IB201

The exchange rate between the euro (€) and the dollar is €0.8461/$. Which of the following is the correct direct quote on the dollar?

$1.1819/ €

the _____ of a country is its gross national product divided by its population

GNP per capita

Which of the following is an example of a dual use product?

a GPS navigation device

Under the WTO agreement _______

a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures

the condition that results when a nation's exports are greater than its imports is called ________

a trade surplus

Purposely understaffing customs offices to cause time delays, requiring special licenses that take a long time to obtain, and requiring air carriers to land at inconvenient airports are all examples of ________

administrative delays

the main difference between a free trade area and customs unions is that the members of a customs union ________

agree to treat trade with an all nonmember nations in a similar manner, by having a common external tariff

In a quoted exchange rate of $1.69/British pound, the British pound is called the ________.

base currency

ethnocentricity can be defined as the ________

belief that one's own ethnic group or culture is superior to that of others

______ are usually located on small island nations or territories with favorable tax and/or secrecy laws

booking centers

Which of the following terms is used to refer to the departure of highly educated people from one profession, geographic region, or nation to another?

brain drain

Which of the following created a new international monetary system based on the value of the U.S. dollar?

bretton woods agreemnt

______ is the environment impact of greenhouse gases (measured in units of carbon dioxide) that results from human activity

carbon footprint

______ is a legal system which is based on a detailed set of written rules and statutes that constitute a legal code and its also based on a codification of what is and is not permissible

civil law

A product's components are manufactured in a country that can produce them at a very low cost while maintaining its quality. These components are then assembled in another country where productivity in assembly is high. This process resembles the theory of____

comparative advantage

according to the theory of ______ trade is beneficial even is one country is less efficient in the production of two goods as long as it is less inefficient in the production of one of the goods

comparative advantage

Which results in a loss of assets, without compensation?

confiscation

A greenfield investment is another name for a company's decision to ________

construct a new facility in a foreign market

in a market economy the patterns of resource allocation are most directly influenced by ______

consumers who "vote" by their personal decision to buy or not buy products

A _____ is calculated to offset the advantage an exporter receives from a subsidy

countervailing duty

Contact among countries brings about cultural change, which is a process called ________.

cultural diffusion

Critics of globalization say that global consumer-goods companies destroy ________.

cultural diversity

A ____ is anything that represents a culture's way of life, including gestures, material objects, traditions, and concepts

cultural trait

______ consists of specific learned norms based on attitudes and beliefs of a group of people

culture

______ is the instantaneous purchase and sale of a currency in different markets for profit

currency arbitrage

_____ make it more difficult for importers of nonessential goods acquire foreign exchange

currency controls

A ______ is a right to exchange a specific amount of a currency on a specific date at a specific rate

currency option

which of the following occurs in a country's balance of payments when a country exports more goods and services and receives more income from abroad than it imports and pays abroad

current account surplus

Which of the following terms is used to refer to habits or ways of behaving in specific circumstances that are passed down through generations?

customs

A ____ combines the elimination of internal trade barriers among member countries with the adoption of common external trade policies toward nonmembers

customs union

the theory of comparative advantage was proposed by _______

david ricardo

a ________ is a political system in which gov. leaders are elected by the wide participation of the people or by their representatives

democracy

as a result of globalization argonia finds that its national borders are becoming less relevant. this indicates that argonia is undergoing ______

denationalization

when the brazilian real changes from 1000 real per u.s dollar the real is ______

devalued

an established consumer market that primarily comprises the middle class and posses efficient infrastructure is characteristic of ______ markets

developed

The U.S gov. has decided to impose a tariff rate quota on sugar imports into the United States. Which of the following would benefit from this decision?

domestic sugar producers

________ can occur when a firm sells its goods in a foreign market at a price below what it charges in its home market

dumping

A _____ is an absolute ban on the exporting and importing of goods to a particular destination

embargo

Local content regulations are primarily intended to ________.

encourage MNEs to increase production activities in a country

the stock market is also known as the ______

equity-capital market

Currently the most sophisticated and advanced example of regional integration is occurring in ________.

europe

British pounds of a British trading company that are deposited in a U.S. bank are called ________.

europounds

Globalization is criticized because it ________.

exploits workers in low-wage nations

which of the following is an instrument that gov. use to promote trade?

export financing

A special region in which companies can engage in tariff-free importing and exporting is called a(n) ________

export-processing zone

when the value of a country's currency declines the price of its________

exports on world markets declines and the price of its imports increases

_______ is the forced transfer of assets from a company to the government with compensation.

expropriation

Bonds sold outside the borrower's country and denominated in the country in which they are sold are called_______

foreign bonds

Which type of investment involves the acquisition of foreign assets for the purpose of controlling them?

foreign direct investment

A ______ is geographic area where imported or exported receive preferential tariff treatment

foreign trade zone

Country X protects its domestic manufacturers from foreign competition by using a variety of nontariff barriers. Which of the following is not one of those nontariff barriers?

