International Trade Exam Solutions
Course Introduction
International Trade explores the theories, policies, and real-world dynamics shaping the exchange of goods and services across national borders. The course examines the fundamental principles of comparative advantage, gains from trade, and the impact of trade policies such as tariffs, quotas, and trade agreements. Students will analyze the role of international organizations, trade blocs, and economic integration in global commerce, alongside the challenges of globalization, protectionism, and trade disputes. Emphasis is placed on understanding the effects of international trade on economic growth, employment, and income distribution within and among countries.
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International Business Opportunities and Challenges v2.0 by Mason A. Carpenter
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15 Chapters
1488 Verified Questions
1488 Flashcards
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Chapter 1: Introduction
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Sample Questions
Q1) A(n) _____ is defined as an individual whose interests may be affected as the result of what another individual or organization does.
A)intrapreneur
B)entrepreneur
C)stakeholder
D)strategist
E)importer
Answer: C
Q2) _____ refers to developing a new product or service in an already existing business.
A)Entrepreneurship
B)Strategic management
C)SWOT
D)Globalization
E)Intrapreneurship
Answer: E
Q3) A _____ is the central,integrated,and externally oriented concept of how an organization will achieve its performance objectives.
Answer: s trategy
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Chapter 2: International Trade and Foreign Direct Investment
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Q1) Specific tariffs are:
A)fixed taxes that are imposed on the customers irrespective of the value of the product or the service.
B)taxes that are levied as a fixed charge,regardless of the value of the product or service.
C)tariffs that are calculated as a percentage of the value of the product or service.
D)taxes that are levied on the exporters depending on the value of the products or the service being provided.
E)taxes that are levied on the producers of specific goods as decided by the ministry in charge of the finances of a country.
Answer: B
Q2) The strategy to promote exports by imposing restrictions on imports is called: A)capitalism.
B)protectionism.
C)liberalization.
D)mercantilism.
E)free trade.
Answer: B
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Chapter 3: Culture and Business
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Q1) How can we effectively deal with the problems of cross-cultural interaction?
Answer: Much of the problem in any cross-cultural interaction stems from our expectations.The challenge is that whenever we deal with people from another culture,whether in our own country or globally,we expect people to behave as we do and for the same reasons.Culture awareness most commonly refers to having an understanding of another culture's values and perspective.This does not mean automatic acceptance.It simply means understanding another culture's mind-set.It also means understanding its history,economy,society and the impact that it had on what people think.This would help in the proper interpretation of someone's words and actions,which would mean that one could effectively interact with them.
Q2) In theory,most global firms have clear guidelines articulating antidiscrimination policies whereas in reality,they routinely self-censor.
A)True
B)False
Answer: True
Q3) In _____ cultures,men cut tough and independent personas,while women cultivate modesty and quality of life.
Answer: masculine
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Chapter 4: World Economies
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Q1) Per capita gross domestic product refers to:
A)the value of the GDP divided by the population of the country.
B)the value of all the goods and services produced by a country in a single year.
C)the value of the GDP adjusted for purchasing power.
D)an economic theory that adjusts the exchange rate between countries to ensure that a good is purchased for the same price in the same currency.
E)the sum value of all goods and services produced in the country valued at prices prevailing in the United States.
Q2) The early 1980s saw the gradual transition of the Chinese economy from a centrally planned economy toward a market-driven economy.
A)True
B)False
Q3) The _____ represents the monetary union of twenty-seven European countries.
Q4) A(n) _____ is a country that can be defined as a society transitioning from a centrally managed economy to a free market-oriented economy.
Q5) In the Human Development Index,the standard of living is measured by _____(PPP US$)
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Page 6
Chapter 5: Global and Regional Economic Cooperation and Integration
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Q1) The _____ program of the United Nations helps to advance sustainable business models and markets in order to contribute to the initiative's overarching objective of helping to build a more sustainable and inclusive global economy.
Q2) The European Union is an example of an economic union because:
A)the union frames the economic policies of the member countries individually. B)some areas of the member countries have economic and other laws that are more free-market-oriented than the country's national laws.
C)the union frames common administrative policies for the member countries. D)member countries are free to independently determine trade policies with nonmember nations.
E)the member countries have adopted common economic policies.
