Leigh contracts with Klausen, a financial planner who is required by the state to have a license. Klausen does not have a license. Their contract is enforceable if

Leigh contracts with Klausen, a financial planner who is required by the state to have a license. Klausen does not have a license. Their contract is...

Sam leases real property from Regina under an agreement that includes an exculpatory clause. This clause is likely unenforceable

Sam leases real property from Regina under an agreement that includes an exculpatory clause. This clause is likely unenforceable  a) as a matter...

Franz signs a covenant not to compete with his employer, Gifts n More corporation. This covenant is enforceable if it

Franz signs a covenant not to compete with his employer, Gifts n More corporation. This covenant is enforceable if it a) is not ancillary to the sale...

Luke is an unlicensed contractor in a state that requires a license to protect the public from unauthorized contractors. Kirkpatrick hires Luke to build an office building. This contract is

Luke is an unlicensed contractor in a state that requires a license to protect the public from unauthorized contractors. Kirkpatrick hires Luke to build...

Jaime sells his business to Isabella and, as a part of the agreement, promises not to engage in a business of the same kind within thirty miles for one year. This promise is

Jaime sells his business to Isabella and, as a part of the agreement, promises not to engage in a business of the same kind within thirty miles for...

Bosley bets Finster on the outcome of the SuperBowl. Gab=mbling on sports events is illegal in their state. Before the game is over, Bosley's attempt to withdraw from the bet is

Bosley bets Finster on the outcome of the SuperBowl. Gab=mbling on sports events is illegal in their state. Before the game is over, Bosley's attempt...

Ewa, a sixteen year old minor, buys a car from Downtown Autos and wrecks it. To disaffirm the contract and satisfy a duty of restitution, Ewa must

Ewa, a sixteen year old minor, buys a car from Downtown Autos and wrecks it. To disaffirm the contract and satisfy a duty of restitution, Ewa must a)...

Vincenzo is adjudged mentally incompetent. Sophia is appointed to act as Vincenzo's guardian. Vincenzo signs a contract to sell his house. The contract is

Vincenzo is adjudged mentally incompetent. Sophia is appointed to act as Vincenzo's guardian. Vincenzo signs a contract to sell his house. The contract...

While intoxicated, Konrad agrees to sell his warehouse for half its assessed value. The contract is

While intoxicated, Konrad agrees to sell his warehouse for half its assessed value. The contract is a)enforceable even if Konrad did not understand...

Tom is a minor who enters into a contract with Dinane. All of the following are effective methods for Tom to ratify the contract EXCEPT

Tom is a minor who enters into a contract with Dinane. All of the following are effective methods for Tom to ratify the contract EXCEPT a) expressly...

Blakely has a cause to sue Carly in a tort action, but agrees not to sue her if Carly will pay for the damage. If Carly fails to pay, Blakely can bring an action against her for breach of contract. This is

Blakely has a cause to sue Carly in a tort action, but agrees not to sue her if Carly will pay for the damage. If Carly fails to pay, Blakely can bring...

Owen hires Paula under a contract that reserves to Owen the right to cancel the contract on thirty days notice at any time after Paula begins work. This promise is

Owen hires Paula under a contract that reserves to Owen the right to cancel the contract on thirty days notice at any time after Paula begins work....

Mikayla promises to pay Lauren to work for her. Lauren agrees and quits her job, but Mikayla does not hire her. Mikayla is liable to Lauren based on

Mikayla promises to pay Lauren to work for her. Lauren agrees and quits her job, but Mikayla does not hire her. Mikayla is liable to Lauren based on a)...

Sawyer causes an accident in which Reese is injured. Reese accept Sawyers offer of $5,000 to release Sawyer from further liability. Later, Reese learns that his injuries are more serious than he realized. The release will

Sawyer causes an accident in which Reese is injured. Reese accept Sawyers offer of $5,000 to release Sawyer from further liability. Later, Reese learns...

Idle Contractor corporation begins constructing a building for Haute Apartments, Inc. In midproject, Idle asks for $150,000 more, claiming an increase in ordinary business expenses. Haute agrees. This agreement is

Idle Contractor corporation begins constructing a building for Haute Apartments, Inc. In midproject, Idle asks for $150,000 more, claiming an increase...

Delite Pastires, Inc., contracts with Elron to deliver its products. Later, the parties decide to cancel their contract. They

Delite Pastires, Inc., contracts with Elron to deliver its products. Later, the parties decide to cancel their contract. They a) may rescind their...

Hillcrest Office Company promises to pay Gerard $1,000 to repair the roof on Hillcrest's building Gerard fixes the roof. The act of fixing the roof

Hillcrest Office Company promises to pay Gerard $1,000 to repair the roof on Hillcrest's building Gerard fixes the roof. The act of fixing the roof a)...

Jay is seeking to avoid performing a promise to pay Karen $150. Jay is claiming a lack of consideration on Karen's part. Jay will win if he can show that

Jay is seeking to avoid performing a promise to pay Karen $150. Jay is claiming a lack of consideration on Karen's part. Jay will win if he can show...

Dave offers to buy a book owned by Lee for $40. Lee accepts and hands the book to Dave. The transfer and delivery of the book constitute performance. Is this performance consideration for Daves promise?

Dave offers to buy a book owned by Lee for $40. Lee accepts and hands the book to Dave. The transfer and delivery of the book constitute performance....

