Busa 3000 Final Exam

A quantitative restriction on specific imports from a specific country for a set period of time is referred to as ________.

quota

Regional economic integration blocs ________.

reduce trade and investment barriers

The European Union is classified as a(n) ________.

regional trade organization

Which of the following terms refers to the existence of a legal system based on clear rules and fair enforcement?

rule of law

A(n) ________ is a type of trade penalty imposed on one or more countries by one or more other countries.

sanction

The ________ phase of globalization began around 1900 and was associated with the rise of electricity and steel production.

second

In his International Product Life Cycle (IPLC) Theory, Raymond Vernon observed that each product and its manufacturing technologies go through three stages of evolution: introduction, maturity, and ________.

standardization

Financing or other resources that a government grants to a firm or group of firms, to ensure their survival or success is referred to as a ________.

subsidy

The free movement of capital around the world is also known as ________.

the globalization of capital

Demographic trends indicate that, in the coming two decades, ________.

the proportion of middle-class households in emerging markets will continue to grow, representing enormous spending power

International business is defined as the performance of _________________ activities by firms across national borders.

trade and investment

Born global firms are ________.

young companies that internationalize early in their evolution

What is the value of one country's currency expressed in relation to the currency of another country?

exchange rate

According to the internationalization process model, a firm advances to the ________ stage by initiating limited international activity, typically in the form of basic exporting.

experimental involvement

In countries with minimal corruption ________.

financial and accounting information is transparent

Emerging markets are ________.

former developing economies that have achieved substantial industrialization, modernization, and rapid economic growth since the 1980s

The purpose of the Bretton Woods Agreement was to ________.

govern the exchange rates of major international currencies

Emerging markets act as manufacturing bases for global MNEs because of ________.

high availability of low-wage workforce

The purchasing power parity concept suggests that ________.

in the long run, exchange rates should move toward levels that would equalize the prices of an identical basket of goods and services in any two countries

Culture is NOT

inherited

The levels of supply and demand for a currency in a free market vary ________ with its price.

inversely

Which of the following best characterizes the development of international business ? a) its development has slowed in recent years b) it has existed in some form for centuries c) it first started in Europe d) it developed after the year 2000

it has existed in some form for centuries

Excessive bureaucracy is usually associated with ________.

lack of transparency

In polychronic cultures, ________.

members are easily distracted and are inclined to do many tasks at once

According to Michael Porter, a nation's factor endowments help determine its ________.

national competitive advantage

The ________ is one of the three key modern perspectives that helps explain the development of national competitive advantage.

national industrial policy

Currency risk can best be defined as the risk that occurs when ________.

one currency changes in relation to another currency

Governments impose export controls for the purpose of ________.

preventing the export of certain products to certain countries

Transition economies were once socialist states but have been largely transformed into capitalism-based systems, partly through ________.

privatization of state-owned industries

________ refer to post-industrial countries characterized by high per-capita income, highly competitive industries, and well-developed commercial infrastructure.

Advanced economies

_______ refers to offering, giving, receiving, or soliciting anything of value to influence the actions of a government official or a corporate manager.

Bribery

________ is the procurement of selected value-chain activities, including production of intermediate goods or finished products, from independent suppliers.

Outsourcing

________ refers to the superior features of a country that provide unique benefits in global competition, typically derived from either natural endowments or deliberate national policies.

Comparative advantage

________ refers to the government reduction of its currency value relative to the other currency values.

Devaluation

An individual from a country with a high degree of political risk would most likely be from ________.

Iraq

The most widespread form of religious law is ________ law.

Islamic

A French company sells goods to a foreign customer whose currency is depreciating against the euro. Which of the following will the company most likely experience when completing the sale?

The company will receive fewer euros if the sales price was expressed in the buyer's currency.

Which of the following is TRUE with regard to new trade theory? a) According to new trade theory, trade is beneficial even for countries that produce only a limited variety of products. b) New trade theory rests solely on the premise that countries differ in the type and quantity of production factors they possess. c) New trade theory suggests that export is less beneficial to firms than commonly believed. d) According to new trade theory, achieving economies of scale is not necessary for superior international performance.

a) According to new trade theory, trade is beneficial even for countries that produce only a limited variety of products.

Which of the following statements is TRUE of NAFTA? a) It eliminated all tariffs and nontariff trade barriers on goods originating from within North America. b) It introduced a common currency for trade between the U.S., Mexico, and Canada. c) It called for stringent rules regarding government procurement practices and the imposition of countervailing duties. d) It overrode the local content requirements and rules of origin for products manufactured in the member nations.

a) It eliminated all tariffs and nontariff trade barriers on goods originating from within North America.

