Question 1

Recently,the Organization for Economic Cooperation and Development (OECD)has become more focused on global issues,social policy,and labor market regulations as seen by:

Accepted Answer

All of the options are examples of how the OECD has become more focused on global issues, social policy, and labor market regulations. The OECD has addressed the issue of bribery, requiring member cooperation in pursuing allegations, and works with members to assess their economic policies. The OECD also has committees focused on reviewing and improving social policies.

Question 2

The fastest-growing sector of world trade includes:

Accepted Answer

All the options listed (travel and entertainment, accounting and legal services, royalties and license fees, and engineering services) are part of the services sector, which is the fastest-growing sector in world trade. This sector includes a wide range of services that are increasingly being traded internationally, thanks to advancements in technology and globalization.

Question 3

Product and market opportunities in a postindustrial society are more heavily dependent upon new products and innovations than in industrial societies.An example of this would be:

Accepted Answer

The statement mentions that product and market opportunities in a postindustrial society are more heavily dependent upon new products and innovations. The new e-commerce markets for interactive forms of electronic communication represent such innovative products and opportunities that are distinct from those in traditional industrial societies. The other options are either not specific to postindustrial societies or do not demonstrate a clear dependency on new products and innovations.

Question 4

The term "Expanded Triad" includes all of the following countries or regions except:

Accepted Answer

The Expanded Triad typically includes the United States, Japan, and Europe (including Canada). Russia is not typically included in this group.

Question 5

The United States' growing trade deficit reflects a number of factors which exclude:

Accepted Answer

The services trade surplus actually helps to offset the trade deficit, not contribute to it. The trade deficit is primarily concerned with the balance of goods, and a surplus in services trade indicates that the U.S. exports more services than it imports, which would mitigate rather than exacerbate the trade deficit.

Question 6

Devaluation can result from government action or an economic crisis.In August 1998,the Russian economy imploded.As a result,all of the following listed events happened except:

Accepted Answer

The question states that the Russian economy "imploded" in August 1998. The word "imploded" generally implies a sudden and severe collapse. Therefore, it is likely that Russia's economy did not immediately recover from the impact. However, the question does not provide any information that explicitly states that Russia's economy never recovered. Therefore, we cannot say for certain that option D is incorrect. However, based on the given information, all of the other options (A, B, C, and E) are accurate descriptions of the events that followed Russia's economic crisis in 1998.

Question 7

Measuring elevator populations in countries measured as units installed per thousand people gives an estimate of the market for elevators.That China has about one half an elevator per thousand people is indicative of:

Accepted Answer

An elevator population of one half per thousand people indicates a relatively low product saturation level, meaning that there is still room for growth in the elevator market in China.

Question 8

To the extent that a country sells more goods and services abroad than it buys,there will be:

Accepted Answer

When a country sells more goods and services abroad than it buys, it earns more foreign currency than it spends. This increases the international demand for its currency, resulting in a greater demand for its currency and a rise in its value.

Question 9

The Big Mac Index shows that the price of the Big Mac in China converted from the local currency,yuan,to be $2.18,whereas its price in the United States is $3.73.This shows that:

Accepted Answer

The Big Mac Index is used to measure purchasing power parity (PPP) between two currencies. If the price of a Big Mac in one country is lower than in another country, it means that the currency of the first country is undervalued when compared to the second. In this case, the price of a Big Mac in China (converted to US dollars) is lower than in the United States, indicating that the yuan is undervalued against the US dollar. Therefore, the correct answer is D.

Question 10

Which country was upgraded from "emerging" to "developed" status by the Financial Times Stock Exchange (FTSE)in 2009?

Accepted Answer

The Financial Times Stock Exchange (FTSE) upgraded South Korea from "emerging" to "developed" status in 2009 based on its economic development, market size, liquidity, and regulatory environment.

Question 11

If an American tourist in Tokyo pays more in dollars for the same amount of yen that she bought last week,then:

Accepted Answer

If the American tourist is paying more in dollars for the same amount of yen, it means that the value of the dollar has decreased in relation to the yen. Therefore, when the Japanese tourist buys dollars in San Francisco, they will have to pay more yen for the same amount of dollars compared to the previous week. So, option B is the correct answer.

Question 12

When countries or regions experience currency and/or economic stress,all of the following events can take place except:

Accepted Answer

During currency and/or economic stress, local currency financing costs usually increase due to higher interest rates and inflation. Therefore, the statement "lower local currency financing costs" is not a possible event. The other options (A, B, D, and E) are all potential events that can occur during currency and/or economic stress.

Question 13

The Organization for Economic Cooperation and Development (OECD)is comprised of:

Accepted Answer

The answer of The Organization for Economic Cooperation and Development...

Question 14

Which of the following statements is not accurate?

Accepted Answer

The answer of Which of the following statements is not...

Question 15

Porsche relies on currency hedging rather than price increases in order to:

Accepted Answer

Porsche relies on currency hedging to achieve all three goals mentioned in options A, B, and C. They use financial instruments like forward contracts and options to mitigate the impact of foreign exchange movements on their profits and balance the relative value of the dollar compared to the euro. This strategy allows them to avoid price increases and maintain their competitiveness in different markets, including the United States where they generate about 45% of their sales.

Question 16

The "balance of payments" is a record of all economic transactions between the residents of a country and the rest of the world.It is divided into the current and capital accounts.Current accounts include all of the following except:

Accepted Answer

The current account includes the balance on goods, services and transfers. Portfolio investments fall under the capital account, which tracks financial flows such as foreign direct investment and loans. Therefore, option B is not part of the current account.

Question 17

One Friday a few years ago,the Big Mac Index suggested that the yen was overvalued relative to the dollar by 70%.When currency markets opened on the following Monday,anyone using the Big Mac Index would conclude that the yen was only 20% overvalued relative to the dollar.What is the most likely explanation for this?

Accepted Answer

The most likely explanation is that McDonald's Japan reduced the yen price of a Big Mac, as this would cause the yen to appear less overvalued relative to the dollar according to the Big Mac Index.

Question 18

Which two companies are sourcing product components from small-scale enterprises,which in turn are helping preserve old-growth forests as well as economic opportunities in Brazil?

Accepted Answer

The answer of Which two companies are sourcing product components...

Question 19

The top global merchandise exporter is:

Accepted Answer

According to recent data from the World Trade Organization, China is the top global merchandise exporter, accounting for over 13% of the world's total exports in 2019. Germany comes in second place with a share of 8.2%, followed by the United States (7.1%), Japan (3.9%), and Korea (2.7%).

Question 20

Which of the following is true about the Triad?

Accepted Answer

The Triad refers to the three major economic regions of the world - North America, Western Europe, and Japan. Together, they account for approximately 75% of world income as measured by GNP. Therefore, option B is the correct answer. Option A, D, and E are incorrect because they either underestimate or overestimate the contribution of the Triad to world income. Option C is also incorrect because it defines the Triad based on the contribution of different sectors to GDP, which is not accurate.

Quiz 2: The Global Economic Environment

Recently,the Organization for Economic Cooperation and Development (OECD) has become more focused on global issues,social policy,and labor market regulations as seen by: