International Finance MCQs
International Finance MCQs
These International Finance multiple-choice questions and their answers will help you strengthen your grip on the subject of International Finance. You can prepare for an upcoming exam or job interview with these 20 International Finance MCQs.
So scroll down and start answering.
1: The record of international transactions in which a nation has engaged over a _____ is called the balance of payments.
A. Year
B. Decade
C. Century
D. Millennium
2: The net surplus or deficit resulting from the level of exportation and importation of merchandise is called _____ of trade.
A. Balance
B. Disruption
C. Loss
D. Unbalance
3: Record of country’s imports,net investment and net transfers
A. Current account
B. Saving account
C. Financial account
D. Off-shore account
4: Fluctuations in currency values are determined by_____.
A. Government
B. Parliament
C. Individual
D. Citizens
5: The price of one unit of a country’s currency in terms of another country’s currency is called the exchange rate.
A. True
B. False
6: A record of foreign purchases or assets is called______ account.
A. Financial
B. Domestic
C. National
D. Accounting
7: Purchasing-power-parity theory is about how exchange rates move to equalize the purchasing power of different______.
A. Currencies
B. Crypto
C. Symbols
D. None of the above
8: Which of the following statements accurately defines the current account?
A. It is a record of the foreign purchases of assets in the domestic economy and domestic purchases of assets abroad.
B. It is a record of the price of one unit of a country’s currency in terms of another country’s currency.
C. It is a record of a country’s imports and exports of goods and services, net investment income, and net transfers.
D. It is a record of the fluctuations in currency values that are partially determined by government intervention.
9: Which of the following line items is a credit in the current account?
A. Statistical discrepancy
B. Service imports
C. Service exports
D. Net balance
10: Suppose the United States receives more humanitarian aid from foreigners than it supplies abroad. How would this impact the balance of payments?
A. Foreign-owned assets in the United States would be negative.
B. U.S. service imports would be positive.
C. U.S. service exports would be negative.
D. Net unilateral transfers would be positive.
11: A strong U.S. dollar will ______ the price of imports and make trips to foreign countries ______.
A. Lower; more expensive
B. Raise; more expensive
C. Lower; less expensive
D. Raise; less expensive
12: Which of the following statements accurately describes the demand curve for euros?
A. There is an inverse relationship between the dollar price of euros and the quantity of euros demanded.
B. There is a positive relationship between the dollar price of euros and the quantity of euros demanded.
C. The quantity of euros demanded increases as the dollar price of euros increases.
D. The quantity of euros demanded decreases as the dollar price of euros decreases.
13: Which of the following statements accurately describes the supply curve for euros?
A. There is an inverse relationship between the dollar price of euros and the quantity of euros supplied.
B. There is a positive relationship between the dollar price of euros and the quantity of euros supplied.
C. The dollar price of euros increases as the quantity of euros supplied increases.
D. The dollar price of euros decreases as the quantity of euros supplied decreases.
14: Which of the following statements accurately describes capital movements?
A. When foreigners supply more funds than they demand, the result is a capital outflow from the United States.
B. In a closed economy, individuals, firms, and governments are able to borrow from and lend to foreigners.
C. When foreigners demand more funds than they supply, the result is a capital inflow to the United States.
D. In an open economy, individuals, firms, and governments are able to borrow from and lend to foreigners.
15: An increase in average U.S. incomes, ceteris paribus, will lead to ______ demand for euros and a(n) ______ exchange rate for the euro.
A. Increased; lower
B. Decreased; lower
C. Increased; higher
D. Decreased; higher
16: An increase in European tastes for U.S. goods, ceteris paribus, would ______.
A. Increase the supply of euros on the euro foreign exchange market
B. Lead to a higher exchange rate for the euro compared to the U.S. dollar
C. Increase the income of European residents
D. Decrease European demand for U.S. dollars
17: When the U.S. dollar appreciates compared to the yen, this means that ______.
A. A U.S. dollar can buy fewer units of yen than before
B. The U.S. dollar declines in value compared to the yen
C. A U.S. dollar can buy more units of yen than before
D. The yen appreciates compared to the U.S. dollar
18: If currency speculators believe that the value of the U.S. dollar will soon be falling because of an anticipated rise in the U.S. inflation rate compared to the Japanese inflation rate, ______.
A. There will be increased demand for U.S. dollars
B. Those who are holding U.S. dollars will convert them to yen
C. There will be decreased demand for yen
D. Those who are holding yen will convert them to U.S. dollars
19: During the late 1970s the U.S. government attempted but mostly failed to ______.
A. Implement the Bretton Woods fixed exchange rate system
B. Actively depress the exchange rate for the U.S. dollar
C. Slow the rapid appreciation of the U.S. dollar
D. Prevent depreciation of the U.S. dollar
20: If U.S. consumers were to receive fewer and fewer British pounds per U.S. dollar, the effect would be ______, ceteris paribus.
A. Appreciation of the U.S. dollar relative to the British pound
B. Decreasing imports of U.S. goods to Britain
C. Depreciation of the British pound relative to the U.S. dollar
D. Increasing prices for imports of British goods to the United States
21: When the Japanese yen appreciates relative to the U.S. dollar, ceteris paribus, then ______.
A. Japanese consumers need a greater number of Japanese yen to buy a given number of U.S. dollars
B. U.S. consumers need a greater number of dollars to buy a given number of Japanese yen
C. The U.S. dollar appreciates relative to the Japanese yen
D. The cost of Japanese imports to the United States declines
22: The exchange rate system that exists in the 21st century ______.
A. Is the Bretton Woods fixed exchange rate system
B. Was not planned, but occurred by accident
C. Does not impact currency prices
D. Was implemented by a team of central banks
23: The world bank system is controlled by _______.
A. A weighted voting system
B. Equal voting rights by all controlling members
C. The changing needs of the economy
D. The elected leaders of the board
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