Gayla questions whether there is consideration for her contract with Julius. Consideration has two elements- there must be a bargained-for exchange and the value of whatever is exchanged must be.

Gayla questions whether there is consideration for her contract with Julius. Consideration has two elements- there must be a bargained-for exchange...

T or F: The doctrine of promissory estoppel requires a clear and definite promise.

T or F: The doctrine of promissory estoppel requires a clear and definite promise. Answer: Tr...

T or F: Consideration is the value given in return for a promise.

T or F: Consideration is the value given in return for a promise. Answer: Tr...

T or F: Only a liquidated debt can serve as consideration for an accord and satisfactions.

T or F: Only a liquidated debt can serve as consideration for an accord and satisfactions. Answer: Fal...

T or F: A covenant not to sue always bars further recovery.

T or F: A covenant not to sue always bars further recovery. Answer: Fal...

T or F: If, in a contract, and promisor does not definitely promise to do anything, the promise is illusory.

T or F: If, in a contract, and promisor does not definitely promise to do anything, the promise is illusory. Answer: Tr...

T or F: A promise has no legal value as consideration.

T or F: A promise has no legal value as consideration. Answer: Fal...

T or F: Rescission is the unmaking of a contract and the parties return to their pre contract positions.

T or F: Rescission is the unmaking of a contract and the parties return to their pre contract positions. Answer: Tr...

T or F: Past consideration is consideration.

T or F: Past consideration is consideration. Answer: Fal...

T or F: A promise to do what one already has a legal duty to do is not legal sufficient consideration.

T or F: A promise to do what one already has a legal duty to do is not legal sufficient consideration. Answer: Tr...

T or F: Inadequate consideration may indicate fraud, duress, or undue influence.

T or F: Inadequate consideration may indicate fraud, duress, or undue influence. Answer: Tr...

Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh and India where child labor is common. Other clothing and footwear firms have recently faced criticism regarding the use of child labor, and Quantum executives want to avoid similar problems. Which of the following guidelines enforced by Quantum would LEAST likely be supported by the International Labor Organization?

Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh...

Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh and India where child labor is common. Other clothing and footwear firms have recently faced criticism regarding the use of child labor, and Quantum executives want to avoid similar problems. Which of the following would be the best approach for Quantum?

Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh...

What is the primary reason that Anglo American PLC developed its ART program?

What is the primary reason that Anglo American PLC developed its ART program? A) comply with government standards B) maintain a healthy workforce C)...

What is the primary problem associated with Anglo American PLC's ART program?

What is the primary problem associated with Anglo American PLC's ART program?  A) unknown side effects to drugs and treatment B) rising costs...

Which of the following is most important to the effectiveness of an internal code of conduct?

Which of the following is most important to the effectiveness of an internal code of conduct?  A) ensuring that employees understand the code...

Which of the following is most important when designing an internal code of conduct?

Which of the following is most important when designing an internal code of conduct? A) requesting U.N. oversight and intervention when necessary B)...

The U.N. Global Compact is best described as a(n) ________.

The U.N. Global Compact is best described as a(n) ________.  A) corruption mandate B) environmental initiative C) external code of conduct D)...

A guideline for responsible action by a firm in its operations worldwide is a(n) ________.

A guideline for responsible action by a firm in its operations worldwide is a(n) ________. A) code of conduct B) corporate monitoring policy C) education...

Which of the following best explains Nike's quick response to criticism of unfair employment practices in developing countries?

Which of the following best explains Nike's quick response to criticism of unfair employment practices in developing countries? A) retaining employees B)...

Which of the following is NOT a likely reason for companies to act more ethically?

Which of the following is NOT a likely reason for companies to act more ethically? A) Consumer boycotts may result from unethical corporate behavior. B)...

Which of the following best supports the idea that MNEs should remain in countries that allow child labor?

Which of the following best supports the idea that MNEs should remain in countries that allow child labor? A) MNEs have a positive influence on government...

According to the Ethical Trading Initiative (ETI), ________.

According to the Ethical Trading Initiative (ETI), ________. A) child labor cannot be used unless there are no suitable alternatives B) employment...

The Ethical Trading Initiative (ETI)is primarily focused on ________.

The Ethical Trading Initiative (ETI)is primarily focused on ________. A) fair trade laws for undeveloped countries B) tiered pricing by pharmaceutical...

Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the most attention?

Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the most attention? A) safe and hygienic working conditions B)...

Which of the following has been the primary reason for the recent growth of India's pharmaceutical industry?

Which of the following has been the primary reason for the recent growth of India's pharmaceutical industry? A) globalized supply chains B) tiered...

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) ________.

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) ________. A) allows rich countries to produce generic versions...

Some countries reverse engineer pharmaceutical products ________.

Some countries reverse engineer pharmaceutical products ________. A) because they know that generic products are inherently better than branded products B)...

Medco Pharmaceuticals charges a market price for heart medication to distributors in Italy and a discounted price for the same medication to distributors in Bangladesh. Medco is most likely using ________.

Medco Pharmaceuticals charges a market price for heart medication to distributors in Italy and a discounted price for the same medication to distributors...

How has the Kyoto Protocol affected U.S. companies operating in Europe?

How has the Kyoto Protocol affected U.S. companies operating in Europe? A) U.S. companies are changing the way they do business in order to comply...

Firms that operate in countries that have adopted the Kyoto Protocol are required to either reduce emissions or ________.

