BUS 280
Which of the following accounts for about 55 percent of the world;s GNP and 49 percent of the world trade?
APEC
Which of the following is true with respect to multinational firms?
Because of their pivotal role in international trade firms can and do exert a strong influence on gov. policy toward trade.
Are the accepted principles of right or wrong governing the conduct of business people
Business ethics
The naive immoralist claims that a multinational's home country standards of ethics are the appropriate ones for companies to follow in foreign countries
False
The value systems and norms of a country have little influence on the costs of doing business in that country
False
There is a consensus that EU is what economists would call an optimal currency area.
False
Using Hofstede's dimensions of social culture, research has shown that companies headquartered in cultures where masculinity an power distance are important attributes were more likely to emphasize the importance of behaving ethically.
False
A pen costs E50 in Britian. An indentcal pen costs $70 in the US when the exchange rate is E1 = $1.50. Which of the following is correct?
The US offers a better deal.
One of the U.N.'s Millennium Goals was to cut in half the number of people living in extreme poverty by 2015. Which of the following is an accurate statement concerning this goal or its impact?
This goal was reached five years ahead of schedule.
Tariff barriers raise the costs of exporting products to a country ( or of exporting partly finished products between countries). Which of the following is likely a consequence of these barriers?
This may put a firm at a competitive disadvantage to indigenous competitors in that country.
What is the purpose of a greenfield investment?
To establish a new operation in a foreign country
Occurs when high cost domestic producers are replaced by low cost producers within the free trade area.
Trade creation
Which of the following statements is true about trademarks?
Trademarks are designs and names by which businesses differentiate their products.
A chinese petroleum company sets up a crude oil refining facility in Vietnam. This is an example of a greenfield investment.
True
A code for ethics is a formal statement of the ethical priorities that a business follows
True
A country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it.
True
An international business is any firm that engages in international trade or investment.
True
Direct effects arise when a foreign MNE employs a number of host country citizens.
True
Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics
True
Hostede's power distance dimension focused on how a society deals with the facts that people are unequal in physical and intellectual capabilities
True
If the spot difference is $1 = yen120 and the 30-day forward is $1 = yen 130 the dollar is selling at a premium in the forward market.
True
In industries where economies of scale are important both the variety of goods that country can produce and the scale of production are limited by the size of the market.
True
In the early twentieth century, the socialist ideology split into two broad camps: communists and social democrats.
True
Offshore production refers to FDI undertaken to serve the home market.
True
Paul Samuelson critique looks at what happens when a rich country enters into a free trade agreement with a poor country
True
The convention on combating bribery of foreign public officials in international business transactions obliges member states to make facilitating payments made to expedite routine government action a criminal offense.
True
The movement toward economic regional integration has been most successful in Europe
True
The rate at which one currency is converted into another is known as the exchange rate.
True
Theories of international trade claim that promoting free trade is generally in the best interests of a country, although it may not always be in the interest of an individual firm.
True
While a nation as a whole may benefit significantly from a regional trade agreement, certain groups within the country may lose.
True
Historically, command economies were found in _____, where collectivist goals were given priority over individual goals.
communist countries
An impediment to integration arises from
concerns over national sovereignty.
If porters theory is correct we would expect his model to predict the pattern of international trade that we observe in the real world. For example,
countries should be exporting products from those industries where all four components of the diamond are favorable
Globalization has enabled organizations to reduce their costs of production by
creating manufacturing units in developing countries.
From an international perspective some argue that what is ethical
depends on one's cultural perspective.
If lots of people want euros and euros are inshort supply and a few people want japanese yen and yen are in plentiful supply, the yen is likely to ____ against the euro.
depreciate
Assuming the 60-day forward exchange rate was $1 = yen110 and the spot exchange was $1 = yen120, the dollow is selling a _____ on the 60-day forward market.
discount
The extent to which a firm's future international earning power is affected by changes in exchange rates in the long run is known as
economic exposure
According to the ___ international production should distributed among citizens according to the theory of comparative advantage.
free market view
Moral imagination refers to
identifying people who have a strong sense of personal ethics and would not engage in unethical or illegal behavior
In a command economy, the government plans the goods and services that a country produces and all businesses are state owned, the rationale being that the government can direct the businesses to make
investments that are in the best interests of the nation as a whole. Since the demise of communism in the late 1980s, the number of command economies has fallen dramatically.
Globalization critics argue that the decline in unskilled wage rates is due to the
migration of low-wage manufacturing jobs offshore
If GE a US based corporation purchases a 12% interest in a company in Italy that purchase would be an example of a
minority acquisition
The ethical obligations of a multinational corp. toward employment conditions, human rights, corruption, and environmental pollution are
not always clear-cut
5 airlines control 90% of the aviation sector of a country. The aviation industry in the country would be an example of a
olgopoly
Which of the following statements is true about caste system
A caste system is an open system of satisfaction
Which of the following expresses one of the reasons why managing an international business is different from managing a purely domestic business?
An international business must find ways to work within the limits imposed by government intervention in the international trade and investment system.
Benefits inefficient farmers and the politicians who rely on the farm vote, but not consumers in the EU, who end up paying more for their foodstuffs.
Common Agricultural Policy (CAP)
Since the demise of communism in the late 1980s, the number of command economies has risen dramatically.
