International Financial Management
Final Exam Questions
Course Introduction
International Financial Management explores the principles and practices that govern the financial operations of multinational corporations. The course covers a range of topics including foreign exchange markets, international capital budgeting, risk management, global financing strategies, and cross-border investment decisions. Emphasis is placed on understanding exchange rate dynamics, managing currency risk, and evaluating investment opportunities in diverse regulatory environments. Through case studies and real-world examples, students develop the analytical tools and knowledge necessary to make informed financial decisions in an increasingly interconnected global economy.
Recommended Textbook
International Finance Theory and Policy 10th Edition by Paul R. Krugman
Available Study Resources on Quizplus
12 Chapters
706 Verified Questions
706 Flashcards
Source URL: https://quizplus.com/study-set/1029
Page 2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/20417
Sample Questions
Q1) The euro,a common currency for most of the nations of Western Europe,was introduced
A) before 1900.
B) before 1990.
C) before 2000.
D) in order to snub the pride of the U.S.
E) in order to fix currencies in terms of the U.S dollar.
Answer: C
Q2) Because the Constitution forbids restraints on interstate trade
A) the U.S. may not impose tariffs on imports from NAFTA countries.
B) the U.S. may not affect the international value of the $ U.S.
C) the U.S. may not put restraints on foreign investments in California if it involves a financial intermediary in New York State.
D) the U.S. may not impose export duties.
E) the U.S. may not disrupt commerce between Florida and Hawaii.
Answer: E
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: National Income Accounting and the Balance of Payments
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/20428
Sample Questions
Q1) Unilateral transfers between countries are
A) long-term loans.
B) only international gifts, never payments that do not correspond to the purchase of any good, service, or asset.
C) part of the current account but not a part of national income.
D) known for reducing the income of capital owners.
E) the difference between Y and GNP if the identity Y = C + I + G + CA holds exactly.
Answer: E
Q2) In 2006,the United States had
A) a surplus in the current account.
B) a balance in the current account.
C) a deficit in the current account.
D) From 2006 data, it is too difficult to determine whether a surplus or a deficit existed in the current account.
E) a positive balance of net financial flows.
Answer: C
Q3) What is the national income identity for an open economy?
Answer: Y = C + I + G + EX - IM
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Labor Productivity and Comparative Advantage:
The Ricardian Model
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/20418
Sample Questions
Q1) Which of the following statements is TRUE?
A) Free trade is beneficial only if your country is strong enough to stand up to foreign competition.
B) Free trade is beneficial only if your competitor does not pay unreasonably low wages.
C) Free trade is beneficial only if both countries have access to the same technology.
D) Free trade is never beneficial for developing countries.
E) Free trade can be beneficial to economic welfare of all countries involved.
Answer: E
Q2) If the world terms of trade for a country are somewhere between the domestic cost ratio of H and that of F,then
A) country H but not country F will gain from trade.
B) country H and country F will both gain from trade.
C) neither country H nor F will gain from trade.
D) only the country whose government subsidizes its exports will gain.
E) country F but not country H will gain from trade.
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Specific Factors and Income Distribution
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/20419
Sample Questions
Q1) In the specific factors model,which of the following is treated as a specific factor?
A) capital
B) labor
C) cloth
D) food
E) technology
Q2) A country's budget constraint states that
A) whether or not a country engages in trade, the value of goods consumed must be equal to the value of goods produced.
B) real income in the exporting country must be equal to real income in the importing country.
C) unless a country engages in trade, the value of goods consumed cannot exceed the value of goods produced.
D) a country will engage in trade only if the value of goods consumed exceeds the value of goods produced.
E) a country will engage in trade only if the value of goods produced exceeds the value of goods consumed.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Resources and Trade: The Heckscher-Ohlin
Model
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/20420
Sample Questions
Q1) If Australia has relatively more land per worker,and Belgium has relatively more capital per worker,then if trade began between these two countries
A) the relative price of the land-intensive product would increase in Australia.
B) the relative price of the capital-intensive product would increase in Australia.
C) the relative price of the land-intensive product would increase in Belgium.
D) the relative price of the capital-intensive product would decrease in Belgium.
E) relative product prices would diverge between Australia and Belgium.
Q2) If Australia has more land per worker,and Belgium has more capital per worker,then if trade began between these two countries
A) the real income of landowners in Belgium would decline.
B) the real income of capital owners in Australia would increase.
C) the real income of labor in Australia would decline.
D) the real income of labor in Belgium would decline.
E) the real income of labor in both countries would decline.
Q3) International trade leads to complete equalization of factor prices.Discuss.
Q4) Countries do not in fact export the goods the H.O.theory predicts.Discuss.
Q5) "No country is abundant in everything." Discuss.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: The Standard Trade Model
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/20421
Sample Questions
Q1) The meaning of "terms of trade" is
A) the price of a country's exports divided by the price of its imports.
B) the amount of exports sold by a country.
C) the price conditions bargained for in international markets.
D) the quantities of imports received in free trade.
E) the tariffs in place between two trading countries.
Q2) Terms of trade refers to
A) the relative price at which trade occurs.
B) what goods are imported.
C) what goods are exported.
D) the volume of trade.
E) the tariffs applied to trade.
Q3) Tastes of individuals are represented by
A) indifference curves.
B) production possibility frontiers.
C) isovalue lines.
D) production functions.
E) the terms of trade.
Q4) Describe the nature of trade between two countries based on intertemporal comparative advantage.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: External Economies of Scale and the
International Location of Production
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/20422
Sample Questions
Q1) If a firm's output more than doubles when all inputs are doubled,production is said to occur under conditions of
A) increasing returns to scale.
