchange. The authors suggest that one way to
characterize the global financial marketplace is through its assets, institutions, and
linkages. Explain how each of the three dimensions characterize the global financial
marketplace.
Answer: 1) the financial assets at the heart of the global capital markets are the debt
securities issued by governments. These low-risk or risk-free assets (e.g., u.s. Treasury
bonds) form the foundation for the creation, trading, and pricing of other financial assets
like bank loans, corporate bonds, and equities (stock). In recent years, a number of
additional securities have been created from existing securities-derivatives, whose value is
based on market value changes of the underlying securities. The health and security of the
global financial system relies on the quality of these assets. 2) the institutions of global
finance are the central banks, which create and control each country's money supply; the
commercial banks, which take deposits and extend loans to businesses, both local and
global; and the multitude of other financial institutions created to trade securities and
derivatives. These institutions take many shapes and are subject to many different
regulatory frameworks. The health and security of the global financial system relies on the
stability of these financial institutions. 3) the links between the financial institutions, the
actual fluid or medium for exchange, are the interbank networks using currency. The
ready exchange of currencies in the global marketplace is the first and foremost necessary
element for the conduct of financial trading, and the global currency markets are the
largest markets in the world. The exchange of currencies, and the subsequent exchange of
all other securities globally via currency, is the international interbank network.
Diff: 2
L.o.: 1.1 the global financial marketplace skill:
conceptual
Aacsb: application of knowledge
18.2 The theory of comparative advantage
1) The theory that suggests specialization by country can increase worldwide production is:
A) The theory of comparative advantage.
B) The theory of foreign direct investment.
C) The international fisher effect.
D) The theory of working
capital management. Answer: a
Diff: 1
L.o.: 1.2 the theory of comparative advantage
skill: recognition
Aacsb: application of knowledge
,2) Which of the following is not a reason governments interfere with comparative
advantage?
A) Governments attempt to achieve full employment.
B) Governments promote economic development.
C) National self-sufficiency in defense-related industries
D) All are reasons governments interfere with comparative
advantage. Answer: d
Diff: 1
L.o.: 1.2 the theory of comparative advantage
skill: recognition
Aacsb: application of knowledge
3) Which of the following factors of production do not flow freely between countries?
A) Raw materials
B) Financial capital
C) (non-military) technology
D) All of the above factors of production flow freely among
countries. Answer: a
Diff: 1
L.o.: 1.2 the theory of comparative advantage
skill: recognition
Aacsb: application of knowledge
4) Which of the following would not be a way to implement comparative advantage?
A) Ibm exports computers to egypt.
B) Computer hardware is designed in the united states but manufactured and
assembled in korea.
C) Water of the greatest purity is obtained from wells in oregon, bottled, and
exported worldwide.
D) All of the above are examples of ways to implement comparative
advantage. Answer: d
Diff: 2
L.o.: 1.2 the theory of comparative advantage
skill: conceptual
Aacsb: application of knowledge
5) Of the following, which would not be considered a way that government interferes
with comparative advantage?
A) Tariffs
B) Managerial skills
C) Quotas
D) Other non-tariff
restrictions answer: b
diff: 1
L.o.: 1.2 the theory of comparative advantage
skill: recognition
Aacsb: application of knowledge
, 6) the concept of absolute comparative advantage's origins lie in:
A) adam smith's work of 1776.
B) david ricardo's work of 1776.
C) the wealth of nations book, published in 1887.
D) on the principles of political economy and taxation book, published in
1817. answer: a
diff: 3
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
7) the concept of relative comparative advantage's origins lie in:
A) adam smith's work of 1776.
B) david ricardo's work of 1776.
C) the wealth of nations book, published in 1887.
D) on the principles of political economy and taxation book, published in
1817. answer: d
diff: 3
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
8) comparative advantage is one of the underlying principles driving the growth of
global business.
answer: true diff:
1
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
9) the theory of comparative advantage owes it origins to ben bernanke as described in his
book
the wealth of
bankers. answer:
false diff: 1
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
10) international trade might have approached the comparative advantage model in
the 19th century, and it does so even more today.
answer: false diff:
2
l.o.: 1.2 the theory of comparative advantage skill:
recognition
aacsb: application of knowledge