False
The inefficient market school argues that investing in exchange rate forecasting services would be a waste of money.
False
What is the term for unit cost reductions associated with a large amount of output?
Economies of scale
Which of the following actions was implemented in the Uruguay Round, finalized in December 1993?
Establishment of the World Trade Organization
The emerging role of the ___ in competition policy suggests the EU is increasingly willing and able to intervene and impose conditions on companies proposing mergers and acquisitions.
European Commission
Governments always act in the national interest of their countries when they intervene in the economy.
FALSE
A civil law system tends to be more adversarial than a common law system.
False
An efficient market has many impediments to the free flow of goods and services.
False
An import quota has a specific tax levied on imports
False
Entrepreneurs and business owners of high uncertainty avoidance culture will be more willing to take risks and make changes
False
In a command economy, certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant state ownership and government planning.
False
In a free trade area, countries are not allowed to determine their own trade policies with nonmembers.
False
New trade theorists argue that getting a first mover advantage is not a significant determinant of international trade.
False
A lead strategy involves delaying collection of foreign currency receivables if that currency is expected to appreciate and delaying payable if the currency is expected to depreciate.
False, this is lag strategy. Lead is paying before.
A firm needs to develop a mechanism for ensuring it maintains an appropriate mix of tactics and strategies for minimizing its foreign exchange exposure. Which of the following is one of the common tactics that should be employed?
Firms need to as far as possible model and forecast future exchange rate movements.
Draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements
Fundamental analysis
The _____ is often seen as the lender of last resort.
International Monetary Fund
The creation of a single market through regional economic integration offers significant opportunities. Which of the following is one of these opportunities?
Over time price differentials across nations will decline in a single market.
Argues that a strategic trade policy aimed at establishing domestic firms in a dominant position in a global industry is a beggar thy neighbor policy that boosts national income at the expense of other countries.
Paul Krugman
Are controls over the behavior of the MNE's local subsidiary. The most common of these are related to local content, exports, technology transfer, and local participation in top management.
Performance requirements
Which of the following argues that it is in a country's best interests to maintain a trade surplus?
Principle of mercantilism
Theory argues that such advanced nations as the US have an incentive to develop consumer products and hence such nations tend to produce newer products
Product life-style
Can be seen as an attempt to achieve additional gains from the free flow of trade and investment between countries beyond those attainable under global agreement.
Regional economic integration.
Which of the following theories explains global trade in terms of the international differences in labor productivity?
Ricardo's theory of comparative advantages
General Motors stand against apartheid in South Africa was based upon what came to be known as
Sullivan principles
Which of the following statements is true about the righteous moralist approach to ethics
The righteous moralist approach is typically associated with managers from developed nations
In which of the following situations would FDI deteriorate the current account of the host country's balance of payments?
When a foreign subsidiary imports a substantial number of its inputs from abroad.
When is a currency said to be externally convertible?
When only nonresidents can convert it into a foreign currency without any limitations
The lack of progress in the DOHA ROUND negotiations has resulted in countries
forging ahead with their own bilateral agreements.
Indulgence refers to
a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun
Values are
abstract ideas about what a group believes to be good, right, and desireable
Opponents of globalization argue that falling trade barriers
allow firms to move manufacturing activities to countries with lower wage rates.
The foreign corrupt practices act was amended to
allow for "facilitating payments".
According to the findings of the world values survey
as countries get richer there seems to be a shift from survival values to well being values
The practice of "gift giving" between the parties to a business negotiation is considered right and proper behavior in many Asian cultures while some westerners view the practice as a form of bribery. what is this an example of?
ethical dilemma
To make sure that a business behaves in an ethical manner a number of companies have hired ___ who are responsible for making sure the company's code of ethics is followed in every business decision.
ethics officers
The belief in the superiority of one's own culture
ethnocentrism
The common law system
is based on tradition, precedent, and custom.
Which of the following is a disadvantage of a high degree of managerial mobility between companies
lack of loyalty and commitment to an individual company
Ad valorem tariffs are
levied as a proportion of the value of the imported good
The threat of anti-dumping action affects a firm by
limiting its ability to use aggressive pricing to gain market share in a country
Host governments use a wide range of controls to restrict FDI in one way or another. The 2 most common are
ownership restraints and performance requirements
At the Doha Round of the WTO in late 2001, an agenda was established to
phase out subsidies to agricultural producers.
The benefits, costs, and risks associated with doing business in a country are a function of that country's
political, economic, and legal systems.
A lobbyist from California argues that the U.S. government needs to protect the U.S. semiconductor industry from foreign competition. She argues that semiconductors are now such important components of defense products that it would be dangerous to rely primarily on foreign producers for them. This is an example of a(n) _____ argument for government intervention.
self-defense
The _____ committed themselves to achieving socialism without resorting to violent revolution and dictatorship.
social democrats
A Japanese tourist in NY foes to a bank to convert his yens into dollars. The exchange rate that will be used for conversion will be the
spot exchange rate
Moral imagination refers to
standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder
folkways are
the routine conventions of everyday life
The stock of foreign direct investment refers to
the total cumulative value of foreign investments.
Contracts drafted under a common law framework tend to be
very detailed with contingencies spelled out.
As a philosophy for business ethics utilitarianism focuses attention on the need to
weigh carefully all of the social benefits and costs of a business action
