International Economics MCQs and Notes

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📊 International Economics
Q. Which one of the following statements is the most accurate?
  • (A) A devaluation occurs when the central bank lowers the domestic currency price of foreign currency, E, and a revaluation occurs when the central bank raises E.
  • (B) A devaluation occurs when the central bank raises the domestic currency price of foreign currency, E, and a revaluation occurs when the central bank lowers E.
  • (C) ---
  • (D) ---
💬 Discuss
✅ Correct Answer: (Devaluatio)
📊 International Economics
Q. Which of the following is true regarding the capital market development since the 1970s?
  • (A) The extent of intertemporal trade was larger than theory predicts.
  • (B) Onshore-offshore interest rate differentials were too large.
  • (C) The extent of the international portfolio diversification was smaller than theory predicts.
  • (D) The role of emerging markets declined over time.
💬 Discuss
✅ Correct Answer: (C) The extent of the international portfolio diversification was smaller than theory predicts.
📊 International Economics
Q. The Basel Committee:
  • (A) Coordinates monetary policy among 11 countries.
  • (B) Provides international deposit insurance.
  • (C) Provides supervision of the banks trading internationally.
  • (D) Provides LLR services to international banks.
💬 Discuss
✅ Correct Answer: (C) Provides supervision of the banks trading internationally.
📊 International Economics
Q. What institution reduces the risk of bank runs in the U.S.?
  • (A) FDIC
  • (B) Federal Reserve System
  • (C) Congress
  • (D) S&Ls
💬 Discuss
✅ Correct Answer: (A) FDIC
📊 International Economics
Q. Which of the following is NOT true about the IBFs?
  • (A) They make loans to foreigners
  • (B) They are not subject to taxes
  • (C) They are only investment banks
  • (D) They accept deposits from foreigners
💬 Discuss
✅ Correct Answer: (C) They are only investment banks
📊 International Economics
Q. What are "Eurobanks"?
  • (A) Banks that accept Eurocurrency deposits
  • (B) Banks located in Europe
  • (C) European-owned banks in the U.S.
  • (D) Banks that accept deposits in euros
💬 Discuss
✅ Correct Answer: (A) Banks that accept Eurocurrency deposits
📊 International Economics
Q. Which of the following is an example of "Eurocurrency" trade?
  • (A) Trade of euros in Europe
  • (B) Trade of dollars for euros anywhere
  • (C) Trade of dollars in Europe
  • (D) Intervention by the ESCB in the euro market
💬 Discuss
✅ Correct Answer: (C) Trade of dollars in Europe
📊 International Economics
Q. Which of the following is NOT a type of offshore bank?
  • (A) Agency office
  • (B) Subsidiary bank
  • (C) Foreign branch
  • (D) Investment bank
💬 Discuss
✅ Correct Answer: (D) Investment bank

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