Question 1

The law of one price
says that the supply and demand of a product must not alter its price.
says that if a retailer puts an item on sale, all other retailers must match that price.
says that identical products should sell for the same price in all countries.
is a principle suggested by Canadian economists that means that all identical products in a given economy should be sold for the same price.
is the principle that to be competitive, a company must offer its product at only one price, that is, it should not negotiate with customers about the price.

Accepted Answer

The answer of The law of one price
says that the...

Question 2

According to the Big Mac index
Big Mac's must be priced higher in China than in Canada.
the price of a Big Mac is used to determine if a given currency is overvalued or undervalued.
Big Mac's are better than Mom's homemade hamburgers.
Big Mac's are always cheaper in France than they are in Canada.
Big Mac's are priced the same all over the world.

Accepted Answer

The answer of According to the Big Mac index
Big Mac's...

Question 3

Financing new, untested businesses is risky, so the most likely route to financing would be to go to
a venture capital firm.
the Economic Development Bank.
an institutional lender.
the Industrial Development Bank.
a brokerage house.

Accepted Answer

The answer of Financing new, untested businesses is risky, so...

Question 4

The United Nations agency that provides a limited scope of financial services, such as funding national improvements in developing countries is the
International Monetary Fund (IMF).
Interbank Bank.
World Bank.
Bank of Canada.
Global Bank.

Accepted Answer

The answer of The United Nations agency that provides a...

Question 5

The determination of whether a currency is overvalued or undervalued is based on a comparison with
the Japanese yen.
the U.S. dollar.
the British pound.
the euro.
none of these.

Accepted Answer

The answer of The determination of whether a currency is...

Question 6

Which of the following would not be expected when a country's currency becomes overvalued?
Its export goods become too expensive.
Its high costs make the country less competitive.
Its exchange rate is higher than warranted by its economic conditions.
Fewer goods are purchased by other countries.
The costs of exported goods declines.

Accepted Answer

The answer of Which of the following would not be...

Question 7

One function of investment dealers is to
manage pensions for large Canadian corporations.
create stability in the money supply.
provide equity start-up loans for small business.
underwrite new stock and bond issues.
provide debt financing to small businesses.

Accepted Answer

The answer of One function of investment dealers is to
manage...

Question 8

Geoff works for a company that buys accounts receivables from a firm for less than face value, but collects the face value of the accounts. Geoff works for a
sales finance company.
credit union.
trust company.
consumer finance company.
factoring company.

Accepted Answer

The answer of Geoff works for a company that buys...

Question 9

The value of the Canadian dollar
is always valued at the same exchange rate.
typically trades above the U.S. dollar.
typically values at par with the U.S. dollar.
reflects the overall supply and demand for Canadian dollars both at home and abroad.
none of these.

Accepted Answer

The answer of The value of the Canadian dollar
is always...

Question 10

Which of the following is correct with regard to government sources of funds for businesses?
The Business Development Bank of Canada helps small companies sell stock to the general public.
The Export Development Corporation finances and insures export sales for Canadian companies.
The Canada Mortgage and Housing Corporation makes mortgages available to businesses, but it does not guarantee those mortgages.
The Department of Business Expansion gives grants for businesses that provide services, but not for business that provide physical products.
All of these are correct.

Accepted Answer

The answer of Which of the following is correct with...

Question 11

A pool of funds managed to provide retirement income for its members is called a(n)
trust service.
insurance company.
finance company.
factoring company.
pension fund.

Accepted Answer

The answer of A pool of funds managed to provide...

Question 12

The law of one price says that
almost all countries will have a trade deficit.
identical products should sell for the same price in all countries.
a good must be available for the same price in every province in Canada.
the price of a Rolex watch is the same in all countries.
all currencies are over-valued.

Accepted Answer

The answer of The law of one price says that
almost...

Question 13

A corporation selling bonds to investors will often use a __________ to protect the bondholders' interests.
trust company
chartered bank
credit union
caisses populaire
finance company

Accepted Answer

The answer of A corporation selling bonds to investors will...

