International Economics
Exam Bank
Course Introduction
International Economics explores the flow of goods, services, and capital across national borders, examining both the theoretical foundations and real-world applications of global trade and finance. The course covers topics such as comparative advantage, trade policies, exchange rates, balance of payments, and the economic impact of globalization. Students will analyze the effects of international economic policies on countries at different stages of development, evaluate trends in trade and investment, and discuss current issues such as trade disputes and international economic cooperation. Through a mix of quantitative analysis and case studies, the course provides tools for understanding how economic relationships among nations influence growth, stability, and welfare.
Recommended Textbook
International Business Competing in the Global Market Place 9th editon by Charles W.
Available Study Resources on Quizplus
20 Chapters
2022 Verified Questions
2022 Flashcards
Source URL: https://quizplus.com/study-set/3070
Page 2
L. Hill
Chapter 1: Globalization
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60913
Sample Questions
Q1) The expansion of world trade implies that nations are becoming less dependent on each other for important goods and services.
A)True
B)False
Answer: False
Q2) A multinational enterprise (MNE)is any business that exports or imports products from other countries.
A)True
B)False
Answer: False
Q3) Globalization critics argue that the decline in unskilled wage rates is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: National Differences in Political Economy
Available Study Resources on Quizplus for this Chatper
97 Verified Questions
97 Flashcards
Source URL: https://quizplus.com/quiz/60912
Sample Questions
Q1) In Russia in the chaotic period following the collapse of communism,an outdated legal system,coupled with a weak police force and judicial system,allowed the Russian Mafia to demand "protection money" from business owners.Any business owner who rebelled had to face violent retribution.This violation of property rights exemplifies
A) private action
B) copyright violation
C) infrastructural failure
D) public liability
Answer: A
Q2) Which of the following philosophies can be traced back to the ancient Greek philosopher Aristotle?
A) Socialism
B) Individualism
C) Collectivism
D) Anarchism
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Political Economy and Economic Development
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60911
Sample Questions
Q1) _____ is required for a business environment to be conducive to innovation and entrepreneurial activity.
A) State ownership of means of production
B) Strong legal protection of property rights
C) Barriers to foreign trade and investment
D) Government regulation of the market
Answer: B
Q2) A market with a large number of consumers,with low living standards will have a relatively large market when measured in economic terms.
A)True
B)False
Answer: False
Q3) Some totalitarian regimes have fostered a market economy and strong property rights protection and have experienced rapid economic growth.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Differences in Culture
Available Study Resources on Quizplus for this Chatper
103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/60910
Sample Questions
Q1) _____ are social conventions concerning things such as the appropriate dress code in a particular situation,good social manners,eating with the correct utensils,neighborly behavior,and the like.
A) Values
B) Beliefs
C) Mores
D) Folkways
Q2) Folkways include rituals and symbolic behavior.
A)True
B)False
Q3) Ethical systems are:
A) a set of moral principles,or values,that are used to guide and shape behavior.
B) shared beliefs and rituals that are concerned with the realm of the sacred.
C) routine conventions of everyday life.
D) social rules that govern people's actions toward each other.
Q4) The protection of the right to private property is embedded within Islam.
A)True
B)False
Q5) Discuss the relationship between society and the nation-state.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Ethics in International Business
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60909
Sample Questions
Q1) The _____ occurs when a resource is shared by all,but owned by no one,is overused by individuals,resulting in its degradation.
A) Friedman effect
B) noblesse oblige
C) inequity aversion
D) tragedy of the commons
Q2) Why do managers behave in a manner that is unethical?
Q3) Discuss the cultural relativism approach to business ethics.What is the connection between this approach and the phrase "When in Rome do as the Romans"? How well does this approach hold up ethically?
Q4) Employees in a business often take their cue from business leaders,and if those leaders do not behave in an ethical manner,they might not either.
