Question 1 (1 point)
Trade diversion refers to the: Question 1 options:
tendency of the member countries to trade more with each other than 1) with nonmember nations due to the removal of trade barriers. 2) movement of production to cheaper labor markets in member countries.
movement of workers to job markets to gain access to better jobs and 3) wages. 4) dilution of the political and economic rights of a country.
increased number of opportunities for countries to trade with one 5) another by removing the barriers to trade and investment.
Question 2 (1 point) The decisions taken by the Security Council are not binding on the rest of the
member nations of the UN. Question 2 options:
1) True
2) False
Question 3 (1 point)
The Benelux countries refer to: Question 3 options:
1) Belgium, Luxembourg, and Norway.
2) Belgium, Luxembourg, and the Netherlands.
3) Belarus, Luxembourg, and Norway.
4) Belgium, Latvia, and Norway.
5) Belarus, Latvia, and the Netherlands.
Question 4 (1 point) Taiwan has been prevented from membership because of the political issue with China and has only been granted observer status by the United Nations. Question 4 options:
1) True
2) False
Question 5 (1 point)
What is CEFTA? Question 5 options:
It is the only regional trading group that uses the term "member 1) economies" rather than "countries." It is a trading group that focuses on the development of the coal and 2) steel industries in Europe for peaceful purposes. It is a trade agreement between the European countries in Northern and 3) Western Europe.
4)
5) It is a trading group that focuses on economic, social, cultural, and technical cooperation as well as promoting regional peace and stability in Northern Europe.
It is a trade agreement between nonEU countries in Central and Southeastern Europe. Question 6 (1 point)
The _____ makes up the judicial branch of the EU consisting of three different
courts. Question 6 options:
1) European Commission
2) European Parliament
3) European Council
4) European Court of Human Rights
5) Court of Justice
Question 7 (1 point)
The basic underlying principle of GATT was: Question 7 options: 1) free and equal trade.
2) it was unethical to form trade blocs by the developed nations.
3) that free trade was unrealistic and damaging to individual nations.
4) that tariff barriers were important for the development of a country.
5) that the MFN concept was antitrade and discriminatory in nature.
Question 8 (1 point)
The goal of NAFTA has been to encourage trade between the South American countries. Question 8 options:
1) True
2) False
Question 9 (1 point)
GATT’s initial focus was on nontariff barriers of trade. Question 9 options:
1) True
2) False
Question 10 (1 point)
One of GATT’s key provisions stated that if the mostfavorednation clause status was granted by a country to another country, then it was automatically extended to all other member countries. Question 10 options:
1) True
2) False
Question 11 (1 point) The European Union (EU) consists of the same countries as the continent of Europe. Question 11 options:
1) True
2) False
Question 12 (1 point)
Global firms in general prosper best in times of conflict. Question 12 options:
1) True
2) False
Question 13 (1 point)
The _____ is a series of rules governing trade that were first created in 1947
by 23 countries. Question 13 options:
1) Pacific Accord
2) G3 Free Trade Agreement
3) General Agreement on Tariffs and Trade
4) Southern Common Market
5) North American Free Trade Agreement
Question 14 (1 point)
The _____ provides the daytoday leadership and initiates legislation. Question 14 options:
1) European Commission
2) European Parliament
3) European Council
4) Council of the European Union
5) Court of Justice Question 15 (1 point)
Intellectual property rights (IPR) law does not deal with the financial aspect
of a creation of an individual. Question 15 options:
1) True
2) False
Question 16 (1 point)
What was the primary goal for the development of the European Union (EU)? Question 16 options:
To use it as a platform to further European military and political 1) goals 2) To establish a common financial denomination for the whole world
3) To bar nonEuropean countries from trading with European countries
To create a larger trading platform to compete against the United 4) States, China, and India To transform Europe and Asia into a single political and 5) administrative unit
Question 17 (1 point) _____ refers to a kind of economic cooperation wherein member countries are free to independently determine trade policies with nonmember nations. Question 17 options:
1) Free zone
2) Export processing zone
3) Free trade area
4) Free port
5) Free trade zone
Question 18 (1 point)
Current account deficit refers to: Question 18 options:
the amount of borrowing that a country does from either the private 1) sector or other countries. the market value of all final goods and services produced within a 2) country in a given period. the accounting record of all monetary transactions between a country 3) and the rest of the world. 4) imports being greater than the exports.
