Course Introduction
International Economics
Chapter Exam Questions
International Economics explores the theories, policies, and dynamics that govern economic interactions between countries. The course examines topics such as international trade theory, trade policy, balance of payments, exchange rate systems, and the impact of globalization on national economies. Students will analyze how goods, services, and capital flow across borders, the role of international institutions, and the effects of economic integration and development. Through case studies and empirical evidence, the course aims to provide a comprehensive understanding of how international economic relationships shape global prosperity and challenges.
Recommended Textbook
International Business 1st Edition by Michael Geringer
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Page 2
Chapter 1: The Challenging Context of International Business
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Sample Questions
Q1) UNCTAD,the United Nations agency in charge of all matters relating to FDI and international corporations,estimates there are 82,000 transnational corporations with international production activities and that these transnationals account for approximately _____ percent of total global output.
Answer: 25
Explanation: UNCTAD, the United Nations agency in charge of all matters relating to FDI and international corporations, estimates there are 82,000 transnational corporations with international production activities. These transnationals have approximately 810,000 foreign affiliates that collectively employ more than 78 million people. These transnationals account for approximately 25 percent of total global output and two-thirds of world trade.
Q2) PwC,a professional services company,predicts the next decade will see an increase of ______ percent in the number of workers accepting global assignments.
Answer: 50
Explanation: PwC, a professional services company, predicts the next decade will see an increase of 50 percent in the number of workers accepting global assignments.
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Chapter 2: International Trade and Investment
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Sample Questions
Q1) The amount by which the value of a nation's exports exceed the value of its imports is known as the country's ___________.
Answer: trade surplus
Explanation: The amount by which the value of a nation's exports exceed the value of its imports is known as the country's trade surplus.
Q2) The establishment of new facilities from the ground up is known as
A) cross-border acquisition.
B) exporting.
C) greenfield investment.
D) gray market trade.
E) international entrepreneurship.
Answer: C
Q3) Individuals and corporations from ____________ accounted for $6.3 trillion invested abroad in 2014,a total more than three times the FDI of the next-largest investor nation.
Answer: the United States
Explanation: Individuals and corporations from the United States accounted for $6.3 trillion invested abroad in 2014, a total more than three times the FDI of the next-largest investor nation.
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Page 4
Chapter 3: Sociocultural Forces
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Q1) International business managers need to be able to communicate across cultural borders,even if they don't speak foreign languages.
A)True
B)False
Answer: True
Q2) Hall suggests that communication tends to be implicit and indirect in A) the U.S.
B) HC/high context.
C) LC/low context.
D) Australia.
Answer: B
Q3) Trompenaars's diffuse cultures are called diffuse because
A) their differentiation between public and private life is spread out freely (diffused).
B) specific responsibilities are spread over a wide area, that is, non hierarchical.
C) they extend the concept of culture to religion and other institutions.
D) diffusion exists to moderate cultural differences.
Answer: A
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Chapter 4: Sustainability and Natural Resources
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Q1) The two main types of solar power are ___________ and concentrating solar thermal.
Q2) One example of the effect of topography is:
A) isolated language groups, which require special marketing adjustments.
B) regional metals markets.
C) a unified China.
D) equal distribution of populations.
Q3) Triple bottom-line (3BL)accounting is not a framework for sustainability because: A) its measures are not standardized and therefore, are not comparable.
B) accountants are resistant to change.
C) Wall Street has not approved its use.
D) foreign and domestic factors affect its use.
Q4) The stakeholder model for environmentally sustainable business has failed because we don't have an accounting system to measure the present costs of environmental irresponsibility.
A)True
B)False
Q5) Companies can use _____________ to share their performance results across sustainability's larger business context.
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Chapter 5: Political Forces That Affect Global Trade
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Q1) Import duties can be set to encourage
A) increased imports based on sales volumes.
B) local input.
C) price fixing.
D) imports from other suppliers.
Q2) What is the role of the home country in risk assessment?
A) It has no role. What matters is the country in which the business is conducted.
B) It is a significant consideration.
C) It is used initially, but then more micro issues become the focus of CRA.
D) Country risk does not involve political considerations at all.
Q3) The CRA firm Maplecroft has recently dropped ____________ and Brazil from its list of growth markets due to its increasing risk.
Q4) Kidnap,ransom,and extortion are techniques often used by terrorists against which no insurance is available.
A)True B)False
Q5) U.S.ocean shipping companies are benefiting from U.S.government subsidies.
A)True
B)False
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Chapter 6: Intellectual Property Rights and Other Legal Forces
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Q1) The _____________,according to Lawrence Lessig,is the place intellectual property is least respected.
Q2) Incoterms attempt to standardize shipping agreements,and include
A) FAS and CIF.
B) CED and COD.
C) descriptions of portside processes.
D) insurance arrangements for international shipments.
Q3) Patents are government grants that give the owner
A) exclusive rights to use, sell, manufacture, or exploit the invention or process.
B) the exclusive right to use the fundamental ideas on which the invention is based.
C) the rights to sell the invention, but only beyond the patent-granter's borders.