A)True
B)False
Q5) Milton Friedman's basic position is that the only social responsibility of business is to increase profits,so long as the company stays within the rules of law.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: International Trade Theory
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/60908
Sample Questions
Q1) The simple comparative advantage model assumed that trade does not change a country's stock of resources or the efficiency with which it utilizes those resources.
A)True
B)False
Q2) Do you think a new trade theorist would stress the role of luck and entrepreneurship? Explain.
Q3) Textile industry in a nation is characterized by vigorous domestic rivalry.Which of the following observations of this nation's international competency is most likely to be true?
A) The nation will have access to such basic factors of textile industry as natural resources.
B) The nation's textile firms will have a competitive advantage in international trade.
C) The domestic customers of the textile firms will be less demanding.
D) The nation's textile industry will lack the advanced factors that are necessary to be internationally competent.
Q4) Briefly differentiate between constant returns to specialization and diminishing returns to specialization.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: The Political Economy of International Trade
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60907
Sample Questions
Q1) Foreign producers typically agree to voluntary export restrictions because:
A) their manufacturing capacity is limited.
B) they can divert their exports to other countries and charge more for their products.
C) they fear far more damaging punitive tariffs or import quotas might follow if they do not.
D) they are required to by the World Trade Organization.
Q2) Import tariffs:
A) reduce the price of foreign goods.
B) create efficient utilization of resources.
C) reduce the overall efficiency of the world economy.
D) are unambiguously pro-consumer and anti-producer.
Q3) Tariff rate quotas are common in agriculture,where their goal is to:
A) reduce the use of synthetic fertilizers.
B) limit imports over quota.
C) increase agricultural imports.
D) increase foreign competition.
Q4) Explain how governments use administrative trade policies to boost exports and restrict imports.Provide an example of an administrative trade policy.
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Foreign Direct Investment
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60906
Sample Questions
Q1) Describe the situations when licensing is not a good option for a firm.
Q2) A country rejects FDI proposals in certain industries.It does so because the tangible advantages of such investments are lesser than potential costs like loss of employment and reduction of overall well-being.However,it aggressively pursues inviting foreign investments in sectors like infrastructure,education,and healthcare because of the benefits that accrue with them.Which political view of FDI is discussed in this example?
A) The pure market view
B) The free market view
C) The radical view
D) The pragmatic nationalist view
Q3) Why do many economists favor internalization theory as an explanation for FDI compared to Knickerbocker's theory?
Q4) Countries adopting a pragmatic stance pursue policies designed to maximize the national benefits and minimize the national costs.
A)True
B)False
Q5) What are the major drawbacks of licensing according to the internalization theory?
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Regional Economic Integration
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60905
Sample Questions
Q1) In early 2006,six CARICOM members and the United States established the _____,which was modeled on the EU's single market.
A) Central American Common Market
B) Central America Free Trade Agreement
C) Caribbean Single Market and Economy
D) North American Free Trade Area
Q2) Discuss the trend toward increased regional economic integration.
Q3) Explain how MERCOSUR has changed over time.What are the implications of these changes?
Q4) What was the main objection raised by those in the United States and Canada who opposed the ratification of the NAFTA?
A) Job losses
B) Balance of payment problems
C) Threat of competition from Asian companies
D) Threat of a loss of national sovereignty
Q5) How easy is it for countries to integrate?
Q6) Discuss the economic case for economic integration.How does it relate to trade theory?
Q7) Debate the ratification of the North American Free Trade Agreement.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: The Foreign Exchange Market
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60904
Sample Questions
Q1) Which of the following refers to the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates?
A) Currency pairing
B) Carry trade
C) Currency exchange
D) Currency swap
Q2) Carry trade is non-speculative in nature.
A)True
B)False
Q3) When two parties agree to exchange currency and execute the deal immediately,the transaction is a:
A) futures exchange.
B) carry trade.
C) spot exchange.
D) forward exchange.
Q4) Explain the notion of economic exposure.How can economic exposure be minimized?
Q5) The foreign exchange market is open for only 12 hours in a day.