Firms that operate in countries that have adopted the Kyoto Protocol are required to either reduce emissions or ________.  A) purchase carbon...

The 1997 Kyoto Protocol is best described as an agreement that requires ________.

The 1997 Kyoto Protocol is best described as an agreement that requires ________.  A) all members of the United Nations to reduce their greenhouse...

Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as ________.

Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as ________. A) competitive...

Which of the following is a voluntary effort by 150 multinational construction and natural-resources companies to end bribery?

Which of the following is a voluntary effort by 150 multinational construction and natural-resources companies to end bribery? A) Foreign Corrupt...

The OECD Convention against bribery is an example of a(n) ________.

The OECD Convention against bribery is an example of a(n) ________. A) bilateral agreement developed for the EU B) agreement that targets the demand...

Which of the following is permitted by the Foreign Corrupt Practices Act?

Which of the following is permitted by the Foreign Corrupt Practices Act? A) a bribe paid by foreign firms operating in U.S. territories B) a bribe...

A 1998 U.S. law that outlaws bribery payments by U.S. firms to foreign government officials is known as the ________.

A 1998 U.S. law that outlaws bribery payments by U.S. firms to foreign government officials is known as the ________. A) Anti-Bribery Act of 2004 B)...

Which of the following statements describes an inconsistency of the FCPA?

Which of the following statements describes an inconsistency of the FCPA? A) Facilitation payments are classified as bribery. B) Facilitation payments...

Which of the following is NOT affected by the Foreign Corrupt Practices Act?

Which of the following is NOT affected by the Foreign Corrupt Practices Act?  A) companies registered in the U.S. B) foreign firms operating...

What is the primary concern regarding anti-corruption measures in the EU?

What is the primary concern regarding anti-corruption measures in the EU? A) resistance to an official anti-fraud commission B) inability to adopt...

According to Transparency International, companies from which of the following countries are more likely to pay bribes?

According to Transparency International, companies from which of the following countries are more likely to pay bribes? A) China B) Japan C) Singapore D)...

The requirement by the U.S. government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of ________.

The requirement by the U.S. government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of ________. A) utilitarianism B)...

What is the primary argument against extraterritoriality?

What is the primary argument against extraterritoriality? A) increases opportunities for corporate bribery B) contradicts demands for increased globalization C)...

A government that enforces its own laws on foreign subsidiaries of its domestic companies practices ________.

A government that enforces its own laws on foreign subsidiaries of its domestic companies practices ________. A) civil law B) relativism C) externality D)...

Which of the following is an example of extraterritoriality?

Which of the following is an example of extraterritoriality? A) a U.S. subsidiary operating in China that is forced to follow some U.S. laws, even...

An advocate of the legal-justification standard would most likely assert that the law ________.

An advocate of the legal-justification standard would most likely assert that the law ________.  A) develops slowly in response to evolving societal...

Which of the following is a reason for an MNE to base its standards for ethical behavior on a country's laws?

Which of the following is a reason for an MNE to base its standards for ethical behavior on a country's laws? A) The law embodies many of a country's...

Why is the argument that "anything legal is ethical" most likely insufficient?

Why is the argument that "anything legal is ethical" most likely insufficient? A) Everything that is unethical is also illegal. B) The law is an...

A manager who refuses to bribe customs officials in a foreign country, even though it is morally acceptable in that country, is most likely to believe in which of the following perspectives on ethics?

A manager who refuses to bribe customs officials in a foreign country, even though it is morally acceptable in that country, is most likely to believe...

The belief that there are universal standards of behavior that all cultures should follow is called ________.

The belief that there are universal standards of behavior that all cultures should follow is called ________. A) humanism B) relativism C) normativism D)...

A manager practicing relativism would most likely ________.

A manager practicing relativism would most likely ________. A) adapt to local conditions instead of implementing home-country practices B) enforce...

Ethical dilemmas tend to be ________ for MNE managers than for domestic managers.

Ethical dilemmas tend to be ________ for MNE managers than for domestic managers. A) more complicated B) less controversial C) easier to decide D)...

Bantam Enterprises, a multi-national enterprise, makes significant efforts to avoid being perceived as socially irresponsible. What is the most likely reason for this?

Bantam Enterprises, a multi-national enterprise, makes significant efforts to avoid being perceived as socially irresponsible. What is the most likely...

Encouraging ethical behavior for the purpose of developing competitive advantages will most likely result in all of the following for a firm EXCEPT ________.

Encouraging ethical behavior for the purpose of developing competitive advantages will most likely result in all of the following for a firm EXCEPT...

Which of the following is a primary business objective for pursuing ethical behavior?

Which of the following is a primary business objective for pursuing ethical behavior? A) replacing home-country technology with host-country technology B)...

Which of the following is a primary business objective for pursuing ethical behavior?

Which of the following is a primary business objective for pursuing ethical behavior? A) avoiding industrial sanctions B) developing competitive advantages C)...

Which of the following most likely complicates ethical behavior for firms that expand overseas?

Which of the following most likely complicates ethical behavior for firms that expand overseas? A) local laws and values B) expatriate management C)...

According to the teleological approach, individuals base moral decisions on ________.

According to the teleological approach, individuals base moral decisions on ________. A) personal and social responsibilities B) consequences of an...

Which of the following statements is most likely true about the postconventional level of moral development?

Which of the following statements is most likely true about the postconventional level of moral development?  A) Individuals learn what is moral...

