Global MKT ch. 2

To the extent that a country sells more goods and services abroad than it buys, there will be: a. a greater demand for its currency b. a surplus production of goods and services c. a scarcity of goods and services within the country d. a need for revaluation of its currency e. time for fluctuating its currency

a. a greater demand for its currency

48. China predominantly follows an economic system that can be classified under: a. centrally planned socialism b. market socialism c. market capitalism d. centrally planned capitalism e. socialistic capitalism

a. centrally planned socialism

Between the year 2001 and 2006, China bought more than $ 250 billion in U.S. Treasury bonds. Such purchases: a. ensures that China's currency is relatively weak compared to the U.S. dollar b. indicate that China is not sure of its economic viability c. show that currency exchange rate is unpredictable d. predict that yuan will be devalued in the near future e. China's currency is stronger than the U.S. dollar

a. ensures that China's currency is relatively weak compared to the U.S. dollar

54. Global marketers should take note of the fact that almost half of the world's population is located in: a. low-income countries b. lower-middle income countries c. upper-middle income countries d. high-income countries e. higher-middle income countries

a. low-income countries

54. The United Nations designates fifty countries in the bottom ranks of the low-income category as LDCs (least-developed countries), which have a GNI per capita between: a. $ 826 and $ 3,255 b. $ 1,025 and $ 4,255 c. $ 926 and $3,500 d. $ 826 and $ 3,755 e. none of the above

a. $ 826 and $ 3,255

The Big Mac Index dated February 01, 2007 shows that the price of Big Mac in China was 11 yuan whereas its price in the United States was $ 3.22. The index translated into yuan being undervalued by 56%. This shows that: a. Big Mac is more expensive in the United States than in China b. Big Mac is less expensive in the United States than in China c. Big Mac costs the same in the United States and China d. Big Mac is less popular in China than in the United States e. Big Mac is more popular in China than in the United States

a. Big Mac is more expensive in the United States than in China

48. According to analysis by the Heritage Foundation, which of the following countries ranks number one in the world in terms of economic freedom: a. Hong Kong b. Singapore c. Ireland d. Denmark e. Australia

a. Hong Kong

The country that does not belong to the Group of Eight (G-8) is: a. Japan b. Germany c. France d. Italy e. Brazil

e. Brazil

Porsche relies on currency hedging rather than price increases in order to: a. boost pretax profits on sales of its automobiles b. balance the relative value of the dollar compared to the euro c. protect all earnings from foreign-exchange movements d. generate about 45% of its sales in the United States e. a, b & c

e. a, b & c

42. According to author William Greider, executives and marketers must take into account the following new realities in the global economic situation: a. production has become "uncoupled" from employment b. the world economy dominates the scene c. the struggle between capitalism and socialism is over d. the growth of e-commerce diminishes the importance of national barriers e. all of the above

e. all of the above

54. Low-income countries have a GNI per capita of less than: a. $ 1,025 b. $ 825 c. $ 925 d. $ 725 e. none of the above

b. $ 825

Which of the following BRIC nations fall in the lower-middle-income category? a. India and China b. China and Brazil c. Brazil and Russia d. Russia and India e. none of the above

b. China and Brazil

Which two companies are sourcing product components from small-scale enterprises, which in turn are helping preserve old-growth forests as well as economic opportunities in Brazil? a. Ford Motor Company and Armani b. DaimlerAG and Hermes c. General Motors and Hugo Boss d. Volkswagen and Coach e. Coca-cola and Nestle

b. DaimlerAG and Hermes

48. According to the analogical assertion presented by author Thomas L. Friedman, with the end of the Cold War virtually every country in the world is using the following hardware: a. DOScapital 6.0 b. Free-market capitalism c. Communism d. Hybrid capitalism and communism e. Illiberal democracies

b. Free-market capitalism

The term "tiger" has frequently been used to describe fast-growing economies in Asia which does not include: a. South Korea b. India c. Taiwan d. Singapore e. Hong Kong

b. India

Which country is the only country classified as an emerging market among the high- income countries: a. United States b. South Korea c. Britain d. Italy e. Malaysia

b. South Korea

Which of the following is true about the Triad? a. Triad countries account for approximately one-third of world income and one- third of world population b. Triad countries account for approximately 75% of world income as measured by GNP c. Triad countries are those in which consumer products, industrial products, and the services sector each contribute one-third to GDP d. Triad countries account for approximately 25% of world income as measured by GNP e. Triad countries account for approximately 50% of world income as measured by the World Bank

b. Triad countries account for approximately 75% of world income as measured by GNP

As a repercussion set by the devaluation of Chinese yuan in 1994 the following action was noted: a. the yuan became stronger than U.S. dollar b. a stage was set for the devaluation of the Thai baht c. the demand for Indonesian rupiah increased considerably d. Malaysian ringgit became very competitive e. India rupees were devalued

b. a stage was set for the devaluation of the Thai baht

46. Which type of economic system is characterized by command resource allocation and private resource ownership: a. market capitalism b. centrally-planned capitalism c. market socialism d. centrally-planned socialism e. None of the above

b. centrally-planned capitalism

If an American tourist in Tokyo pays more in dollars for the same amount of yen that she bought last week, then: a a Japanese tourist in San Francisco pays more in yen for the same amount of dollars that she bought the week before b. the dollar has depreciated relative to the yen c. the yen has depreciated relative to the dollar d. the dollar has appreciated relative to the yen e. the dollar and yen both remained same in value

b. the dollar has depreciated relative to the yen

43. The rampant corruption and bribery witnessed in a nation's economy is referred to as: a. re-nationalization b. managed democracy c. Kleptocracy d. autocracy e. None of the above

