TCQT 2

11. A product cycle theory is:

• a. multinational companies try to differentiate their products to increase the competitiveness of their products

• b. multinational companies create new products in foreign markets

• c. multinational companies create new products in domestic markets

• d. All sentences are wrong

12.  The process by which multinational companies provide their technology as copyright, patent, trademark) that is ______

• a. International trade

• b. Licensing

• c. Acquisitions of existing operations

• d. Joint ventures

13. The agency costs of an MNC are likely to be lower if it:

• a.

  scatters its subsidiaries across many foreign countries.

• b.

  increases its volume of international business.

• c.

  uses a centralized management style.

• d.

  All sentences are right

14. The process by which national governments sell state owned operations to corporations and other investors is________

• a. International trade

• b. Licensing

• c. Joint ventures

• d. Franchising

15. Licensing obligates a firm to provide ____, while franchising obligates a firm to provide ____.

• a.

  a specialized sales or service strategy; its technology

• b.

  its technology; a specialized sales or service strategy

• c.

  its technology; its technology

• d.

  a specialized sales or service strategy; a specialized sales or service strategy

17. If a country’s government imposes a tariff on imported goods, that country’s current account balance will likely ______ (assuming no retaliation by other governments).

• A.   Decrease

• B.    Increase

• C.    Remain unaffected

• D.   All of them are incorrect

19.  The international financial Corporation was established to:

• A.   Enhance development solely in Asia through grants

• B.    Enhance economic development through no subsidized loans (at market interest rate)

• C.    Enhance economic development through low interest rate loans (below market rates)

• D.   Enhance economic development of the private sector through investment in stock of corporations

20. The World Bank was established to:

• A.   Enhance development solely in Asia through grants

• B.    Enhance economic development through no subsidized loans (at market interest rate)

• C.    Enhance economic development through low interest rate loans (below market rates)

• D.   Enhance economic development of the private sector through investment in stock of corporations

24.  Which of the following would likely have the least direct influence on a country’s current account

• A.   Inflation

• B.    Nation income

  stocks

• C.    Tariffs

• D.   A tax on income earned from foreign

28. Under the Product Cycle Theory, _______________________

• a. foreign demand can be initially satisfied by exporting.

• b. Firm establishes foreign subsidiary to establish presence in foreign country and possibly to reduce costs.

• c. Firm differentiates product from competitors and/or expands product line in foreign country