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WorksheetsBusiness Policy Mock Test
Total questions: 98
Worksheet time: 48mins
Which of the following is an example of an ad valorem tariff?
only licensed importers can import automobiles
20% on imported automobiles
$300 tariff on each imported computer
D. 25% of automobile must be manufactured domestically
Two of the first industries targeted for reform by the WTO with a view to encompass regulations governing foreign direct investment were:
global telecommunication and financial services industries
scientific research and defense sector
pharmaceuticals and heavy metal industry
agriculture and biotechnology
Which of the following illustrates the costs associated with regional economic integration?
The Andean Pact was largely based on the EU model, but was far less successful at achieving its stated goals
Due to the establishment of NAFTA, Canadian workers in the textile industry lost their jobs as Canadian firms moved production to Mexico
Americans suffer job losses when technology support work is outsourced to cheaper locations to countries like India
The euro is now used by 16 of the 27 member states of the European Union, with some countries opting to retain their national currencies
Which of the following are not criteria for entry into the Euro Zone?
High national debt
Sound fiscal situation
High degree of price stability
Converged long term interest rates
In the US, which branch of government has the ability to impose antidumping duties?
Judiciary
House of Representative
Senate
President
Which of the following are not factors that led to the collapse of Bretton Woods?
Role of US dollar in the system
US macroeconomic policy
US began importing more than it was exporting
Speculative attack on the Japanese Yen
Which of the following are not considered political reasons for economic integration?
Economic integration creates incentives for political cooperation
Economic integration allows countries to enhance their political weight in the world
Economic integration allows countries to eliminate nationalism and patriotism
Economic integration reduces potential for violent conflict
In a _____ staffing approach, host country nationals have limited opportunities to gain experience outside their own country
Geocentric
Ethnocentric
Transnational
Polycentric
Which of the following observations is true?
Countries adopting the euro have to give up control over monetary policy
Countries adopting the euro need not give up their own currencies
Countries adopting the euro need only to satisfy the criteria of being democratic in nature
Countries agreeing to the euro allow their exchange rates to float against each other
Which of the following are not reasons the radical view of FDI is in retreat:
poor economic performance of countries that embraced this view
collapse of communism in Eastern Europe
strengthening US dollar all around the world
strong economic performance of countries that embraced capitalism
Which of the following trade agreements was abandoned by President Trump?
US-Korea FTA
WTO
USMCA
TPP
Which of the following would be a likely action motivated by the desire of governments to protect their consumers from unsafe products?
Outlawing importation, sale, or use of genetically modified organisms by Austria and Luxembourg
Placing tariffs on imports of foreign steel, by the Trump administration in 2017
Passing legislations such as the D'Amato Act and the Helms-Burton Act targeting products from Libya, Iran, and Cuba
Threatening 100 percent tariffs on a range of Chinese products violating intellectual property laws
Which of the following Chinese companies operates an automotive glass factory in Ohio, USA?
SAIC
Fuyao
Geely
Huawei
One benefit of longer distribution channels is:
Lower product prices
Decreased profit margins
Greater market access
Lower mark-ups
Which of the following is not a reason why FDI has grown more rapidly than world trade and world output?
Fear of terrorism dampens consumer demand
Shift toward free market economies encourages FDI
Firms still fear protectionist policies
Globalization means firms want to produce closer to their customer
The biggest trade dispute between the United States and the European Union surrounds the issue of:
Sugar
bananas
hormone treated beef
Dutch flowers
A _______ allowance compensates an expatriate for not having access to amenities they are used to having such as retail stores and comparable health care in their foreign country assignment.
Housing
Education
Hardship
Reciprocal
Which of the following is recognized as one of the founding fathers of Taiwan?
