全球营销-基坎-第六版-第二章题库-答案

PAGE20Copyright©2011PearsonEducation,Inc.GlobalMarketing,6e(Keegan/Green)Chapter2TheGlobalEconomicEnvironment1)Theglobaleconomiccrisisvividlyillustratesthedynamic,integratednatureoftoday'seconomicenvironment.Answer:TRUEDiff:1PageRef:39AACSB:ReflectiveThinking2)CarswithEuropeannameplatessuchasPeugeot,Volvo,Renault,andCitroenwereoriginallydesignedaslocalcarsmostlydestinedforlocalorregionalmarkets.Answer:TRUEDiff:2PageRef:39AACSB:ReflectiveThinking3)Duringthepasttwodecadesthevolumeofcapitalmovementshasdecreased.Answer:FALSEDiff:1PageRef:40AACSB:ReflectiveThinking4)Globalcapitalmovementsfarexceedthedollarvolumeofglobaltradeingoodsandservices.Answer:TRUEDiff:2PageRef:40AACSB:ReflectiveThinking5)Grossdomesticproduct(GDP),ameasureofanation'seconomicactivity,iscalculatedbyaddingconsumerspending(C),investmentspending(I),governmentpurchases(G),andnetexports(NX).Answer:TRUEDiff:2PageRef:40AACSB:AnalyticSkills6)Russiaissodependentonrevenuesfromthefuelandenergysectorsthatsomefearedthemajordeclineinworldoilpricesthatbeganin2008wouldhaveadestabilizingeffect.Answer:TRUEDiff:2PageRef:41AACSB:ReflectiveThinking7)TheeconomicsuccessofGermanyandJapanisduetothefactthattheircompanyexecutivesandnationalleadersrecognizedtheemergenceoftheworldeconomyasthedominanteconomicunitandthereforefocusedonworldmarketsandtheirrespectivecompetitivepositionsintheworldeconomy.Answer:TRUEDiff:2PageRef:42AACSB:ReflectiveThinking8)ThepersonalcomputerrevolutionandtheadventoftheInterneterahaveincreasedtheimportanceofnationalboundaries.Answer:FALSEDiff:1PageRef:429)Duetoglobalizationitiseasiertocategorizeeconomicsystemswithintheconfinesofafour-cellmatrix.Answer:FALSEDiff:2PageRef:42AACSB:ReflectiveThinking10)Today,marketcapitalismiswidelypracticedaroundtheworld,mostnotablyinNorthAmericaandtheEuropeanUnion.Answer:TRUEDiff:2PageRef:43AACSB:ReflectiveThinking11)Incentrallyplannedsocialismeconomicsystemsthestateallocatesresources,whereasproductionresourcesareprivatelyowned.Answer:FALSEDiff:1PageRef:4312)Incentrallyplannedsocialismeconomicsystems,sincedemandtypicallyexceedssupply,theelementsofthemarketingmixarenotusedasstrategicvariables.Answer:TRUEDiff:2PageRef:44AACSB:ReflectiveThinking13)InSweden,wherethegovernmentcontrolstwo-thirdsofallexpenditures,resourceallocationismore"market"orientedthan"command"oriented.Answer:FALSEDiff:1PageRef:45AACSB:ReflectiveThinking14)Marketreformsandnascentcapitalisminmanypartsoftheworldarecreatingopportunitiesforlarge-scaleinvestmentsbyglobalcompanies.Answer:FALSEDiff:1PageRef:4515)AccordingtotheIndexofEconomicFreedomcompiledbytheHeritageFoundation,HongKongisrankedashavingthehighestdegreeofeconomicfreedom.Answer:TRUEDiff:1PageRef:45-46AACSB:ReflectiveThinking16)AsperthelistingsoftheIndexofEconomicFreedombytheHeritageFoundation,thereisahighcorrelationbetweenthedegreeofeconomicfreedomandtheextenttowhichanation'smixedeconomyisheavilymarket-oriented.Answer:TRUEDiff:2PageRef:45AACSB:AnalyticSkills17)TheWorldBankhasdevelopedafour-categoryclassificationsystemforstagesofmarketingdevelopmentwhichusesGDPasabase.Answer:FALSEDiff:3PageRef:47AACSB:ReflectiveThinking18)TheWorldBankhasdevelopedafour-categoryclassificationsystemforstagesofmarketingdevelopmentwhichusespercapitagrossnationalincome(GNI)asabase.Answer:TRUEDiff:2PageRef:47AACSB:ReflectiveThinking19)About40percentoftheworldpopulationisincludedintothelow-incomeeconomiccategoryaspertheWorldBankclassificationsystem.Answer:TRUEDiff:2PageRef:48AACSB:AnalyticSkills20)AlthoughBangladeshiscategorizedinthelow-incomecountriestheyhavegenuinemarketopportunities,particularlyinthegarmentindustry.Answer:TRUEDiff:2PageRef:48AACSB:AnalyticSkills21)TheUnitedNationsdesignates50countriesinthebottomranksofthelow-incomecategoryasleast-developedcountries(LDCs);thetermissometimesusedtoindicateacontrastwithdevelopingcountriesanddevelopedcountries.Answer:TRUEDiff:2PageRef:49AACSB:AnalyticSkills22)Upper-middle-incomecountries,alsoknownasindustrializingordevelopingcountries,arethosethatachievethehighestratesofeconomicgrowthandarealsocollectivelyreferredtoasNewlyIncomingEconomiesorNIEs.Answer:FALSEDiff:2PageRef:50AACSB:ReflectiveThinking23)Today,NikeproducesandsellsonlyasmallportionofitsoutputinChina,butwhenthefirmreferstoChinaasa"two-billion-footmarket,"itclearlyhasthefutureinmind.Answer:TRUEDiff:2PageRef:51AACSB:ReflectiveThinking24)AccordingtoC.K.PrahaladandA.Hammondthepooroftenpayhigherpricesformanygoods,andsothereisanopportunityforefficientcompetitorstorealizeattractivemarginsbyofferingqualityandlowprices.Answer:TRUEDiff:2PageRef:52AACSB:ReflectiveThinking25)TheCoca-ColaCompanyrecentlybegantoaddressdietaryandhealthneedsinlow-incomecountriesbydevelopingVitango,abeverageproductthatcanhelpfightanemia,blindness,andotherailmentsrelatedtomalnutrition.Answer:TRUEDiff:2PageRef:52AACSB:ReflectiveThinking26)Globalcompaniescanalsocontributetoeconomicdevelopmentbyfindingcreativewaystopreserveold-growthforestsandotherresourceswhilecreatingeconomicopportunitiesforlocalinhabitants.Answer:TRUEDiff:3PageRef:53AACSB:ReflectiveThinking27)Withtheexceptionofafewoil-richnations,thecountriesinthehigh-incomecategoryreachedtheirpresentincomelevelthroughaprocessofsustainedeconomicgrowth.Answer:TRUEDiff:2PageRef:53AACSB:AnalyticSkills28)Adistinctionbetweenindustrialandpostindustrialcountriesisthatthepostindustrialcountriesexhibitanorientationtowardthefutureandstresstheimportanceofinterpersonalrelationshipsinthefunctioningofsociety.Answer:TRUEDiff:2PageRef:53-54AACSB:ReflectiveThinking29)ThethirtynationsthatbelongtotheOECD,thatbelieveinmarket-allocationeconomicsystemsandpluralisticdemocracy,addressedthevexingproblemofbriberybyrequiringmemberstocooperatewhenpursuingbriberyallegations.Answer:TRUEDiff:2PageRef:57AACSB:ReflectiveThinking30)Incountrieswithlowpercapitaincome,productsaturationlevelsformanyproductsarehigh.Answer:FALSEDiff:1PageRef:57AACSB:ReflectiveThinking31)BoththeG8andtheOECDarecomprisedofhigh-incomecountriesandarereferredtoasa"rich-man'sclub."Answer:FALSEDiff:2PageRef:58AACSB:ReflectiveThinking32)Aspolicymakersaroundtheglobetriedtorespondtothefinancialcrisisof2008,somelookedtoMexico'sTequilaCrisisforanswers.Answer:FALSEDiff:2PageRef:58AACSB:ReflectiveThinking33)Acountrywithapositivecurrentaccountbalancehasatradedeficit;thatis,theoutflowofmoneytopayforimportsexceedstheinflowofmoneyforsalesofexports.Answer:FALSEDiff:2PageRef:59AACSB:AnalyticSkills34)TheUnitedStatesregularlypostsdeficitsinboththecurrentaccountandthetradebalanceingoods.Answer:TRUEDiff:2PageRef:59AACSB:ReflectiveThinking35)Chinaoffsetsitstradesurpluseswithanoutflowofcapital,whiletechnologyUnitedStatesoffsetsitstradedeficitwithaninflowofcapital.Answer:TRUEDiff:2PageRef:60AACSB:ReflectiveThinking36)TheU.S.servicessurpluscanbeattributedtoservicesprovidedbycompaniessuchasDisney,IBM,andMicrosoft.Answer:TRUEDiff:2PageRef:62AACSB:ReflectiveThinking37)Theforeignexchangemarketconsistsliterallyofabuyer'sandaseller'smarketwherecurrenciesaretradedforbothspotandfuturedeliveryonacontinuousbasis.Theforwardmarketisforimmediatedeliveryandthespotmarketisforfuturedelivery.Answer:FALSEDiff:2PageRef:62AACSB:ReflectiveThinking38)Acountry'scurrencywouldbeovervaluediftheBigMacprice(convertedtodollars)ishigherthantheU.S.price.Answer:TRUEDiff:1PageRef:63AACSB:ReflectiveThinking39)Hedgingexchangerateexposureinvolvesestablishinganoffsettingcurrencypositionsuchthatthelossorgainofonecurrencypositionisoffsetbyacorrespondinggainorlossinsomeothercurrency.Answer:TRUEDiff:2PageRef:64AACSB:AnalyticSkills40)Acalloptioninforeigncurrencygivesthebuyertheright,nottheobligation,tosellaspecifiednumberofforeigncurrencyunitsatafixedprice,uptotheoption'sexpirationdate.Answer:FALSEDiff:2PageRef:66AACSB:AnalyticSkills41)Duringthepasttwodecades,theworldeconomicenvironmenthasbecomeincreasinglydynamic.Toachievesuccess,executivesandmarketersmusttakeintoaccountallofthefollowingrealitiesexcept:A)capitalmovementshavereplacedtradeasthedrivingforceoftheworldeconomy.B)productionhasbecome"uncoupled"fromemployment.C)theworldeconomydominatesthescene.D)thestrugglebetweencapitalismandsocialismcontinues.E)thegrowthofe-commercediminishestheimportanceofnationalbarriers.Answer:DDiff:2PageRef:40AACSB:ReflectiveThinking42)ThatRussiaisbeingtransformedbyeconomicchangecanbewitnessedinallofthefollowingobservationsexcept:A)affluentRussianscanshopatboutiquesthatofferVersace.B)percapitagrossnationalincomeinRussiaisonly$5770.C)thebankingsysteminRussiaisrobust.D)Russianshoppersspendanestimated$4billioneachyearonluxurygoods.E)Russiangovernmentliftedallcurrencycontrols.Answer:CDiff:2PageRef:41AACSB:ReflectiveThinking43)MarketCapitalismisaneconomicsysteminwhich:A)individualsandfirmsallocateresourcesandproductionresourcesthatareprivatelyowned.B)thestatehasbroadpowerstoservethepublicinterestasitseesfit.C)marketresourceallocationiscommandedbybothprivateandstateownership.D)thereisnocorrelationbetweeneconomicfreedomandanation'seconomy.E)nocorrectanswerAnswer:ADiff:1PageRef:43-4544)OneofthedistinguishingfeaturesofaCentrallyPlannedCapitalismeconomicsystemis:A)allproductionresourcesareprivatelyowned.B)thestatehasbroadpowerstoservethepublicinterestasitseesfit.C)commandresourceallocationisutilizedextensivelyinaprivateresourceownershipenvironment.D)marketallocationpoliciesarepermittedwithinanenvironmentofstateownership.E)noneoftheaboveAnswer:CDiff:3PageRef:44AACSB:ReflectiveThinking45)TheSwedishgovernmenthassignificantholdingsinkeybusinesssectorsandhasahybrideconomicsystemthatincorporate:A)marketcapitalismandcentrallyplannedsocialism.B)centrallyplannedsocialismandmarketsocialism.C)centrallyplannedsocialismandcapitalism.D)marketsocialismandmarketcapitalism.E)marketcapitalismandsocialisticcapitalism.Answer:CDiff:2PageRef:45AACSB:ReflectiveThinking46)Coca-ColareturnedtoIndiain1994aftertwodecadesofbeingforcedoutofthegovernmentbecause:A)Coca-Coladecidedtorevealitsformulatothegovernment.B)Cokewasnotverypopularinearlierdays.C)anewlawallowing100percentforeignownershipwaspassed.D)thewatersupplywasnotconsistentinearlieryears.E)installationofabottlingplantrequiredspecialpermits.Answer:CDiff:2PageRef:4547)Chinapredominantlyfollowsaneconomicsystemthatcanbeclassifiedunder:A)centrallyplannedsocialism.B)marketsocialism.C)marketcapitalism.D)centrallyplannedcapitalism.E)socialisticcapitalism.Answer:ADiff:1PageRef:45AACSB:ReflectiveThinking48)WhichofthefollowingistrueabouteconomicoutputinChinatoday?A)Thestatesectoraccountsforabout70percentofoutput.B)Thestateandprivatesectorseachaccountforabout50percentofoutput.C)Theprivatesectoraccountsforabout70percentofoutput.D)TheprivatesectorisvirtuallynonexistentinChina.E)ThestatesectorisvirtuallynonexistentinChina.Answer:CDiff:3PageRef:45AACSB:ReflectiveThinking49)TheWashington,DC-basedHeritageFoundationcompilesasurveyofover150countriesrankedbydegreeofeconomicfreedom.Althoughthereareanumberofkeyeconomicvariableswhichareconsideredinthisrankingitdoesnotinclude:A)monetarypolicy.B)bankingpolicy.C)blackmarket.D)propertyrights.E)nocorrectanswerAnswer:EDiff:2PageRef:4550)AccordingtoanalysisbytheHeritageFoundation,whichofthefollowingcountriesranksnumberoneintheworldintermsofeconomicfreedom?A)HongKongB)SingaporeC)IrelandD)DenmarkE)AustraliaAnswer:ADiff:1PageRef:4651)Singaporebannedtheimport,manufacture,andsalesofchewingguminthecountrysincewadsofgumweremakingamessonsidewalks,buses,andsubwaytrains.Violatorsaresubjecttoseverepenaltiesandbeforebuyingapackconsumersmustregistertheirnamesandaddresses.This,accordingtoauthorWilliamGreider,demonstratesthatSingapore'sgovernment:A)isharshlyautocratic.B)administersaparanoidcontroloverSingaporeans.C)administersaparanoidcontroloverpressandpolitics.D)runsaneffectivewelfarestate.E)alloftheaboveAnswer:EDiff:1PageRef:48-49AACSB:ReflectiveThinking52)About40percentoftheworld'spopulationisincludedintothefollowingeconomiccategory:A)high-incomecountries.B)upper-middle-incomecountries.C)lower-middle-incomecountries.D)low-incomecountries.E)lower-upperincomecountries.Answer:DDiff:2PageRef:47-48AACSB:AnalyticSkills53)Upper-middle-incomecountries,alsoknownasindustrializingordevelopingcountries,arethosewithGNIpercapitarangingfrom:A)$936to$3,705B)$3,706to$11,455C)$11,456orhigherD)lessthan$936E)nocorrectanswerAnswer:BDiff:2PageRef:47-51AACSB:AnalyticSkills54)AccordingtotheearlierclassificationoftheBEM(bigemergingmarkets)thecountry/countriesincludedwere:A)Indonesia.B)Argentina.C)SouthAfrica.D)Poland.E)alloftheaboveAnswer:EDiff:2PageRef:48AACSB:ReflectiveThinking55)Thegeneralcharacteristicssharedbylow-incomecountriesdoesnotinclude:A)highbirthrates.B)lowliteracyrates.C)concentrationinAfricasouthoftheSahara.D)heavyrelianceonforeignaid.E)lackofgenuinemarketopportunities.Answer:EDiff:3PageRef:48AACSB:AnalyticSkills56)Globalmarketersshouldtakenoteofthefactthatalmosthalfoftheworld'spopulationislocatedin:A)low-incomecountries.B)lower-middleincomecountries.C)upper-middleincomecountries.D)high-incomecountries.E)higher-middleincomecountries.Answer:ADiff:1PageRef:48AACSB:ReflectiveThinking57)Upper-middle-incomecountriesthatachievethehighestratesofeconomicgrowtharesometimesreferredtocollectivelyas:A)LDCs.B)BEMs.C)BRICs.D)NIEs.E)BOPs.Answer:DDiff:1PageRef:5058)Whichofthefollowingnationsfallinthelower-middle-incomecategory?A)BurundiB)BangladeshC)ChinaD)VenezulaE)noneoftheaboveAnswer:CDiff:1PageRef:5259)AccordingtotheauthorsoftheHarvardBusinessReviewarticle,"ServingtheWorld'sPoor,Profitably",