intro to international business (mc)

Why has FDI grown more rapidly than world trade ?

Executives of business firms see FDI as a way of circumventing future trade barriers.

Which of the following statements is true about culture?

Multinational enterprises can themselves be engines of cultural change.

Which of the following countries has seen a relative decline in its share of world output between 1960 and 2014?

United States

The currency of the country of Venadia falls sharply in value against the currency of Lutetia, a neighboring country. Which of the following is a consequence of this exchange rate movement?

Venadia's exports to Lutetia will increase, because Venadian goods will become cheaper in Lutetia.

As a result of _____, large amounts of economic activity in India are unrecorded and the official GDP figures of the country fail to tell the entire story of the economy.

active bartering

Animax Limited got an order to sell 50,000 central processing units (CPUs) to Palladia, but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia. This stipulation by the Palladian government would be example of a(n)

local content requirement

The six countries in the northern side of the Pacific Rim agreed to reduce and ultimately remove tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other. The agreement among these countries is referred to as a

regional economic integration.

The motive behind the high tariffs imposed by nations on imports of manufactured goods, prior to World War II, was to:

protect domestic industries from foreign competition.

Cadmia banned imports of Mattel toys with high levels of toxic lead, manufactured in Argonia. The underlying motive for such a move could be

protecting consumers from unsafe products

Which of the following is most likely to be an objective of export tariffs?

reducing exports from a sector, often for political reasons

The value of Omega's top selling fitness product to an average consumer is $150 and the average unit cost of producing that product is $65. In this scenario, $85 ($150-$65) represents

value creation

Every breathing person in the United States owes ___________________ money to foreign investors because of the national debt.

$69060

Which of the following statements reflects the nature of the global economy of the twenty-first century?

Countries have extensively adopted liberal economic policies.

Which of the following is most likely to involve establishment of a new operation in a foreign country?

Greenfield investments

Which of the following statements reflects an important trend in the changing nature of multinational enterprises?

International business is conducted not just by large firms but also by medium-size and small enterprises.

Which of the following statements is most likely to be true regarding private ownership?

It gives entrepreneurs an incentive to search for better ways of serving consumer needs.

Which of the following best exemplifies an entrepreneur?

Javier purchased an invention made by his friend to start a company that processes plastic bags into synthetic cloth.

Richard purchased a computer for $600 in 2015. Compared to the $900 computer that he had purchased back in 2011, the new one seems to be more efficient in terms of the price he has paid and the power of the microprocessor technology. This is best explained by

Moore's Law

_________________________ is the US President that suspended the use of the Gold Standard during the Great Depression.

Roosevelt

The United Republic emphasizes individual performance and achievements in every sphere of society. Which of the following statements is true about the society of this type of country?

The employees in this country will lack loyalty and commitment to a company

Which of the following characterizes the lowering of trade and investment barriers?

allows firms to base production at optimal locations outside their home country

The argument for unrestricted free trade is that both import controls and export incentives

are self-defeating and result in wasted resources.

Lugnow Inc. paid a sum of $76,000 to an official in the government of Nepotismia to ensure that the company obtained exclusive preferential treatment. The $76,000 can be classified as

bribe

Assume that the interest rate on borrowings in India is 1 percent while the interest rate on bank deposits in a U.S. bank is 6 percent. John, an active currency trader borrows in Japanese yen, converts the money into U.S. dollars and deposits it in a U.S. bank. John is engaging in

carry trade

The needs of society as a whole are generally viewed as being more important than individual freedoms when the emphasis is on

collectivism

In 2014, if the PPP per capita of China was $13,170 and the PPP per capita of the United States was $55,860, this means that the

cost of living was lower in China.

You can adjust GNI per capita by purchasing power to account for differences in the

cost or living

Three countries, close to each other in the Pacific Rim, enter into an agreement to remove all tariffs and trade barriers between them. They decide on a common trade policy with regard to nonmembers. Faced with political backlash, the countries stop short of allowing mobility of factors of production such as labor and capital. Which of the following levels of economic integration best describes this arrangement?

custom union

Which of the following caused a decline in the dollar/yen carry trade during 2008-2009?

decrease in interest rate differentials as the U.S. rates came down

Which of the following identifies the motivation for much of the foreign direct investment by non-U.S. firms?

desire to disperse production activities to optimal location

In a bid to compete better in a highly-competitive fitness products market, Omega is focusing primarily on increasing the attractiveness of its product. What Omega is doing is referred to as a

differentiation strategy.

