Emerging Markets
Exam Review
Course Introduction
This course provides an in-depth exploration of emerging markets, focusing on their increasing significance in the global economy. Students will examine the unique economic, political, and cultural challenges and opportunities that characterize emerging economies, including issues related to governance, risk assessment, financial systems, and demographic trends. Through case studies and real-world examples, the course will analyze strategies for market entry, sustainable growth, and the management of volatility. By the end of the course, participants will develop a comprehensive understanding of how businesses and investors can effectively operate within and capitalize on the dynamic environments of emerging markets.
Recommended Textbook
International Business 15th Edition by John Daniels
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20 Chapters
2001 Verified Questions
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Page 2
Chapter 1: Globalization and International Business
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Sample Questions
Q1) Advanced communication systems have contributed to growth in international business by ________.
A) enabling better oversight of global operations
B) reducing the effects of global competition
C) decreasing the cost of cargo transportation
D) reducing export regulations
Answer: A
Q2) Which of the following BEST explains how a firm reduces risk by operating internationally?
A) taking advantage of business-cycle differences among countries
B) buying competitive risk insurance unavailable domestically
C) preventing competitors from operating in the countries it has entered
D) operating in less competitive environments than those at home
Answer: A
Q3) Improvements in transportation and communications enable managers to better oversee foreign operations.
A)True
B)False
Answer: True
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Page 3
Chapter 2: The Cultural Environments Facing Business
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Sample Questions
Q1) Raj,an engineer,works long hours and takes full responsibility for both his good and bad work performance.Raj most likely believes in ________.
A) self-determination
B) low power distance
C) collectivism
D) fatalism
Answer: A
Q2) Assume a firm plans to expand internationally.If its managers wish to avoid pitfalls caused by differences in "silent language," they should consider differences in
A) normal proximity during conversations
B) degree of detail expected in written contract
C) the meaning of slang words during presentations
D) importance of adherence to schedules
Answer: A
Q3) National origin is an acquired group membership.
A)True
B)False
Answer: False
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Page 4
Chapter 3: The Political and Legal Environments Facing Business
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Sample Questions
Q1) Garnet Footwear suffered significant financial losses and had to close its foreign operations.The dissolution process took six months and cost four percent of the firm's value.Where were Garnet's foreign operations most likely located?
A) Ecuador
B) France
C) Japan
D) China
Answer: C
Q2) A democracy grants the voting citizenry the power to alter the laws and structures of government.
A)True
B)False
Answer: True
Q3) In some collectivist systems,such as Venezuela,politicians control media outlets and limit individual property rights in order to acquire power in the business environment.
A)True
B)False
Answer: True
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Chapter 4: The Economic Environments Facing Businesses
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Sample Questions
Q1) A worrisome outcome of chronic inflation is that it tends to ________.
A) erode confidence in a country's currency
B) give central banking officials excessive flexibility to manage monetary policy
C) increase the real income of people, thereby inflating their spending and borrowing levels
D) lower consumer demand for foreign goods, which triggers lower prices and eventually lower employment
Q2) A mixed economy is a system where economic decisions are largely market driven and ownership is largely private,but the government intervenes in many private economic decisions.
A)True
B)False
Q3) In a ________ economy,certain sectors of the economy are left to private ownership and free market mechanisms,while other sectors have significant state ownership and government planning.
A) state-directed
B) market
C) command
D) mixed
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Page 6
Chapter 5: International Trade and Factor-Mobility Theory
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Sample Questions
Q1) According to the PLC theory,what is the most likely reason that companies manufacture products in locations with high labor rates during the introductory stage of a product's life cycle?
A) Doing so allows use of long production runs using capital-intensive methods.
B) Many consumers are willing to pay high costs for the newest products.
C) Transportation costs are reduced by focusing on markets in developed countries.
D) Import restrictions prevent production in countries other than the ones making product innovations.
Q2) Trade occurs more between culturally dissimilar countries than between culturally similar countries.