D) rights to the invention but does not prevent others from copying the invention.
Q4) The ______________ allows non-U.S.nationals to file lawsuits in U.S.courts for some alleged violations of international law.
Q5) Competition or antitrust laws are intended to prevent __________.
Q6) Legal systems are based on __________,common law,or civil law.
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Chapter 7: Economic and Socioeconomic Forces
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Q1) __________ is a measure of how the inhabitants are distributed over a nation's area.
A) Urbanization
B) Population size
C) Population distribution
D) Population density
E) Population
Q2) The purpose of economic analysis is to assess the overall outlook of the economy and the impact of economic changes on the firm.
A)True
B)False
Q3) Why are international managers interested in age distribution studies?
Q4) The Atlas conversion factor is the arithmetic average of the current exchange rate and the exchange rates in the two previous years.Incomes measured by the Atlas conversion factor are generally more stable over time and changes in income rankings are more likely to be due to relative economic performance than fluctuations in the exchange rate.
A)True
B)False
Q5) The Big Mac Index is a playful application of __________ theory.
Page 9
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Chapter 8: The International Monetary System and Financial Forces
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Q1) Bretton Woods led to an exchange rate agreement known as the Bretton Woods System or
A) the floating rate system.
B) the India Accord system.
C) the gold exchange standard.
D) the French rate system.
Q2) In the gold standard,trade imbalances were corrected by a transfer of _______ in the direction of the surplus.
Q3) The Triffin paradox suggests that
A) reserve currencies can never run deficits.
B) eventually, reserve currencies will run deficits, which will lead to lack of confidence in the currency.
C) the more a currency is held in reserves, the stronger it is.
D) the U.S. dollar could never be a reserve currency.
Q4) With increasing inflation,borrowing becomes
A) more attractive because repayment can be made with cheaper money.
B) less attractive because repayment is made with dearer money.
C) impossible because money has lost its value.
D) a mute issue because of liquidity issues.
Q5) The highest inflation rate recorded was in ______________.
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Chapter 9: International Competitive Strategy
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Q1) Knowledge that an individual has that is easy to express clearly in words,pictures,or formulas is known as
A) explicit.
B) implicit.
C) tacit.
D) intangible.
E) valuable.
Q2) Which of the following is a disadvantage of bottom-up planning?
A) It restricts initiative at lower levels of the organization.
B) It shows some insensitivity to local conditions, particularly when a company's top management team exhibits ethnocentric tendencies.
C) There is no guarantee that the sum total of all the affiliates' goals will coincide with those of headquarters.
D) Subsidiary directors' hands-on perspective may allow them to recognize potentially innovative opportunities.
E) The people responsible for attaining the goals are formulating them.
Q3) ________ are an itemized projection of revenues and expenses for a future time period.
Q4) ________ are multiple,plausible stories for probable futures.
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Chapter 10: Organizational Design and Control
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Q1) According to the text,an organization that coordinates economic activity to deliver value to customers using resources outside its traditional boundaries is an integrated corporation.
A)True
B)False
Q2) Two of the concerns that management faces in designing the organizational structure for an international company are (1)finding the most effective way to take advantage of geographic differences,and (2)coordinating the activities of departments to enable the firm to meet its overall objectives.
A)True
B)False
Q3) In designing the organizational structure,management know two concerns,__________ and __________,run counter to each other.
A) an effective way to departmentalize; coordinating activities
B) earning profits; paying taxes
C) hiring employees; reducing labor costs
D) sales growth; research and design expenditures
E) geographic dispersion; profit rate
Q4) Most SBUs are organized based on ____________.
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Chapter 11: Global Leadership Issues and Practices
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Q1) The challenge of dealing with information that lacks clarity and incorporates both quantitative and qualitative dimensions,hindering the understanding of cause-and-effect relationships and the effectiveness of subsequent problem solving efforts,is known as
A) complexity.
B) cognition.
C) interdependence.
D) dependency.
E) ambiguity.
Q2) Global team leaders want to set specific team norms because A) leaving the norming process to team members will allow the predominant culture to dominate.
B) global teams work best with norms of accountability and independence.
C) without norms or with dysfunctional norms, global teams are likely to underperform. D) norms that support consideration and cooperation lead to good team functioning.
E) only when norms are set can the global team leader go on to the next step in the team process.
Q3) Research has shown that women's and men's typical leadership styles ______.
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13
Chapter 12: International Markets: Assessment and Entry
Modes
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Sample Questions
Q1) The social desirability bias is
A) the respondent's desire to please the researcher, leading to answers calculated to please.
B) the desire to be accepted as a foreigner in the local setting, so assuming local dress and mannerisms.
C) the desire to become part of the social in-group in the new setting, with high status. D) a bias in favor of those locals who pretend to like and accept the researcher.
Q2) Country screening differs from segment screening in that
A) it looks at the country level, while segment screening is international.
B) there is no real difference, just terminology differences.
C) it looks at the country level, while segment screening is within the country.
D) segment screening is larger than country screening.
Q3) Psychographics as used in segment screening are _________________.
Q4) Entering a foreign market through ___________ does not require investment in plant and facilities.
