Question 1

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

Accepted Answer

In 2009, South Korea was upgraded from "emerging" to "developed" status by the Financial Times Stock Exchange (FTSE).

Question 2

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, there will be a greater demand for its currency as foreign buyers will need to exchange their currency for the country's currency in order to buy the goods and services. This increased demand for the currency will lead to an increase in its value.

Question 3

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

Accepted Answer

The services trade surplus is the only factor listed that would not contribute to the growing trade deficit.

Question 4

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 5

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

Accepted Answer

Lower local currency financing costs are a possible event that can take place when a country or region experiences currency and/or economic stress. Therefore, this option cannot be the correct answer. The other options, A, B, D, and E, are all possible events that can occur during currency and/or economic stress.

Question 6

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, Europe, and Asia-Pacific. Together, these regions account for approximately 75% of world income as measured by GNP, making option B the correct answer. Option A is incorrect as it is an underestimation of their economic significance. Option C is incorrect as this definition of the Triad is not commonly used. Option D is incorrect as it is an even greater underestimation of their economic significance. Option E is incorrect as it is not a commonly used measure of world income.

Question 7

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 compare the prices of a Big Mac in different countries and to determine the purchasing power of currencies. Based on the given information, the price of the Big Mac in China (converted to US $) is lower than in the United States. This suggests that the Chinese yuan is undervalued when compared to the US $. Therefore, option D is the correct choice. The price of the Big Mac does not indicate its popularity or the price of beef in China.

Question 8

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

Accepted Answer

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

Question 9

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

If the yen price of a Big Mac decreased, while the dollar price remained the same, it would suggest that the yen is becoming cheaper relative to the dollar. This would result in the Big Mac Index suggesting that the yen is less overvalued relative to the dollar. Therefore, McDonald's Japan reducing the yen price of a Big Mac is the most likely explanation for the change in the Big Mac Index's valuation of the yen.

Question 10

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

Accepted Answer

The Expanded Triad is a term used to describe the three largest economic regions in the world: the United States, the European Union, and Japan. Therefore, Russia is not included in this list.

Question 11

Which of the following statements is not accurate?

Accepted Answer

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

Question 12

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

The OECD has been addressing global issues such as bribery through its Anti-Bribery Convention, requiring members to cooperate in pursuing allegations. It also helps members assess their economic policies and has been focused on social policy and labor market regulations through committees that review and make recommendations.

Question 13

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 option "New e-commerce markets for interactive forms of electronic communication" demonstrates how postindustrial societies heavily rely on new products and innovations. The shift towards digitalization and e-commerce has created new opportunities for businesses to reach consumers in interactive ways. This showcases the importance of coming up with new products and ideas to succeed in a postindustrial society. The other options do not specifically demonstrate this reliance on innovation and new products.

Question 14

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

Portfolio investments are recorded in the capital account, not the current account. The current account includes transactions like the balance on goods and services, goods imports, and goods exports.

Question 15

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 16

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 17

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

Accepted Answer

Porsche relies on currency hedging to balance the relative value of the dollar compared to the euro, protect all earnings from foreign-exchange movements, and boost pretax profits on sales of its automobiles without increasing prices. As Porsche generates about 45% of its sales in the United States, it is important for them to manage currency risk effectively. Therefore, option E is the correct answer.

Question 18

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

A measurement of 0.5 elevators per thousand people suggests that there is still a significant portion of the population without access to elevators, indicating a low product saturation level in China.

Question 19

The top global merchandise exporter is:

Accepted Answer

China has been the world's largest merchandise exporter since 2009, contributing 13.8% to the total global exports in 2020. Germany, the United States, Japan, and Korea follow China in the ranking of top merchandise exporters.

Question 20

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 statement "Russia's economy did not recover from the impact" is incorrect as Russia did eventually recover from the 1998 crisis, although it took several years to do so.

Quiz 2: The Global Economic Environment

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