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WorksheetsMGT 321 V1
Total questions: 150
Worksheet time: 1hrs 15mins
According to _, the government should invest in education, infrastructure, and basic research.
Adam Smith
Leontief
Porter
David Ricardo
_____ involves attempting to collect foreign currency receivables (payments from customers) early when a foreign currency is expected to depreciate and paying foreign currency payables (to suppliers) before they are due when a currency is expected to be appreciated.
Strategy
Lag strategy
Business strategy
Lead strategy
_____ perform an indirect connection function between investors and borrowers in the generic capital market.
Investment banks
Federal banks
Agricultural banks
Commercial banks
Which of the following is true of wholly owned subsidiaries?
It is the least expensive method of serving a foreign market from a capital investment standpoint.
It is the most feasible entry mode due to the political considerations.
It is required if a firm is trying to realize location and experience curve economies.
_____ roots in Marxist political and economic theory.
Radical View
Pragmatic Nationalism
Neo-classical View
Which of the following assertions is TRUE in respect of the World Bank?
It is tasked with maintaining order in the international monetary system.
Later, it moved to lending to third-world nations for development.
_____ predicts that the power of microprocessors doubles, and its cost of production falls in half every months.
Keynes’s Law
Say’s Law
Moore’s Law
Sullivan Principle
Identify the true statement about trade barriers.
To conform to local content regulations, a firm may have to locate more production activities in a given market than it would otherwise.
They may help a firm to serve a country from locations outside of that country.
They lower the costs of exporting products to a country.
They may put a firm at a competitive advantage to indigenous competitors.
_____ refers to the rules and procedures that direct actions of subunits.
Cultural Controls
Bureaucratic Controls
Personal Controls
Output Controls
An effective business strategy to reduce economic exposure is to
contract out manufacturing.
contract out consumption.
contract out high-value-added manufacturing.
contract out low-value-added manufacturing.
When a rich country enters into a free trade agreement with a poor country, the poor country benefits more than the rich country. This is the concept behind:
Ricardo’s theory
Paul Samuelson’s critique
Porter’s critique
Adam Smith’s theory
Modern international trading system is based on:
General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)
General Agreement on Tariffs and Trade (GATT) and the World Bank
General Agreement on Tariffs and Trade (GATT) and the United Nations (UN)
General Agreement on Tariffs and Trade (GATT) and the International Monetary Fund (IMF)
Identify the true statement about trade barriers:
They may help a firm to serve a country from locations outside of that country.
They lower the costs of exporting products to a country.
They may put a firm at a competitive advantage to indigenous competitors.
Quotas may limit a firm’s ability to serve a country from locations outside the country.
The firm’s … must be consistent with its strategy:
organizational culture
organizational architecture
code of ethics
organizational structure
… was designed to liberalize trade by eliminating tariffs, subsidies, import quotas, etc.:
GATT
WTO
UN
IMF
Vertical differentiation, Horizontal differentiation, and Integrating mechanisms are the dimensions of:
organizational structure
organizational culture
organizational architecture
control systems and incentives
Relative monetary growth, relative inflation rates, and nominal interest rate differentials are all moderately good predictors of… in exchange rates:
short-run changes
long-run changes
exceptional changes
normal changes
… is often seen as the lender of last resort:
World Bank
World Trade Organization
International Monetary Fund
General Agreement on Tariffs and Trade (GATT)
Which of the following is one of the most common ethical issues?
International trade
Human welfare
Economic development
Human rights
When two parties agree to exchange currency and execute the deal at some specific date in the future, it is called:
Currency swap
Exchange rate
Spot exchange rate
Forward exchange rate
The total cumulative value of foreign investments is best referred to as:
Portfolio investments
Stock market investments
Accumulation of foreign shares
Stock of foreign direct investments
Supporters of globalization maintain that the apparent decline in real wage rates of unskilled workers:
is due to technological changes that create greater demand for skilled workers.
can be checked by limiting free trade and foreign investment.
can be checked by increasing government ownership of enterprises.
is due to the migration of low-wage manufacturing jobs offshore.