Xi Jinping
Deng Xiaoping
Hu Jintao
Chiang Kai Shiek
FDI by Japanese auto companies in the United States has resulted in U.S.-owned auto companies losing market share to their Japanese competitors. This forms the basis for critics of employment benefits of FDI to argue that
A. majority of employees of an MNE in a host-country migrate to more developed countries, thereby bringing down the net employment statistics
Jobs created by this FDI have been more than offset by the jobs lost in U.S. auto firms
Direct employment effects of FDI are far larger than the indirect effects
Most jobs in MNEs are of a contract nature and hence, cannot be counted as actual employment statistics.
Which of the following are typically not considered a cost for countries receiving FDI?
positive effect on domestic employment
Vadverse effect on balance of payments
adverse effect on domestic competitors
loss of economic independence
Swedish car company Volvo is owned by
BYD
Fiat
Ford
Geely
Which free trade area was created by countries in Southeast Asia?
ANDEAN
AFTA
MERCOSUR
APEC
Assume that the currency of Country A falls sharply in value against the currency of Country B. Which of the following will be a consequence of this exchange rate movement?
Country B's products will become more competitive
Country A's exports to Country B will increase
Country B's products will become less expensive in Country A
There will be no difference in the volume or direction of trade
Which of the following is a drawback to ISO9000 certification?
It’s ineffective in improving processes
It’s impossible to achieve
It’s bureaucratic and expensive
It’s losing importance in global business
Which of the following are not typically considered part of a company's primary activities?
Production
Customer Service
Marketing & Sales
Information systems
Which of the following is not considered a benefit of the Euro?
lose control of monetary policy
creates larger market for capital
makes it easier to travel and engage in tourism
makes it easier to compare prices across countries
Equipment that reduces setup time is an example of which type of manufacturing?
Lean production
JIT
TQM
Six Sigma
Which of the following are not reasons governments impose tariffs?
Increase government revenues
Force consumers to pay more for certain imports
Protects domestic producers
To facilitate the free flow of goods and services
If a company with operations in multiple countries adopts a policy that assigns management positions with managers and executives from the home country only, it has adopted what type of staffing policy?
Transnational
Polycentric
Geocentric
Ethnocentric
Until the 1980s, Japan perceived direct entry of foreign (especially U.S.) firms with ample managerial resources into the Japanese markets as detrimental to the development and growth of their own industry and technology, leading Japan to block the majority of applications to invest in Japan. However, there were always exceptions to this policy, where, from the perspective of the Japanese government, the benefits of FDI outweighed the perceived costs. From this, it can be inferred that, Japan adopted the _____ view of FDI
eclectic
radical
pragmatic nationalist
free market
Which of the following are not typically part of the benefits associated with a country receiving inward FDI?
strengthening currency benefits
employment benefits
resource transfer benefits
competitive growth benefits
Which of the following are not reasons why firms may want to limit licensing?
a firm may give away valuable know-how
a firm can avoid major capital expenses by asking another firm to take on manufacturing its products
a firm may give away control of manufacturing
a firm's capabilities are not amenable to licensing
Which of the following should be produced in many different locations to lower the costs of transportation?
Electronics
Petroleum products
Magazines
Books
_____ is the amount of other messages that compete for a consumer’s attention:
Source effects
Logistics
Noise
Standardized advertising
Why are local content requirements frowned upon in the WTO but permitted in regional economic integration?
They are unnecessary for trade creation.
They are required to prevent transshipment through an FTA country just to get duty free treatment.
They are required to allow greatest location externalities.
They are unnecessary for trade diversion.
When demand is _____, a large change in price results in a small change in demand
Consistent
Flexible
Elastic
Inelastic
Which of the following are not arguments made by critics of the Euro?
the ECB is not free of political pressure
printing Euro notes will make it easier to counterfeit currency
the ECB is focused on inflation not growth
the EU is not an optimal currency area
Which of the following are not part of life-cycle support?