A)True
B)False
Q3) In a short essay,discuss the theory of absolute advantage and the reasons a country's efficiency improves based on this theory.
Q4) In a short essay,discuss the theory of mercantilism,and discuss favorable and unfavorable balances of trade as they apply to international business.
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Chapter 6: Governmental Influence on Trade
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Sample Questions
Q1) Unlike the infant-industry argument,the industrialization argument for trade protection ________.
A) requires independence from other countries
B) stresses labor-intensive production methods despite high costs
C) emphasizes use of locally available raw materials for manufacturing inputs
D) presumes that economic growth will occur even if domestic manufactured prices are not globally competitive
Q2) Unemployed workers are most apt to form a pressure group to support ________.
A) export restrictions
B) import restrictions
C) price limitations
D) import subsidies
Q3) The purpose of "Made in" labels on imported products is to enable countries to keep records of the origin of imports.
A)True
B)False
Q4) What are common reasons that governments enact export restrictions? What are the possible negative consequences of such restrictions?
Q5) Describe and compare the different types of tariffs (duties).
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Chapter 7: Cross-National Cooperation and Agreements
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Q1) Which of the following is a unique provision of NAFTA?
A) tariff elimination
B) common currency
C) environmental standards
D) immigration oversights and policies
Q2) ________ integration is the political and economic agreements among countries that give preference to member countries to the agreement.
A) Global
B) Economic
C) Bilateral
D) Regional
Q3) Korman Industries is a foreign multinational that recently established operations in the European Union.What is the most likely advantage for Korman as a result?
A) Governance processes are streamlined because local governments have been eliminated.
B) Market size is larger because of the elimination of internal tariff barriers.
C) Differential external tariff barriers exist for product shipments.
D) The EU uses English as its official language.
Q4) What are the rules of origin and regional content provisions of NAFTA?
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Chapter 8: Global Foreign-Exchange Markets
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Sample Questions
Q1) If a foreign currency is quoted in American terms (the direct quote)and the forward rate is greater than the spot rate,the foreign currency is selling at a ________.
A) forward premium
B) forward discount
C) backward discount
D) discounted premium
Q2) Although most foreign-exchange activity takes place through big money center banks,the use of electronic trading has allowed even regional banks to deal directly in foreign-exchange markets.
A)True
B)False
Q3) As a trading currency,the euro is ________.
A) more widely traded than the U.S. dollar in seven of the top ten currency markets in the world
B) widely traded in London but not in any other major foreign-exchange markets in the world
C) becoming more popular than the U.S. dollar because of its global acceptance
D) gaining ground against the U.S. dollar in Eastern European countries
Q4) What is a futures contract? What institutions handle futures contracts?
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Chapter 9: The Determination of Exchange Rates
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Sample Questions
Q1) If the real interest rate is 5%,the rate of inflation in the United States is 6%,and the rate of inflation in the United Kingdom is 3%,which of the following statements would NOT be true?
A) The nominal rate of interest in the U.S. would be greater than the nominal interest rate in the U.K.
B) The difference between the U.K. and U.S. interest rates is a function of the difference between their inflation rates.
C) The nominal rate of interest in the United States and the United Kingdom would be the same because of purchasing power parity.
D) Investors would get a higher return on their money in the United States.
Q2) The three variables predicted by forecasting are the timing,magnitude,and length of exchange rate movements.
A)True
B)False
Q3) What are the main arguments for and against Africa developing a common currency like the EU?
Q4) In a short essay,compare the roles of the Federal Reserve Bank of New York and the European Central Bank.
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Page 11
Chapter 10: Global Capital Markets
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Sample Questions
Q1) How do countries differ in terms of taxation? In regards to taxation,why do some MNEs turn to offshore financial centers? Why are offshore financial centers a concern to the OECD?
Q2) Which of the following is NOT an advantage of ADRs to U.S.shareholders?
A) Transfer of ownership is done in the U.S. in accordance with U.S. laws.
B) In the event of the death of the shareholder, the estate does not go through a foreign court.
