International Trade and Investment Review Questions
Course Introduction
This course explores the fundamental theories and practices of international trade and investment, examining how goods, services, and capital flow across borders in the global economy. Students will analyze the economic, political, and institutional factors influencing international trade, including comparative advantage, trade policy, tariffs, and trade agreements. The course also covers the role of multinational enterprises, foreign direct investment, and the impact of globalization on national economies and development. Through case studies and real-world examples, students will gain a comprehensive understanding of the opportunities and challenges associated with participating in the international marketplace.
Recommended Textbook
Global Business 3rd Edition by Mike Peng
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17 Chapters
1326 Verified Questions
1326 Flashcards
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Page 2
Chapter 1: Globalizing Business
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) The emerging markets of the world are placed at the top of the global economic pyramid.
A)True
B)False
Answer: False
Q2) The liability of foreignness is the inherent disadvantage faced by _____.
A) domestic firms against other domestic firms that have engaged in global business
B) foreign firms in host nations due to their non-native status
C) domestic firms from foreign firms setting up in their country
D) foreign firms from their home country governments
Answer: B
Q3) On the global economic pyramid,the Triad refers to developed economies consisting of North America,Western Europe,and Japan.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Understanding Formal Institutions: Politics, Laws, and Economics
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Which of the following is an example of an intellectual property?
A) Home
B) Scientist's laboratory
C) Office
D) Website
Answer: D
Q2) An institutional framework is made up of formal and informal institutions governing individual and firm behavior.
A)True
B)False
Answer: True
Q3) Patents are exclusive rights of firms to use specific names and brands.
A)True
B)False
Answer: False
Q4) Proposition 1 of the institution-based view specifically concerns bounded rationality.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Emphasizing Informal Institutions: Cultures, Ethics, and Norms
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Which of the following is one of the five dimensions outlined in the Dimensions Approach?
A) Language
B) Work ethics
C) Religion
D) Uncertainty avoidance
Answer: D
Q2) In high-context cultures,communication is usually taken at face value without much reliance on unspoken context.
A)True
B)False Answer: False
Q3) The Ronen and Shenkar cluster divides the world into eight civilizations.
A)True
B)False Answer: False
Q4) Confucianism has been a leading philosophy in East Asian business ethics.
A)True
B)False Answer: True
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Chapter 4: Leveraging Resources and Capabilities
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78 Flashcards
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Sample Questions
Q1) Articulate the benefits of offshoring.
Q2) A firm's financial resources and capabilities are an example of its intangible assets. A)True
B)False
Q3) An original brand manufacturer includes research and development in its value chain activities.
A)True
B)False
Q4) According to the VRIO framework,only valuable and rare resources and capabilities have the potential to provide temporary competitive advantage for a firm.
A)True
B)False
Q5) In global business,social complexity refers to the socially intricate and interdependent ways firms are typically organized.
A)True
B)False
Q6) Illustrate with examples the difference between OEMs,ODMs,and OBMs.
Q7) Identify the four categories of tangible resources that a firm can possess.
Page 6
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Chapter 5: Trading Internationally
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Which of the following is true of voluntary export restraints?
A) It is an extra tax imposed by a country on its exports.
B) It is an example of a tariff barrier.
C) It is a government payment to domestic firms.
D) It is an export quota levied by a country on the quantity of its exports.
Q2) Protectionism is similar to mercantilism as they both advocated _____.
A) dividing the nations of the world into three categories based on its innovation capabilities
B) developing comparative advantages based on a nation's locally abundant factors
C) specializing in economic activities in which a nation can have an absolute advantage
D) government involvement in international trade
Q3) Which of the following is a modern trade theory?
A) Comparative advantage
B) National competitive advantage
C) Mercantilism
D) Absolute advantage
Q4) Discuss the political arguments against free trade.
Q5) Briefly explain the classical theory of mercantilism.
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Chapter 6: Investing Abroad Directly
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78 Flashcards
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Sample Questions
Q1) Compared to licensing,FDI increases dissemination risks.
A)True
B)False
Q2) _____ is the amount of FDI moving in a given period (usually a year)in a certain direction.