Which level of moral development involves an individual learning role-conformity from peers, parents, and laws?

Which level of moral development involves an individual learning role-conformity from peers, parents, and laws? A) conventional B) principled C) autonomous D)...

All of the following are levels of moral development EXCEPT the ________.

All of the following are levels of moral development EXCEPT the ________.  A) preconventional level B) autonomous level C) internalized level D)...

Monique has recently been hired as an accounts supervisor at Ballston Enterprises. She wants to understand Ballston values and its expectations for employee behavior. Which of the following would most likely provide Monique with this information?

Monique has recently been hired as an accounts supervisor at Ballston Enterprises. She wants to understand Ballston values and its expectations for...

Which of the following statements is most likely true regarding relationships between MNEs and stakeholders?

Which of the following statements is most likely true regarding relationships between MNEs and stakeholders? A) An MNE typically serves all stakeholder...

Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes?

Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes? A) shareholders B) society C)...

Which stakeholder group primarily wants additional sales and increased productivity?

Which stakeholder group primarily wants additional sales and increased productivity? A) customers B) shareholders C) society at large D) government Answer:...

Which of the following is NOT a key stakeholder group that a company must work to satisfy in order to survive in a global environment?

Which of the following is NOT a key stakeholder group that a company must work to satisfy in order to survive in a global environment? A) employees B)...

Which of the following statements about GE and its "Green is Green" movement is true?

Which of the following statements about GE and its "Green is Green" movement is true? A) GE is responding in part to the fact that it is operating...

General Electric has focused on being more "green" in recent years most likely because ________.

General Electric has focused on being more "green" in recent years most likely because ________. A) the industry has always looked to GE as a trend...

According to the text, which of the following has resulted from GE's Ecomagination initiative?

According to the text, which of the following has resulted from GE's Ecomagination initiative? A) rising profitability for many GE products B) increasing...

According to the text, which currency is expected to experience the most change in the upcoming years?

According to the text, which currency is expected to experience the most change in the upcoming years? A) yen B) yuan C) euro D) U.S. dollar Answer:...

Which of the following most accurately describes the economic situation in El Salvador?

Which of the following most accurately describes the economic situation in El Salvador? A) It is facing significant competition from neighboring...

Endaka, the "high yen," caused financial problems for ________.

Endaka, the "high yen," caused financial problems for ________. A) Japanese foreign-exchange reserves B) American foreign-exchange reserves C) Japanese...

If the euro continues to remain strong against the U.S. dollar, which of the following strategies would make the most sense for BMW?

If the euro continues to remain strong against the U.S. dollar, which of the following strategies would make the most sense for BMW? A) It might...

Which of the following accurately explains how producers are affected by exchange rate changes?

Which of the following accurately explains how producers are affected by exchange rate changes? A) To save money, a manufacturer may decide to relocate...

Ray, a marketer at a global firm, monitors the exchange rate of countries in which the firm sells its products. Ray is most likely concerned about changes in ________.

Ray, a marketer at a global firm, monitors the exchange rate of countries in which the firm sells its products. Ray is most likely concerned about changes...

Tanya is a manager at a global firm that has operations located in Brazil, India, and Japan. Tanya is in the process of making a fundamental analysis in order to forecast exchange rates in each country. Which of the following is a confidence factor that Tanya should consider in trying to predict exchange rate movements in each country?

Tanya is a manager at a global firm that has operations located in Brazil, India, and Japan. Tanya is in the process of making a fundamental analysis...

Tanya is a manager at a global firm that has operations located in Brazil, India, and Japan. Tanya is in the process of making a fundamental analysis in order to forecast exchange rates in each country. Which of the following questions is most relevant to Tanya?

Tanya is a manager at a global firm that has operations located in Brazil, India, and Japan. Tanya is in the process of making a fundamental analysis...

Craig, a manager at a global firm, is studying the cyclical nature of growth and employment as a part of the process to forecast exchange rates. Which factor is Craig most likely monitoring?

Craig, a manager at a global firm, is studying the cyclical nature of growth and employment as a part of the process to forecast exchange rates. Which...

Shelly, a manager at a global firm, is studying the foreign currency intervention practices of Indonesia. Shelly is most likely examining ________ factors.

Shelly, a manager at a global firm, is studying the foreign currency intervention practices of Indonesia. Shelly is most likely examining ________ factors. A)...

Many economists have predicted that Hong Kong will change its currency system to the ________.

Many economists have predicted that Hong Kong will change its currency system to the ________. A) U.S. dollar B) euro C) yuan D) won Answer:...

In a country with a currency that is not freely floating, the timing of an exchange rate change is often a ________ decision.

In a country with a currency that is not freely floating, the timing of an exchange rate change is often a ________ decision. A) cultural B) consensus C)...

It is easier to predict the ________ of a change than the ________ of a change in exchange rates.

It is easier to predict the ________ of a change than the ________ of a change in exchange rates. A) altitude; magnitude B) depth; length C) timing;...

Forecasters must predict the magnitude, direction, and ________ of an exchange rate change or movement.

Forecasters must predict the magnitude, direction, and ________ of an exchange rate change or movement. A) length B) timing C) altitude D) depth Answer:...

Research has shown that past exchange rates are an accurate predictor of future exchange rates ________.

Research has shown that past exchange rates are an accurate predictor of future exchange rates ________. A) only in the long run B) only in the very...

