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International Financial Management Test Bank

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International Financial Management Test Bank International Financial Management Test Bank ch1 Student: The first two columns give the maximum daily amounts of beer and whiskey that Southern Irela... nd and Northern Ireland can produce when they completely specialize in one or other product. The last two columns give each country's consumption without trade. 1. Is Northern Ireland better off when it trades with Southern Ireland? True False 2. Now suppose that Southern workers receive a raise to €2 per day. Will trade be possible at the exchange rate you found in the last question? True False 3. Now suppose that Southern workers are paid €1 per day but the Northern workers receive a raise to £2 per day. Will trade be possible at the exchange rate you found in the question before the last question? True False 4. What major dimension sets apart international finance from domestic finance? A. Foreign exchange and political risks B. Market imperfections C. Expanded opportunity set D. All of the above 5. An example of a political risk is A. expropriation of assets. B. adverse change in tax rules. C. the opposition party being elected. D. both answers a) and b) are correct. 6. Production of goods and services has become globalized to a large extent as a result of A. natural resources being depleted in one country after another. B. skilled labor being highly mobile [Show More]

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