When Japan’s MITI (Ministry of International Trade and Industry) focused resources on the semiconductor industry, and in particular on Random Access Memory (RAM), it was viewed as a typically successful Japanese foray into a new dynamic strategic sector. The results, as viewed by the late 1990s A) justified this view. B) led to similar structuring […]
Monetary policy is most effective at home when exchange rates are flexible. Indicate whether the statement is true or false ANSWER TRUE
The Balance of Payments always balances. Indicate whether the statement is true or false ANSWER TRUE Explanation: Sum of the credits and debits on all accounts will always be equal.
If one country’s wage level is very high relative to the other’s (the relative wage exceeding the relative productivity ratios), then if they both use the same currency A) neither country has a comparative advantage. B) only the low wage country has a comparative advantage. C) only the high wage country has a comparative advantage. […]
If people expect relative PPP to hold A) the difference between the interest rates offered by dollar and euro deposits will equal the difference between the inflation rates expected, in the United States and Europe, respectively, over the relevant horizon. B) the difference between the interest rates offered by dollar and euro deposits will equal […]
Speculation would involve using forward contracts and options to reduce the exchange rate risk on future foreign exchange transactions. Indicate whether the statement is true or false ANSWER FALSE
A substantial amount of trade between industrialized countries is intraindustry or intrafirm trade rather than interindustry trade. Indicate whether the statement is true or false ANSWER TRUE
Inflationary tendencies and even hyperinflation in many Latin American countries have been exacerbated by the tendency of governments to A) tax too heavily. B) regulate too heavily. C) print money to finance policies to stimulate the economy. D) keep out foreign competition. E) use industrial policies to foster growth. ANSWER C
Please define and give an example of sterilized foreign exchange intervention. What will be an ideal response? ANSWER Sterilized foreign exchange intervention occurs when a central bank carries out equal foreign and domestic asset transactions in opposite directions to nullify the impact on the domestic money supply. An example is a central bank purchasing […]
All the following nations except ________ have recently utilized export-led growth policies. A) Hong Kong B) South Korea C) Argentina D) Singapore E) Taiwan ANSWER C