A technical forecaster is also known as a ________.

A technical forecaster is also known as a ________. A) CFO B) de facto economist C) chartist D) monetary administrator Answer: ...

Sarah, a manager at Farley Enterprises, an MNE with operations in Asia, Europe, and North America, is using past trends in exchange rate movements to spot future trends. Which type of forecasting approach is Sarah most likely using?

Sarah, a manager at Farley Enterprises, an MNE with operations in Asia, Europe, and North America, is using past trends in exchange rate movements to...

Ted, a manager at Global Manufacturing, is analyzing trends in economic variables to predict future exchange rates that might affect the MNE's international operations. Which of the following is Ted most likely doing?

Ted, a manager at Global Manufacturing, is analyzing trends in economic variables to predict future exchange rates that might affect the MNE's international...

If the real interest rate is 5%, the rate of inflation in the United States is 6%, and the rate of inflation in the United Kingdom is 3%, which of the following statements would NOT be true?

If the real interest rate is 5%, the rate of inflation in the United States is 6%, and the rate of inflation in the United Kingdom is 3%, which of the...

The International Fisher Effect implies that ________.

The International Fisher Effect implies that ________. A) the country with the higher interest rate should have lower inflation B) the currency of...

The International Fisher Effect ________.

The International Fisher Effect ________. A) links interest rates and inflation B) implies that the currency of the country with the lower interest...

Which of the following states that the country with the higher interest rate should have the higher inflation?

Which of the following states that the country with the higher interest rate should have the higher inflation? A) the Fisher Effect B) the International...

If a Big Mac costs $3.41 in the United States and $2.67 in Argentina (the price of a Big Mac in Argentine pesos converted into dollars at the spot exchange rate), which of the following is most likely true?

If a Big Mac costs $3.41 in the United States and $2.67 in Argentina (the price of a Big Mac in Argentine pesos converted into dollars at the spot exchange...

According to purchasing power parity, if the domestic inflation rate is ________ than that in the foreign country, the domestic currency should be ________ than that of the foreign country.

According to purchasing power parity, if the domestic inflation rate is ________ than that in the foreign country, the domestic currency should be ________...

Which of the following statements best describes a limitation of the Big Mac Index?

Which of the following statements best describes a limitation of the Big Mac Index? A) Profit margins vary by the strength of competition, which...

Which of the following is used as an illustration of the PPP theory for estimating exchange rates?

Which of the following is used as an illustration of the PPP theory for estimating exchange rates? A) the Composition of Official Foreign Exchange...

According to purchasing power parity theory, if Brazilian inflation was 6 percent and inflation in Argentina was 12 percent, the Brazilian real would be expected to ________.

According to purchasing power parity theory, if Brazilian inflation was 6 percent and inflation in Argentina was 12 percent, the Brazilian real would...

The ________ theory seeks to define the relationship between currencies based on relative inflation.

The ________ theory seeks to define the relationship between currencies based on relative inflation. A) inflation growth rate B) revaluation C)...

The purchasing power parity theory claims that a change in relative ________ between two countries must cause a change in ________ in order to keep the prices of goods in two countries fairly similar.

The purchasing power parity theory claims that a change in relative ________ between two countries must cause a change in ________ in order to keep...

Thomas is planning a vacation to Country X. On a tourism Web site, he reads that the government of Country X limits the amount of money a tourist may convert into the country's currency. Country X most likely uses which of the following?

Thomas is planning a vacation to Country X. On a tourism Web site, he reads that the government of Country X limits the amount of money a tourist may...

Country X has a floating rate for luxury goods and a lower rate for semi-manufactured goods. Which of the following is most likely used by Country X?

Country X has a floating rate for luxury goods and a lower rate for semi-manufactured goods. Which of the following is most likely used by Country X? A)...

Governments use a multiple exchange rate system to ________.

Governments use a multiple exchange rate system to ________. A) increase their budget surplus B) reduce exports C) control foreign-exchange convertibility D)...

Fully convertible currencies are also called ________.

Fully convertible currencies are also called ________. A) external currencies B) hard currencies C) unlimited currencies D) soft currencies Answer:...

Hard currencies are usually ________.

Hard currencies are usually ________. A) not fully convertible B) undesirable assets C) highly liquid D) unstable Answer: ...

A black market exists when ________.

A black market exists when ________. A) a country closely monitors and adjusts the foreign-exchange rate B) people pay more for hard currency than...

The Fed wants to counter downward pressure on the dollar, so it will most likely ________.

The Fed wants to counter downward pressure on the dollar, so it will most likely ________. A) sell dollars for foreign currency B) sell dollars and...

The ________ is the currency most widely used as a reserve asset.

The ________ is the currency most widely used as a reserve asset. A) euro B) Japanese yen C) U.S. dollar D) British pound Answer: ...

The central bank in the United States is the ________.

The central bank in the United States is the ________. A) Federal Reserve System B) U.S. Exchange Reserve C) Board of Governors D) U.S. Treasury Answer:...

A country's central bank is responsible for ________.

A country's central bank is responsible for ________. A) distributing money to foreign countries that are in a debt crisis B) encouraging disorderly...

Given the daily volume of foreign-exchange transactions, it is most accurate to say which of the following?

Given the daily volume of foreign-exchange transactions, it is most accurate to say which of the following? A) It is impossible for a government's...