Which of the following groups benefits the most from the imposition of tariffs?

domestic producers

If Argonia exports vast quantities of cheap toys to Cadmia, selling them at below their costs of production, it would constitute

dumping

When compared to American society, Japanese society lacks

dynamism and entrepreneurship

The Foreign Corrupt Practices Act was subsequently amended to allow for speed money or grease payments, which are payments made to

ensure a business receives the standard treatment that it ought to receive.

Which of the following refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization?

ethics

Which of the following is a reason for the emergence of the gold standard?

expansion in the volume of international trade due to the Industrial Revolution

Moora and Trun, two countries that are part of the BURPHA common market have an exchange rate system where the values of their currencies are set against each other at a mutually agreed on exchange rate. Moora and Trun's exchange rate system is called

fixed

A computer manufacturing firm from the United States invests in a microprocessor manufacturing plant in Taiwan. This is an example of

foreign direct investment.

Which of the following enables organizations to conduct international trade without having to resort to barter?

foreign exchange market

Which of the following occurs when two parties agree to exchange currency and execute the deal at some specific date in the future?

forward exchange

The government of Murinca does not attempt to influence through quotas or duties what its citizens can buy from another country, or what they can produce and sell to another country. Which of the following terms best represents the situation in Murinca?

free trade

Which of the following is the most popular form of regional economic integration, accounting for almost 90 percent of regional agreements?

free trade agreement

The countries of Mimbo, Juwan, and Ninot agreed to remove all barriers to the trade of goods and services among each other. However, the three countries agreed that each would be allowed to determine its own trade policies with regard to nonmembers. The economic integration among these three countries is a(n)

free trade area

By lowering production costs, subsidies help domestic producers to

gain export markets

Due to certain strict environmental and employment standards in its home nation, Taurus Inc. has shifted its operations to developing nations. Hence, the firm has now been able to gain competitive advantage by avoiding costly pollution controls. This strategic move of Taurus Inc. will be considered

immoral

For years, the world had used the country of Votnam as a place to assemble goods because of the country's availability of cheap labor. To shift its manufacturing base from simple assembly to full-fledged manufacture of components and finished goods, Votnam introduced a policy that 35 percent of the value of a product must be produced locally. This is an example of a(n)

local content requirement

Which of the following is in a country's best interests, according to the main tenet of mercantilism?

maintaining trade surplus

Which of the following refers to an economic system in which the interaction of supply and demand determines the quantity in which goods and services are produced?

market

In the modern world, corporations can worsen the global tragedy of the commons by

moving production to locations where they are free to pump pollutants into the environment.

Silver Fire Electric Inc., a U.S.-based company, has productive activities in more than two countries. As a result, it would be most appropriate to refer to Silver Fire Electric as what type of enterprise?

multinational

Once it undertakes FDI, a firm becomes a(n)

multinational enterprise.

__________________________ was the US President that finally took the US off the gold standard forever.

nixon

A black economy is most likely to be prevalent when

people engage in barter agreements to avoid paying taxes.

BERPHO, an economic union, wants to make a coordinating bureaucracy that is accountable to the citizens of member nations. What BERPHO wants to do is called a(n)

political union

Which of the following refers to currency speculation?

short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates

In the context of social structure, American society is characterized by a low degree of

social satisfaction

In order to build large production units and expedite certain routine government actions related to this, Scorpius Inc. made legal payments to the government officials of a host nation. Such payments are typically referred to as

speed money

At the end of 2015, companies from the country of Erithrea collectively owned $37 billion in assets in its neighboring country of Outflowia. The $37 billion is Erithrea's _______ of FDI.:

stock

While the lowering of trade barriers made globalization of markets and production a theoretical possibility, which of the following has made it a tangible reality?

the advances in communication, information processing, and transportation technologies

A regional free trade agreement will benefit the world only if

the amount of trade it creates exceeds the amount it diverts.

Which of the following has seen a positive change from 1960 to 2014?

the share of world output accounted for by developing nations

The 1944 Bretton Woods conference created two major international institutions that play a role in the international monetary system—the International Monetary Fund (IMF) and the

world bank