Which of the following is an example of nontariff trade barrier? a) The U.S. Department of Commerce announced that white sugar imports will be limited to 7,500 million tons. b) The U.S. imports chocolates manufactured in Belgium that cost $65 a box with taxes. c) Gayle Inc. is a U.S.-based retailer that imports cosmetic products manufactured in Thailand. These products pass through U.S. customs and are subject to a 5 percent import duty. d) Spices imported from India to the U.S. for sale in the domestic market are subject to a 10 percent import duty.

a) The U.S. Department of Commerce announced that white sugar imports will be limited to 7,500 million tons.

Which of the following should an international manager keep in mind about the constantly fluctuating exchange rates? a) The time taken between placement and delivery of an order can at times go up to a few months; fluctuations in the exchange rate during that time can cost or earn the firm money. b) If goods are bought from a supplier whose currency is appreciating against the buyer's currency, the buyer will have to pay a lesser amount of their currency to complete the purchase. c) The prices the firm charges should be quoted in the firm's currency exclusively. d) The firm and its customers should use the exchange rate as it stands on the date of each transaction, there is no scope for an agreement between them to use any other specific exchange rate.

a) The time taken between placement and delivery of an order can at times go up to a few months; fluctuations in the exchange rate during that time can cost or earn the firm money.

Which of the following entry strategies do most firms use in the absence of high tariffs? a) exporting b) joint ventures c) licensing d) FDI

a) exporting

Which of the following laws is responsible when Germany largely prohibits comparative advertising, in which a product is promoted as superior to a competing brand? a) marketing and distribution laws b) foreign investment laws c) product and liability laws d) environmental laws

a) marketing and distribution laws

Acculturation is defined as the process of ________.

adjusting and adapting to a culture other than one's own

Firms use foreign trade zones to ________.

assemble foreign dutiable materials and components into finished products, which are then re-exported

Which of the following is an example of a developing economy? a) Brazil b) Bangladesh c) Australia d) France

b) Bangladesh

Which of the following is a benefit to a foreign firm collaborating with a family conglomerate in an emerging market? a) complete exemption from paying taxes b) reduced capital requirements d) low dependence on technology d) complete protection from intellectual property rights violations

b) reduced capital requirements

Common law can best be described as a system ________.

based on legal precedents set by the nations courts

A(n) ________ is a voluntary refusal to engage in commercial dealings with a nation or a company.

boycott

Companies strive to drive down prices ________, among other strategies.

by standardizing what they sell

Governments impose defensive barriers to ________. a) safeguard industries b) promote national security c) all of the these d) protect workers

c) all of the these

Which of the following is characteristic of globalization of markets? a) diminishing gap between the rich and the poor b) lack of skilled labor c) declining trade barriers d) conservatism

c) declining trade barriers

In recent years, business executives and scholars have used ________ to refer to the advantages possessed by nations and individual firms in international trade and investment.

competitive advantage

_______ is the seizure of corporate assets without compensation.

) Confiscation

Which of the following would NOT be considered an example of foreign direct investment (FDI)? a) purchase of foreign land for business operations b) cross-border purchase of stocks c) A cross-border purchase of a textile plant d) purchase of capital assets of a foreign company

B) cross-border purchase of stocks

_______ refers to the values, beliefs, customs, arts, and other products of human thought and work that characterize the people of a given society.

Culture

________ are checkpoints at the ports of entry in each country where government officials inspect imported products and levy tariffs.

Customs

--------- is the total value of products and services produced in a country over the course of a year.

GDP

_______ is the procurement of products or services from suppliers located abroad.

Global sourcing

________ is(are) at odds with free trade, the unrestricted flow of products, services, and capital across national borders.

Government intervention

________ refers to the transfer of assets to another country or the acquisition of assets in that country.

International investment

Which of the following is TRUE about national industrial policy?

It is designed to create monetary and fiscal policies, such as low-interest loans, that provide a stable supply of capital for company investment needs.

_______ are ways of behaving and conducting oneself in public and business situations.

Manners and customs

________ occurs when investors buy stocks whose prices have been rising and sell stocks whose prices have been falling

Momentum trading

The U.S. dollar is an example of ________.

convertible currency

The process of reproducing assets without compensating those who originally created them is known as ________.

counterfeiting

Which of the following grants protections to the creators of art, music, books, software, movies, and TV shows? a) domain registration b) trademark c) patent d) copyright

d) copyright

Which of the following terms indicates potential loss or adverse effects on company operations and profitability caused by developments in a country's political and/or legal environments? a) commercial risk b) currency risk c) cross-cultural risk d) country risk

d) country risk

Which of the following resolves the problem of making international payments and facilitates international investment and borrowing among firms, banks, and governments? a) capital flight b) barter c) foreign exchange

d) foreign exchange

According to Porter's competitive advantage of nations, ________ refer to the nature of home-market demand for specific products and services.

demand conditions