Which of the following statement is TRUE in respect of ethical principles?
Ethical principles are the same throughout the world.
There is no universal worldwide agreement about what constitutes accepted ethical principles.
Countries all over the world are ethical.
There is universal worldwide agreement about what constitutes accepted ethical principles.
The need for coordination or integrating mechanisms is:
Transnational Strategy.
Global Standardization Strategy.
Localization Strategy.
International Strategy.
The monetary autonomy argument is supported by the advocates of:
Pegged exchange rates.
Fixed exchange rates.
Floating exchange rates.
A dirty-float system.
According to Porter, the government should invest in:
Location.
Climate.
Demography.
Education.
A … arises when a country is importing more goods and services than it is exporting:
Current account deficit.
Current account surplus.
Capital account surplus.
Capital account deficit.
Value is determined by supply and demand in:
Forward exchange rate.
Currency swap.
Spot exchange rate.
Exchange rate.
A purely domestic capital market faces the problem of:
Deregulated markets.
Foreign exchange risk.
Higher cost of capital.
Lack of regulation.
When individuals gain knowledge of the most efficient ways to perform particular tasks, they are saving costs through:
Learning effects.
Experience curve effects.
Location economies.
Value creation effects.
Analysts who believe globalization of capital has serious risks argue that:
Individual nations are becoming more vulnerable to speculative capital flows.
Most of the capital that moves internationally is pursuing long-term gains.
Capital does not shift in and out of countries as quickly as conditions change.
Deregulation of trade is helpful for economic growth in a country.
Which feature of a common market differentiates it from a customs union?
Holds a common external trade policy toward nonmembers
Requires harmonization of members’ tax rates
Has a common currency
Allows factors of production to move freely among members
A wholly owned subsidiary is appropriate when the firm wants:
To share the cost and risk of developing a foreign market
A plant that is ready to operate
percent of the profits generated in a foreign market
To test a market
What is the name of the market in which the currency of one country is converted into the currency of another country?
Currency market
Carry trade market
NYSE
Foreign exchange market
To maximize the learning benefits of an alliance, a firm must:
Build relational capital
Try to learn from its partner and then apply the knowledge within its own organization
Be sensitive to cultural differences
Build trust
Which of the following arguments supports a floating exchange rate?
It adds to uncertainty surrounding future currency movements
Advocates believe that exchange rate adjustments can help a country deal with economic crises
It can cause fluctuations in exchange rates
It brings monetary discipline
Who concludes that strategic trade policy is almost certain to be captured by special interest groups which will distort it to their own ends?
Friedman
Krugman
Ricardo
Smith
The most typical joint venture is:
60-40
75-25
0-90
50-50
A lack of information about the fundamental quality of foreign investments may encourage what in the global capital market?
Capital flow
Cash flow
Speculative flows
Investment flow
Organizational structure includes several elements. Which of the following is one of them?
The informal division of the organization into cultural groups
The establishment of integrating mechanisms to coordinate the activities of subunits
The horizontal decision making that occurs daily on the plant floor to improve operations, describing how individuals perform work
Which of the following is NOT a determinant of ethical behavior?
Business ethics
Personal values
Societal culture
Leadership style
Which type of crisis refers to a loss of confidence in the banking system that leads to a run on banks as individuals and companies withdraw their deposits?
Banking
Currency crisis
Debt crisis
Balance-of-payments crisis
Interdependence between firms in an oligopoly leads to imitative behavior. Imitative behavior also occurs in ...
Licensing Free trade
Foreign Direct Investment
Exporting
Ethical dilemmas exist because many real-world decisions involve?
first-, second-, and third order consequences that are hard to quantify.
people from different multinational firms.
people from different cultures.
employers and employees.