A) FDI stock
B) FDI flow
C) Horizontal FDI
D) Vertical FDI
Q3) Compared to licensing,FDI provides more direct and tighter control over foreign operations.
A)True
B)False
Q4) Dissemination risk refers to the cost that a firm has to endure even when its investment turns out to be unsatisfactory.
A)True
B)False
Q5) In order to become an MNE,an exporter has to undertake FDI.
A)True
B)False
8
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Chapter 7: Dealing with Foreign Exchange
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) _____ is a country's international transaction statement,which includes merchandise trade,service trade,and capital movement.
A) Capital flight
B) Currency hedging
C) Purchasing power parity
D) Balance of payments
Q2) Basic economic theory suggests that the price of a commodity is most fundamentally determined by its supply and demand.
A)True
B)False
Q3) _____ is defined as the conversion of one currency into another at Time 1,with an agreement to revert it back to the original currency at a specific Time 2 in the future.
A) Currency swap
B) Currency hedging
C) Spot transaction
D) Forward transaction
Q4) Briefly explain the cause for the fall of the Bretton Woods System.
Q5) What determines the success and failure of currency management around the globe?
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Chapter 8: Capitalizing on Global and Regional Integration
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Which of the following is a WTO agreement regulating intellectual property?
A) GATT
B) GATS
C) MFA
D) TRIPS
Q2) _____ is the organization underpinning regional economic integration in Southeast Asia.
A) ASEAN
B) APEC
C) ANZCERTA
D) UNASUR
Q3) Local content requirements is an example of a nontariff barrier.
A)True
B)False
Q4) Explain the formation of APEC.
Q5) TRIPS is a WTO agreement governing the international trade of services.
A)True
B)False
Q6) Discuss the formation of GATT and the issues that precipitated the formation of the WTO (Post GATT).
Page 10
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Chapter 9: Growing and Internationalizing the Entrepreneurial Firm
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78 Flashcards
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Sample Questions
Q1) Which of the following types of entrepreneurs are best described as people who start,grow,and sell several businesses throughout their career?
A) Social entrepreneurs
B) Lifestyle entrepreneurs
C) Serial entrepreneurs
D) Cooperative entrepreneurs
Q2) Entrepreneurial opportunities exist to lower transaction costs and bring distant groups of people,firms,and countries together.
A)True
B)False
Q3) Which of the following nations has the lowest level of VC investment,as a percentage of GDP,in the world?
A) Sweden
B) The United States
C) Greece
D) South Africa
Q4) Explain the institution-based views in light of their effect on entrepreneurial success.
Q5) Explain the concept of microfinance.
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Chapter 10: Entering Foreign Markets
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78 Flashcards
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Sample Questions
Q1) Late movers face greater technological and market uncertainties.
A)True
B)False
Q2) Natural resource-seeking firms have compelling reasons to enter culturally and institutionally distant countries.This is a counter example of _____.
A) the stage model
B) large-scale entry
C) the equity mode of entry
D) the country-of-origin effect
Q3) _____ are the most basic non-equity mode of entry,capitalizing on economies of scale in production concentrated in the home country and providing better control over distribution.
A) Indirect exports
B) Direct exports
C) Turnkey projects
D) Acquisitions
Q4) Define a wholly owned subsidiary (WOS).What are the two primary means to set up a WOS?
Q5) Identify the advantages and disadvantages that pertain to first movers.
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Chapter 11: Managing Global Competitive Dynamics
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) _____ determines the institutional mix of competition and cooperation that gives rise to the market system and also seeks to balance efficiency and fairness.
A) Competition policy
B) Antitrust policy
C) Mutual forbearance
D) Fairness policy
Q2) The defender strategy centers on local assets in areas in which MNEs are weak.
A)True
B)False
Q3) A price leader is a firm that ____ in the industry.
A) sets the highest prices and has a low market share
B) sets the lowest prices
C) sets acceptable prices and has a dominant market share
D) sets the globally consistent price
Q4) Define predatory pricing.Why is it difficult to win a domestic predation case in the United States?
Q5) Explain the possible outcomes of an antidumping investigation in the United States.
Q6) Explain how interaction differs between tacit collusion and explicit collusion.
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Chapter 12: Making Alliances and Acquisitions Work
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Licensing is a form of equity-based alliance.