Q3) The _____ refers to an economic trade agreement that specifically allowed Iceland,Liechtenstein,and Norway to participate in the EU's single market without a conventional EU membership.
Q4) What are the advantages that European Union (EU) enjoys that has led it to become one of the most successful examples of regional economic cooperation?
Q5) The _____ provides the political leadership for the EU.
Q6) What is antidumping?
Page 7
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Chapter 6: International Monetary System
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Sample Questions
Q1) What was the significance of the Bretton Woods Agreement in the international monetary market?
Q2) The World Bank consists of two main bodies which are the:
A)Asian Development Bank and EBRD.
B)Inter-American Development Bank and AFDB.
C)World Trade Organization and GATT.
D)International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
E)IBRD and the International Development Association (IDA).
Q3) The Bretton Woods Agreement provided for the devaluation of a currency in order to enable countries to manage temporary but serious downturns.
A)True
B)False
Q4) What was the Smithsonian Agreement?
Q5) How did World War I combined with the Great Depression at a later period contribute to the collapse of the gold standard?
Q6) _____ became the first nation to borrow from the IMF.
Q7) The _____ is the official currency of China.
Q8) What was the impact of the 2008 global crisis on the IMF?
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Chapter 7: Foreign Exchange and the Global Capital Markets
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Q1) What is a bid and how does it differ from an offer?
Q2) Companies use hedging as a way to protect themselves if there is a time lag between when they bill and receive payment from a customer.
A)True
B)False
Q3) _____ is defined as the rate at which the market converts one currency into another.
Q4) An organization makes use of the spot rate for making an immediate payment.The organization does not face the risk of the currency increasing or decreasing in value.
A)True
B)False
Q5) The _____ is the currency market for transactions at forward rates.
Q6) Typically,the sell or the ask is always cheaper than the bid or the buy.
A)True
B)False
Q7) What do you understand by the term "world financial centers"?
Q9) Cross-currency pairs that include the U.S.dollar are called the "_____." Page 9
Q8) What is the primary source of appeal of the Eurocurrency market for the borrowers?
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Page 10
Chapter 8: International Expansion and Global Market Opportunity Assessment
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Sample Questions
Q1) Home-market norms tend to remain the same over time irrespective of the shifting demographics due to immigration or aging populations.
A)True
B)False
Q2) If the acquiring firm is in a country with a strong currency,acquisitions becomes expensive for the acquiring firm.
A)True
B)False
Q3) In a truly global industry,the core product is standardized,the marketing approach is relatively uniform,and competitive strategies are integrated in different international markets.
Q4) The rate of industry change remains relatively the same from one industry to the next in one financial year.
A)True
B)False
Q5) What are the three steps in the PESTEL analysis?
Q6) When entering a new market,the two typical dimensions of corporate fit are _____ and the firm's risk tolerance.
Page 11
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Chapter 9: Exporting,Importing,and Global Sourcing
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Sample Questions
Q1) What are the investment modes of entry into a foreign country?
Q2) Multinational companies may purchase a local supplier to directly control the supply of raw materials.This is known as:
A)horizontal integration.
B)diversification.
C)vertical integration.
D)branding.
E)underwriting.
Q3) Which of the following can also function as collateral against loans?
A)Certificate of origin
B)Export declaration
C)License
D)Customs invoice
E)Bill of lading
Q4) One of the drawbacks of countertrade is the quality of goods received which are often useless or of poor quality.
A)True
B)False
Q5) What are the advantages of outsourcing?
Q6) What are the hidden costs of outsourcing?
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Chapter 10: Strategy and International Business
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Sample Questions
Q1) _____ strategy is highly desirable and appropriate for many industries,given the differences across markets and the similarities being fostered by the flatteners.
A)Differentiation
B)Global
C)Cost-leadership
D)Multidomestic
E)Transnational
Q2) In Holland,KFC makes a potato-and-onion croquette,while in France it sells pastries alongside chicken.KFC:
A)has centralized its business processes to enable it to provide the services mentioned.
B)assumes that consumer needs and desires vary by country.
C)assumes that the world is flat.
D)sells the same products in the same way in every country.
E)is following the cost-leadership strategy.
Q3) Only the primary activities make up a firm's value chain.
A)True
B)False
Q4) What is staging and pacing?