5) the net inflow of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor. Question 19 (1 point)
The Gulf Cooperation Council is an example of a customs union because: Question 19 options:
the union frames the economic policies of the member countries 1) individually. there are no restrictions on the movement of labor and capital between 2) member countries. member countries agree to treat trade with nonmember countries in a 3) similar manner. member countries are free to independently determine trade policies 4) with nonmember nations. 5) member countries adopt common economic policies.
Question 20 (1 point)
Which of the following statements is true about the European Council? Question 20 options:
1) It provides daytoday leadership and initiates legislation.
It reviews, interprets, and applies the treaties and laws of the 2) European Union. 3) It makes laws on domestic matters for the member countries.
4) It debates and amends legislation proposed by the European Commission.
5) It collectively functions as the European Union’s "Head of State."
Question 21 (1 point) MERCOSUR is committed to the consolidation of democracy and the maintenance of
peace throughout the Asian continent. Question 21 options:
1) True
2) False
Question 22 (1 point)
The General Agreement on Trade in Services (GATS) requires member nations to treat foreign service companies as they would domestic ones. Question 22 options:
1) True
2) False Question 23 (1 point)
One of the advantages of the gold standard is that countries were forced to observe strict monetary policies. Question 23 options:
1) True
2) False
Question 24 (1 point)
Which of the following is true of the gold standard as the international monetary system? Question 24 options:
1) The gold standard allowed countries to observe lax monetary policies.
2) The volume of paper currency could not exceed the gold reserves.
3) The countries could just print money to combat economic downturns.
The gold standard provided for the devaluation of the currency to 4) prevent the largescale economic downturn.
5) The gold standard tied the currencies of all the countries to the U.S. dollar. Question 25 (1 point)
Russia’s renewed calls for the G20 to replace the U.S. dollar were due to the fact that as the largest holder of U.S. dollar financial assets, it is concerned about the potential inflationary risk of the U.S. Federal Reserve printing money. Question 25 options:
1) True
2) False
Question 26 (1 point)
The SDR serves as the unit of account of the IMF and countries borrow from the
IMF in SDRs in times of economic need. Question 26 options:
1) True
2) False
Question 27 (1 point)
The Bretton Woods Agreement was a new dollarbased monetary system, which did away with all the provisions of the gold standard. Question 27 options:
1) True
2) False
Question 28 (1 point)
_____ refers to the percentage of the assets in cash or another liquid form that banks are required to maintain. Question 28 options:
1) Float 2) Trade deficit
3) Exchange rate
4) Reserve currency
5) Bank reserve
Question 29 (1 point)
The World Bank’s first loans were extended during the late 1940s to finance the: Question 29 options:
infrastructural development of the newly independent countries of 1) Asia. 2) reconstruction of the warravaged economies of Western Europe.
3) economic rehabilitation of the faminestruck countries of West Africa.
4) repatriation and the settlement of the Jewish population in Israel.
5) restoration of the financial institutions of North America.
Question 30 (1 point)
The Bretton Woods system tied the value of the currencies of all other countries to the U.S. dollar rather than directly to gold. Question 30 options:
1) True
2) False
Question 31 (1 point)
Gold standard refers to the: Question 31 options:
preWorld War I global monetary system that used gold as the basis of 1) international economic exchange. highest rating that is given to an organization for following the 2) international standards of corporate social responsibility. highest rating that is given to a country with regard to the ease with 3) which an organization can set up business in that particular country.
4) best business practices that need to be followed by organizations in the international market.
highest standard of transparency that national governments exhibit in 5) their administrative and financial dealings.
