INTERNATIONAL BUSINESS 1. Any company that does business in ...

INTERNATIONAL BUSINESS
1. Any company that does business in several counties simultaneously is referred to as a(n):
a. dumping company
b. ad valorem
c. MVE
d. joint venture
2. Which one of the following terms is used to describe the idea that a state's location, natural
resources, and physical terrain determine its foreign policy?
a. prospect theory
b. geopolitics
c. diversionary theory of geography
d. geography
3. The vast majority of Christians live in:
a. North America, South America
b. Eastern Europe, Asia
c. Europe, North America, South America
d. Asia, Australia
4. The term that refers to the extent to which individuals can move out of the class into which
they are born is referred to as:
a. vertical mobility
b. social potential
c. vertical potential
d. social mobility
5. The exchange rate for immediate delivery of a currency is called the ________ rate.
a. forward
b. clipped
c. demand
d. spot
6. An exchange rate between two countries based on the exchange rates of those countries to a
third currency is called a ________ rate.
a. indirect exchange
b. cross-exchange
c. tiered
d. forward
7. ________ suggests that the exchange rate will adjust to reflect inflation differentials.
a. Inflation parity
b. Currency parity
c. Interest rate parity
d. Purchasing power parity

8. The spot rate of the euro is $1.10. The one-year interest rate in the United States is 5 percent
and 8 percent in Germany. Using interest rate parity, what is the one-year forward price of one
euro?
a. $0.88
b. $1.13
c. $1.07
d. $0.94
9. When the demand for a good or service drops, the demand curve:
a. shifts to the right
b. shifts to the left
c. drops off the chart
d. stabilizes
10. Which one of the following is not a common method used by corporations when raising
money?
a. using earned money
b. borrowing
c. cutting costs
d. selling stock

International Business Answer Key
1. C
2. B
3. C
4. D
5. D
6. B
7. D
8. C
9. B
10. C

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