Finance Sample Questions

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Additional Sample Questions. Set I (red) Set II (blue), and Set III (black).

1. Which of the following would likely have the least direct influence on a country’s current account?

a. Inflation. b. National income. c. Exchange rates. d. Tariffs. e. Tax on income earned on foreign stocks.

2. ______________ is (are) income received by investors on investments in foreign financial assets (securities).

a. Portfolio income b. Foreign direct investment income c. Unilateral transfers d. Factor income e. All of the above

3. Also known as the “Central Banks’ Central Bank,” the ___________ attempts to facilitate cooperation among countries with regard to international transactions and provides assistance to countries experiencing a financial crisis.

a. World Bank b. International Financial Corporation (IFC) c. World Trade Organization d. International Development Association (IDA) e. Bank for International Settlements (BIS)

4. ___________ is not a factor that causes currency supply and demand schedules to change.

a. Relative inflation rates b. Change in exchange rates. c. Relative interest rates d. Relative income levels e. Expectations

5. A large increase in the income level in Mexico along with no growth in the U.S. income level, ceteris paribus, is expected to cause a/an _________ in Mexican demand for U.S. goods, and the Mexican peso should ____________

a. Increase; appreciate b. Increase; depreciate c. Decrease; depreciate d. Decrease; appreciate

6. An increase in U.S. interest (real) rates relative to German interest rates would likely ___________ the U.S. demand for euros and ____________ the supply of euros for sale.

a.…...

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