Consider Table 1 to answer Question 2 – 5. Table 1: Foreign Exchange QuotationsU.S. DollarEquivalentCurrency PerU.S. DollarTuesdayMondayTuesdayMondayBritain (Pound)1.42701.43900.70080.694930-day Forward1.42111.43330.70370.697760-day Forward1.40901.42200.70970.7032180-day Forward1.39301.40700.71790.7107Consider Table 1. If one were to buy pounds for immediate delivery, on Tuesday the dollar cost of each pound would be:
A. $0.7008
B. $0.7037
C. $1.4211
D. $1.4270
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In August 1982, which of the following countries declared that it was unable to service its foreign debt and thereby triggered a long-lasting crisis in international lending?
A. The United Kingdom
B. The United States
C. Thailand
D. Mexico
Since 2000 developing countries received large net capital inflows in the form of:
A. Foreign direct investments.
B. Short-term lending.
C. Official loans from foreign governments and the IMF.
Debt service.
Which of the following will occur if a country with sufficient market power restricting foreign lending?
A. Increase world production.
B. Lower world interest rates.
C. Bid up the rate that domestic lenders get after taxes.
D. Bid up the rate that foreign borrowers have to pay.
Which of the following would result from international financial freedom?
A. Maximizes world product.
B. Hurts poor countries.
C. Hurts wealthy countries.
D. Helps all citizens in both poor and wealthy countries.