c. Kleptocracy

Product and market opportunities in a postindustrial society are more heavily dependent upon new products and innovations than in industrial societies. An example of this would be: a. Nestle marketing Bono brand cookies in Brazil b. Coca-cola company developing a beverage Vintago in low-income countries c. New e-commerce markets for interactive forms of electronic communication d. Hermes creating handbags called Amazonia e. India's Suzlon Energy using wind driven turbines

c. New e-commerce markets for interactive forms of electronic communication

44. The Swedish government has significant holdings in key business sectors and has a hybrid economic system that incorporate: a. market capitalism and centrally planned socialism b. centrally planned socialism and market socialism c. centrally planned socialism and capitalism d. market socialism and market capitalism e. market capitalism and socialistic capitalism

c. centrally planned socialism and capitalism

44. One of the distinguishing features of Centrally Planned Capitalism economic system is: a. all production resources are privately owned b. the state has broad powers to serve the public interest as it sees fit c. command resource allocation is utilized extensively in private resource ownership environment d. market allocation policies are permitted within and environment of state ownership e. none of the above

c. command resource allocation is utilized extensively in private resource ownership environment

46. Which type of economic system is characterized by market resource allocation and state resource ownership: a. market capitalism b. centrally-planned capitalism c. market socialism d. centrally-planned socialism e. None of the above

c. market socialism

48. Which of the following is true about economic output in China today: a. the state sector accounts for about 75 percent of output b. the state and private sectors each account for about 50 percent of output c. the private sector accounts for about 75 percent of output d. the private sector is virtually nonexistent in China e. the state sector is virtually nonexistent in China

c. the private sector accounts for about 75 percent of output

. One Friday a few years ago, the Big Mac Index suggested that the yen was overvalued relative to the dollar by 70%. When currency markets opened on the following Monday, anyone using the Big Mac Index would conclude that yen was only 20% overvalued relative to the dollar. What is the most likely explanation for this? a. Japan's Central Bank acted to prop up the yen b. Inflation in Japan suddenly spiked upward c. McDonald's headquarters stopped hedging d. McDonald's Japan reduced the yen price of a Big Mac e. McDonald's Japan increased the yen price of a Big Mac

d. McDonald's Japan reduced the yen price of a Big Mac

Upper-middle-income countries that achieve the highest rates of economic growth are sometimes referred to collectively as: a. LDCs b. BEMs c. BRICs d. NIEs e. BOPs

d. NIEs

Which of the following statements best sums up the market potential in Vietnam? a. An economic embargo and the lack of diplomatic relations keep U.S. Companies out of Vietnam b. With only $425 in per capita income, Vietnam is an LDC with little market potential c. The U.S. is the leading foreign investor in Vietnam d. Sixty percent of the population is under the age of 25, making Vietnam a promising market for many consumer goods e. The U.S. companies do not face any competition in Vietnam from other countries

d. Sixty percent of the population is under the age of 25, making Vietnam a promising market for many consumer goods

Pursuing alternative sources of energy, such as wind and solar power is important due to the fact that: a. people in developing countries are more conscious about environment b. global marketers are more interested in publicizing environmental issues c. it is easy to develop solar power in many parts of the world d. heavy reliance on fossil fuels contributes to global warming e. people worldwide can afford to buy power generated from wind and solar

d. heavy reliance on fossil fuels contributes to global warming

The United States' growing trade deficit reflects a number of factors which exclude: a. increased imports from China b. seemingly insatiable consumer demand for imported goods c. the enormous cost of military operations in the Middle East d. the services trade surplus e. record goods sales to developing countries

d. the services trade surplus

48. Singapore banned the import, manufacture, and sales of chewing gum in the country since wads of gum were making a mess on sidewalks, buses, and subway trains. Violators are subject to severe penalties and before buying a pack consumers must register their names and addresses. This according to author William Greider demonstrates that Singapore's government: a. is harshly autocratic b. administers a paranoid control over Singaporeans c. administers a paranoid control over press and politics d. runs an effective welfare state e. all of the above

e. all of the above

54. According to the earlier classification of the BEM (big emerging markets) the country/countries included were: a. Indonesia b. Argentina c. South Africa d. Poland e. all of the above

e. all of the above

The fastest-growing sector of world trade includes: a. travel and entertainment b. accounting and legal services c. royalties and license fees d. engineering services e. all of the above

e. all of the above

According to the authors of the Harvard Business Review article, "Selling the World's Poor, Profitably," which of the following is a mistaken assumption that global companies might have about the BOP (bottom of the pyramid)? a. The poor have no money b. The poor are too concerned with fulfilling basic needs to "waste" money on nonessential goods c. People in BOP markets will be criticized for exploiting the poor d. People in BOP markets cannot use advanced technology e. all of the above are mistaken assumptions discussed by the authors

e. all of the above are mistaken assumptions discussed by the authors

1. The dramatic recovery of Russian Economy in recent days can be attributed to: a. record world prices for oil and gas b. the succession of Vladimir Putin as president c. Putin slashed subsidies to state-owned enterprises d. the price increases for imports due to ruble's devaluation e. all of the above can be attributed

e. all of the above can be attributed

The Organization for Economic Cooperation and Development (OECD) is comprised of: a. the 30 high-income countries b. countries that believe in market-allocation economic systems c. pluralistic democracies d. countries that demonstrate progress toward economic reform e. all of the above statements are applicable

e. all of the above statements are applicable

54. The general characteristics shared by low-income countries does not include: a. high birth rates b. low literacy rates c. concentration in Africa south of the Sahara d. heavy reliance on foreign aid e. low tourist income

e. low tourist income

48. The Washington, DC-based Heritage Foundation compiles a survey of over 150 countries ranked by degree of economic freedom. Although there are a number of key economic variables which are considered in this ranking it does not include: a. monetary policy b. banking policy c. black market d. property rights e. none of the above

e. none of the above