International Economics Exam Practice
Tests
Course Introduction
International Economics explores the theories, policies, and real-world dynamics governing the exchange of goods, services, and capital across national borders. The course analyzes topics such as comparative advantage, trade patterns, tariffs and trade barriers, international financial markets, exchange rates, and the economic impact of globalization. Students will also examine contemporary issues such as regional trade agreements, the role of international institutions, and the challenges and opportunities facing both developed and developing economies in a rapidly integrating world.
Recommended Textbook
International Business The Challenges of Globalization 7th Edition by John J. Wild
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16 Chapters
1669 Verified Questions
1669 Flashcards
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Page 2
Chapter 1: Globalization
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) The power of the General Agreement on Tariffs and Trade (GATT)to settle trade disputes is what sets it apart from the World Trade Organization (WTO).
A)True
B)False
Answer: False
Q2) ________ are all goods and services sold abroad and sent out of a country.
A)Net national products
B)Exports
C)Gross domestic products
D)Imports
Answer: B
Q3) According to the opponents of globalization,which of the following occurs as a result of worker dislocation brought about by globalization?
A)increased labor costs for companies
B)lower workers' wages in developed nations
C)surfeit of jobs in developed nations
D)increased investment in individual education
Answer: B
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3
Chapter 2: Cross-Cultural Business
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) According to Hofstede's framework,a culture with ________ values security and places its faith in strong systems of rules and procedures in society.
A)large uncertainty avoidance
B)low power distance
C)short-term orientation
D)high individualism
Answer: A
Q2) The practice of exchanging rings at weddings,which was initially a pagan ritual,is now followed by most people across the world.Which of the following does this illustrate?
A)cultural literacy
B)cultural encoding
C)cultural diffusion
D)cultural lag
Answer: C
Q3) Social status is determined by family heritage,income,and occupation.
A)True
B)False
Answer: True
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Chapter 3: Politics,Law,and Business Ethics
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) A legal tradition based on religious teachings is called ________ law.
A)democratic
B)common
C)civil
D)theocratic
Answer: D
Q2) Economic socialism won the battle over communist totalitarianism and capitalism.
A)True
B)False
Answer: False
Q3) Corporate social responsibility is the practice of going beyond legal obligations to actively balance commitments to investors,customers,other companies,and communities.
A)True
B)False
Answer: True
Q4) Totalitarian governments tend to favor private ownership of economic resources.
A)True
B)False
Answer: False
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Chapter 4: Economics and Emerging Markets
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) A company is conducting a research on new markets by comparing countries in terms of their human development index (HDI)scores.The company wishes to expand into a market where individuals experience a very high level of total well-being.Which of the following countries would the company most likely choose?
A)Russia
B)Mexico
C)China
D)Japan
Q2) Supply and demand are dictated by ________.
A)government ownership
B)free enterprise
C)the price mechanism
D)the management's decisions
Q3) When the assets of a country are owned by the government,there seems to be more incentive to eliminate waste.
A)True
B)False
Q4) Does greater economic freedom guarantee a higher standard of living? Provide examples of two specific countries to support your answer.
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Chapter 5: International Trade
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100 Flashcards
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Sample Questions
Q1) Which of the following is an argument offered by the new trade theory?
A)It is in line with the factor proportions theory.
B)There are gains to be made from specialization and increasing economies of scale.
C)The companies first to market forgo the opportunities to create barriers to entry.
D)Market forces alone play a role in assisting the home companies in a country.
Q2) A third country,Funland,also produces food and drinks.In Funland,one resource unit produces 8 tons of food and 6 tons of drinks.Which of the following is true about Funland,Foodland,and Drinkland?
A)Funland has a comparative advantage in producing drinks.
B)Funland has a comparative advantage in producing food.
C)Funland has an absolute advantage in producing food.
D)Funland has an absolute advantage in producing drinks.
Q3) National competitive advantage theory states that a nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade.