Product recall
Inventory responsiveness
Reverse logistics
Recycling
According to the product life-cycle theory, pioneering firms shift production to _____ countries when product standardization and market saturation give rise to price competition and cost pressures
free market
other advanced countries
industrialized
developing
A _____ is used to centrally store products and provide a location where customization can be facilitated
Acquisition
Distribution center
Wholesaler
Franchisee
R.L. Tung’s survey found that ____ expatriate managers may fail an overseas assignment due to the inability to cope with larger overseas responsibilities.
British
Japanese
Dutch
American
Which of the following are not considered drivers of globalization?
Transportation technology
Increasing trade barriers.
The internet
Technological advancement
The Foreign Corrupt Practices Act (FCPA) applies to
US companies
US persons
Persons who work for US companies
All of the above
Which of the following are reasons why India has a comparative advantage in software engineering?
Cheap and abundant labor
The time difference allows engineers to work while American customers are sleeping
English language capability
All of the above
If Apple won an order to sell 500 of its new minicomputers to Australia, but the Australian government stipulated that 20 percent of the component parts of the minicomputers that it purchased must be produced in Australia, that stipulation would be an example of a(n):
administrative policy
voluntary export restraint
local content requirement
import quota
Which of the following is true of a free trade area?
Factors of production are allowed to move freely between member nations
Member nations are not required to have a common external trade policy
Member nations are required to have a common monetary and fiscal policy
Member nations are required to have a common currency
A ______ program is one that prepares expatriates to return to work at their home office location
Standardization
Inpatriation
Localization
Repatriation
Which of the following are not reasons firms undertake acquisitions as a form of FDI?
Quicker than greenfield
Easier and less risky to acquire established business
Firms believe they can increase efficiency of the acquired unit
None; all of the above are reasons
Which of the following statements did former President Trump make regarding globalization?
We reject globalism and embrace patriotism
We embrace the new globalization driven by Trump hotels
We embrace globalization only by Western countries
We reject globalism and reject any attempts to divide close allies
Which of the following statements is true regarding Boeing’s approach to production?
Boeing designs commercial aircraft with engines manufactured by itself
Boeing designs, manufactures, and sells commercial aircraft without any outside suppliers (vertical integration)
Boeing designs and sells commercial aircraft, and assembles aircraft from components sourced from suppliers
Boeing designs and sells commercial aircraft, with all production outsourced to suppliers
IKEA’s first entry into which market was not successful until it localized products such as bed sizes and kitchens?
United Kingdom
Norway
India
United States
Americans pay more for _____ than citizens in other countries do, due to federal government policies that restrict imports and support domestic producers
Catfish
Motorcycles
flowering plants
Sugar
The average price of a Big Mac in the United States is $3.58. If the "Big Mac Index" is an accurate indicator, which of the following currencies would be the most overvalued?
South Africa; average price of a Big Mac equals $2.46
Norway; average price of a Big Mac equals $7.02
Japan; average price of a Big Mac equals $3.50
China; average price of a Big Mac equals $1.83
Which of the following accurately depicts the levels of economic integration, from least integrated to most integrated?
Common market, economic union, political union, free trade area, and customs union
Economic union, common market, free trade area, political union, and customs union
Political union, free trade area, common market, customs union, and economic union
Free trade area, customs union, common market, economic union, and political union
A country's currency is said to be _____ when the country's government allows both residents and nonresidents to purchase unlimited amounts of a foreign currency with it
externally convertible
freely convertible
internally convertible
nonconvertible
When Uber enters foreign markets it looks for accelerants, which do not include which of the following?
Holidays and events
Nightlife and restaurants
Inclement weather
Extensive supply of taxicabs
Which of the following indicates a company that relies on advertising media?
Direct selling
Pull
Push
Personal selling
IKEA’s store strategy is roughly the same around the world, and includes features except which of the following?