If inflation in the United States is relatively higher than inflation in Japan, and the Japanese government wants to keep the exchange rate fixed between the yen and the dollar, it should most likely ________.

If inflation in the United States is relatively higher than inflation in Japan, and the Japanese government wants to keep the exchange rate fixed between...

Which of the following links together the central banks of the world and acts as a central banker's bank?

Which of the following links together the central banks of the world and acts as a central banker's bank? A) the IMF B) the World Bank C) the BIS D)...

Why is China most likely considering a greater reliance on the SDR?

Why is China most likely considering a greater reliance on the SDR?  A) gains in the foreign-exchange market B) concerns about the value of the...

The global financial crisis has pushed China closer to ________.

The global financial crisis has pushed China closer to ________. A) operating independently from the central banks of other countries B) discontinuing...

Which of the following has the greatest amount of foreign-exchange reserves in the world?

Which of the following has the greatest amount of foreign-exchange reserves in the world? A) China B) Japan C) Russia D) Taiwan Answer: ...

Which of the following problems with the euro most likely worsened the financial crisis in Greece?

Which of the following problems with the euro most likely worsened the financial crisis in Greece? A) excessive flexibility with interest rates B)...

The major objective of the European Central Bank is to ________.

The major objective of the European Central Bank is to ________. A) set monetary policy for EU countries that adopt the euro B) ensure that EU interest...

Which EU country has NOT adopted the euro?

Which EU country has NOT adopted the euro? A) Germany B) France C) Sweden D) Greece Answer: ...

Which of the following was part of the stability and growth pact that was required for countries to be part of the European Monetary Union?

Which of the following was part of the stability and growth pact that was required for countries to be part of the European Monetary Union? A) The...

Which of the following countries has a soft peg currency?

Which of the following countries has a soft peg currency? A) China B) Brazil C) Japan D) India Answer: ...

Which type of exchange rate arrangement is based on supply and demand?

Which type of exchange rate arrangement is based on supply and demand?  A) soft peg B) hard peg C) crawling D) floating Answer: ...

_______ is a form of locking the value of a country's currency onto another currency.

_______ is a form of locking the value of a country's currency onto another currency. A) Managed floating B) Monetarization C) Dollarization D) Floating Answer:...

The primary result of the Jamaica Agreement was to ________.

The primary result of the Jamaica Agreement was to ________.  A) allow greater exchange-rate flexibility B) set austerity measures for debt control C)...

Which of the following was NOT a result of the Smithsonian Agreement?

Which of the following was NOT a result of the Smithsonian Agreement? A) revaluation of currencies other than the dollar against gold B) establishment...

What role has the IMF played in the Greek financial crisis of 2010-2011?

What role has the IMF played in the Greek financial crisis of 2010-2011? A) setting the value of the drachma B) releasing funds for debt payments C)...

The value of the SDR is currently based on the ________.

The value of the SDR is currently based on the ________. A) euro B) U.S. dollar C) weighted average of four currencies D) weighted average of six...

Which of the following best describes the special drawing right?

Which of the following best describes the special drawing right? A) an international reserve asset created to supplement members' existing reserve...

In order to join the IMF, a country must contribute a certain sum of money, called a ________.

In order to join the IMF, a country must contribute a certain sum of money, called a ________. A) special drawing right B) trade balance C) monetary...

The Bretton Woods Agreement established a system of fixed exchange rates under which each IMF member country set a ________.

The Bretton Woods Agreement established a system of fixed exchange rates under which each IMF member country set a ________.  A) quota B) par...

The primary objective of the International Monetary Fund is to ________.

The primary objective of the International Monetary Fund is to ________.  A) encourage euro adoption B) promote exchange rate stability C) establish...

Which of the following is LEAST relevant to being designated by Euromoney magazine as a top foreign-exchange dealer?

Which of the following is LEAST relevant to being designated by Euromoney magazine as a top foreign-exchange dealer?  A) capability of handling...

An investor sells Japanese yen which is yielding a low interest rate and uses the proceeds to buy Swiss francs that yield a higher interest rate. Which term best describes the investor's actions?

An investor sells Japanese yen which is yielding a low interest rate and uses the proceeds to buy Swiss francs that yield a higher interest rate. Which...

Which of the following best explains why migrant workers in Dubai send money back home?

Which of the following best explains why migrant workers in Dubai send money back home? A) Non-citizens cannot purchase property. B) Non-citizens...

How does arbitrage differ from speculation?

How does arbitrage differ from speculation? A) Speculation, unlike arbitrage, is never used to protect against risk. B) A speculator buys or sells...

Which of the following is an example of interest arbitrage?

Which of the following is an example of interest arbitrage? A) investing in debt instruments in different currencies or different countries B) selling...

Ryan, a foreign-exchange dealer, sold U.S. dollars for Swiss francs in the U.S., then sold Swiss francs for Japanese yen in Switzerland, and then sold the Japanese yen for U.S. dollars in the U.S. Ryan hopes that he will end up with more U.S. dollars than when he began. Which term best describes Ryan's actions?

Ryan, a foreign-exchange dealer, sold U.S. dollars for Swiss francs in the U.S., then sold Swiss francs for Japanese yen in Switzerland, and then sold...

Which of the following best describes arbitrage?

Which of the following best describes arbitrage? A) using foreign exchange to fund new foreign direct investments B) purchasing foreign currency...