... refers to the total accumulated value of foreign-owned assets at a given time:
Foreign Direct Investment (FDI)
Flow of FDI
Stock of FDI
Foreign trade
The ... suggests that trade is a positive sum game in which all countries that participate realize economic gains:
Theory of product life cycle
Theory of comparative advantage
Theory of factor endowment
Theory of absolute advantage
... is any firm that engages in international trade or investment:
International investment
International trade
Foreign direct investment
International business
A country is said to be in balance-of-trade equilibrium when:
It produces all the goods needed for domestic consumption.
The income its residents earn from imports is equal to the money its residents pay to other countries for exports.
It produces all the goods needed for exportation.
The income its residents earn from exports is equal to the money its residents pay to other countries for imports.
The shift toward a market-based system DOES NOT involve:
Privatization
Globalization
A legal system to safeguard property rights
Deregulation
... is the rate of return a firm makes on its invested capital. Divide net profits by total invested capital:
Revenue growth
Profitability
Value creation
Profit growth
Managed float system is also known as:
Fixed-exchange rate system
Dirty-float system
Floating exchange rate regime
Pegged exchange rate system
... requires a high degree of integration, a coordinating bureaucracy, and the sacrifice of national sovereignty to the bureaucracy:
Trade Union
Political Union
Economic Union
A country with ... political institutions, market based economic system, and strong legal system is clearly more attractive to do business in:
Communist
Totalitarian
Democratic
Pseudo-democratic
Establishing … involves a business to resolve to place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated:
Moral intent
Noblesse oblige
Veil of ignorance
Moral imagination
Which of the following is NOT a quality of a good partner in Strategic Alliances? Helps the firm achieve its strategic goals. Is unlikely to try to opportunistically exploit its partner. Has capabilities the firm lacks. Gather data from informed third parties.
Helps the firm achieve its strategic goals
Is unlikely to try to opportunistically exploit its partner
Has capabilities the firm lacks
Gather data from informed third parties
The World Bank was established to …….
to help reconstruct the war-torn economies of Europe
to manage global exchange rates
to regulate international trade tariffs
to provide microloans exclusively to rural farmers
…… are a product of investment by individuals, companies, and governments.
Advanced factors
Basic factors
Secondary factors
…… occurs when a firm exports goods or services to consumers in another country.
Inward investment
Outsourcing
Foreign direct investment
International trade
Regional Economic Integration allows firms to realize cost economies by ……. in those locations where the mix of factor costs and skills is optimal.
centralizing production
decentralizing governance
eliminating tariffs unilaterally
outsourcing marketing
…… means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder.
Moral imagination
Moral intent
Veil of ignorance
Noblesse oblige
…… a country raise important ethical issues that have implications for international business.
Political system
Economic system
Political, economic, and legal systems
Two extensive multinational agreements were reached to liberalize trade in … and financial services.
trade
telecommunications
transportation
information-technology
Which of the following is an example of market makers?
Commercial bankers
Individuals
Companies
Governments
In … all countries gain from free trade and investment:
Negative-sum-game
Neutral-sum-game
Zero-sum-game
Positive-sum-game
The system of government in a nation is called the:
Political economy
Legal system
Political system
Economic system
Empirical evidence suggests that neither PPP theory nor … is particularly good at explaining short-term movements in exchange rates:
the international Fisher effect
the barter system
the Fisher effect
the law of one price
Theory of absolute advantage is adhered to:
Vernon
David Ricardo
Adam Smith
Heckscher-Ohlin
Two extensive multinational agreements were reached to liberalize trade in telecommunications and:
Financial services
Trade
Information-technology
Transportation
Which of the following might limit ability of companies to realize cost economies?