A)True
B)False
Q6) Explain the difference between fundamental analysis and technical analysis.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: The International Monetary System
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60903
Sample Questions
Q1) Discuss the significance of the Jamaica Agreement.
Q2) The current system of foreign exchange is a mixed system of government intervention and speculative activity.
A)True
B)False
Q3) Which of the following arguments is in favor of floating exchange rates?
A) A country's ability to expand or contract its money supply should be limited by the need to maintain exchange rate parity.
B) Maintaining balance of trade equilibrium is not in the best interest of a country.
C) Countries can isolate themselves from uncertainties when they trade using a mutually agreed on exchange rate.
D) Governments can restore monetary control by removing the obligation to maintain exchange rate parity.
Q4) The IMF made pegging Mexican peso to the dollar,a condition for lending money to the Mexican government in the 1980s.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: The Global Capital Market
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60902
Sample Questions
Q1) A factor that makes the Eurocurrency market attractive to both depositors and borrowers is its lack of government regulation.
A)True
B)False
Q2) What are the advantages of global capital market in comparison with a purely domestic capital market?
Q3) Explain how equity loans and debt loans differ in terms of attractiveness to businesses.
Q4) Domestic currency deposits are regulated in most industrialized countries.
A)True
B)False
Q5) A _____ brings together those who want to invest money and those who want to borrow money.
A) consumer market
B) value chain
C) supply chain
D) capital market
Q6) What are the financial advantages that make the Eurocurrency market attractive to both depositors and borrowers?
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: The Strategy of International Business
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60901
Sample Questions
Q1) Discuss the factors that lead to pressure for local responsiveness.
Q2) _____ activities are basically concerned with creating the product,marketing and delivering the product to buyers,and providing support and after-sales service.
A) Support
B) Subordinate
C) Ancillary
D) Primary
Q3) Lenovo's ThinkPad laptop computers is designed in the United States,the case,keyboard,and hard drive are made in Thailand; the display screen and memory in South Korea; the built-in wireless card in Malaysia; and the microprocessor in the United States.In each case,these components are manufactured and sourced from the optimal location given current factor costs.In this example,Lenovo has:
A) vertical integration advantages.
B) a global web of value creation activities.
C) learning effects.
D) high local responsiveness.
Q4) What are learning effects? When are learning effects most significant?
Q5) Describe the benefits of global expansion for firms.
Q6) What is a core competence? Why is it essential to the success of the firm?
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: The Organization of International Business
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60900
Sample Questions
Q1) The need for coordination is high in firms trying to profit from location and experience curve economies.
A)True
B)False
Q2) A knowledge network is a network for transmitting information within an organization that is based on formal organizational structure.
A)True
B)False
Q3) What are the main strengths and weaknesses of the worldwide product division structure?
Q4) In a matrix structure all roles are viewed as integrating roles.
A)True
B)False
Q5) Bureaucratic control involves personal contact with subordinates.
A)True
B)False
Q6) What are output controls?
Q7) What is a knowledge network? What is the advantage of such a system?
Q8) What are the three dimensions of organizational structure?
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Entry Strategy and Strategic Alliances
Available Study Resources on Quizplus for this Chatper
104 Verified Questions
104 Flashcards
Source URL: https://quizplus.com/quiz/60899
Sample Questions
Q1) Costs that an early entrant has to bear that a later entrant can avoid are known as first-mover costs.
A)True
B)False
Q2) Draw a distinction between firms based on their core competency.
Q3) Exporting is most appropriate when lower-cost locations for manufacturing the product can be found abroad.
A)True
B)False
Q4) Firms pursuing global standardization or transnational strategies tend to prefer joint-venture arrangements over wholly owned subsidiaries.
A)True
B)False
Q5) Acquisitions are quick to execute.
A)True
B)False
Q6) What are the two methods of entering foreign marketing using a wholly owned subsidiary?