Question 14

With regard to the international payments process, which of the following statements is true?
Most foreign nations will never accept dollars.
Banks do not get involved in such transactions.
Money does not actually have to flow between the two countries.
Diplomatic pouches move currency payments from one nation to another.
All of these statements are true.

Accepted Answer

The answer of With regard to the international payments process,...

Question 15

Suppose that, as a small business, you decide to buy a new copying machine. Since you cannot afford to pay cash, you finance the machine over 12 months. The copy machine itself will serve as loan collateral. The major source of credit is a(n)
investment company.
sales finance company.
venture capital firm.
consumer finance company.
factoring company.

Accepted Answer

The answer of Suppose that, as a small business, you...

Question 16

The ________ makes term loans, primarily to small firms judged to have growth potential but which are unable to secure funds on reasonable terms from traditional sources.
International Monetary Fund
Business Development Bank of Canada
Department of Business Expansion
Government Pension Fund
Export Development Corporation

Accepted Answer

The answer of The ________ makes term loans, primarily to...

Question 17

________ provides funds for new or expanding firms thought to have significant potential and may demand an ownership stake in the business.
A pension fund
The International Monetary Fund (IMF)
A chartered bank
A global bank
A venture capital fund

Accepted Answer

The answer of ________ provides funds for new or expanding...

Question 18

When the value of the Canadian dollar is less than the U.S. dollar,
Canadian companies are more interested in buying American companies.
Big Macs are more expensive in Canada than the United States.
American companies become more interested in buying Canadian companies.
the overall supply and demand of the Canadian dollar is in equilibrium.
American companies become less interested in buying Canadian companies.

Accepted Answer

The answer of When the value of the Canadian dollar...

Question 19

A ________ company shares risks with its policyholders in return for payment of a premium.
life insurance
venture capital
credit union
sales finance
factoring

Accepted Answer

The answer of A ________ company shares risks with its...

Question 20

A financial corporation that specializes in financing installment purchases made by individuals and firms is called a
consumer finance company.
factoring company.
credit union.
sales finance company.
commercial finance company.

Accepted Answer

The answer of A financial corporation that specializes in financing...

Quiz 14: Money and Banking

Financing new, untested businesses is risky, so the most likely route to financing would be to go to a venture capital firm. the Economic Development Bank. an institutional lender. the Industrial Development Bank. a brokerage house.

The United Nations agency that provides a limited scope of financial services, such as funding national improvements in developing countries is the International Monetary Fund (IMF). Interbank Bank. World Bank. Bank of Canada. Global Bank.

The determination of whether a currency is overvalued or undervalued is based on a comparison with the Japanese yen. the U.S. dollar. the British pound. the euro. none of these.

One function of investment dealers is to manage pensions for large Canadian corporations. create stability in the money supply. provide equity start-up loans for small business. underwrite new stock and bond issues. provide debt financing to small businesses.

Geoff works for a company that buys accounts receivables from a firm for less than face value, but collects the face value of the accounts. Geoff works for a sales finance company. credit union. trust company. consumer finance company. factoring company.

The value of the Canadian dollar is always valued at the same exchange rate. typically trades above the U.S. dollar. typically values at par with the U.S. dollar. reflects the overall supply and demand for Canadian dollars both at home and abroad. none of these.

A pool of funds managed to provide retirement income for its members is called a(n) trust service. insurance company. finance company. factoring company. pension fund.

A corporation selling bonds to investors will often use a __________ to protect the bondholders' interests. trust company chartered bank credit union caisses populaire finance company

________ provides funds for new or expanding firms thought to have significant potential and may demand an ownership stake in the business. A pension fund The International Monetary Fund (IMF) A chartered bank A global bank A venture capital fund

A ________ company shares risks with its policyholders in return for payment of a premium. life insurance venture capital credit union sales finance factoring

A financial corporation that specializes in financing installment purchases made by individuals and firms is called a consumer finance company. factoring company. credit union. sales finance company. commercial finance company.