whichofthefollowingisamistakenassumptionthatglobalcompaniesmighthaveabouttheBOP(bottomofthepyramid)?A)Thepoorhavenomoney.B)Thepooraretooconcernedwithfulfillingbasicneedsto"waste"moneyonnonessentialgoods.C)PeopleinBOPmarketswillbecriticizedforexploitingthepoor.D)PeopleinBOPmarketscannotuseadvancedtechnology.E)alloftheabovearemistakenassumptionsdiscussedbytheauthorsAnswer:EDiff:2PageRef:51-52AACSB:ReflectiveThinking60)Pursuingalternativesourcesofenergy,suchaswindandsolarpower,isimportantduetothefactthat:A)peopleindevelopingcountriesaremoreconsciousabouttheenvironment.B)globalmarketersaremoreinterestedinpublicizingenvironmentalissues.C)itiseasytodevelopsolarpowerinmanypartsoftheworld.D)heavyrelianceonfossilfuelscontributestoglobalwarming.E)peopleworldwidecanaffordtobuypowergeneratedfromwindandsolar.Answer:DDiff:2PageRef:52AACSB:ReflectiveThinking61)Whichtwocompaniesaresourcingproductcomponentsfromsmall-scaleenterprises,whichinturnarehelpingpreserveold-growthforestsaswellaseconomicopportunitiesinBrazil?A)FordMotorCompanyandArmaniB)DaimlerAGandHermesC)GeneralMotorsandHugoBossD)VolkswagenandCoachE)Coca-colaandNestléAnswer:BDiff:3PageRef:53AACSB:ReflectiveThinking62)Productandmarketopportunitiesinapostindustrialsocietyaremoreheavilydependentuponnewproductsandinnovationsthaninindustrialsocieties.Anexampleofthiswouldbe:A)NestlémarketingBonobrandcookiesinBrazil.B)Coca-colacompanydevelopingabeverageVintagoinlow-incomecountries.C)Newe-commercemarketsforinteractiveformsofelectroniccommunication.D)HermescreatinghandbagscalledAmazonia.E)India'sSuzlonEnergyusingwinddriventurbines.Answer:CDiff:3PageRef:54AACSB:ReflectiveThinking63)Whichcountryistheonlycountryclassifiedasanemergingmarketamongthehigh-incomecountriesbyinfluentialstockmarketindexes?A)UnitedStatesB)SouthKoreaC)BritainD)ItalyE)MalaysiaAnswer:BDiff:3PageRef:54AACSB:ReflectiveThinking64)Whentheworld'sleadersmeettodiscusspolicyissues,non-governmentalorganizations(NGOs):A)areincludedinmeetings.B)oftentakeadvantageoftheopportunitytomaketheirvoicesheard.C)signfinaldocuments.D)provideeducationalmaterials.E)areexcludedfrommeetings.Answer:BDiff:1PageRef:5565)Thetermtigerhasfrequentlybeenusedtodescribe:A)marketsocialism.B)lessrelianceonforeignaid.C)upper-middle-incomecountries.D)postindustrialcountries.E)fast-growingeconomiesinAsia.Answer:EDiff:1PageRef:5666)Theterm"tiger"hasfrequentlybeenusedtodescribefast-growingeconomiesinAsiawhichdoesnotinclude:A)SouthKorea.B)India.C)Taiwan.D)Singapore.E)HongKong.Answer:BDiff:2PageRef:56AACSB:ReflectiveThinking67)Recently,theOrganizationforEconomicCooperationandDevelopment(OECD)hasbecomemorefocusedonglobalissuesasseenby:A)addressingthevexingproblemofbribery.B)requiringmemberstocooperatewhenpursuingbriberyallegations.C)helpingmemberscandidlyassesstheirowneconomicpolicies.D)membernationsworkingtogetherincommitteestoreviewsocialpolicies.E)alloftheaboveAnswer:EDiff:1PageRef:5768)TheOrganizationforEconomicCooperationandDevelopment(OECD)iscomprisedof:A)the30high-incomecountries.B)countriesthatbelieveinmarket-allocationeconomicsystems.C)pluralisticdemocracies.D)countriesthatdemonstrateprogresstowardeconomicreform.E)Alloftheabovestatementsareapplicable.Answer:EDiff:3PageRef:57-58AACSB:ReflectiveThinking69)WhichofthefollowingistrueabouttheTriad?A)Triadcountriesaccountforapproximatelyone-thirdofworldincomeandone-thirdofworldpopulation.B)Triadcountriesaccountforapproximately75%ofworldincomeasmeasuredbyGNP.C)Triadcountriesarethoseinwhichconsumerproducts,industrialproducts,andtheservicessectoreachcontributeone-thirdtoGDP.D)Triadcountriesaccountforapproximately25%ofworldincomeasmeasuredbyGNP.E)Triadcountriesaccountforapproximately50%ofworldincomeasmeasuredbytheWorldBank.Answer:BDiff:2PageRef:57AACSB:ReflectiveThinking70)India'steledensityameasureofownershipofprivatetelephones—isonlyabout20percentofthepopulationisindicativeof:A)lowproductsaturationlevel.B)highproductsaturationlevel.C)triadpower.D)hightechnologicallevel.E)lowtechnologicallevel.Answer:ADiff:2PageRef:57AACSB:AnalyticSkills71)TheUnitedStates'growingtradedeficitreflectsanumberoffactorswhichexclude:A)increasedimportsfromChina.B)aseeminglyinsatiableconsumerdemandforimportedgoods.C)theenormouscostofmilitaryoperationsintheMiddleEast.D)theservicestradesurplus.E)recordgoodssalestodevelopingcountries.Answer:DDiff:3PageRef:59AACSB:ReflectiveThinking72)Thefastest-growingsectorofworldtradeincludes:A)travelandentertainment.B)accountingandlegalservices.C)royaltiesandlicensefees.D)engineeringservices.E)alloftheaboveAnswer:EDiff:1PageRef:6173)Betweentheyear2001and2006,Chinaboughtmorethan$250billioninU.S.Treasurybonds.Suchpurchases:A)ensuresthatChina'scurrencyisrelativelyweakcomparedtotheU.S.dollar.B)indicatethatChinaisnotsureofitseconomicviability.C)showthatcurrencyexchangerateisunpredictable.D)predictthatyuanwillbedevaluedinthenearfuture.E)indicatethatChina'scurrencyisstrongerthantheU.S.dollar.Answer:ADiff:3PageRef:62AACSB:AnalyticSkills74)AsarepercussionsetbythedevaluationofChineseyuanin1994,thefollowingactionwasnoted:A)theyuanbecamestrongerthantheU.S.dollar.B)astagewassetforthedevaluationoftheThaibaht.C)thedemandforIndonesianrupiahincreasedconsiderably.D)Malaysianringgitbecameverycompetitive.E)Indiarupeesweredevalued.Answer:BDiff:3PageRef:62AACSB:AnalyticSkills75)Totheextentthatacountrysellsmoregoodsandservicesabroadthanitbuys,therewillbe:A)agreaterdemandforitscurrency.B)asurplusproductionofgoodsandservices.C)ascarcityofgoodsandserviceswithinthecountry.D)aneedforrevaluationofitscurrency.E)timeforfluctuatingitscurrency.Answer:ADiff:2PageRef:62AACSB:AnalyticSkills76)TheBigMacIndexdatedMay01,2009showsthatthepriceofBigMacinChinaconvertedfromthelocalcurrency,yuan,tobe$1.83;whereasitspriceintheUnitedStateswas$3.54.Thisshowsthat:A)BigMacismorepopularinChinathanintheUnitedStates.B)BigMacislessexpensiveintheUnitedStatesthaninChina.C)ChineseyuanisovervaluedwhencomparedtoUS$.D)ChineseyuanisundervaluedagainsttheUS$.E)beefislessexpensiveinChinathanintheUnitedStates.Answer:DDiff:3PageRef:63AACSB:AnalyticSkills77)OneFridayafewyearsago,theBigMacIndexsuggestedthattheyenwasovervaluedrelativetothedollarby70%.WhencurrencymarketsopenedonthefollowingMonday,anyoneusingtheBigMacIndexwouldconcludethatyenwasonly20%overvaluedrelativetothedollar.Whatisthemostlikelyexplanationforthis?A)Japan'sCentralBankactedtopropuptheyen.B)InflationinJapansuddenlyspikedupward.C)McDonald'sheadquartersstoppedhedging.D)McDonald'sJapanreducedtheyenpriceofaBigMac.E)McDonald'sJapanincreasedtheyenpriceofaBigMac.Answer:DDiff:3PageRef:63AACSB:AnalyticSkills78)IfanAmericantouristinTokyopaysmoreindollarsforthesameamountofyenthatsheboughtlastweek,then:A)aJapanesetouristinSanFranciscopaysmorein