B) imperfect competition.
C) intra-industry equilibrium.
D) constant returns to scale
E) decreasing returns to scale.
Q2) In the presence of external economies of scale,trade
A) may or may not improve welfare in both countries.
B) will unambiguously improves welfare in both countries.
C) will unambiguously worsens welfare in both countries.
D) will unambiguously worsen welfare in the exporting country and improve welfare in the importing country.
E) will unambiguously improve welfare in the exporting country and worsen welfare in the importing country.
Q3) Why is it that if an industry is operating under conditions of internal scale economies then the resultant equilibrium cannot be consistent with the pure competition model?
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Firms in the Global Economy: Export
Decisions,Outsourcing,and Multinational Enterprises
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/20423
Sample Questions
Q1) A product is produced in a monopolistically competitive industry with scale economies.If this industry exists in two countries,and these two countries engage in trade with each other,then we would expect
A) each country will export different varieties of the product to the other.
B) the country in which the price of the product is lower will export the product.
C) the country with a relative abundance of the factor of production in which production of the product is intensive will export this product.
D) neither country will export this product since there is no comparative advantage.
E) the countries will trade only with other nations they are not in competition with.
Q2) Intra-industry trade will tend to dominate trade flows when which of the following exists?
A) small differences between relative country factor availabilities
B) large differences between relative country factor availabilities
C) homogeneous products that cannot be differentiated
D) constant cost industries
E) uneven distribution of abundant resources between two countries
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: The Instruments of Trade Policy
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/20424
Sample Questions
Q1) Refer to above figure.With a specific tariff of $3 per unit,what is the quantity of Widgets consumed domestically?
Q2) Which of the following are examples of goods that have been subject to voluntary export restraints?
A) Japanese cars and Chinese solar panels
B) Belgian chocolates and French wines
C) French wines and cheeses
D) Japanese sushi and German cars
E) Taiwanese electronics and Canadian barley
Q3) The deadweight loss of a tariff
A) is a social loss because it promotes inefficient use of national resources.
B) is a social loss because it reduces the revenue of the government.
C) is not a social loss because it merely redistributes revenue from one sector to another.
D) is not a social loss because it is paid for by rich corporations.
E) is not a social loss because it aids domestic consumers.
Q4) Refer to above figure.With free trade and no tariffs,what is the quantity of Widgets imported?
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: The Political Economy of Trade Policy
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/20425
Sample Questions
Q1) The World Trade Organization provides for all of the following EXCEPT
A) the usage of the most favored nation clause.
B) assistance in the settlement of trade disagreements.
C) bilateral tariff reductions.
D) multilateral tariff reductions.
E) the prevention of nontariff interventions in trade.
Q2) Assume that a country has a domestic demand curve defined as Qd = 100 - 2P and a domestic supply curve defined as Qs = -20 + 3P.What is the autarchy equilibrium price and quantity?
Q3) Today U.S.protectionism is concentrated in
A) high-tech industries.
B) labor-intensive industries.
C) industries in which Japan has a comparative advantage.
D) computer intensive industries.
E) capital-intensive industries.
Q4) Presumably,since the United States is a large country in many of its international markets,a positive optimum tariff exists for this country.It follows therefore that when any legislator or government official who promotes zero-tariff free trade policies,is by definition not acting in the public's best interest.Discuss.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Trade Policy in Developing Countries
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/20426
Sample Questions
Q1) China's recent experience supports the proposition that
A) "economic miracles" are solely to be expected in small countries.
B) central planning and socialism can promote sustained economic growth.
C) a lessening of income disparities is a prerequisite for economic growth.
D) growth in a large country cannot be affected by its foreign sector.
E) policy changed can dramatically prompt export oriented growth
Q2) Classical and Neoclassical trade theory makes the case that free trade can bring a country to an optimum and economically efficient use of its resources;and hence is an optimal trade-policy,if the objective is maximizing long term economic growth.There are those who argue that the experience of the Asian Miracle countries,such as Taiwan,South Korea and Singapore verify this argument in the real world.Explain.There are others who argue that the experience of these countries cannot be used to verify or support the argument above.Explain.
Q3) Sophisticated theoretical arguments supporting import-substitution policies include A) terms of trade effects.
B) scale economy arguments.
C) learning curve considerations.
D) the problem of appropriability.
E) domestic market failure arguments.
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Controversies in Trade Policy
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/20427
Sample Questions
Q1) The reason Airbus succeeded in the Brander Spencer example is that
A) the European government made an explicit subsidy offer, but the U.S. government did not.
B) Airbus' prices were better when adjusted for quality and warranty services.
C) Boeing traditionally refused to undertake any exchange rate risk in its transactions.
D) the U.S. acted in accordance with its ideological reliance on market solutions, whereas the Europeans ignored market and technological factors.
E) the Airbus plane benefited from more advanced technology.
Q2) Working conditions for clothing workers in Bangladesh are very poor.If countries refuse to buy clothing from Bangladesh in order to encourage change,the effect is likely to be that
A) firms will be forced to comply and workers will be better off.
B) firms will refuse to comply, but workers will be better off.
C) firms will try to comply and workers will be worse off.
D) firms will try to comply and workers will be better off.
E) regardless of how firms respond, workers will be better off.
Q3) What is a pollution haven?
Q4) Describe the environmental Kuznets curve.
To view all questions and flashcards with answers, click on the resource link above.
Page 14