International Money and Business summary [Distinction] Questions and Answers 2023

international monetary system - -the framework within which countries value and exchange their currencies -balance of payments accounting system - -provides valuable information about an economy health. System provides analysts with information about international transactions that allow them to ...

Trade among nations allows each to take advantage of its area of specialization. - -True -Usually all the goods sold in a community are produced in that community. - -False -Because of its many natural resources, the United States can provide for all of the wants and needs of its people. - -Fa...

International Monetary System - --establishes the rules by which countries value and exchange their currencies. It also provides a mechanism for correcting imbalances between a country's international payments and its receipts. -Balance of payments (BOP) accounting system - --records internation...

India has more millionaires than does China, despite China's higher savings rate. - -false -Foreign exchange markets are - -located in major trading capitals and have a virtual presence. -When a firm enters overseas markets, economic analyses become more complex because now managers must oper...

Bank discount method - -Financial instruments traded using the bank discount method are quoted in terms of a percentage discount from their face value rather than at their yield or rate of return -London Interbank Bid Rate (LIBID) - -The rate top banks pay for taking in Eurocurrency deposits in t...

floating exchange rate system - -when a country allows the foreign exchange market to determine the relative value of currency (US, Euro) -pegged exchange rate - -exists when a country fixes the value of its currency relative to a reference currency -dirty float - -exists when a country tries ...

What is the main difference between domestic and international business? - -The increased risk exposure of internationally operating companies (currency risk, country risk, cross cultural risk, commercial risk) -What are examples of cross-cultural risk? - -cultural differences different negotiat...

Arbitrage - -The act of simultaneously buying and selling the same or equivalent assets or commodities for the purpose of making certain, guaranteed profits. -Market equilibrium - -Exists when no profitable arbitrage opportunities exist. -Interest rate parity - -An arbitrage condition that mus...

Gold Standard - -A monetary system in which paper money and coins are equal to the value of a certain amount of gold -dirty float - -A system under which a country's currency is nominally allowed to float freely against other currencies, but in which the government will intervene, buying and sel...