All of the following are possible outcomes of a financial crisis EXCEPT
A) bank failings and disintermediation.
B) a recession.
C) an increase in domestic consumption.
D) depreciation or devaluation of a currency.
Question 2 - If the case study on U.S. / China trade is correct in its analysis of factor abundance,
A) Chinese capital owners should see their income rise as trade increases.
B) U.S. skilled labor inputs should see their incomes fall as trade increases.
C) U.S. capital owners should see their income fall as trade increases.
D) Chinese unskilled labor should see their income rise as trade increases.
Question 3 - Latin America
A) is significantly smaller than the NAFTA market in terms of population.
B) has a smaller population, but a larger GDP than the NAFTA market.
C) has a larger population than the NAFTA market.
D) is similar in population to the NAFTA market.
Question 4 - Which of the following is an example of portfolio investment?
A) Toyota builds an automobile plant in Ohio.
B) The Bank of Japan buys dollars.
C) A citizen of Japan buys stock in Microsoft.
D) A citizen of Japan buys an option to purchase Microsoft stock in the future.
Question 5 - A flexible exchange rate system crisis involves
A) a revaluation of the currency.
B) a rapid and uncontrolled depreciation of the currency.
C) a decrease in the dollar value of the country's international debt.
D) a sure political collapse of the ruling government.
Question 6 - Which of the following is true according to the case study on U.S. / China trade presented in the chapter?
A) China has relative abundance in capital.
B) China has relative abundance in skilled labor.
C) The United States has relative scarcity in unskilled labor.
D) The United States has relative scarcity in capital.
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