Enduring organizational differences and competitive practices
Enduring cultural similarities and competitive practices
Enduring cultural differences and comparative advantages
Enduring cultural differences and competitive practices
… tracks exports and imports:
Savings account
Salary account
Capital account
Current account
… can inject risk into foreign currency borrowing:
Unpredictable movements in exchange rates
Stable domestic inflation rates
Fixed interest rate loans
Government guarantees
Regional economic integration is only beneficial if:
The amount of trade it creates exceeds the amount it diverts
The amount of trade it diverts exceeds the amount it creates
It results in no change in overall trade flows
It immediately eliminates all tariffs and quotas
… advocates government involvement in promoting exports and limiting imports:
Mercantilism
Theory of absolute advantage
Theory of comparative advantage
Free trade
… of a country clearly influence the attractiveness of that country as a market or investment site:
Legal environment
Political, economic, and legal environments
Economic environment
Political environment
One of the competitive pressures that firms competing in the global marketplace face is:
Pressure for value creation
Pressure for cost increases
Pressure for local responsiveness
political benefit of economic integration is that it:
Enables participants to achieve gains from the free flow of trade
Allows countries to specialize in the production of goods and services that they can produce most efficiently
Enables participants to achieve gains from the free flow of investment
Gives countries greater political clout when dealing with other nations
refers to skills within the firm that competitors cannot easily match or imitate.
Competitive competence
Absolute advantage
Core competence
Hedge funds position themselves to make……. that they think will ……….
short: increase in value
short: weather a volatile market
long: weather a volatile market
long: increase in value
… often occurs when the causes of good or bad performance are not clearly identifiable.
Performance ambiguity
Process clarity
Perfect information
Predictable variance
…is based on tradition, precedent, and customs.
Theocratic law
Criminal law
Theocratic law Criminal law Common law
…is a closed system where social position is determined by family and change is usually not possible.
Political system
Education system
Caste system
Class system
One of the impediments to integration arises from
The fact that economic integration aids a minority
Concerns that too many multinational firms will lose investors
Concerns over national sovereignty
Concerns that regional trade blocks will reduce exports
…occurs when companies sell goods in a foreign market at below their costs of production or below their "fair" market value.
Antidumping
Countervailing duties
Bureaucracy
duties Bureaucracy Dumping
______ allows market makers to absorb and process large volumes of information from around the world.
FDI technology
Information technology
Information
According to , actions are desirable if they lead to the best possible balance of good consequences over bad consequences.
Utilitarian approaches to ethics
Righteous moralist
Naïve immoralist
Kantian ethics
…occurs when a firm invests resources in business activities outside its home country.
Foreign indirect investment
Foreign direct investment
Domestic direct investment
The need to customize the product to local conditions may work against the implementation of a
International strategy
Transnational strategy
Global standardization strategy
Localization strategy
According to , certain industries, like defense-related ones, must be protected.
The infant industry argument
Strategic trade policy
The national security argument
Retaliation policy
Which of the following is an effective strategy for implementing organizational change?
Physically move the organization to a new state
Refreeze the organization
Keep the organizational structure
International businesses use foreign exchange markets for many reasons. Which of the following is one of these reasons?
To pay a foreign company for its products or services in its native country’s currency
To cover themselves from all risks involved in currency speculation
To receive payments from domestic investors that are in local currencies
To invest for short terms in money markets
… created a wall of tariff barriers against imports into the United States.
Anti-Corruption Act
Smoot-Hawley Act
U.S. Foreign Corrupt Practices Act
Political, economic, and legal systems of a country together is called:
Political economy
Economic system
Legal system
Political system
… mandated segregation and prohibited blacks from managing whites.
Apartheid system in South Africa
Apartheid system in Europe
Which of the following is NOT true in respect of Currency Boards?
Boards are popular among many of the world’s smaller nations
Commitment to converting its domestic currency on demand into another currency at a fixed exchange rate
It can issue additional domestic notes and coins only when backed by foreign reserves
… is the largest FDI source since WWII.
K.S.A
U.S.
Canada
U.K.
Under …, contracts tend to be much shorter and less specific.
