IB quiz

Different products for export have different characteristics, which may make them more or less viable for exporting. When transportation costs are taken into account along with the costs of production, it becomes unprofitable to transport some products over significant distances. This is especially true of products that have which type of characteristic?

• A low value-to-weight ratio

• A high value-to-weight ratio

• They can be produced only in one region

• They are chemically unstable

The benefits and drawbacks of FDI to a national economy can be complex to project. In some cases, why can it be asserted that not all of the new jobs created by flows of FDI represent net additions in employment overall?

• Because of the uncertainty of the overall economic environment

• Because most of the job creation is indirect in nature

• Because jobs created by FDI investment may be offset by the jobs lost in domestic companies.

• Because the unemployment rate more or less remains constant over the short-term

Vinmart makes large bulk purchases from its suppliers and therefore it is able to negotiate better prices than its competitors. This allows Vinmart to offer larger price reductions to its customers. In this case, what effect is Vinmart benefiting from?

• MNC size advantage

• Constant marginal returns

• Economies of scale

• Absolute advantage of production

There are a number of different theoretical influences upon policy when it comes to FDI. Which view of FDI can trace its source back to Marxist economic and political theories?

• Pragmatic nationalism

• The radical view

• The free market view

• The noninterventionist principle

When trade policy is implemented, it can impact a number of different actors. When taken together, theories of international trade suggest that the promotion of free trade policies is generally in the best interests of what?

• A trading country, although it may not always be in the best interest of an individual firm

• All MNCs

• An individual firm, although it may not always be in the best interest of a country

• The WTO

David Ricardo is one of the most influential thinkers of Classical Economics. His work expanded on the ideas of Adam Smith, introducing further elements to the concepts of trade that Smith expounded upon. What does Ricardo’s theory of comparative advantage explain?

• Domestic trade in terms of international differences in political environments

• International trade in terms of international differences in political environment

• Domestic trade in terms of international differences in labor productivity

• International trade in terms of international differences in labor productivity

What is the name given to approaches to business ethics that are raised by ethics experts primarily to show that they offer inappropriate ethical decision making for an MNC?

• The naive immoralist

• Straw men

• The righteous moralist

• Cultural relativism

FDI can have a number of complex effects on the balance of payments for the trading nations involved. For the home country (or source country) involved, how is the negative effect of the balance of payments due to FDI typically offset?

• By increased imports to the home country as a result of the FDI

• By the subsequent inflow of foreign earnings

• By substituting direct exports made earlier from the home country

• By further investments usually made to expand foreign operation

There are various ethical frameworks proposed by philosophers for dealing with ethical issues. What is the name of the approach to ethics that states that the moral worth of actions is determined by their consequences or outcomes?

• Cultural relativist

• Naïve immoralist

• Rightous moralist

• Utilitarian

FDI has increased significantly in recent decades since the end of the Cold War. It is true to state that most cross-border FDI in developed economies takes place in what form?

• Hostile takeovers

• Greenfield investments

• Competitive investments

• Mergers and acquisitions