International Business Midterm

International Monetary Fund 1944

-"Lender of Last Resort" to failing economies requires loan recipients to enact specific policies

Who is a nobel prize winning economist has argues that development is not just an economic process but is is political as well

Amartya Sen

Ethnocentrism

Belief in the superiority of one's own culture

Example of privatization

a country sells its postal services to a consortium of companies that runs it as a profit making venture without any state funding

it has been argued that the success of japanese enterprises in the global economy has been based partly on which of the following

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

innovation and entrepreneurial activity help increase economic activity by

creating new products and markets

The EU originated as a blank promoting the removal of trade barriers among member countries and adopting a shared external trade policy, while not allowing the free movement of factors of production among member nations

customs union

From an international business perspective some argue that what is ethical

depends on one's cultural perspective

Investing in blank is an important determinant of economic development as it leads to higher growth rates and a more productive population

education

The role of the government in a market economy

encouraging vigorous free and fair competition among private producers

Factor endowments refer to the

extent to which a country is gifted with such resources such as land, labor and capital

The lack of progress in the Doha Round negotiations has resulted in countries that are

forging ahead with their own bilateral and multilateral agreements

Antonio is an artisan. The country he lives in allows him to sell his goods to people in other countries without any quotas or tariffs. Likewise, he is free to buy materials he needs for his craft from other countries without any restrictions. The country in which Antonio lives practices

free trade

Which theory would support the idea that by increasing the efficiency of resource utilization in the global economy, international trade results in greater economic growth and provides economic benefits to all countries that participate in a global trading system

gains from trade

Which factor has contributed to the globalization of markets?

global convergence of consumer tastes and preferences

The WTO argues that by removing all tariff barriers and subsidies to agriculture,

global economic growth would rise

Initially, the Andean Community struggled, but in the late 1980s, this trend started to reverse when

governments of Latin America began to adopt free market economic policies

in a blank society the welfare of society is best served by letting people pursue their own economic self interest

individualist

Which statement best characterizes the concept of individualism

indivudualism and democracy go hand in hand

Principle of Mercantilism

it is a countrys best interest to maintain a trade surplus

Priyanish grew uo in india where caste systems have become less prevalent. what is true about caste systems

it is a rigid form of social stratisfaction

Which of the following is a disadvantage of a high degree of managerial mobility between companies

lack of loyalty and commitment to an individual company

Globalization of markets results in markets becoming

less diverse

Customs Union

level of economic integration characterizes the arrangement where three latin American countries eliminate all tariffs and trade barriers among themselves, while also implementing a common external trade policy

Tariff rate quotas are common in agriculture, where their goal is to:

limit imports over quota

The threat of antidumping action affects a firm by

limiting its ability to use aggressive pricing to gain market share in a country.

According to the Buy American Act, if a company wishes to win a contract from a US government agency to provide some equipment it must ensure that at least 51% of the product by value is manufactured in the US. This is an example of

local content requirements

World Bank 1944

makes low interest loans to poorer nations to support infrastructure development

Gross National Income

measures total annual income per resident (can be misleading bc it does not consider differences in cost of living)

Karl Marx

modern socialists trace their intellectual roots to blank althougj socialist thought clearly predates this individual

During the late 1980s and 1990s totalitarian governments collapsed and were replaced by democratically elected governments that were typically blank than their predecessors had been

more committed to free market capitalism

The volume of world merchandise trade and production is growing faster than world GDP. This implies that

more firms are dispersing their production processes to global locations

Which factor hinders globalization of consumer goods market?

national and cultural differences in tastes and preferences

Factor endowments

nations position in factor of production, such as skilled labor, land, or the capital necessary to compete in a given industry

Country A exports electronic goods to Company B although there are no underlying differences in factor endowments between the two countries. Which theory explains this anomaly?

new trade theory

To achieve full economic union, the European Union introduced a common currency, the euro, controlled by a central EU bank. Although most member states signed on, blank remains an important holdout.

Czechia (Czech Republic)

Which regional trade bloc includes Kenya, Uganda, and Tanzania?

EAC

The emerging role of the blank in competition policy suggests the EU is increasingly willing and able to intervene and impose conditions on companies proposing mergers and acquisitions.

European Commission

The ethical obligations of a mulinational corpoaration toward employment conditions, human rights, corruption and environmental pollution are

not always clear cut

culture is

not static

International Trade

occurs when a firm exports goods or services to consumers in another country

society

people who share a common set of values and norms form a

Types of Country Risk

political, economic, and legal

If the textile industry in a nation is characterized by vigorous domestic rivalry which observation of this nations international competency is most likely to be true

The nations textile firms will have a competitive advantage in international trade

The basic objective of ASEAN is to foster free trade among member countries and to achieve cooperation in their industrial policies. ASEAN can be found in which location?

