International joint ventures can lead to welfare losses when the newly established firm
A. | adds to the pre-existing productive capacity |
B. | enters markets neither parent could have entered individually |
C. | yields cost reductions unavailable to parent firms |
D. | gives rise to increased amounts of market power |
Option: D Explanation : Click on Discuss to view users comments. |
Credit (+) items in the balance of payments correspond to anything that
A. | involves receipts from foreigners |
B. | involves payments to foreigners |
C. | increases the domestic money supply |
D. | decreases the demand for foreign exchange |
Option: A Explanation : Click on Discuss to view users comments. |
Suppose that a Swiss television set that costs 400 francs in Switzerland costs $200 in the United States. The exchange rate between the franc and the dollar is
A. | 2 francs per dollar |
B. | 1 franc per dollar |
C. | $2 per franc |
D. | $3 per franc |
Option: A Explanation : Click on Discuss to view users comments. |
The franc is said to be selling at a ____ if the spot dollar price is $0.48 and the ninemonth forward rate is $0.42.
A. | forward discount |
B. | forward premium |
C. | forward spread |
D. | none of the above |
Option: A Explanation : Click on Discuss to view users comments. |
The exchange rate system that best characterizes the present international monetary arrangement used by industrialized countries is
A. | freely fluctuating exchange rates |
B. | adjustable pegged exchange rates |
C. | managed floating exchange rates |
D. | pegged or fixed exchange rates |
Option: C Explanation : Click on Discuss to view users comments. |