A)True
B)False
Q2) Discuss few ways of improving the odds for acquisition success.
Q3) Which of the following motives for acquisition faces the resource-based issue of access to complementary resources?
A) Collaborative
B) Hubristic
C) Managerial
D) Synergistic
Q4) In the context of alliance formation,shared capabilities is one of the driving forces in deciding whether to take a contract or an equity approach.
A)True
B)False
Q5) In the context of acquisitions,synergistic motives destroy value while hubris and managerial motives add value.
A)True
B)False
Q6) Describe the stages in the formations of alliances.
Page 14
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Chapter 13: Strategizing,Structuring,and Learning around the World
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78 Flashcards
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Sample Questions
Q1) In which of the following strategies is knowledge mostly developed and retained at the center and key locations?
A) Global standardization strategy
B) Transnational strategy
C) Localization strategy
D) Home replication strategy
Q2) Knowledge acquisition,one of the knowledge management elements,faces the common problem of _____.
A) "How does it help me? " syndrome
B) failure to share and integrate external knowledge
C) "Not invented here " syndrome
D) absorptive capacity
Q3) The global standardization strategy,despite its complexity,is still the best option at being cost effective,locally responsive,and learning-driven.
A)True
B)False
Q4) Cost pressures often push MNEs to adapt locally.
A)True
B)False
Page 15
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Chapter 14: Competing on Marketing and Supply Chain Management
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Elaborate on the major concerns faced by MNEs doing business around the world.
Q2) ____ refers to the expenditures a customer is willing to pay for a product.
A) Total cost
B) Price
C) Total cost of ownership
D) Price elasticity
Q3) As one of the Ps in the marketing mix,place is also often referred to as the distribution channel.
A)True
B)False
Q4) Firms dealing with global agnostics can leverage global brands and their relatively more standardized products and services.
A)True
B)False
Q5) In the context of achieving alignment,supply chain members of less standing exercise greater bargaining power.
A)True
B)False
Q6) Elaborate on the triple As in supply chain management.
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Chapter 15: Managing Human Resources Globally
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Sample Questions
Q1) Describe the different roles of expatriates.
Q2) The advantage of hiring employees who are host-country nationals is that it facilitates control by headquarters.
A)True
B)False
Q3) Performance appraisal only entails the evaluation of employee performance for performance.
A)True
B)False
Q4) _____ is specific preparation to do a particular job.
A) Appraisal
B) Onboarding
C) Tracking
D) Training
Q5) Which of the following staffing approaches focuses on the norms and practices of the host country?
A) Polycentric approach
B) Geocentric approach
C) Regiocentric approach
D) Ethnocentric approach
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Chapter 16: Financing and Governing the Corporation
Globally
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) The vast majority of large firms throughout continental Europe,Asia,Latin America,and Africa feature _____ ownership.
A) concentrated state
B) concentrated family
C) diffused family
D) diffused state
Q2) The main external governance mechanism is the _____.
A) market for corporate control
B) market for product competition
C) market for private equity
D) market for stock options
Q3) Agency relationship refers to the relationship between different shareholders.
A)True
B)False
Q4) Shareholders purchase stock both for dividends and for the growth potential of the stock.
A)True
B)False
Q5) Explain the role of the Board of Directors.
Page 18
Q6) Elaborate on the principal-principal conflicts.
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Page 19
Chapter 17: Managing Corporate Social Responsibility
Globally
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Sample Questions
Q1) The free market school has provided much of the intellectual underpinning for globalization spearheaded by MNEs.
A)True
B)False
Q2) Which of the following corporate social responsibilities with regard to employment practices is recommended for MNEs by international organizations?
A) Restrict collective bargaining
B) Give advance notice of plant closures and mitigate the adverse effects
C) Refrain from improper or illegal involvement in local politics
D) Consult governmental authorities and national employers' and workers' organizations to ensure conformance to the economic and social development policies
Q3) Top management at a reactive firm not only supports and champions CSR activities,but also views CSR as a source of differentiation that permeates throughout the corporate DNA.
A)True
B)False
Q4) Elaborate on the resource-based view to CSR.
Q5) Elaborate on the CSR movement.
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