Question :
71) The United States’ growing trade deficit reflects a number : 1353270
71) The United States’ growing trade deficit reflects a number of factors which exclude:
A) increased imports from China.
B) a seemingly insatiable consumer demand for imported goods.
C) the enormous cost of military operations in the Middle East.
D) the services trade surplus.
E) record goods sales to developing countries.
72) The fastest-growing sector of world trade includes:
A) travel and entertainment.
B) accounting and legal services.
C) royalties and license fees.
D) engineering services.
E) all of the above
73) Devaluation can result from government action or an economic crisis. In August 1998, the Russian economy imploded. As a result, all of the following listed events happened except:
A) the ruble plunged in value.
B) the government defaulted on its foreign debt obligation.
C) many Russians faced wage cuts and layoffs.
D) Russia’s economy did not recover from the impact.
E) savings were wiped out as banks collapsed.
74) To the extent that a country sells more goods and services abroad than it buys, there will be:
A) a greater demand for its currency.
B) a surplus production of goods and services.
C) a scarcity of goods and services within the country.
D) a need for revaluation of its currency.
E) time for fluctuating its currency.
75) The top global merchandise exporter is:
A) China.
B) Germany.
C) the United States.
D) Japan.
E) Korea.
76) The Big Mac Index shows that the price of the Big Mac in China converted from the local currency, yuan, to be $2.18, whereas its price in the United States is $3.73. This shows that:
A) the Big Mac is more popular in China than in the United States.
B) the Big Mac is less expensive in the United States than in China.
C) the Chinese yuan is overvalued when compared to US $.
D) the Chinese yuan is undervalued against the US $.
E) beef is less expensive in China than in the United States.
77) One Friday a few years ago, the Big Mac Index suggested that the yen was overvalued relative to the dollar by 70%. When currency markets opened on the following Monday, anyone using the Big Mac Index would conclude that the yen was only 20% overvalued relative to the dollar. What is the most likely explanation for this?
A) Japan’s Central Bank acted to prop up the yen.
B) Inflation in Japan suddenly spiked upward.
C) McDonald’s headquarters stopped hedging.
D) McDonald’s Japan reduced the yen price of a Big Mac.
E) McDonald’s Japan increased the yen price of a Big Mac.
78) If an American tourist in Tokyo pays more in dollars for the same amount of yen that she bought last week, then:
A) a Japanese tourist in San Francisco pays more in yen for the same amount of dollars that she bought the week before.
B) the dollar has depreciated relative to the yen.
C) the yen has depreciated relative to the dollar.
D) the dollar has appreciated relative to the yen.
E) the dollar and yen both remained same in value.
79) Porsche relies on currency hedging rather than price increases in order to:
A) boost pretax profits on sales of its automobiles.
B) balance the relative value of the dollar compared to the euro.
C) protect all earnings from foreign-exchange movements.
D) generate about 45% of its sales in the United States.
E) A, B, and C
80) When countries or regions experience currency and/or economic stress, all of the following events can take place except:
A) increased exposure to certain risks.
B) new profit opportunities.
C) lower local currency financing costs.
D) bad debts occur.
E) cancellation of aircraft equipment sales.