Q5) Trends in inflation,exchange rates,and interest rates are part of ______________.
Q6) Discuss the process of market screening.
Page 14
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Chapter 13: Marketing Internationally
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Q1) Sales ____________ provides selling aids for the marketing function.
Q2) Disparity of income worldwide
A) is an obstacle to standardization.
B) supports standardization.
C) has led to standardization of the physical product but not total product.
D) is a given and will increase over time.
Q3) The need to change the color of packages when selling a product in a new market is generally a result of the influence of
A) distributive forces.
B) competitive forces.
C) political conflicts.
D) cultural differences.
Q4) The variation in media availability is a strong reason to use ________ media consultants.
Q5) The factors that influence the selection of market channels include
A) the local market and product.
B) taxation policies.
C) claims made by channel pirates.
D) local legislation.
Q6) ______________ pricing is local pricing in another country.
Page 15
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Chapter 14: Managing Human Resources in an International Context
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Q1) A drawback of ethnocentric staffing policies is that
A) it is less expensive to use employees from the home country.
B) there are no additional expenses associated with relocating these employees and their families.
C) these employees may not have experience with the language and culture of the host country.
D) they expand the experience base of home-country employees.
Q2) Immigrants from developing countries
A) lead to unemployment in skilled sectors of the U.S. economy.
B) have become essential contributors to the U.S. economy's health.
C) dilute the skill levels of the U.S. workforce.
D) are primarily college educated.
E) usually take highly paid 3-D jobs.
Q3) A staffing policy that involves hiring and promoting employees on the basis of the parent company's home-country frame of reference is ___________________.
Q4) Please provide an overview of the major issues a compensation package for expatriates should address.
Q5) Discuss the reasons some workers leave their countries to work abroad.
Q6) What are guest workers and why do some nations have them?
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Chapter 15: International Accounting and Financial Management
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Q1) Discuss how culture might impact accounting.
Q2) The ____________ center is a location that specializes in financing nonresidents,with low taxes and few banking regulations.
Q3) Because startups often have several years of losses,a ________ is the favored form,because it generates tax benefits for the parent company.
Q4) Swap contracts are used to hedge
A) derivatives.
B) foreign currency exposure.
C) covered positions.
D) sales performance.
Q5) The International Accounting Standards Board (IASB)represents the standards of A) most of the world, except the U.S.
B) the U.S. exclusively.
C) Europe and parts of Africa.
D) most globally minded managers.
Q6) Exposure at the operations level caused by FX changes on projected cash flows is known as ____________ exposure.
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Q7) ____________ is holding assets in one market to offset price changes to exposure in another market.
Chapter 16: Appendix A: International Institutions From a Business Perspective
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Q1) Regional trade agreements have been growing
A) to compensate for slow progress at the WTO's Doha Round.
B) because it is natural for neighbors to made trade agreements.
C) at the behest of the WTO.
D) largely influenced by the U.S. and EU.
Q2) The EU began as a collaboration focused on only two industrial goods,____________.
Q3) The United Nations is
A) a forum for the promotion of peace and global stability.
B) an organization established to ensure dominance of the superpowers.
C) a critical member of the WTO.
D) a formal institution with strict regulations.
Q4) The Bretton Woods Conference established the European Union currency,the euro.
A)True
B)False
Q5) The two major developed African economies are
A) South Africa and Nigeria.
B) Nigeria and Kenya.
C) South Africa and Kenya.
Page 18
D) South Africa and the Central African Republic.
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Chapter 17: Appendix B: Export and Import Practices
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Q1) __________ is a stipulation that a letter of credit cannot be canceled without the seller's consent.
Q2) Factoring allows the exporter to be more competitive by selling on open account rather than by means of the more costly letter of credit method.
A)True
B)False
Q3) The two major reasons U.S.firms give for not exporting are (1)preoccupation with the vast American market and (2)reluctance to become involved in a new and unknown operation.
A)True
B)False
Q4) Free trade zones are areas designated by the government of a country for duty-free entry of any nonprohibited good.
A)True
B)False
Q5) A confirmed letter of credit guarantees payment to the seller.
A)True
B)False
Q6) The Incoterm acronym CIF (named destination port)refers to
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Chapter 18: Appendix C: Global Operations and Supply Chain Management
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Q1) For purchases of capital goods such as manufacturing equipment,many U.S.buying organizations now use "business-cycle costing" to analyze purchasing decisions.
A)True
B)False
Q2) ISO 9000
A) is the standard most used for quality in the United States.
B) is a set of five universal standards for a quality assurance system agreed to by the International Organization for Standardization (ISO).
C) ensures product quality.
D) guarantees the performance of suppliers.
Q3) What are the reasons for sourcing globally,and what options are available to a firm that wishes to engage in global sourcing?
Q4) A recent design process innovation,such as Dell's IdeaStorm site or Starbucks' MyStarbucksIdea.com site,involves what?
A) Participation of designers with representatives of suppliers.
B) Many iterative cycles of design and testing.
C) Selling products that have been produced in lot sizes of one.
D) Encouraging very broad input, including from general customers.
Page 20
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