IBUS Preparation Questions

Explain why it is suggested that trade with China is positive on balance for the US, but negative when analyzing specifics

The outcome that is normally predicted by trade scholars has been observed: there is a wider range of products and a reduction in the price of those products. However, the benefits of trade are unequally distributed. Lost jobs have not resulted in larger wages in the affected industries and there has not been a way to integrate the unemployed in other sectors

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?

a) Firms need to, as far as possible, model and forecast future exchange rate movements

The government of Bangladesh has not invested in infrastructure. According to Michael Porter, infrastructure is an example of an ______________ factor of endowment

advanced

The belief in the superiority of one's own culture is known as...

ethnocentrism

Globalization critics argue that the decline in unskilled wage rates is due to the...

migration of low-wage manufacturing jobs offshore

Why is it so difficult to identify the effect of China on the US labor market?

Combined effects from other factors such as technological changes

The idea of comparative advantage was proposed by?

David Ricardo

What are the argued implication of the rise of China as an international trade player on welfare in the US? And whose welfare?

Emigration of jobs to China. It affects the welfare of workers that lose their employment and have not found an alternative option

(T/F)A lead strategy involves delaying collection of foreign currency receivables if that currency is expected to appreciate and delaying payables if that currency is expected to depreciate

False

(T/F)Globalization resulted in a decrease in non-US firms' investment across national borders

False

(T/F)If the spot rate is $1 US = $20 MX, and the 30-dayforward rate is $1 US = $23 MX, the Peso is selling at a premium in the forward market

False

(T/F)In a free trade area, countries are not allowed to determine their own trade policies with nonmembers

False

(T/F)The PPP theory tells us that a country with a high inflation rate will see an appreciation in its currency exchange rate

False

(T/F)The emergence of single markets will make the business environment within each grouping less competitive

False

(T/F)Trade diversion occurs when huh-cost domestic producers are replaced by low-cost producers within the free trade area

False

Which factor helps Bangladesh's gods stay competitive when compared to goods from China?

Fear of relying on a single country

Name the most popular form of regional economic integration, accounting for almost 90% of regional agreements

Free trade areas

__________ ____________________draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements

Fundamental analysis

According to huckster-Ohlin Theory, which of the following gives Bangladesh a cost advantage?

Labor-intensive production

Bangladesh's textile industry relies on inputs from other industries within the country. This supports which one of Michael Porter's attributes when it comes to competitive advantage?

Related and supporting industries

(T/F)People who violate folkways may be thought of as eccentric or ill-mannered, but they are not usually considered to be evil or bad. In many countries, foreigners may initially be excused for violating folkways

True

(T/F)The concept of carry trade involves borrowing money in one currency where interest rates are low and then using the proceeds to invest in other currency where interest rates are high

True

(T/F)The mudarabah contract of Islamic banks is similar to a profit-sharing scheme

True

An obstacle to integration arises from...

d) concerns over national sovereignty

A ___________ ________ eliminates trade barriers between member countries and adopts a common external trade policy, but does not allow free movement of factors of production between member nations

b) customs union

The lowering of trade and investment barriers among countries in a trade group has led to...

b) increased price competition throughout the EU and NAFTA

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....

c) economic exposure

It has been argued that the success of Japanese enterprises in the global economy has been based partly on which of the following?

d) Cooperation between a company and its suppliers on issues such as design, quality control, and inventory reduction

Which of the following aspects of Protestantism paved the way for the subsequent emphasis on individual economic and political freedoms?

d) The emphasis on individual religious freedom

Which of the following expresses one of the reasons why managing an international business is different from managing a purely domestic business?

d) an international business must find ways to work within the limits imposed by government intervention in the international trade and investment system

The stock of foreign direct investment refers to...

the total cumulative value of foreign investments

According to the findings of the World Values Survey, as countries get richer...

there seems to be a shift form survival values to well-being values