Under a gold standard, countries should

Related MCQs

• If countries are highly influential upon each other, the correlations of their economic growth levels would likely be __________. A firm would benefit __________ by diversifying sales among these countries relative to another set of countries that were not influential upon each other.
• When economic conditions of two countries are ________, then a firm would _______ its risk by operating in both countries instead of concentrating just in one.
• Volusia, plc is a UK-based exporting firm that expects to receive payments denominated in both euros and Canadian dollars in one month. Based on today's spot rates, the pound value of the funds to be received is estimated at £500,000 for the euros and £300,000 for the Canadian dollars. Based on data for the last fifty months, Volusia estimates the standard deviation of monthly percentage changes to be 8 percent for the euro and 3 percent for the Canadian dollar. The correlation coefficient between the euro and the Canadian dollar is 0.30. What is the portfolio standard deviation?
• Consider an MNC that is exposed to the Taiwan dollar (TWD) and the Egyptian pound (EGP). 25% of the MNC's funds are Taiwan dollars and 75% are pounds. The standard deviation of exchange movements is 7% for Taiwan dollars and 5% forpounds. The correlation coefficient between movements in the value of the Taiwan dollar and the pound is .7. Based on this information, the standard deviation of this two-currency portfolio is approximately:
• Rule which states that similar set of goods and services produced in various countries should have equal price is classified as
• Under a fixed exchange standard, if the domestic demand for foreign exchange increases
• If a country experiences high inflation relative to the UK, its exports to the UK should _______________, its imports should ___________, and there is __________ pressure on its currency's equilibrium value.
• Other things being equal, countries with relatively _______ populations and _______ inflation are more likely to have a low cost of capital.
• Trade between two countries can be useful if cost ratios of goods are:
• Based on the text, it should be obvious that markets are__________ in reality, and consequently, monopolistic advantages _________ be exploited.