INTB 200 - FINAL EXAM PREP QUESTIONS AND
ANSWERS
Europe - Answers - where has the movement toward regional economic integration
been most ambitious?
each member country is allowed to determine its own trade policies with regard to
nonmembers - Answers - what is a defining characteristic of a free trade area?
customs union - Answers - three South American countries enter into an agreement to
remove all tariffs and trade barriers between them. they decide on a common external
trade policy and charge the same tariffs. which level of economic integration best
describes this arrangement?
impact of currency exchange rate changes on the reported financial statements of a
company - Answers - a company's translation exposure is based on the...
economic union - Answers - within this, there is a level of economic integration that
involves the use of a common currency, harmonization of members' tax rates, and a
common monetary and fiscal policy
desire to suppress another war in Europe - Answers - one reason for the establishment
of the European Community in 1957 was the...
two - Answers - how many trade blocs are in Europe?
European Commission - Answers - responsible for proposing European Union
legislation, implementing it, and monitoring compliance with European Union laws by
member-states
Euro Zone - Answers - comprised of 19 member nations who use the euro as their
currency
implied loss of national sovereignty to the European Central Bank - Answers - Great
Britain, Denmark, and Sweden have stayed out of the euro zone because of the...
concerns over human rights issues - Answers - the country of Turkey has lobbied for EU
membership for many years but full membership has been denied because of...
intermarket - Answers - Eyewear 20/20 markets eyeglasses and sunglasses to young
adults between 18 and 25. in approaching its international markets, Eyewear 20/20
believes that its target segment spans multiple countries, transcending national
boarders. the company's target segment is called a(n) __________ segment
, Mexico would be used as an assembly site and higher-paying jobs would be kept in the
U.S. and Canada - Answers - Opponents of NAFTA in Mexico were concerned that...
NAFTA - Answers - North American Free Trade Agreement; allows open trade with US,
Mexico, and Canada.
high unemployment - Answers - the countries of the Andean Pact have faced....
Andean Pact - Answers - a 1969 agreement between Bolivia, Chile, Ecuador, Columbia,
and Peru to establish a customs union
Mercosur - Answers - a pact originated in 1988 to establish a free trade area now
including Argentina, Brazil, Paraguay, and Uruguay
CARICOM - Answers - an association of English-speaking Caribbean states that are
attempting to establish a customs union
Association of Southeast Asian Nations (ASEAN) - Answers - An attempt to establish a
free trade area among Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand, and Vietnam
economic union - Answers - the European Union is considered a(n) _______ even
though not all members have adopted a common currency
carry trade - Answers - assume that the interest rate on borrowings in Japan is 5% while
the interest rate on bank deposits in a U.S. bank is 7%. Talia, an active currency trader,
borrows in Japanese yen, converts the money into U.S. dollars, and deposits it in a U.S.
bank. Talia is engaging in...
the interaction between supply and demand of a currency relative to other currencies -
Answers - how are spot exchange rates determined?
the dollar will appreciate against the euro - Answers - assume that the dollar is selling at
a premium on the 30-day dollar/euro forward market. what is true of the foreign
exchange dealers' market's expectations about the dollar over the next 30 days?
currency swap - Answers - a(n) ______ is used by an international business to move
out of one currency and into another for a limited period without incurring foreign
exchange risk
arbitrage - Answers - assume that the yen/dollar exchange rate quoted in London at
3PM is #115 = $1. Drew, a trader, finds out that the rate quoted in NY at 10AM (3PM
London) is #135 = $1. Drew decides to buy yen in NY and sell it in London. Drew is
engaging in...
ANSWERS
Europe - Answers - where has the movement toward regional economic integration
been most ambitious?
each member country is allowed to determine its own trade policies with regard to
nonmembers - Answers - what is a defining characteristic of a free trade area?
customs union - Answers - three South American countries enter into an agreement to
remove all tariffs and trade barriers between them. they decide on a common external
trade policy and charge the same tariffs. which level of economic integration best
describes this arrangement?
impact of currency exchange rate changes on the reported financial statements of a
company - Answers - a company's translation exposure is based on the...
economic union - Answers - within this, there is a level of economic integration that
involves the use of a common currency, harmonization of members' tax rates, and a
common monetary and fiscal policy
desire to suppress another war in Europe - Answers - one reason for the establishment
of the European Community in 1957 was the...
two - Answers - how many trade blocs are in Europe?
European Commission - Answers - responsible for proposing European Union
legislation, implementing it, and monitoring compliance with European Union laws by
member-states
Euro Zone - Answers - comprised of 19 member nations who use the euro as their
currency
implied loss of national sovereignty to the European Central Bank - Answers - Great
Britain, Denmark, and Sweden have stayed out of the euro zone because of the...
concerns over human rights issues - Answers - the country of Turkey has lobbied for EU
membership for many years but full membership has been denied because of...
intermarket - Answers - Eyewear 20/20 markets eyeglasses and sunglasses to young
adults between 18 and 25. in approaching its international markets, Eyewear 20/20
believes that its target segment spans multiple countries, transcending national
boarders. the company's target segment is called a(n) __________ segment
, Mexico would be used as an assembly site and higher-paying jobs would be kept in the
U.S. and Canada - Answers - Opponents of NAFTA in Mexico were concerned that...
NAFTA - Answers - North American Free Trade Agreement; allows open trade with US,
Mexico, and Canada.
high unemployment - Answers - the countries of the Andean Pact have faced....
Andean Pact - Answers - a 1969 agreement between Bolivia, Chile, Ecuador, Columbia,
and Peru to establish a customs union
Mercosur - Answers - a pact originated in 1988 to establish a free trade area now
including Argentina, Brazil, Paraguay, and Uruguay
CARICOM - Answers - an association of English-speaking Caribbean states that are
attempting to establish a customs union
Association of Southeast Asian Nations (ASEAN) - Answers - An attempt to establish a
free trade area among Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand, and Vietnam
economic union - Answers - the European Union is considered a(n) _______ even
though not all members have adopted a common currency
carry trade - Answers - assume that the interest rate on borrowings in Japan is 5% while
the interest rate on bank deposits in a U.S. bank is 7%. Talia, an active currency trader,
borrows in Japanese yen, converts the money into U.S. dollars, and deposits it in a U.S.
bank. Talia is engaging in...
the interaction between supply and demand of a currency relative to other currencies -
Answers - how are spot exchange rates determined?
the dollar will appreciate against the euro - Answers - assume that the dollar is selling at
a premium on the 30-day dollar/euro forward market. what is true of the foreign
exchange dealers' market's expectations about the dollar over the next 30 days?
currency swap - Answers - a(n) ______ is used by an international business to move
out of one currency and into another for a limited period without incurring foreign
exchange risk
arbitrage - Answers - assume that the yen/dollar exchange rate quoted in London at
3PM is #115 = $1. Drew, a trader, finds out that the rate quoted in NY at 10AM (3PM
London) is #135 = $1. Drew decides to buy yen in NY and sell it in London. Drew is
engaging in...