Southeast Asia

According to Hofstede an employee concerned about job security career patterns and retirement benefits would exhibit a high level of

uncertainty avoidance

World Bank

was created in 1944 by 44 nations that met in Bretton Woods, New Hampshire to promote economic development

As a philosophy for business ethics utilitarianism focuses attention on the need to

weigh carefully all social benefits and costs of a business action

Amartya Sen

Freedom=Economic development

Protestant ethics

Max weber was a german sociologist who in 1904 made the connection between blank and "spirit of capitalism"

In the reading, French farmers vandalized an under construction branch of which international franchise in protest of American Trade policies

Mcdonalds

What theory that supports the view that, in some cases, countries export because in certain industries the world market can support only a limited number of firms.

New Trade theory

When a rich country enters into a free trade agreement with a poor country, the poor country benefits more than the rich country. This is the concept behind

Paul Samuelson's Critique

Free trade refers to a situation where

a government does not try to influence what its citizens can buy from global markets

What is an example of intellectual property

a music store

ethical system

a set of moral principles, or values, that are used to guide and shape behavior

Geert Hofstede added the dimension of indulgence to the world values survey to refer to

a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun

Culture

a system of values and norms that are shared among a group of people and that when taken together constitute a design for living

Opponents of globalization argue that falling trade barriers

allow firms to move production to countries with low wages

The foreign corrupt practices act was amended in order to

allow for facilitating payments

The government is considering placing additional taxes on foreign steel imports that are a proportion of the value of the imported steel. This is an example of

an ad valorem tariff

An american executive of a multinational home furnishings chain finds that one of the company's production units in philippines employs children to work in factories who are orphans who will be sold as forced labor or prostitution. The executive finds that all the available alternatives seem ethically unacceptable. In this example, the Americam executive faces

an ethical dilemma

What safeguard do representative democracies use to ensure their elected officials are held responsible for their actions

an individual's right to freedom of expression, opinion, and peaceable assembly

Collectivism

an individuals right to do something may be restricted on the grounds that it runs counter to "the good of society"

Common Agricultural Policy (CAP)

benefits inefficient farmers and the politicians in the EU who rely on the farm vote, but not consumers in the EU, who end up paying for their foodstuffs.

Regional economic integration

can be seen as an endeavor to attain further benefits from the unrestricted movement of trade and investment between nations, surpassing what can be achieved through global agreements alone

One of the impediments to integration arises from

concerns over national sovereignty

Heckscher-Ohlin Theory

predicts that countries will export those goods that make intensive use of factors that are locally abundant.

A negative effect of subsidies is to

protect inefficient domestic producers

The net effect of import tariffs is to

reduce the overall efficiency of the world economy

Globalization

refers to the shift toward a more integrated and interdependent world economy

According to amartya sen, development should be

seen as a process of expanding the real freedoms that people experience.

Which of the following is an example of an advanced factor, as proposed by Porter, that a nation will posses

skilled labor

Political Economy

stresses that the political, economic, and legal systems of a country are interdependent

What is the ultimate controlling authority within the EU bc it has the power to turn legislation into law?

the European Council

Which entity is the primary beneficiary of an import tariff

the government

Economic risks of doing business in a country

the inflation rate in a country is an indicator of the economic risks of doing business in a country

cultural relativism

the practice of gift giving between the parties in a business negotiation is considered right and proper behavior in many asian cultures while some westeners view the practice as a form of bribery what is this an example of

Which of the following statements is true about the righteous moralist approach to ethics

the righteous moralist approach is typically associated with managers from developed nations

The steady rise of regional economic integration has recently seen some retrenchment. What factor is considered to be primarily responsible for this drawback?

the rise of populist politics

what is true about planned economies

the state owns all means of production

Individualism

the welfare of society is best served by letting people pursue their own economic self-interest

newly privatized entities often have little incentive to restructure their operations to become more efficient when

they continue to receive subsidies from the state

Foreign producers typically agree to voluntary export restrictions bc

they fear far more damaging punitive tariffs or import quotas might follow if they do not

Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics bc

they may be based in a culture that does not place the same value on ethical norms important in the managers home country

Which of the following is a reason for the spread of democracy

totalitarian regimes failing to deliver economic progress to the majority of their populations

Country A and Country B entered into a free trade agreement recently. After this, Country A started importing heavy machinery from Country B, which Country A had previously produced domestically at a higher cost. Which of the following has occurred in this scenario?

trade creation

When higher-cost external producers are replaced by lower cost external producers within the free trade, blank occurs.

trade creation

The All-Emissions Corporation moved its automobile production plant to a country in South America because it could freely dup waste products into the nearby ocean. By doing this, the corporation was contributing to the concept of

tragedy of the commons