A)True
B)False
Q4) Discuss the factor proportions theory and describe the evidence on this theory.
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Chapter 6: Business-Government Trade Relations
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) The major purpose of foreign trade zones is to implement barriers to trade and commerce.
A)True
B)False
Q2) Freeland's protection of its national identity is an example of a(n)________.
A)political motive
B)economic motive
C)cultural motive
D)social motive
Q3) What is meant by dumping? Describe the various roles of the World Trade Organization,including when a country is accused of dumping.
Q4) Transit tariffs have been almost entirely eliminated worldwide through international trade agreements.
A)True
B)False
Q5) Write a short note on the World Trade Organization and its influence on the environment.
Q6) Explain how tariffs protect domestic producers,and describe how a foreign trade zone might offset the effects of tariffs.
Page 8
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Chapter 7: Foreign Direct Investment
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104 Verified Questions
104 Flashcards
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Sample Questions
Q1) The realization that companies can start production in the most efficient and productive locations in the world and export to markets worldwide led to a new surge of foreign direct investment into ________.
A)First World nations
B)low-income nations
C)high-income nations
D)newly industrialized nations
Q2) A home country encourages outflows of foreign direct investment because it
A)helps in replacing jobs at home
B)sends resources out of the home country
C)tends to increase the long-term competitiveness of firms
D)takes the place of all the exports and imports in the country
Q3) In the maturing product stage of the international product life cycle theory,increased competition creates pressures to reduce production costs.
A)True
B)False
Q4) Explain the various methods that host countries use to restrict and promote foreign direct investment.
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Chapter 8: Regional Economic Integration
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) When trade diversion occurs,buyers will likely pay less for products.
A)True
B)False
Q2) In regional economic integration,industries that require mostly unskilled labor tend to shift production to low-wage nations within a trading bloc.
A)True
B)False
Q3) If all countries in the bloc are asked to give up the greatest amount of sovereignty,they would most likely be joining a(n)________.
A)economic union
B)free trade area
C)customs union
D)political union
Q4) No proposed legislation becomes EU law unless the ________ votes it into law.
A)Council of the European Union
B)European Parliament
C)Court of Auditors
D)European Commission
Q5) Discuss the benefits and drawbacks of regional integration.
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Chapter 9: International Financial Markets
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) If ABC Software simultaneously purchases and sells foreign exchange for two different dates,the company is said to be involved in ________.
A)increasing its foreign exchange rate risk
B)conducting a currency swap
C)entering an arbitrage situation
D)buying and selling at the spot rate
Q2) ABC Software has had difficulty obtaining funds to expand.A friend of the CEO recommends that the company should explore an offshore financial center,which
A)is a country or territory whose financial sector features very few regulations and few,if any,taxes
B)tends to be characterized by political and economic instability making,it an inexpensive but risky source of funds
C)typically lends money to companies that have had difficulty getting financing elsewhere because of poor credit records
D)is a financial center located in a resort community and is characterized by poor telecommunications infrastructure
Q3) Differentiate between currency speculation and currency arbitrage.
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Chapter 10: International Money System
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107 Flashcards
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Sample Questions
Q1) Predictable exchange rates reduce the need for ________.
A)currency conversion
B)currency swap
C)currency depreciation
D)currency hedging
Q2) Low unemployment rates can lead to higher inflation.
A)True
B)False
Q3) IMF members formalized the existing system of floating exchange rates as the new international monetary system by drafting the so-called ________.
A)Bretton Woods Agreement
B)Smithsonian Agreement
C)Plaza Accord
D)Jamaica Agreement
Q4) ________ was the first nation to implement the gold standard in the early 1700s.
A)The United States
B)Britain
C)France
D)Japan
Q5) Briefly describe the gold standard,its advantages,and why it collapsed.
Page 12
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Chapter 11: International Strategy and Organization
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Strategy is the set of planned actions that managers take to help a company meet its objectives.
