Multiple Choice (Choose the one alternative that best completes the statement or answers5) The balance of payments statement recordsa) lew of intemational labor and capital among countries over a period of timeb) intemational trading, lending, and borrowing transactions among countries over a period of timec) changes in a country's trade flows that occur over a period of time aloned) only changes in a country's official reserve assets that occur over a period of time

Introduction:- The difference between all money coming into a country in a certain period of time…

Answered: Multiple Choice (Choose the one…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

ChapterP1: Part 1: Integrative Problem: The International Financial Environment

Section: Chapter Questions

Problem 1Q

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Q2-5 In the monetary approach to the balance of payments (under flexible exchange rates) an increase in the proportion of income that people in country A wish to hold as money would, other things equal, lead to _______ in country A's demand for money and to ______ of A's currency in the foreign exchange markets. a. an increase / a depreciation b. an increase / an appreciation c. a decrease / a depreciation d. a decrease / an appreciation
If the foreign operations reports in the currency of hyperinflationary economy, assets and liabilities are translated at Group of answer choices Average rate Exchange rate on date of transaction Forward rate Closing rate
what's the required condition for a country's Current Acoount Balance to improve after the devaluation of its currency. explain.
Question Special Drawing Rights are Answer a. a reserve asset created by the International Monetary Fund that can be used to settle international payments. b. loans granted by the International Monetary Fund to countries that experience balance of payments problems. c. the term given for official reserves taken as a whole. d. financial assets held by the U.S. Treasury Department.
45 In presenting foreign currency denominated transactions to the functional currency of the entity, which of the following statements is correct? Group of answer choices When nonmonetary items are translated from foreign currency to functional currency in the financial statements, foreign currency gain of loss will be recognized. Monetary items shall be initially recognized and measured at the exchange rate prevailing at the end of the reporting period. Foreign currency denominated income statement accounts shall be translated using the exchange rate at the date of transaction. Foreign currency gain or loss arising from translation of the foreign currency denominated items to functional currency shall be presented in other comprehensive income with reclassification adjustment to profit or loss if realized.
For each of the following monetary policy tools:A. The BSP buys securities in the open market.B. The BSP sells foreign exchange currentC. The BSP increases the reserve requirement ratio.D. The BSP applies its moral suasion ability requesting commercial banks to lowerdown interest rates.E. The government decided to deposit funds at the BSP.1. Determine whether the monetary tool imposed by the BSP is an expansionary or acontractionary policy.
Q2-15 In a fixed exchange rate regime, the government Select one: a. establishes capital controls. b. establishes exchange rate controls. c. buys and sells currency through the central bank. d. expands the money supply.
31. How should exchange gains or losses resulting from foreign currency transactions be accounted for?a. Included as component of income from continuing operations for the period in which the ratechanges.b. Included as component of other comprehensive income for the period in which the rate changes.c. Included in the statement of financial position as a deferred item.d. Included in net earnings for gains, but deferred for losses. 32. When the information about two entities engaged in the same industry has been prepared and presented in similarmanner, the information exhibits the enhancing qualitative characteristics ofa. Relevanceb. Consistencyc. Faithful representationd. Comparability 33. What are the attributes that make the information provided in the financial statements useful to the readers?a. Qualitative characteristics of financial informationb. Quantitative characteristics of financial informationc. Elements of financial statementsd. Objectives of financial reporting 34.…
Q3-3 Under a flexible-rate system, when the BP curve is flatter than the LM curve (i.e., there is relative capital mobility), an autonomous increase in foreign interest rates will have what impacts on the domestic interest rate and domestic national income? Select one: a. domestic interest rate will increase, domestic national income will decrease b. domestic interest rate will increase, domestic national income will not change c. domestic interest rate will increase, domestic national income will increase d. domestic interest rate will not change, domestic national income will decrease
Assuming that a foreign entity is deemed to be operating in an environment dominated by the local currency, the entity's capital stock is translated using a. the current rate. b. a simple average rate. c. a weighted average rate. d. a historical rate.
Q2-2 In the portfolio balance approach, which of the following (other things equal) will cause an increase in the demand for domestic bonds by home country citizens? a. a decrease in the home country interest rate b. an increase in the home country price level c. an increase in the home country real income level d. a decrease in the expected rate of appreciation of the foreign currency (or a decrease in the expected rate of depreciation of the home currency)
These are currency quotes found on a foreign market: GH 4.30/$, and GH 4.55/$. ii. Which currency is depreciating in value?

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