C) Settlement for trading is generally faster in the United States.
D) All of the above are advantages of ADRs.
Q3) The financial management activity that determines the proper mix of debt and equity is ________.
A) capital structure
B) long-term financing
C) capital budgeting
D) working capital management
Q4) A bond issued by a Brazilian company in British pounds in London is a ________.
A) Eurobond
B) global bond
C) local bond
D) foreign bond
Page 12
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Chapter 11: Globalization and Society
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Sample Questions
Q1) How can an MNE operating in a developing country have a positive influence on labor policies? Illustrate your answer with an example.
Q2) What is the difference between relativism and normativism? How do these concepts relate to ethical behavior in international business?
Q3) Which of the following is NOT affected by the Foreign Corrupt Practices Act?
A) companies registered in the U.S.
B) foreign firms operating in U.S. territory
C) foreign firms quoted on a U.S. stock exchange
D) foreign companies managed by U.S. expatriates
Q4) General Electric's Ecomagination initiative is responding in part to the fact that it is operating in many countries which require compliance with higher environmental standards than exist in the United States.
A)True
B)False
Q5) All of the following are levels of moral development EXCEPT the ________.
A) preconventional level
B) autonomous level
C) internalized level
D) conventional level
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Chapter 12: The Strategy of International Business
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Sample Questions
Q1) Managers use a value chain analysis to determine how the company will design,make,move,and sell products; how it will find efficiencies in doing so; and how it will coordinate the decisions in one part of the business with those made in other parts.
A)True
B)False
Q2) Which of the following has the greatest potential to transform an industry's structure?
A) a change in a competitor's management
B) a change in a competitor's pricing structure
C) the expansion of a distribution channel
D) the exit of a competitor from the industry
Q3) Change in the long-term industry growth rate has the potential to transform an industry's structure.
A)True
B)False
Q4) Discuss the characteristics of international,multidomestic,global,and transnational strategies.Include situations and a specific example in which each strategy would be most appropriate.
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14
Chapter 13: Country Evaluation and Selection
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Sample Questions
Q1) Which of the following is the LEAST likely reason that inaccuracies appear in published information about countries?
A) inclusion of both legal and illegal economic activities
B) inclusion of both market and non-market economic activities
C) poor methodology used in data collection
D) use of different translation software
Q2) Liability of foreignness refers to the situation in which a government has more stringent legal operating regulations on foreigners and foreign companies than on its own citizens and companies.
A)True
B)False
Q3) Sales potential is probably the most important variable in determining international location decisions because consumer demand exceeds supply.
A)True
B)False
Q4) When income inequality is high in a specific country,the per capita GDP figures are more meaningful.
A)True
B)False
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Chapter 14: Export and Import
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Sample Questions
Q1) Which of the following transactions refers to the sale of goods or services produced by a company based in one country to customers that reside in a different country?
A) importing
B) countertrading
C) exporting
D) freight forwarding
Q2) Companies new to exporting most frequently suffer over-commitment by top management in taking on the initial difficulties and financial requirements of exporting.
A)True
B)False
Q3) A company classified as a small and medium-sized enterprise (SME)has fewer than 500 employees.
A)True
B)False
Q4) In the U.S.,international trade is hampered by homeland security issues and delays.
A)True
B)False
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Chapter 15: Direct Investment and Collaborative Strategies
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Sample Questions
Q1) Dependencia theory holds that ________.
A) countries should seek to diversify their economies
B) low-income countries have practically no power in dealings with MNEs
C) in a globalized world, no nation can be independent economically or politically
D) there is a natural division of labor whereby developing countries depend on production using fairly unskilled labor and developed countries depend on highly educated workers
Q2) What is the difference between licensing and cross-licensing? What factors do firms need to consider before entering into licensing agreements?
Q3) Lesser-known franchisors sometimes enter foreign countries with company-owned outlets.A reason for doing this is to ________.
