International Business Study Guide Questions
Course Introduction
International Business explores the dynamic environment of global commerce, examining the strategies, challenges, and opportunities faced by organizations operating across national borders. The course covers fundamental concepts such as international trade theory, cross-cultural management, global market entry strategies, supply chain logistics, and the impact of political, economic, and legal environments on international operations. Students gain insights into how companies adapt their products, marketing, and management practices to different cultural and regulatory contexts while addressing the ethical and sustainability issues inherent in global business activities. Through case studies and practical examples, the course prepares students to navigate the complexities of the international business landscape and develop the skills necessary for success in a globalized economy.
Recommended Textbook
Introduction to International Economics 3rd Edition by Dominick Salvatore
Available Study Resources on Quizplus
16 Chapters
861 Verified Questions
861 Flashcards
Source URL: https://quizplus.com/study-set/3614
Page 2
Chapter 1: Introduction to the Global Economy
Available Study Resources on Quizplus for this Chatper
52 Verified Questions
52 Flashcards
Source URL: https://quizplus.com/quiz/71745
Sample Questions
Q1) Why is International Trade Theory and Policy considered as Microeconomic aspect of International Economics and International Finance is considered as the Macroeconomic aspect of International Finance?
Answer: International Trade Theory and Policy treats each country as a unit of measurement and deals with the relative price determination of individual products.This is why this area of International Economics is considered to deal with microeconomic issues.On the other hand,International Finance deals with the mechanisms of adjustment of the balance of payments.It analyzes the relationship between the external and internal sectors of an economy and is,therefore,considered as the macroeconomic aspect of International Economics.
Q2) The persistence of ________________ in exchange rates has led the international community to call for reforms of the current international monetary system.
A)excessive volatility and disequilibria
B)long run stability
C)arbitrage opportunities
D)equilibrium
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Comparative Advantage
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/71746
Sample Questions
Q1) A laissez-faire policy is one in which:
A)The government regulates all aspects of economic activity
B)The government interferes with economic activity to a moderate level
C)The government keeps regulation of economic activity to a minimum
D)The governments interference in economic activity is completely non-existent
Answer: C
Q2) Among the following 4,which one do you think is the most powerful trade theories?
A)Theory of Absolute Advantage
B)Theory of Comparative Advantage
C)Mercantilism
D)Neo-mercantilism
Answer: B
Q3) According to the law of comparative advantage,the less efficient of the two trading countries should specialize in and export the commodity in which it manages to have an absolute advantage.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: The Standard Trade Model
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/71747
Sample Questions
Q1) Relative prices are different for each nation because their production frontiers and indifference curves differ in _______________.
A)shape and location
B)shape,but not location
C)location,but not shape
D)neither shape nor location
Answer: A
Q2) The _____________________ is given by the slope of the common tangent to the nation's production frontier and indifference curve at the autarky point of production and consumption.
A)equilibrium-relative commodity price in isolation
B)revealed comparative advantage
C)equilibrium-relative commodity price with trade
D)marginal rate of substitution
Answer: A
Q3) A nation that has many trading partners is said to be in a state of autarky.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: The Heckscher-Ohlin and Other Trade Theories
Available Study Resources on Quizplus for this Chatper
53 Verified Questions
53 Flashcards
Source URL: https://quizplus.com/quiz/71748
Sample Questions
Q1) Which of the following economists did not participate in a 1967 study that found a strong correlation between expenditures on research and development and export performance?
A)Gruber
B)Mehta
C)Vernon
D)Heckscher
Q2) Which of the following is not a possible source of bias for the Leontief paradox?
A)Leontief only used a two-factor model
B)Leontief did not consider factors such as natural resources
C)Leontief only used physical capital in the measure of capital
D)Leontief used Human Capital as an alternative to Physical capital
Q3) Labor unions in developed nations are usually against trade restrictions because it impedes their ability to acquire skilled workers that can assist in acquiring additional benefits and wage increases.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Trade Restrictions: Tariffs
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/71749
Sample Questions
Q1) A defining characteristic of a "large nation" relative to a "small nation" with respect to identifying the welfare effects of a tariff is that the:
A)large nation is sufficiently powerful to influence the world market price of the imported commodity
B)large nation has a higher per capita income than the small nation
C)large nation is a monopsonist in the market for the imported commodity
D)large nation has a higher marginal rate of substitution for the imported commodity than the small nation
Q2) The reduction in the price of the import commodity that results when a large nation imposes an import tariff is attributed to the ____________ and constitutes a __________ of welfare for the nation.
A)consumption effect of the tariff,loss
B)terms of trade effect of the tariff,loss
C)protective effect,gain
D)terms of trade effect,gain
Q3) "Using international trade theory,we can unambiguously state that the imposition of a tariff imposes net losses to the imposing nation." Is this statement true or false? Explain.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Nontariff Trade Barriers and the Political
Economy of Protectionism
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/71750
Sample Questions
Q1) When a firm produces some of the parts or components that it uses in its products,in its own plants abroad,the process is known as:
A)outsourcing
B)offshoring
C)globalization
D)dumping
Q2) Strategic trade policy argues that an activist trade policy in oligopolistic markets subject to extensive external economies can increase a nation's welfare.
A)True
B)False
Q3) The Smoot-Hawley Tariff Act of 1930 has often been associated with:
A)tariff reductions
B)increasing volume of trade for the US
C)decreasing exports and imports in the US
D)reduction of non-tariff barriers
Q4) Non-tariff barriers are also known as "new protectionism".
A)True
B)False
Page 8
Q5) When it comes to quota and tariff,how are the effects on the economy different?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Economic Integration
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/71751
Sample Questions
Q1) Armenia,Estonia,and Georgia are not Newly Independent States (NIS).
A)True
B)False
Q2) Trade diversion will ______________ for the domestic country.
A)decrease welfare
B)increase welfare
C)have no effect on welfare
D)initially increase,then decrease welfare
Q3) After the customs union is formed and trade barriers among the member nations are enacted,the member nations may become less efficient due to the joined union.
A)True
B)False
Q4) At the time of the NAFTA agreement,who was the United States' largest trading partner?
A) Canada
B)Japan
C)Mexico
D)England
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Growth and Development With International Trade
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/71752
Sample Questions
Q1) Which device has the International Tin Agreement utilized as a way of stabilizing tin prices?
A)Multilateral contracts
B)Export subsidies
C)Buffer stocks
D)Export tariffs
Q2) International trade can contribute to the economic growth of today's developing nations in which of the following ways?
A)Trade can lead to the full utilization of otherwise underemployed domestic resources.
B)By expanding the size of the market,trade makes possible division of labor and economies of scale.
C)International trade is the vehicle for the transmission of new ideas,new technology,and new managerial and other skills.
D)All of these options are correct.
Q3) In the 1980s,high performance Asian economies (HPAEs)were also known as newly industrialized economies (NIEs).
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: International Resource Movements and Multinational Corporations
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/71753
Sample Questions
Q1) If less than full employment is present,then foreign investments tend to ________ the level of employment in the investing country and __________ foreign investments in the host country.
A)Decrease; increase
B)Increase; decrease
C)Decrease; decrease
D)Increase; increase
Q2) When capital moves from lower returns to higher returns,there will be
A)greater efficiency in the use of capital internationally.
B)increased world output.
C)increased world welfare.
D)all of the above.
Q3) ____________ is the production abroad of a differentiated product that is also produced at home.
A)Forward integration
B)Backward integration
C)Vertical integration
D)Horizontal integration
Q4) What are the basic reasons for a multinational corporations (MNCs)existence?
11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Balance of Payments
Available Study Resources on Quizplus for this Chatper
52 Verified Questions
52 Flashcards
Source URL: https://quizplus.com/quiz/71754
Sample Questions
Q1) Why does the balance of good part of the total balance of payment always get prominence?
Q2) During the fiscal year 2009,how much did the US export in dollars?
A)$1 - $2.5 trillion
B)$100 - $500 million
C)$500 million - $1 billion
D)$5 - $10 billion
Q3) _____________ is an example of a credit transaction in the balance of payments.
A)Imports of goods and services
B)Exports of goods and services
C)Unilateral transfers to foreigners
D)Capital outflows
Q4) US military aid granted to foreign countries is entered in the:
A)Merchandise trade account
B)Capital account
C)Current account
D)Official settlements account
Q5) What is the difference between a nation's balance of payment account and its international investment position?
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: The Foreign Exchange Market and Exchange Rates
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/71755
Sample Questions
Q1) Please explain what is meant by Covered Interest Arbitrage.
Q2) ________ was the common currency adopted a majority of the member nations in the EU.