Theocratic law
Common law
Civil law
Which of the following is a first-mover advantage?
Ability to preempt rivals and capture demand by establishing a strong brand name
Creation of innovative products at lower costs than other firms
Ability to capitalize on the work done by other firms
Lower research and development costs and marketing costs than other firms
Which of the following is NOT a most common ethical issue?
Human rights
Employment practices
Environmental regulations
Human welfare
Pressures for cost reduction are intense in industries where:
The company is located in a low-cost location
Consumers are weak and face high switching costs
There is persistent excess capacity
Once a firm undertakes FDI, it becomes a:
private enterprise
international enterprise
domestic enterprise
multinational enterprise
… supports long-term cross-border capital flows:
Support money
Euro money
Patient money
Hot money
Which of the following is NOT the cause of Organizational Inertia?
Existing political economy of a country
Senior managers’ preconceptions about the appropriate business model or paradigm
Existing distribution of power and influence within an organization
… is the extent to which the income from individual transactions is affected by fluctuations in foreign exchange values.
Economic exposure
Social exposure
Translation exposure
Transaction exposure
The key to reducing … is to distribute the firm’s productive assets to various locations so the firm’s long-term financial well-being is not severely affected by adverse changes in exchange rates.
Economic exposure
Transaction exposure
Social exposure
… views trade as a zero-sum game.
Smith
Heckscher-Ohlin
Mercantilism
Ricardo
Under ______, contracts are very detailed with all contingencies spelled out:
Criminal law
Common law
Civil law
Statutory law
First-mover advantages are enjoyed by …………:
early entrants
last entrants
middle entrants
late entrants
What makes Eurobonds more attractive than most major domestic bonds?
favorable tax status
presence of regulatory interference
protection from exchange risks
strong disclosure requirements
Which theory focuses on factors of production?
Vernon's product life-cycle theory
Krugman's new trade theory
Heckscher-Ohlin theory
Ricardo's theory
Countries are more likely to have higher sustained rates of economic growth when they have…
Communist regimes
Democratic regimes
Totalitarian regimes
Socialistic regimes
International businesses use foreign exchange markets for many reasons. Which of the following is one of these reasons?
To convert the payments received for its exports, the income received from foreign investments, or the income received from licensing agreements with foreign firms
To cover themselves from all risks involved in currency speculation
Multinational enterprise (MNE) is any business that has productive activities in two or more countries.
Two
Four
Who argues that while many societies are modernizing, they are not becoming more Western?
Jeffrey Sachs
Paul Krugman
Samuel Huntington
Francis Fukuyama
Which of the following is NOT the determinant of national competitive advantage?
Supply conditions
Demand conditions
Firm strategy, structure, and rivalry
Factor endowments
Which of the following is an advantage of exporting?
Trade barriers
Problems with local marketing agents
High transport costs
Ability to realize location and experience curve economies
_____ are the accepted principles of right or wrong that govern the conduct of businesspeople.
Trade ethics
Personal ethics
Business ethics
Commercial ethics
The greater the pressures for cost reductions, the more likely a firm will want to pursue some combination of exporting and:
Joint venture
Licensing
Turnkey project
Wholly owned subsidiaries
Supporters of floating exchange rates:
Claim that trade deficits are determined by the balance between savings and investment in a country
Argue that countries with permanent deficits in balance of trade could not be corrected by domestic policy
Claim that trade deficits are not determined by the external value of currency
Argue that floating rates lead to a more stable world monetary system
The connection between _____ and _____ has important implications for the choice of countries in which to locate production facilities and do business.
Moral principles; values
Culture; competitive advantage
Values; norms
_____ is the belief in the superiority of one's own ethnic group or culture.
Patriotism
Ethnocentrism
Individualism
_____ societies emphasize individual achievement. Choices:
Asian
Non-Western
African
Western
Strategic alliances DO NOT include: Choices:
Cross-border trade
Cross-shareholding deals
Licensing arrangements
Formal joint ventures
Which of the following is NOT an assumption of Comparative Advantage theory?