Café with Swedish food
Store layout
Flatpacked furniture
Custom-made furniture
Suppose Country A and Country B imposed tariffs on imports from all countries, and then they set up a free trade area, scrapping all trade barriers between themselves but maintaining tariffs on imports from the rest of the world. Country A began to import sugar from Country B. Country A had previously been producing sugar at a higher cost. Which of the following has occurred?
Trade balancing
Trade synergy
Trade creation
Trade diversion
The prevalence of technology companies in Silicon Valley leads to knowledge sharing among workers known as:
Experience curve
Externalities
High drivers
Learning effects
Which of these factors are not contributors to greater retail concentration?
Increase in laptop ownership
Number of households with refrigerators and freezers
Increase in car ownership
Number of two-income households
Regional economic integration without a customs union can distort free trade because:
One of participating countries can have lower tariffs for non-participating countries, distorting the most efficient location for production
One of the non-participating countries can have non-tariff barriers
One of the non-participating countries can have lower export tariffs
One of the participating countries could lobby firms to invest in their country
Three countries enter into an agreement to remove all tariffs and barriers for trade between them. They decide on a common trade policy with regard to nonmembers. Faced with political backlash, the countries stop short of allowing mobility of factors of production such as labor and capital. Which of the following best describes this arrangement?
Customs union
Political union
economic union
Common market
In the context of dumping, predatory behavior can be described as foreign producers:
eliminating competition by subsidizing prices in a foreign market with home market profits and eventually raising prices to earn substantial profits
attempting hostile takeovers of domestic firms and usurping the available resources for production
buying goods of competing domestic firms and hoarding them to create an artificial demand, and exporting those goods at higher prices
indiscriminately exploiting the natural resources of a foreign country to create a later demand that can be met only by imports
Which of following has caused creative destruction?
Economies of scale
Governments
Tariffs and taxes
Technological change
Which of the following is not a reason countries seek automotive FDI?
job creation capability
large capital investments
technology transfer potential
role in food security
_____ analytics uses statistics to identify and build models that can identify trends not readily observable in descriptive analyses.
Prescriptive
Definitive
Directive
Predictive
Which of the following are not reasons Apple manufactures iPhones in China?
Economies of scale
Availability of engineers
Strong supply chain
Strong record of human rights protection
Which of the following are not part of the UN’s charter?
Develop friendly relations among nations
Promote cooperation to solve international problems
Promote respect for human rights
None of the above
Which of the following describes shoe tariffs in the United States?
Consumers pay close attention to shoe tariffs
Shoe tariffs protect domestic shoe producers today
The more expensive the shoe, the less the tariff
The more expensive the shoe, the more the tariff
Which of the following statements regarding GATT is true?
The GATT attempted to liberalize trade restrictions in one go
GATT regulations failed as they were enforced by an unshared monitoring mechanism
Tariff reductions through negotiations were spread over eight rounds
In its early years, GATT was unsuccessful and hence was superseded by the WTO
It is very expensive and time-consuming, and often difficult, to get a visa to work in the United States. This hurts firms that pursue a _____ staffing approach
Transnational
Ethnocentric
Polycentric
Geocentric
The relationship between the number of "sigmas" and the number of errors in the Six Sigma approach is best described as
the higher the number of "sigmas," the smaller the number of errors
the number of "sigmas" is independent of the number of errors
the higher the number of "sigmas," the greater the number of errors
if the number of "sigmas" is a positive value, then the number of errors is always a negative value
XYZ Inc. converted 1 million dollars into euros when the exchange rate was $1 = E0.75. The company converts this back into dollars after three months when the exchange rate is $1 = E0.80. Which of the following is true of the outcome of this transaction?
Loss of $66,667
Gain of $62,500
Loss of $62,500
Gain of $50,000
Which of the following instruments is considered a “loophole” for raising tariffs?
Voluntary export restraints
Antidumping
Administrative barriers
Subsidies
Which of the following are not part of a firm’s marketing mix?