Anita, an employee at ABX Partners, a hedge fund firm, has purchased euros because she believes that the euro will strengthen against other currencies. Which term best describes Anita's activities?

Anita, an employee at ABX Partners, a hedge fund firm, has purchased euros because she believes that the euro will strengthen against other currencies....

A speculator is someone who ________.

A speculator is someone who ________. A) trades foreign exchange illegally B) deals in the black market in currency C) takes positions in foreign-exchange...

A letter of credit that provides an exporter with the guarantee of another bank in addition to the importer's bank is called ________.

A letter of credit that provides an exporter with the guarantee of another bank in addition to the importer's bank is called ________. A) a confirmed...

An irrevocable letter of credit ________.

An irrevocable letter of credit ________. A) is issued by a global credit agency B) is the basis for multilateral credit netting C) can be amended...

A document requesting payment 30 days after delivery is known as a ________.

A document requesting payment 30 days after delivery is known as a ________. A) time draft B) sight draft C) spot draft D) futures draft Answer:...

Gomez Enterprises, a firm based in Mexico City, exported 1,000 circuit boards to Taylor Industries, a firm based in Chicago. Taylor received a document from Gomez that requests immediate payment for the goods. Gomez has most likely sent a ________.

Gomez Enterprises, a firm based in Mexico City, exported 1,000 circuit boards to Taylor Industries, a firm based in Chicago. Taylor received a document...

In a ________, one party directs another party to make payment.

In a ________, one party directs another party to make payment. A) reverse letter of credit B) commercial bill of exchange C) commercial bill of...

Which of the following is NOT a reason a company would deal in foreign exchange?

Which of the following is NOT a reason a company would deal in foreign exchange? A) to pay or receive dividends in a foreign currency B) to speculate...

If a company from Country A decides to sell merchandise to a company from Country B, then the company from Country A ________.

If a company from Country A decides to sell merchandise to a company from Country B, then the company from Country A ________. A) will denominate...

Companies most likely use the foreign-exchange market to ________.

Companies most likely use the foreign-exchange market to ________. A) establish fair currency trading policies B) facilitate regular business transactions C)...

Companies most likely use the foreign-exchange market to ________.

Companies most likely use the foreign-exchange market to ________. A) diversify their expenses from other sources B) convert money for use in financial...

When selecting a commercial and/or investment bank to deal in foreign exchange, corporations are most likely to use ________.

When selecting a commercial and/or investment bank to deal in foreign exchange, corporations are most likely to use ________. A) the exchange-based...

Which of the following is NOT one of the top exchanges that trade in foreign currency futures and options?

Which of the following is NOT one of the top exchanges that trade in foreign currency futures and options?  A) CME B) UBS C) NYSE Liffe D) NASDAQ...

Which of the following handles the majority of all foreign-exchange activities?

Which of the following handles the majority of all foreign-exchange activities? A) multinational enterprises B) commodities exchanges C) commercial...

Stella, who works and lives in San Diego, wants to send money to her mother who lives in a small village south of Puerto Vallarta, Mexico. Stella typically uses Western Union to handle the transaction. Which of the following is the most likely reason that Stella uses Western Union?

Stella, who works and lives in San Diego, wants to send money to her mother who lives in a small village south of Puerto Vallarta, Mexico. Stella typically...

Compared with a forward contract, a futures contract ________.

Compared with a forward contract, a futures contract ________. A) is more flexible B) is normally available through commercial banks C) does not guarantee...

Why are options most likely so attractive to companies?

Why are options most likely so attractive to companies? A) The writer of the option does not charge the company any fee for writing the option. B)...

Which of the following is most likely true regarding options?

Which of the following is most likely true regarding options? A) An option can only be purchased from a commercial bank. B) Options are never used...

A(n) ________ is the right but not the obligation to buy or sell a foreign currency within a certain time period or on a specific date at a specific exchange rate.

A(n) ________ is the right but not the obligation to buy or sell a foreign currency within a certain time period or on a specific date at a specific...

The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9100. Pounds are selling at a ________.

The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9100. Pounds are selling at a ________. A) discounted premium B) backward...

The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9059. Pounds are selling at a ________.

The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9059. Pounds are selling at a ________. A) discounted premium B) backward...

If a foreign currency is quoted in American terms (the direct quote) and the forward rate is greater than the spot rate, the foreign currency is selling at a ________.

If a foreign currency is quoted in American terms (the direct quote) and the forward rate is greater than the spot rate, the foreign currency is selling...

If a foreign currency is quoted in American terms (the direct quote) and the forward rate for a foreign currency is less than the spot rate, the foreign currency is selling at a ________.

If a foreign currency is quoted in American terms (the direct quote) and the forward rate for a foreign currency is less than the spot rate, the foreign...

In the foreign-exchange market, the bid is the rate at which ________.

In the foreign-exchange market, the bid is the rate at which ________. A) the trader is willing to sell foreign exchange B) the buyer is willing...

Melissa, a foreign-exchange trader, wants to buy euros from Stephanie. Which of the following is the price at which Melissa is willing to buy euros?

Melissa, a foreign-exchange trader, wants to buy euros from Stephanie. Which of the following is the price at which Melissa is willing to buy euros? A)...

Which of the following is the price at which the trader is willing to sell foreign currency?

Which of the following is the price at which the trader is willing to sell foreign currency? A) offer B) bid C) spread D) cross rate Answer:...

In the spot market, the ________ is the difference between the bid and offer rates and is the trader's profit margin.

