13) Suppose the real interest rates in the United States are higher than those of our trading partners, what will tend to happen to the foreign exchange value of the dollar and the U.S. current account deficit or surplus? The dollar will depreciate the current account will move toward a deficit The dollar will depreciate the current account will move toward a surplus C. The dollar will appreciate the current account will move toward a deficit The dollar will appreciate the current account will move toward a surplus 14) Why was the World Bank was established? To enhance development solely in Asia through grants To enhance economic development through non-subsidized loans (at market interest rates) To enhance economic development through low-interest rate loans (below-market rates) D. To enhance economic development of the private sector through investment in stock of corporations 15) Which among the following are most commonly classified as a direct foreign investment? A Licensing agreements B. Purchases of international stocks Foreign acquisitions Exporting transactions 16) Suppose Danish investors have Danish Krones available to invest in securities, and they initially view U.S. and British interest rates as equally attractive. Now assume that U.S. interest rates increase while British interest rates stay the same. This would likely cause A the Danish demand for dollars to decrease and the dollar will depreciate against the pound. . the Danish demand for dollars to increase and the dollar will depreciate against the Danish Krone the Danish demand for dollars to increase and the dollar will appreciate against the Danish Krone D the Danish demand for dollars to decrease and the dollar will appreciate against the pound 17) Which of the following changes in the exchange rate represents a depreciation of the dollar? A 100 yen = $1 to 110 yen = $1 B 1 yen = $. 10 to 1 yen = 5.08 1 peso = $10 to 1 peso = $11 200 francs = $10 to 250 francs = $10 18) Among the following transactions, which would be recorded as a credit in the U.S. current account? A Talwanese bank's purchase of IBM stock. A Mexican consumer's purchase of an Apple computer. An American tourist's payment to a hotel in Hing Kong An American consumer's purchase of a Toshiba television set. 19) Among the following theories, which identifies the immobility of resources as a reason for international business? A theory of comparative advantage B. imperfect markets theory. product cycle theory D none of the above