Exam 3 Quiz Questions

Licensing is NOT attractive to which of the following firms?

Firms requiring tight control of operations for realizing experiencing curve and location economies

Which of the following is an advantage of acquisitions as a means of entering foreign markets?

They are quick to execute and help firms to rapidly build their presence in the target foreign market

Which of the following countries presents a favorable benefit-cost trade-off scenario for foreign expansion?

A country with a free market system

Which of the following was a reason that led to the collapse of the gold standard in 1939?

A cycle of competitive currency devaluations by various countries

According to Michael Porter, what are the two basic strategies for creating value and attaining a competitive advantage in an industry?

Differentiation and low-cost

Which of the following explains the rise of the dollar against most major currencies in the late 1990s, even though the United States was still running a significant balance-of-payments deficit?

Increased foreign investments in US financial assets

Axiom International, an Australian company, wants to expand its operations to China, a country that is politically, culturally, and economically different. The firm needs to select a mode of entry that would give it access to local knowledge, allow sharing of development costs and risks, and also be politically acceptable. Which of the following modes of entry into foreign markets is most suitable for Axiom International?

Joint Ventrue

One of the principal risks associated with a strategic alliance is that:

a firm can give away than it receives

Under the US macroeconomic policy package of 1965-1968, President Lyndon Johnson backed an increase in US government spending that was financed by an increase in the money supply resulting in:

a rise in price inflation

Vornoda Inc, a multinational clothing and accessory brand, has been facing huge economic losses due to unpredictable exchange rate movements. In order to gain considerable immunity against such currency fluctuations, Vornoda Inc. should:

disperse production to different locations around the globe

In a floating exchange rate, the relative value of a currency:

is determined by market forces

The two phenomena that help explain the experience curve are:

learning effects and economies of scale

Firms that compete in the global marketplace typically face two types of competitive pressure:

pressures for cost reductions and pressures to be locally responsive

In international business, an advantage of being a late entrant in a foreign market is the ability to:

ride on an early entrant's investments in learning and customer education

The amount of value a firm creates is measured by:

the difference between its costs of production and the value that consumers perceive in its products