In the spot market, the ________ is the difference between the bid and offer rates and is the trader's profit margin. A) bid B) offer C) cross rate D)...

Which of the following is NOT one of the top four locations for trading foreign exchange?

Which of the following is NOT one of the top four locations for trading foreign exchange? A) London B) New York C) Tokyo D) Hong Kong Answer:...

The top location for trading foreign exchange is ________.

The top location for trading foreign exchange is ________. A) London B) New York C) Zurich D) Tokyo Answer: ...

As a center for foreign-exchange trading, London ________.

As a center for foreign-exchange trading, London ________. A) actually trades more U.S. dollars than are traded in the United States B) usually opens...

Why is London most likely the top market for trading foreign exchange?

Why is London most likely the top market for trading foreign exchange? A) The British pound is the world's top trading currency. B) Most multinational...

As a trading currency, the euro is ________.

As a trading currency, the euro is ________. A) more widely traded than the U.S. dollar in seven of the top ten currency markets in the world B)...

Albert, an employee at Morgan Stanley, has been given the task of handling the foreign exchange for a customer who is moving from Brazil to Switzerland in one week. Which of the following should Albert most likely use when exchanging the client's Brazilian real for Swiss francs?

Albert, an employee at Morgan Stanley, has been given the task of handling the foreign exchange for a customer who is moving from Brazil to Switzerland...

The U.S. dollar is most likely traded widely because it is ________.

The U.S. dollar is most likely traded widely because it is ________. A) a reserve currency held by many central banks B) one of the oldest and most...

The ________ is the most widely traded currency in the world.

The ________ is the most widely traded currency in the world. A) pound B) yen C) euro D) U.S. dollar Answer: ...

Which of the following best explains the increase in trading activity in recent years?

Which of the following best explains the increase in trading activity in recent years? A) growing emphasis on hedge funds B) availability of more...

A foreign-exchange contract that is an agreement between two parties to buy or sell a particular currency at a particular price at a particular date in the future as specified in a standardized contract to all participants in the specified market is known as a(n) ________.

A foreign-exchange contract that is an agreement between two parties to buy or sell a particular currency at a particular price at a particular date...

In which of the following transactions is one currency swapped for another on one date and then swapped back on a future date?

In which of the following transactions is one currency swapped for another on one date and then swapped back on a future date? A) reverse transaction B)...

Outright forward transactions involve the exchange of currency on a future date beyond two business days at a fixed exchange rate, known as the ________.

Outright forward transactions involve the exchange of currency on a future date beyond two business days at a fixed exchange rate, known as the ________. A)...

______ involve the exchange of currency the second day after the date on which the two foreign-exchange traders agree to the transaction.

______ involve the exchange of currency the second day after the date on which the two foreign-exchange traders agree to the transaction. A) Spot...

An example of an electronic brokerage system used to trade foreign exchange is ________.

An example of an electronic brokerage system used to trade foreign exchange is ________. A) Reuters B) Interbank Traders Ltd. C) Bank for International...

The interbank market in foreign exchange is where ________.

The interbank market in foreign exchange is where ________. A) electronic brokerage systems are required B) banks trade currency with each other C)...

In foreign-exchange markets, reporting dealers ________.

In foreign-exchange markets, reporting dealers ________. A) work extensively with nonfinancial institutions, such as the regional banks B) trade more...

Which of the following would have the LEAST influence on price setting in the foreign-exchange market?

Which of the following would have the LEAST influence on price setting in the foreign-exchange market? A) Morgan Stanley B) Deutsche Bank C) Western...

In foreign-exchange markets, reporting dealers are ________.

In foreign-exchange markets, reporting dealers are ________. A) financial institutions that actively participate in local and global foreign-exchange...

The relationship between the value of the Brazilian and Chinese currencies is known as the ________.

The relationship between the value of the Brazilian and Chinese currencies is known as the ________. A) stock price B) exchange rate C) foreign-exchange...

If Toranaga-san, who works for a Japanese trading company that operates in Japanese yen, wanted to purchase Spanish castanets from a company in Barcelona and needed Euros to complete the transaction, he would use the ________ to gain access to spot Euros.

If Toranaga-san, who works for a Japanese trading company that operates in Japanese yen, wanted to purchase Spanish castanets from a company in Barcelona...

A(n) ________ is the price of a currency.

A(n) ________ is the price of a currency. A) tariff B) quota C) exchange rate D) subsidy Answer: ...

Which term refers to money denominated in the currency of another nation or group of nations?

Which term refers to money denominated in the currency of another nation or group of nations? A) foreign exchange B) foreign subsidy C) export tariff D)...

Which of the following is the largest source of foreign-exchange income in Mexico?

Which of the following is the largest source of foreign-exchange income in Mexico?  A) FDI B) tourism C) foreign aid D) remittance income Answer:...

In 2010, what was the top remittance-receiving country in the world?

In 2010, what was the top remittance-receiving country in the world? A) Brazil B) Mexico C) India D) China Answer: ...

A major challenge faced by Western Union in wiring money between the United States and Mexico is that ________.

A major challenge faced by Western Union in wiring money between the United States and Mexico is that ________. A) it can only transfer funds in one...

Western Union's role in foreign-exchange trading is best described as ________.

Western Union's role in foreign-exchange trading is best described as ________. A) setting a fair exchange rate in multiple currencies B) transferring...