1. Which of the following is a definition of multinational enterprises? *

3 points

a. A company operating in emerging economies.

b. A company employing foreign nationals.

c. A company headquartered in one country but having operations in other countries

d. The company does at least 30 percent of its business in foreign Markets.

e. None of the above.

2. What does the international Monetary fund do? *

3 points

a. Secure financial stability, facilitate international trade, promote high employment and sustainable economic growth

b. The movement of capital in the global financial system must all take place through a vehicle currency

c. It provides machinery for the orderly adjustment of exchanges rates.

d. It is a sort of lending institution in foreign exchange.

e. None of the Above

3. Why have eurocurrencies and LIBOR remained the centerpiece of the global financial marketplace for so long? *

3 points

a. Because of an international currency issued in Europe or elsewhere outside the country in whose currency its value is stated.

b. The global network utilized by financial institutions to trade currencies and other currency derivatives directly between themselves.

c. It has become an extremely important facet of the global financial system, due to factors to globalization

d. They are largely unregulated and therefore reflect freely traded assets whose value is set by the daily global marketplace.

e. None of the Above

4. Special drawing rights are not *

3 points

a. A credit line allocated by the IMF to member countries according to each countrys quota

b. Backed by US dollars.

c. The IMFs unit of account.

d. A basket of four currencies

e. None of the above.

5. Use the following information to answer questions 5-12. Assume that both Talia Co. located in Turkey and Sahara Co. located in Egypt each have 1,500 production units. With each production unit (a mixture of land, labor, capital and technology), Talia Co. can produce either 75 containers of plastic serving sets or 35 containers of glass serving sets. Sahara Co., on the other hand, can produce from each production unit either 60 containers of plastic serving sets or 55 containers of glass serving sets. If no specialization takes place, and if Talia Co. allocates 1,000 units to the production of plastic serving sets, whereas Sahara allocates 1,000 units to the production of glass serving sets, then the total production of __________ for Talia would be __________, and the total production of __________ for Sahara Co. would be __________. *

4 points

a. glass serving sets, 55,000, plastic serving sets, 75,000.

b. plastic serving sets, 37,500, glass serving sets, 27,500.

c. glass serving sets, 17,500, plastic serving sets, 30,000.

d. plastic serving sets, 75,000, glass serving sets, 27,500.

e. None of the above.

6. What would be the Total Production and Consumption of both companies in the above-mentioned case: *

3 points

a. 105,000 containers of glass serving sets and 72,500 containers of plastic serving sets.

b. 130,000 containers of glass serving sets and 47,500 containers of plastic serving sets.

c. 67,500 containers of plastic serving sets and 82,500 containers of glass serving sets.

d. 97,500 containers of plastic serving sets and 62,500 containers of glass serving sets.

e. None of the above

7. Assume no trade, but specialization takes place, looking at the Domestic Price, what is the opportunity cost of producing 1 container of glass serving sets for Talia Co.? *

3 points

a. 0.46 containers of glass serving sets

b. 0.63 containers of plastic serving sets

c. 1.25 containers of glass serving sets

d. 2.14 containers of plastic serving sets

e. None of the above

8. Looking at the Domestic Price, what is the opportunity cost of producing 1 container of plastic serving sets for Sahara Co. if specialization takes place? *

3 points

a. 0.8 containers of glass serving sets

b. 1.09 containers of plastic serving sets

c. 0.92 containers of glass serving sets

d. 1.57 containers of plastic serving sets

e. None of the above