Question 32 (1 point) The global economic crisis of 2008 began with the 2007 collapse of mortgage lending in the United States. Question 32 options:
1) True
2) False
Question 33 (1 point)
Rapid Credit Facility refers to: Question 33 options:
a system in which currencies float against one another with 1) governments intervening only to stabilize their currencies at set target exchange rates. 2) a negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. 3) an international monetary reserve asset issued by the IMF.
the main currency that many countries and institutions hold as part of 4) their foreign exchange reserves. a system of disbursing loans which is frontloaded and has low 5) conditionality.
Question 34 (1 point) The devaluation of the dollar by the United States in 1934 forced U.S. firms to export less as the price of their goods and services were higher visàvis other nations. Question 34 options:
1) True
2) False
Question 35 (1 point) The _____ are often called the Bretton Woods Institutions. Question 35 options:
1) Asian Development Bank and EBRD
2) InterAmerican Development Bank and AFDB
3) World Trade Organization and GATT
4) World Bank and the IMF
5) West African Development Bank and BDEAC
Question 36 (1 point)
The central purpose of the World Bank is to: Question 36 options:
promote foreign direct investment into developing countries by 1) insuring investors against political risk. promote sustainable private sector development primarily by financing 2) private sector projects and companies located in the developing world.
promote exchange stability, to maintain orderly exchange arrangements 3) among members, and to avoid competitive exchange depreciation. promote economic and social progress in developing countries by 4) helping raise productivity so that their people may live a better and fuller life. provide facilities for the conciliation and arbitration of investment 5) disputes between member countries and individual investors.
Question 37 (1 point)
The World Bank consists of two main bodies which are the: Question 37 options:
1) Asian Development Bank and EBRD.
2) InterAmerican Development Bank and AFDB.
3) World Trade Organization and GATT.
International Finance Corporation (IFC) and the Multilateral 4) Investment Guarantee Agency (MIGA). 5) IBRD and the International Development Association (IDA).
Question 38 (1 point) _____ refers to a situation when a currency’s value increases or decreases based on demand and supply. Question 38 options:
1) Float
2) Trade deficit
3) Exchange rate
4) Reserve currency
5) Bank reserve
Question 39 (1 point)
The SDR is a currency, which constitutes a claim on the IMF. Question 39 options:
1) True
2) False
Question 40 (1 point)
The Bretton Woods Agreement, with regard to currency conversion, established that: Question 40 options:
only major economic powers could convert their U.S. dollar holdings 1) into gold. 2) only governments could convert their U.S. dollar holdings into gold.
only government accredited business organizations could convert their 3) U.S. dollar holdings into gold. 4) anyone could convert their U.S. dollar holdings into gold.
only American businesses could convert their U.S. dollar holdings into 5) gold. Question 41 (1 point)
Which of the following is true for the International Finance Corporation (IFC)? Question 41 options:
1) It disburses loans to countries with the purpose of building economies and reducing poverty.
It provides interestfree loans to countries with sovereign 2) guarantees. It facilitates sustainable development by improving investments in the 3) private sector. It focuses on improving the foreign direct investment of developing 4) countries. It provides a means for dispute resolution between governments and 5) private investors with the end goal of enhancing the flow of capital.
Question 42 (1 point)
When Bretton Woods was established, the Americans initially proposed creating an international currency called _____ as the central currency. Question 42 options:
1) Wocu
2) Ven
3) unitas
4) Bancor
5) dollar
Question 43 (1 point)
The major significance of the _____ was that it was the first formal institution that governed international monetary systems. Question 43 options:
1) Nixon Shock
2) Bretton Woods Agreement
3) Smithsonian Agreement
4) World Trade Organization
5) General Agreement on Tariffs and Trade
Question 44 (1 point)
_____ refers to the price of one currency in terms of a second currency. Question 44 options:
1) Spot rate 2) Trade deficit
3) Exchange rate
4) Currency strength
5) Bank reserve