Pricing Strategy
Distribution Strategy
Product recalls
Product attributes
Regional economic integration allows companies to do which of the following?
serve multiple markets from a single location
establish single headquarters
rationalize manufacturing facilities
all of the above
The sovereign debt crisis in Greece has its roots in:
the Greek government rewarding public employees with high pay and extensive benefits
the Greek government not spending enough on public services
the Greek government's overly aggressive tax collection practices
the Greek government's discounting of sovereign bonds
_____ teaches that defective and poor-quality products are not acceptable
ISO 9000
Lean manufacturing
TQM
JIT
What is the reason that when companies do business overseas, they must first create a separate legal entity in that foreign country?
To maximize learning effects
To avoid a permanent tax establishment
To create the highest level of quality
To avoid local labor laws
Why do automakers such as VW engage in CKD (complete knock down) manufacturing?
Because it is a requirement for membership in the WTO
It is ethically a good idea to create job training opportunities.
Because tariffs on complete vehicles are too high to import vehicles
It is efficient to send CKD kits to manufacturing facilities
Which of the following are not reasons for the huge growth of FDI into China?
Companies earn tax incentives
Companies wish to avoid tariffs
Companies wish to establish guanxi
Companies wish to avoid hiring local labor
Which of the following would be a good strategy to overcome inefficiencies in CKD manufacturing?
Find new distribution channels as quickly as possible
Find local suppliers as quicky as possible
Increase import capacity as quickly as possible
Delay implementing six sigma as long as possible
Being able to lock in the price of something many days or months into the future is known as:
Transmitting
Inflation
Hedging
Deflation
Which aspect of organizational culture is the critical center that brings together all the other components?
Structure
Processes
Culture
People
Which of the following is an example of reverse resource transfer effect?
Ford learning from Mazda how to flexibly produce vehicles
Lenovo purchasing IBM
Geely purchasing Volvo
Fujitsu copying technology from Xerox in photocopiers
A ____ factory is one that is set up to overcome tariff barriers and has the same standard as its home factory
Server
Outpost
Offshore
Source
Which of the following were not part of the steps China took to open up its economy?
Privatized many state-owned enterprises
Adopted a radical view of FDI
Developed a stock market
Removed price controls
Tesco’s success of entering foreign markets cannot be attributed to which of the following?
Lack of established foreign competitors in market
Refusal to transfer core capabilities
Careful partner selection in Asia
Limiting number of foreign expatriates
You exchanged $1000 to 105,000 Yen for a trip to Japan. During your stay, you spent 50,000 Yen. Also, during this period the dollar weakened against the yen to 100 yen to a dollar. On your return, you went to the bank to exchange the remaining yen. How may dollars did you spend on the trip?
$523
$450
$550
$600
One prominent trade dispute in NAFTA involved:
the use of Mexican trucks on US highways
reciprocal law enforcement privileges
the use of English in Mexican schools
the use of the death penalty in the U.S
Which of the following does the US not have a free trade agreement with?
Israel
Jordan
China
Singapore
A ___ factory is one where cutting-edge production takes place before it is implemented in other system factories.
Contributor
Outpost
Lead
Server
Geely owns stakes in other car companies, except which of the following?
Lotus
Daimler-Benz
Proton
Ford
General Motors' Geo Prizm automobile was produced in a joint venture with _____, that Japanese company's first manufacturing base in North America.
Honda
Subaru
Nissan
Toyota
Pickup trucks sold in the US are made in North America because
pickup trucks aren't part of the WTO
federal law requires it
pickup truck buyers don't buy imports
there is a 25% duty on imported trucks
Most economic theories of exchange rate movements agree that three factors have an important impact on future exchange rate movements in a country's currency. Which of the following is not one of these factors?
The country's population
The country's interest rate
Market psychology
The country's price inflation
Which of the following are not arguments set forth by opponents of NAFTA in Mexico?
loss of national sovereignty
Mexico will turn into low-cost assembly site
rising wages
domination by US firms