A)True
B)False
Q2) Which of the following strategies is appropriate for companies in industries where buyer preferences do not converge across national borders?
A)retrenchment strategy
B)global strategy
C)multidomestic strategy
D)mass customization strategy
Q3) The closing of factories with unused capacity is an example of a stability strategy.
A)True
B)False
Q4) Global products are most commonly seen in industries where there is ________.
A)little convergence of buyer preference across national borders
B)low pressure to contain costs
C)high demand for customized products
D)significant price competition
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Page 13
Chapter 12: Analyzing International Opportunities
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) Which of the following statements is true about country image and its effects on global companies?
A)It embodies all important facets of a nation's business environment.
B)If a country's image is positive in one product class,it tends to be positive in all other product classes as well.
C)An image,once formed,seldom changes over time.
D)Products made in emerging countries are evaluated more positively than products made in developed countries.
Q2) The potential to conduct written surveys is independent of the literacy rates among the local population.
A)True
B)False
Q3) When creating a market-potential indicator for an emerging market,market consumption capacity is often estimated from the ________.
A)growth in gross domestic product
B)percentage of a market's population in the middle class
C)gross domestic product at purchasing power parity
D)amount of energy the total population produces
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Chapter 13: Selecting and Managing Entry Modes
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106 Flashcards
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Sample Questions
Q1) Explain franchising with examples.Mention the advantages and disadvantages associated with franchising.How is franchising different from licensing?
Q2) A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.
A)True
B)False
Q3) Which of the following types of joint ventures involve parties investing together in downstream business activities?
A)backward integration
B)forward integration
C)multistage
D)buyback
Q4) Which of the following is a method of export/import financing?
A)offset
B)buyback
C)switch trading
D)documentary collection
Q5) What are the different financing methods available to exporters and importers?
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Chapter 14: Developing and Marketing Products
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103 Flashcards
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Sample Questions
Q1) The value of a product relative to its weight and volume is called its ________.
A)face value
B)value investing
C)real value
D)value density
Q2) A(n)________ channel provides buyers with location convenience because of the large number of outlets through which a product is sold.
A)intensive
B)exclusive
C)one-level
D)zero-level
Q3) Explain the effect of counterfeit goods and black markets on international product strategies.
Q4) The physical path a product follows on its way to customers is called a promotional channel.
A)True
B)False
Q5) How can a lack of market understanding,theft,and corruption affect distribution?
Q6) How does the dual extension method work as a promotional strategy?
Page 16
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Chapter 15: Managing International Operations
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Sample Questions
Q1) Discuss the standardization versus adaptation decision for managers when considering production facilities,and describe considerations for managers when acquiring fixed assets.
Q2) A fixed asset can also be referred to as a ________ asset.
A)liquid
B)current
C)tangible
D)trading account
Q3) ________ refers to the foreign direct investment in factories,equipment,and land that cannot be pulled out of the market quickly.
A)Hot money
B)Patient money
C)Fiat money
D)Key money
Q4) Patient money is the cash that can be quickly withdrawn from a market in times of crisis.
A)True
B)False
Q5) What are the advantages of American Depository Receipts (ADRs)?
Q6) What role does flexibility play in the make-or-buy decision?
Page 17
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Chapter 16: Hiring and Managing Employees
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Sample Questions
Q1) Large international companies tend to make high-level labor decisions at the home office because ________.
A)it creates a sense of unity and solidarity between the labour unions and management members
B)managers in the home office are better equipped than managers in the host-country office,to handle matters that affect workers personally
C)it places decisions that have a direct impact on host-country workers' lives in the hands of the home-country experts
D)it gives them greater control over their network of operations around the world
Q2) Which of the following constitutes the most basic level of training to prepare managers for international assignments?
A)environmental briefings
B)language training
C)cultural assimilation
D)field experience
Q3) What factors influence the wages of nonmanagerial workers?
Q4) Briefly explain how companies compensate managers in international markets.
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