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Chapter 11: Global Entrepreneurship and Intrapreneurship
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Sample Questions
Q1) A(n) _____ is one that seeks to systematically promote the spirit of intrapreneurship in targeted parts of the organization.
A)intrapreneurial organization
B)angel investor
C)venture capitalist
D)social entrepreneur
E)small-business owner
Q2) _____ is a technology that appears at the low end of an industry offering and usually does not lure customers away until it improves and becomes better than the incumbent offering.
A)Social entrepreneurship
B)New-market disruption
C)Low-end disruption
D)Bootstrapping
E)Countertrade
Q3) Culture plays an insignificant role in deciding whether the condition in a particular country is conducive to entrepreneurship.
A)True
B)False
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Chapter 12: Winning Through Effective,global Talent Management
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Sample Questions
Q1) Cultural toughness forms one of the key characteristics that decides the ability of a manager to succeed as an expatriate.Cultural toughness refers to the ability to:
A)strengthen his or her self-esteem,self-confidence,and mental well-being.
B)interact effectively with host-country nationals.
C)understand why people of other countries behave the way they do.
D)adjust to a particular posting given the culture of the assignment's country.
E)communicate from a position of dominance for greater efficiency in work.
Q2) Employees want projects that engage their heads as well as their hearts. A)True
B)False
Q3) In human resources management (HRM),the _____ decision is useful when it is too difficult to predict exactly which skills will be needed in the future.
Q4) What questions does the HR department need to answer in order to ensure the relevance and competitiveness of an organization in a fast-changing world?
Q5) What are the circumstances under which managers may want to choose a local hire rather than an expatriate?
Q6) _____ indicators include employee learning and growth indices.
Page 15
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Chapter 13: Harnessing the Engine of Global Innovation
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Sample Questions
Q1) Companies encourage intrapreneurs to propose new ideas and solutions,rewarding them with seed money to develop and grow their ideas.
A)True
B)False
Q2) Young Chinese migrants to America are affected by tangible forms of social relations between the community,immigrant families,and the younger generations.Chinatown facilitates the accommodation of immigrant children in the expected directions.The knowledge and information that the children gain through the social structure in Chinatown can be termed as:
A)social network.
B)social entrepreneurship.
C)social capital.
D)social mobility.
E)social engineering.
Q3) What is Intellectual property (IP)?
Q4) What is WIPO and what are its functions?
Q5) What factors does a company evaluate when choosing amongst countries in which to locate R&D facilities?
Q6) How are the newer models of organizing R&D different from the traditional ones?
Page 16
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Chapter 14: Competing Effectively Through Global
Marketing, Distribution, and Supply-Chain Management
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Sample Questions
Q1) Nestlé India has a distribution channel that consists of the central warehouse near New Delhi.The goods are handed over to carry forward agents.The agents ensure that the goods reach the distributors assigned to each territory.Then the goods are passed over to the wholesalers in each of the territories.The goods then go to the retailers and finally reach the end customers.The above constitutes an example of:
A)indirect channel of distribution.
B)direct channel of distribution.
C)channel value proposition.
D)franchising.
E)licensing.
Q2) Which of the following statements holds true for demand management?
A)It refers to the process of forecasting,pricing,and customer segmentation.
B)It refers to the process of purchasing,supplier selection,and supplier-base rationalization.
C)It refers to the process of managing raw materials and finished goods.
D)It refers to the process of aggregate planning,workforce scheduling,and factory operations.
E)It refers to the process of establishing the facility location and formulating a distribution strategy.
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Chapter 15: Understanding the Roles of Finance and Accounting in Global Competitive Advantage
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Sample Questions
Q1) Some governments court foreign borrowers by offering low-interest loans or by offering lower corporate income tax to attract investment in their countries.
A)True
B)False
Q2) The downsides of a(n) _____ financial organization structure are higher costs (due to having to hire more employees),some unavoidable duplication of effort,and a diminishment of control.
Q3) _____ refers to using financial instruments to reduce adverse price movements by taking an offsetting position.
Q4) Sharia prohibits "gharar" which means "_____" and includes conventional practices like short selling.
A)interest rate
B)uncertainty
C)gambling
D)lease
E)partnership
Q5) Explain how Brazilian government policies have boosted foreign investment and innovation.
18
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