Q7) Compare and contrast licensing agreements and franchising agreements.
Page 17
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Exporting, Importing, and Countertrade
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60898
Sample Questions
Q1) A banker's acceptance _____.
A) is payable to the drawee immediately on presentation in a bank
B) is a time draft that has been drawn on and accepted by a bank
C) is a sight draft that can be used as a negotiable instrument in banks
D) allows a buyer possession of the merchandise without signing any formal documents
Q2) Which of the following is a major advantage of using a letter of credit?
A) It gives the importer time to resell the merchandise before payment.
B) It guarantees the exporter pre-export financing.
C) It helps international traders engage in trade with trust.
D) It guarantees the importer extra funds for other purposes.
Q3) Discuss the importance of the Export-Import Bank,its goals,and its operations.
Q4) A _____ is issued to the exporter by the common carrier transporting the merchandise and serves as a receipt,a contract,and a document of title.
A) bill of lading
B) sight draft
C) time draft
D) letter of credit
Q5) What are the typical problems that novice exporters face when trying to export?
Q6) Compare and contrast time drafts and sight drafts.
Page 18
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Global Production, Outsourcing, and Logistics
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60897
Sample Questions
Q1) With a(n)_____ system,suppliers,shippers,and the purchasing firm can communicate with each other with no time delay.
A) CAD
B) JIT
C) CAM
D) EDI
Q2) According to the concept of economies of scale,as plant output expands,_____.
A) productivity decline
B) total costs decrease
C) unit costs decrease
D) utilization of capital decline
Q3) An advantage of engaging in in-house production of products and components is that _____.
A) the firm will have fewer subunits to control by making products in-house
B) it will help the firm capture more orders from other countries
C) it enables a firm to protect the proprietary technologies that it has
D) firms can make better use of the location advantages of certain countries
Q4) The firm that sources from independent suppliers has fewer subunits to control.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Global Marketing and RD
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/60896
Sample Questions
Q1) Consumers in highly developed countries value ____ as compared to their counterparts in less developed nations.
A) product price
B) product reliability
C) product attributes
D) product value
Q2) For a product development team to function effectively and meet all its development milestones,the team should be composed of at least one member from each key function.
A)True
B)False
Q3) How do levels of economic development affect consumer behavior? What are the implications for marketing strategy?
Q4) The goal of market segmentation is to optimize the fit between the purchasing behavior of consumers in a given segment and the marketing mix,thereby maximizing sales to that segment.
A)True
B)False
Q5) What factors affect the success of a firm's international communications?
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Global Human Resource Management
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60895
Sample Questions
Q1) A firm that adopts a polycentric approach to staffing is likely to suffer from cultural myopia.
A)True
B)False
Q2) _____ makes it difficult to evaluate the performance of expatriate managers objectively.
A) Cultural relativism
B) Internal documentation
C) Unintentional bias
D) Others-orientation
Q3) Which of the following is true regarding approaches to labor relations?
A) International businesses use mostly similar approaches to international labor relations.
B) The trend is toward greater decentralized control of international labor relations.
C) Historically,most international businesses have centralized the labor relations function.
D) Many firms are now using the threat to move production to another country in their negotiations with unions.
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Accounting and Finance in the International Business
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/60894
Sample Questions
Q1) A German firm raising capital by selling stock through the London Stock Exchange is an example of _____.
A) transnational financing
B) service export
C) indirect financing
D) transnational investment
Q2) Describe the three exchange rates that Lessard and Lorange pointed out.
Q3) According to Lessard-Lorange model,_____ is the spot exchange rate forecast for the end of the budget period.
A) projected
B) initial
C) ideal
D) ending
Q4) Accounting standards _____.
A) are rules for preparing financial statements
B) define the levels of tax-payments needed
C) specify the rules for performing an audit
D) refer to the technical process of balancing accounts
To view all questions and flashcards with answers, click on the resource link above. Page 22
Q5) What are the advantages of using royalties and fees to move money across borders?