foreign trade zone

A(n) ________ eliminates trade barriers among member countries, and is the lowest level of regional economic integration.

free trade area

Which of the following is a major driver of foreign direct investment?

globalization

_____ is defined as the dispersal of production activities to locations that help a company achieve its cost-minimization or quality-maximization objectives for a good or service

globalization of production

In a command economy, the goods and services that a country produces, the quality in which they are produced, and the prices at which they are sold are planned by________

government officials

the term protectionism when applied to international trade refers to______

governmental restrictions and competitive support actions to affect trade flows

Eurobonds are popular because ________.

governments of nations in which they are sold do not regulate them

The value of all goods and services produced by a country's domestic and international activities over a one-year period is the country's ________

gross national product (GNP)

The practice of insuring against potential losses that result from adverse changes in exchange rates is called currency ________.

hedging

Free trade ________.

implies that the national government exerts minimal influence on the exporting and importing decisions of private firms

according to mercantilism the accumulation of national wealth depended on the _______

increase in a nation's trade surplus

According to Hofstede's framework, a culture with large power distance tends to be characterized by ________.

inequality between superiors and subordinates

According to the ________ argument, as an industry grows and matures, it gains the knowledge it needs to become more innovative, efficient, and competitive.

infant industry

the purchasing power parity theory claims that a change in relative _____ between two countries must cause a change in order to keep the prices of the goods in two countries fairly similar

inflation exchange rates

Which of the following was originally created to regulate fixed exchange rates and enforce the rules of the international monetary system?

international monetery fund

the _____ theory that states that a country's export eventually becomes its import

international product life cycle

which of the following best defines international business

it includes all business transactions involving two or more countries

Why is London most likely the top market for trading foreign exchange?

london is uniquely positioned geography in terms of time zone

According to Hofstede's framework, a culture that scores low on ________ can change more rapidly because tradition and commitment are not impediments to change.

long-term orientation

Devaluation of a nation's currency ________.

lowers the price of a country's exports

A system in which currencies float against one another, with governments intervening to stabilize their currencies at particular target exchange rates is called a ________.

managed float system

According to Hofstede's framework, cultures scoring high on the dimension of ________ tend to be characterized by personal assertiveness and the accumulation of wealth, typically translating into an entrepreneurial drive.

masculinity

During which stage of the international product life cycle theory does demand rise and remain sustained for a fairly lengthy period of time?

maturing product stage

A business that has direct investments (in the form of marketing or manufacturing subsidiaries) abroad in several countries is called a ________.

multinational corporation

globalization is chacterized by ______

national boundaries becoming less relevant

________ refers to the transfer of ownership of resources from the private to the public sector.

nationalization

in a totalitarian political system _______

one agent monopolizes political power

Which of the following is a form of foreign direct investment?

participating a contract manufacturing arrangement

A _______ is a right granted to the inventor of a product or process that excludes others from making, using, or selling the invention

patent

guanzi in the chinese business context means _______

personal relationships

country risk is considered similar to_____

political risk

according to hofstede's framework, organizations which have culture that score high on___ tend to be more hierarchical with power deriving from prestige force and inhertance

power distance

The process of collecting and analyzing original data and applying the results to current research needs is called ________.

primary market research

to cool off an inflationary economy a government might______

raise interest rates

According to purchasing power parity theory, if Brazilian inflation was 6 percent and inflation in Argentina was 12 percent, the Brazilian real would be expected to ________.

rise by the difference in inflation rates

The process of obtaining information that already exists within the company or that can be obtained from outside sources is called ________.

secondary market research

One of the main goals of the World Trade Organization is to ________.

settle trade disputes among its members

______ is the ability of individuals to move from one stratum of society to another

social mobility

which of the following terms refers to an economic system in which the gov. own and controls all types of economic activity?

socialism

development that meets the needs of the present without compromising the ability of future generations to meet their own needs indicates _______

sustainability

According to the Porter diamond, which of the following is an example of an advanced factor?

technological infrastructure in the nation

An exchange rate of ¥117.87/$ indicates ________.

that 117.87 yen buys one dollar

The GDP per capita of a country is lower than that of France. If the GDP per capita of the country is adjusted for PPP, the country's revised GDP is higher than that of France. Which of the following is most likely true about the country?

the cost of living in the country is lower than that of france

A legal tradition based on religious teachings is called ________ law.

theocratic

which of the following is a major purpose of the international capital market?

to reduce risk for lenders

A ______ is an international trip by government officials and businesspeople that is organized by agencies of national or provincial governments for the purpose of exploring international business opportunities

trade mission

expropriation is best defined as the ______

transference of ownership from private to public sector with compensation to private owners for their losses

A solid grasp of local values, customs, and traditions can help reduce a company's exposure to political risk.

true

according to adam smith, international trade should not be restricted by tariffs and quotas in order to give a country an absolute advantage

true

According to Hofstede's framework, managers should be more precise in their directions to subordinates when ________.

uncertainty avoidance is high