A)The pound sterling
B)The euro
C)The dollar
D)The franc
Q3) Find out the cross rate between US$ and British Pound Sterling(£)if the spot rate between British Pound Sterling and Japanese Yen is ¥121/£ and the spot rate between US$ and Japanese Yen is ¥85/$
A)$1.52/£
B)$1.42/£
C)$)70/£
D)£1.52/$
Q4) If the exchange rate is $0.012 per yen in New York and $0.019 per yen in Tokyo,an arbitrage trade could profit by buying yen in Tokyo and simultaneously selling them in New York.
A)True
B)False
13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Exchange Rate Determination
Available Study Resources on Quizplus for this Chatper
52 Verified Questions
52 Flashcards
Source URL: https://quizplus.com/quiz/71756
Sample Questions
Q1) Which of the following states that the percentage change in the exchange rate is equal to the difference in the percentage change in the price level in the two countries?
A)The relative theory of exchange rate determination
B)The absolute purchasing-power parity theory
C)The relative purchasing-power parity theory
D)The absolute theory of exchange rate
Q2) Which of the following would occur if labor productivity in the UK increased relative to that in the US,and before this increase the dollar was in an exchange rate equilibrium with the sterling?
A)The United States will now demand fewer imports
B)The United States will now demand more pounds
C)The UK will supply more pounds to the US.
D)The UK will supply more pounds to the US
Q3) Which of the following countries has experienced a higher rate of inflation than the US from 1973-2010?
A)Switzerland
B)Italy
C)Belgium
D)Austria
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Automatic Adjustments With Flexible and Fixed Exchange Rates
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/71757
Sample Questions
Q1) If the US currency pass-through is 60 percent,what will occur as a result of a 15 percent depreciation in the value of the dollar?
A)import prices to fall by 9 percent
B)import prices to rise by 15 percent
C)export prices to fall by 9 percent
D)export prices to rise by 15 percent
Q2) For the US,the currency pass-through is about _______ percent
A)10
B)100
C)30
D)40
Q3) What signs do the price elasticity of the US demand for imports and the price elasticity of the foreign demand for US exports in euros have?
A)positive
B)negative
C)constant
D)these could be either positive or negative
Q4) Please explain the J-Curve effect in exchange rate determination.
Q5) What is the Marshall-Lerner Condition and how is it used?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Adjustment Policies
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/71758
Sample Questions
Q1) Which of the following is not discussed in the book as one of the important national economic goal or objectives?
A)Internal balance
B)A reasonable growth rate
C)An equitable distribution of income
D)A strong defense mechanism
Q2) A devaluation switches expenditures from foreign to domestic commodities and can be used to correct a deficit in the nation's balance-of-payments.
A)True
B)False
Q3) Which of the following is a restriction on international capital flow and multiple exchange rates?
A)Export control
B)Trade control
C)Price control
D)Wage control
Q4) Describe why monetary policy under a fixed exchange rate system is impotent.
Q5) Why during the period of fixed exchange rate,monetary policy is considered to be ineffective.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Flexible Versus Fixed Exchange Rates,european
Monetary Systems,and Macroeconomic Policy
Coordination
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/71759
Sample Questions
Q1) Under which system does a nation not concern itself with external balance?
A)flexible exchange rate system
B)fixed exchange rate system
C)managed peg
D)gold standard
Q2) Which of the following was (were)not one of the main feature(s)of the European Monetary System (EMS)?
A)creation of the European Currency Unit
B)allowing the currency of each EU member to fluctuate by a maximum of 2.25 percent on either side of its center rate
C)the establishment of the European Cooperation Fund
D)Paris was selected as the headquarter of the EMS
Q3) Optimum currency areas provide each member with the ability to pursue its own independent stabilization.
A)True
B)False
Q4) What are the advantages and disadvantages of fixed versus flexible exchange rates?
Q5) What are the advantages of International Macroeconomic Policy Coordination? Page 17
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/71760
Sample Questions
Q1) Which international institution was established after WWII to provide long-run development assistance to developing nations?
A)International Monetary Fund
B)International Bank for Reconstruction and Development
C)International Development Association
D)International Finance Corporation
Q2) Rapid technological change,globalization,and increased competition from the manufactured exports of emerging market economies are causing which of the following in the United States?
A)Increased employment
B)Job security
C)Increased wages
D)Firm downsizing
Q3) During which decades did 'dollar glut' develop?
A)Late 1940s,early 1950s
B)Late 1950s,early 1960s
C)Late 1960s,early 1970s
D)Late 1970s,early 1980s
To view all questions and flashcards with answers, click on the resource link above. Page 19