INTB 3355 CH7 EXAM QUESTIONS AND ANSWERS
/. India has more millionaires than does China, despite China's higher savings rate. -
Answer-✅false
/.When a firm enters overseas markets, economic analyses become more complex
because now managers must operate in two new environments: domestic and
international. - Answer-✅false
/.When conducting international economic analyses, it is usually the responsibility of the
local subsidiary to collect data and prepare reports. - Answer-✅false
/."Developing" is the term given to the world's lowest-income nations, which are
technically undeveloped. - Answer-✅false
/.Economic data provide information on the number of people, and the socioeconomic
data tell us if they have purchasing power. - Answer-✅false
/.Gross national income (GNI) is the total value of all goods and services produced by a
nation's residents from domestic activity. - Answer-✅false
/.Frequently, given the choice between investing in a nation with a lower GNI/capita but
a high growth rate, and a nation in which the conditions are reversed, management will
choose the former. - Answer-✅true
/.The Big Mac Index can indicate whether a particular currency is overvalued or
undervalued. - Answer-✅true
/.The underground economy is an important element of the economic measures
contained in official statistics. - Answer-✅false
/.Data such as overall GNI or GNI per capita can provide a snapshot of the size of an
economy, but most seasoned managers instead look at economic growth rates. -
Answer-✅false
/.From comparisons of income distribution studies over time, it appears that the top and
bottom quintiles are growing at the expense of the middle quintile. - Answer-✅false
, /.Disposable income is the amount of income left after paying taxes and making
essential purchases. - Answer-✅false
/.The percentage of household expenditures in developed nations for health care,
transport and communication, and beverages and tobacco is much higher than for
households in developing nations. - Answer-✅true
/.One factor that contributes to a favorable investment opportunity is the ability to obtain
unit labor costs lower than those currently available to the firm. - Answer-✅true
/.Managers of multinationals are not interested in countries with slow-rising labor costs if
other firms in the same industry are already located there. - Answer-✅false
/.Fringe benefits, productivity, and exchange rates are responsible for relative changes
in labor costs. - Answer-✅false
/.It is difficult for American firms to compete in world markets because they have the
highest international unit labor costs measured in U.S. dollars. - Answer-✅false
/.The large international debt of numerous developing nations is important not only to
international bankers, but also to international firms. - Answer-✅true
/.The 10 lowest-ranked countries in the Human Development Index devised by the
United Nations Development Program are all located in Asia. - Answer-✅false
/.Densely populated countries tend to make product distribution and communications
simpler and less costly. - Answer-✅true
/.Allied and Axis governments met in Bretton Woods in the final days of WWII. - Answer-
✅false
/.The Bretton Woods system worked until the early 1970s. - Answer-✅true
/.One exchange arrangement is to have no separate legal tender. - Answer-✅true
/.The Bank for International Settlements is like a central bank for central bankers. -
Answer-✅true
/.Currencies float because they are allowed to make their own adjustments in the
marketplace. - Answer-✅true
/.The spot rate is the rate for exchange within two days in the currency market. -
Answer-✅true
/. India has more millionaires than does China, despite China's higher savings rate. -
Answer-✅false
/.When a firm enters overseas markets, economic analyses become more complex
because now managers must operate in two new environments: domestic and
international. - Answer-✅false
/.When conducting international economic analyses, it is usually the responsibility of the
local subsidiary to collect data and prepare reports. - Answer-✅false
/."Developing" is the term given to the world's lowest-income nations, which are
technically undeveloped. - Answer-✅false
/.Economic data provide information on the number of people, and the socioeconomic
data tell us if they have purchasing power. - Answer-✅false
/.Gross national income (GNI) is the total value of all goods and services produced by a
nation's residents from domestic activity. - Answer-✅false
/.Frequently, given the choice between investing in a nation with a lower GNI/capita but
a high growth rate, and a nation in which the conditions are reversed, management will
choose the former. - Answer-✅true
/.The Big Mac Index can indicate whether a particular currency is overvalued or
undervalued. - Answer-✅true
/.The underground economy is an important element of the economic measures
contained in official statistics. - Answer-✅false
/.Data such as overall GNI or GNI per capita can provide a snapshot of the size of an
economy, but most seasoned managers instead look at economic growth rates. -
Answer-✅false
/.From comparisons of income distribution studies over time, it appears that the top and
bottom quintiles are growing at the expense of the middle quintile. - Answer-✅false
, /.Disposable income is the amount of income left after paying taxes and making
essential purchases. - Answer-✅false
/.The percentage of household expenditures in developed nations for health care,
transport and communication, and beverages and tobacco is much higher than for
households in developing nations. - Answer-✅true
/.One factor that contributes to a favorable investment opportunity is the ability to obtain
unit labor costs lower than those currently available to the firm. - Answer-✅true
/.Managers of multinationals are not interested in countries with slow-rising labor costs if
other firms in the same industry are already located there. - Answer-✅false
/.Fringe benefits, productivity, and exchange rates are responsible for relative changes
in labor costs. - Answer-✅false
/.It is difficult for American firms to compete in world markets because they have the
highest international unit labor costs measured in U.S. dollars. - Answer-✅false
/.The large international debt of numerous developing nations is important not only to
international bankers, but also to international firms. - Answer-✅true
/.The 10 lowest-ranked countries in the Human Development Index devised by the
United Nations Development Program are all located in Asia. - Answer-✅false
/.Densely populated countries tend to make product distribution and communications
simpler and less costly. - Answer-✅true
/.Allied and Axis governments met in Bretton Woods in the final days of WWII. - Answer-
✅false
/.The Bretton Woods system worked until the early 1970s. - Answer-✅true
/.One exchange arrangement is to have no separate legal tender. - Answer-✅true
/.The Bank for International Settlements is like a central bank for central bankers. -
Answer-✅true
/.Currencies float because they are allowed to make their own adjustments in the
marketplace. - Answer-✅true
/.The spot rate is the rate for exchange within two days in the currency market. -
Answer-✅true
