1. Slow economic growth and continued unemployment problems are common reasons for central banks to hold currency values down.
True
False
2. Green Valley Exporters USA has $100,000 of before tax foreign income. The host country has a corporate income tax rate of 25% and the U.S. has a corporate income tax rate of 35%.If the U.S. has a bilateral trade agreement with the host country that calls for the total tax paid to be equal to the maximum amount that could be paid in the highest taxing country, what is the total amount of income taxes Green Valley Exporters will pay to the host country, and how much will they pay in U.S income taxes on the foreign earned income?
a. none of the other answers
b. $35,000; $0
c. $25,000; $10,000
d. $25,000; $26,250
3. Which of the following is an advantage to exporting goods to reach international markets rather than entering into some form of FDI?
a. a greater risk of losing markets to copycat goods producers
b. fewer agency costs
c. an inability to exploit R&D as effectively as if also invested abroad
d. fewer direct advantages from research and development
4. The reference rate of interest in the eurocurrency market is the:
a. Federal funds rate
b. Prima rate
c. London Interbank Offered Rate
d. Treasury rate
5. A national securities market is segmented if the required rate of return on securities in that market differs from comparable securities traded in other, unsegmented markets.
True
False