Economics and Finance Quiz

The study of financial decisions made by companies and individuals operating in a global environment, where currency exchange rates and political factors play a significant role.

The fluctuating value of one currency against another.

The potential for negative impacts on a company's operations and investments due to political instability, governmental policies, and legal changes in a foreign country.

The difference in financial markets and regulations between countries, leading to inefficiencies and challenges in cross-border transactions.

The expanded opportunities available to companies and individuals when operating in a global marketplace, including access to new markets, resources, and investment opportunities.

The process of the global economy becoming interconnected through increased trade, investment, and communication.

A company that operates and invests in multiple countries, beyond its home country.

The integration of financial markets and institutions across countries, enabling businesses to raise capital and invest globally.

When a country changes its rules for businesses and investors, potentially without proper legal recourse for those affected.

Obstacles that limit the free flow of people, goods, services, and capital across national borders, preventing markets from functioning optimally.

A situation where a country's government can change the regulations for foreign businesses or investors without giving them a fair chance to defend their interests.

Legal restrictions, unfair taxes, lack of accessible information, and high transaction costs are all examples of...?

Nestlé used to limit foreign investors to a more expensive type of stock, but later opened up access to cheaper stock. This is an example of...?

Companies can access more markets to produce goods, raise funds, and expand their operations.

Global markets allow investors to diversify their portfolios, potentially lowering risk and increasing returns.

By locating production and accessing funding in different countries, companies can reduce production costs and improve efficiency.

The idea that focusing solely on one segment or market limits potential gains. By venturing into multiple markets, companies can access a broader range of opportunities and resources.

The primary goal of financial management is to increase the financial well-being of the company's owners, the shareholders, by making decisions that maximize their returns.

This concept acknowledges that companies need to consider the interests of various stakeholders beyond just shareholders, including employees, suppliers, customers, and banks. This approach focuses on a more balanced and sustainable approach.

A group of interconnected companies in Japan that share close business relationships and often invest in each other. This network helps to achieve collective goals and create synergies.

The potential for a manager to act in their own self-interest instead of the best interests of the company, which can lead to conflicts and harm shareholder value. This is a critical concern in corporate governance.

The framework that regulates the relationship between a company's management and its shareholders, aiming to ensure transparency, accountability, and fairness.

The integration of financial markets and institutions globally, allowing businesses to raise capital, invest, and trade more easily across borders. It has transformed the financial landscape, opening up new opportunities and challenges.

The process of a company expanding its operations beyond its home country, establishing production, sales, and investments in multiple nations.

The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement aimed at reducing trade barriers among member countries, founded in 1947. It was later succeeded by the World Trade Organization (WTO) which has stronger enforcement powers for international trade rules. China joined the WTO in 2001.

The European Union (EU), a collection of 27 member states, has removed barriers to the free movement of goods, capital, and people within its borders. The North American Free Trade Agreement (NAFTA) aimed to gradually eliminate trade restrictions between Canada, Mexico, and the United States over a 15-year period beginning in 1994. In 2018, the three countries replaced NAFTA with the U.S.-Mexico-Canada-Agreement (USCMA).

The subprime mortgage crisis in the United States in 2008 led to a severe credit crunch, escalating into a global financial crisis. The excessive borrowing and risky practices adopted by households and financial institutions contributed to the crisis. Securitization amplified and spread the crisis globally.

The ability of a company to lower its average cost per unit by increasing production, often due to factors like shared resources, technology, or specialized labor.

A corporation that operates in multiple countries beyond its home nation, often taking advantage of global opportunities.

The process where a government sells or transfers ownership of its state-owned businesses to the private sector.

The theory that suggests countries can increase their overall wealth by specializing in producing goods they are most efficient at and trading with other countries.

The idea that international trade is beneficial for all participating countries, with everyone gaining something in the process.

The removal or reduction of barriers to trade between countries, allowing goods and services to flow more freely.

The process of countries increasingly integrating their economies through trade, investment, and cooperation.

A stock exchange specifically for foreign investors, allowing them to participate in the Chinese stock market.