Resources can’t move freely
Constant returns to scale
No transportation costs
In firms attempt to create value by transferring core competencies from home to foreign subsidiaries.
Localization Strategy
Global Standardization Strategy
International Strategy
Proposes EU legislation, implements it, and monitors compliance. Choices:
European Commission
European Parliament
European Council
Which of the following is a way to encourage outward FDI by the home country?
Limit capital outflows
Manipulate tax rules
Elimination of double taxation of foreign income
Prohibit investment for political reasons
According to , government can help raise national income when a domestic firm gains first-mover advantages.
The national security argument
Retaliation policy
The infant industry argument
Strategic trade policy
According to de policy some fraction of a good must be produced locally.
Dumping
Antidumping
Bureaucracy
Local Content Requirements
Which of the following is NOT a basic factor?
Sophisticated and skilled labor
Climate
Location
Natural resources
Which of the following is the largest trading center?
Zurich
London
Currency management is the combination of:
Government intervention and speculative activity
Government intervention and foreign exchange transactions
Government intervention and foreign exchange market
Government intervention and financial activity
Which of the following statements is true regarding an international business?
An international business needs to invest directly in operations in other countries
An international business needs to have homogeneous practices across countries
An international business must find ways to work within the limits imposed by government intervention
An international business can be managed in the same way that a domestic business is managed
Rules should ensure that a free trade agreement does not result in trade diversion.
World Bank
IMF
GATT
WTO
means transferring ownership of state property into the hands of private individuals.
Globalization
Liberalization
Deregulation
Privatization
complicates foreign exchange risk.
Gold standard
Gold par value
Fixed exchange rate regime
Floating exchange rate regime
refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production.
Globalization of markets
Globalization of production
International trade
Regional economic integration
Acquisition is a good option when:
Global competitors are also interested in establishing a presence.
The competitive advantage of the firm is based on the transfer of organizationally embedded competencies, skills, routines, and culture.
There are no incumbent competitors to be acquired.
Which of the following is true of the Eurobond market?
They have an unfavorable tax status.
Government limitations are generally more stringent for securities denominated in foreign currencies.
There are many regulations that protect investors.
There are less stringent disclosure requirements than in most domestic bond markets.
opens new markets.
Greenfield Investment
International trade
Foreign Direct Investment
Regional economic integration
The perform an indirect connection function between investors and borrowers in generic capital mrket.
Investment banks
Federal banks
Agricultural banks
Commercial banks
The values and norms shared among an organization's employees are called.
Family culture
Country culture
Culture
Organizational culture
According to , an individual should have freedom in economic and political pursuits.
Socialism
Individualism
Which of the following is NOT included in implementing organizational change?
Unfreezing the organization
Refreezing the organization
Freshen the new state
Moving to the new state
Two alternatives to FDI are:
Licensing and franchising
Exporting and licensing
Tariff and subsidy
Greenfield investment and acquisition
The agreement reached at Bretton Woods established the:
United Nations
International Monetary Fund
World Economic Forum
International Atomic Energy Agency
According to ______, home-country standards of ethics should be followed in foreign countries.
Righteous moralist
Kantian ethics
Naïve immoralist
Utilitarian approaches to ethics
______ shows systematic reductions in production costs that have been observed to occur over the life of a product.
Experience curve
Learning effect
Economies of scale
Early entrants to a market that are able to create switching costs that tie customers into their products or services are capitalizing on ______.
Late-mover advantages
Pioneering costs
First-mover advantages
______ is historically found in communist countries.
Market economy
Pure economy
Mixed economy
Command economy
______ imposes monetary discipline on a country and leads to low inflation.
Floating exchange rates
Fixed exchange rates
Pegged exchange rates
Dirty-float system