A) guarantee profits
B) avoid competition
C) compete with local stores
D) attract potential franchisees
Q4) What is a turnkey operation? What features generally make turnkey operations different from other collaborative arrangements?
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Chapter 16: The Organization of International Business
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Sample Questions
Q1) Historically,managers built organizations by focusing on the boxes and lines of a(n)________ structure.
A) formal
B) innovative
C) collaborative
D) flexible
Q2) Which of the following is NOT one of the three prevalent approaches to coordination?
A) standardization
B) mutual adjustment
C) adaptation
D) planning
Q3) The benefits of managerial visits to foreign subsidiaries can easily be replicated with frequently submitted and reviewed operational reports and schedules.
A)True
B)False
Q4) Profile the idea and features of horizontal differentiation,paying particular attention to its implications to how managers design their company's structure.
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Page 18
Chapter 17: Marketing Globally
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Sample Questions
Q1) A company would most likely export at a price lower than its production and distribution costs in order to ________.
A) use a skimming strategy abroad before using one domestically
B) test a market before making a big commitment
C) use a cost-plus strategy globally
D) encourage gray market sales
Q2) The marketing orientation used by Bantam Shoes for its foreign sales focuses primarily on efficiency and product quality.Bantam most likely uses a ________.
A) production orientation
B) customer orientation
C) sales orientation
D) strategic marketing orientation
Q3) If a company's foreign sales per customer is small compared to those in its domestic market,it should most likely ________.
A) introduce a larger family of products
B) narrow the product line offered to the market
C) reconfigure the product life cycle marketing strategy
D) shift additional salespeople to the domestic market
Q4) In a short essay,describe the various reasons for product alteration.
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Chapter 18: Global Manufacturing and Supply-Chain Management
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Sample Questions
Q1) Offshore manufacturing is attractive because it offers high labor costs,cheap materials and components,and proximity to markets.
A)True
B)False
Q2) Describe total quality management.
Q3) Which of the following best describes a major difference between supply chain management and logistics?
A) Supply chain management involves handling suppliers and customers.
B) Logistics involves longer distances and international distribution networks.
C) Supply chain management focuses on transportation and the storage of goods.
D) Logistics only encompasses the outbound flow of products and materials.
Q4) All of the following tend to be more expensive when sourcing abroad,EXCEPT ________.
A) transportation costs
B) inventory holding costs
C) brokers and agents fees
D) labor rates
Q5) Inbound logistics is also known as materials management.
A)True
B)False
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Chapter 19: International Accounting and Finance Issues
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Sample Questions
Q1) Using the same exchange rate to set the budget and monitor results ________.
A) allows management to focus on operating variances instead of exchange-rate variances
B) enables management to focus on both operating and exchange-rate variances
C) is an illegal reporting method according to the FASB
D) is the only method that can be used in Europe
Q2) According to the translation process in the United States,________.
A) companies first translate their statements into dollars, and then recast their financial statements consistent with U.S. GAAP
B) companies recast their financial statements consistent with U.S. GAAP, and then translate them into U.S. dollars
C) companies only need to worry about the translation process because local operations take place in a local GAAP environment
D) companies translate foreign currency financial statements only if the dollar is weakening against the local currency
Q3) What factors influence international accounting practices? What forces are leading to the global convergence of accounting practices?
Q4) How do exchange rates affect budgets used to evaluate performance in MNEs?
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Page 21
Chapter 20: International Human Resource Management
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Sample Questions
Q1) There is a strong yet inconsistent relationship between the strategic performance of an MNE and the decisions it has made in managing its human resources.
A)True
B)False
Q2) Historically,the most important criterion in selecting individuals for posting to an expatriate slot has been ________.
A) foreign language abilities
B) technical competence
C) leadership skills
D) flexibility
Q3) List and compare the three common methods of implementing a balanced compensation plan.
Q4) A geocentric staffing policy is one in which all key management positions throughout the company's global operations are filled by host-country nationals.
A)True
B)False
Q5) What are the current trends in expatriate allowances? What are the reasons for these changes?
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