1. Which of the following is NOT TRUE regarding Eurocurrencies?

a. All of the above are true

b. The Eurocurrency is the market for getting loans in a currency that is different from the lending bank's home currency

c. The Eurocurrency is similar to the Euro

d. The Eurocurrency actually existed before the Euro

2. The most common currency banked outside of its country of origin is the US dollar and is known as a. Rupees

b. Pound Sterling

c. Eurodollars

d. Dollarization

3.The spot transaction is one in which foreign currency is purchased immediately at a specific exchange rate

a. True

b. False

4. Economies of scale is one of the major factors as discussed in Porter's national diamond

a. True

b. False

5. The demand for a currency is based on a. Currency demand

b. Supply demand

c. Exchange demand

d. Derived demand

6. Heckscher - Ohlin Theory

a. Falling borders, rise of global products and global customers, growing use of Internet b. Business practices that minimize the impact of business operations on the earth's environment thereby enhancing the earth's ecosystem to stay healthy c. Talks about the supply or amount of money in country increases, the prices in that country tend to go up as well

d. Argues that a nation's comparative advantage comes from the relative abundance of its factor endowments

7.According to the Heckscher-Ohlin Theory, what are the two types of factor endowments?

a. Capital and infrastructure

b. Capital and labor

c. None of the above

d. Demand and supply

8. When a country has a surplus of exports over imports, economists call this

a. Absolute advantage

b. Favorable trade balance

c. Specie-flow mechanism

d. Comparative advantage

9. ----------------- is like a tennis match; when one person wins a point, the other person loses.

a. Win - lose game

b. Zero - sum game

c. Wimbledon

d. Gain - loss game

10. The market for getting loans in a bank's home currency is the Eurocurrency market

a. True

b. False

11. When a country adopts the currency of another country, it is using the currency-basket peg

a. True

b. False

12. Comparative advantage a. Explains how relative differences within countries can lead to beneficial trade between partners b. Explains the integration mechanisms of a common market c. Explains the free movement of labor, capital, and technology between member nations' borders d. Explains the quotas that limit the amount of imports or exports

13. The foreign exchange market is the combination of central and private banks and foreign exchange dealers and brokers through which people can trade in foreign currencies

a. True

b. Flase