International Trade
Mock Exam
Course Introduction
International Trade explores the fundamental theories, practices, and policies that govern the exchange of goods and services across national borders. The course examines the motivations for trade, the effects of trade policies such as tariffs and quotas, and the role of international institutions in facilitating global commerce. Key topics include comparative advantage, trade patterns, the impact of globalization on economies, international trade agreements, and contemporary challenges such as protectionism and trade disputes. Students will analyze real-world case studies to understand how international trade shapes economic development, competitiveness, and global relationships in an increasingly interconnected world.
Recommended Textbook
M International Business 1st Edition by Michael Geringer
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17 Chapters
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Page 2
Chapter 1: The Challenging World of International Business
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Sample Questions
Q1) The kinds of forces in the foreign environment are __________ those in the domestic environment except that they occur in foreign nations.
A)different from B)the same as C)less than
D)more stringent than
Answer: B
Q2) According to the text,the tendency toward an international integration of goods,technology,information,labor,and capital,or the process of making this integration happen,is called
A)internationalization.
B)international business.
C)economic globalization.
D)multinationalization.
E)global integration.
Answer: C
Q3) External environmental forces are commonly referred to as controllable. A)True
B)False
Answer: False
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Chapter 2: International Trade and Investment
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Q1) The proportion of the outstanding stock of foreign direct investment accounted for by the United States declined by two-thirds between 1980 and 2008.
A)True
B)False
Answer: False
Q2) Supporters of mercantilism:
A)viewed accumulation of precious metals as an activity essential to a nation's welfare.
B)viewed industrial development as the primary source of a nation's wealth.
C)promoted trade policies that generally benefitted consumers and emerging industrialists.
D)viewed strong agrarian policies to be the primary source of a nation's wealth.
E)viewed unique cultural notions to be the primary source of a nation's wealth.
Answer: A
Q3) The central idea of mercantilism is there should be an export surplus so a nation can accumulate precious metals.
A)True
B)False
Answer: True
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4
Chapter 3: International Institutions From an International Business Perspective
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Q1) ASEAN,whose initial goal was political,to foster peaceful relations among members,includes China as its core member.
A)True
B)False
Answer: False
Q2) Cognitive institutions are important to the international manager because these institutions help the manager understand the schema operating in their international environments and are easily missed or misunderstood by the non-native,so can easily lead to misunderstandings.
A)True
B)False
Answer: True
Q3) One of the significant differences between formal and informal institutions is how they gain compliance.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Sociocultural Forces
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Q1) Culture is a group of shared worldviews,social rules and interpersonal dynamics that is
A)chosen consciously by each group to set themselves apart from other groups.
B)learned,interrelated and shared.
C)used as a way to separate economic classes.
D)a collection of noble pursuits including opera,art,ballet and classical music.
Q2) An achievement culture is one in which members are
A)rewarded with social status for who they are in a spiritual sense.
B)rewarded for what they do,what they have accomplished,so what they are.
C)not rewarded at all because achievement is a doing mentality.
D)rewarded for their lineage.
Q3) One danger of using the frameworks in this chapter is that if they are applied prescriptively,they may well lead to a sophisticated form of stereotyping.Explain this danger and suggest ways to avoid it.
Q4) The unspoken language cannot tell the international manager something that the spoken language does not.
A)True
B)False
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Page 6
Chapter 5: Natural Resources and Environmental Sustainability
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Q1) A way to measure a company's success in sustainable business practices is
A)to examine the return on investment.
B)triple bottom line accounting.
C)to monitor the company in a social context.
D)to review the marketing materials.
Q2) Swiss exports are concentrated,high-density products that minimize the need for importing bulky materials because
A)mountain ranges increase transport costs in and out of Switzerland and limit local resources.
B)the Swiss love of chocolate and watches influenced the export patterns.
C)high density exports encounter lower tariffs.
D)B and C
Q3) Why do nations care about having outlets to the ocean? Are landlocked nations at a disadvantage?
Q4) According to the text,the fastest growing renewable energy source is A)solar
B)nuclear
C)wind
D)biomass
Q5) Explain the concept of sustainability as applied to business,using examples.
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Chapter 6: Political and Trade Forces
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Sample Questions
Q1) Subsidies that confer a benefit may well evoke countervailing duties.
A)True
B)False
Q2) Nationalization and privatization are
A)similar trends.
B)opposing trends.
C)both risks faced by privately held firms.
D)both risks not encountered in capitalist democracies.
Q3) Tariff barriers may be used to protect domestic industry from foreign,lower-cost producers.
A)True
B)False
Q4) The national defense argument for trade restrictions is based on the development-level of the country.
A)True
B)False
Q5) Sanctions against nations are not a form of trade restriction because the motivation is political.
A)True
B)False
Page 8
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Chapter 7: Intellectual Property and Other Legal Forces
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Q1) The Alien Torte Statute allows foreigners to A)sue in the U.S.courts for residency in the U.S.
B)file claims in U.S.courts for violations of international law that may have occurred beyond the U.S.borders.
C)file claims in U.S.courts for alleged violations of foreign laws.
D)file claims against other foreign nationals for violation of U.S.EEOC law.
Q2) Smaller nations would like patent protection
A)extended,to allow for them to build their competitive advantage.
B)extended,so that they can recoup development costs.
C)reduced,so that they can enter the game earlier,possibly with generics.
D)extended,so that their profits can increase.
Q3) By UN regulation,contracts can not contain choice of law and choice of forum clauses.
A)True
B)False
Q4) If you're a Westerner and become victim of a miscellaneous law in a foreign country,all you have to do is call your embassy and you'll be released to your government.
A)True
B)False
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Chapter 8: The International Monetary System and Financial Forces
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Q1) The exchange rate for today for delivery within two days is known as the current rate. A)True
B)False
Q2) The inflation rate determines
A)a currency's strengthening.
B)the real price of borrowing in capital markets.
C)locations for outsourcing.
D)import substitution regimes.
Q3) In order to strengthen the U.S.dollar,the Federal Reserve might sell yen and buy dollars,in which case the yen functions as A)a stronger currency than the dollar.
B)an intervention currency.
C)an arbitrage currency.
D)none of the above.
Q4) The lowest corporate tax rates are found in A)the U.S.,Brazil,India and France.
B)Brazil,China,Australia and Japan.
C)Peru,Australia,Italy and Luxembourg.
D)Switzerland,Ireland,Singapore and Russia.
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Chapter 9: Labor Forces
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Sample Questions
Q1) In some Central American and Sub-Saharan countries,what percentage of the college-educated population emigrates?
A)10%
B)50%
C)80%
D)90%
Q2) Child labor
A)should be roundly condemned.
B)needs to be understood and addressed within its context.
C)is morally wrong and should be outlawed.
D)is a fact of life and needs to be ignored.
Q3) Minorities in traditional societies are at times the target of local racism because
A)the minorities may be more prosperous and successful than are the locals.
B)locals want the minorities to integrate with the majority society.
C)locals are intimidated by the minority's culture.
D)minorities flaunt their superiority over the locals.
Q4) In 2010,31 percent of the world's population was under the age of 15.
A)True
B)False
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Chapter 10: International Competitive Strategy
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Sample Questions
Q1) Policies are broad guidelines issued by upper management for the purpose of assisting lower-level managers in handling recurring problems.
A)True
B)False
Q2) To create a sustainable competitive advantage,an international company should try to develop competencies that are valuable,rare,difficult to imitate,and readily substitutable.
A)True
B)False
Q3) According to the text,the strategic planning process provides a formal structure in which managers will:
A)analyze the company's external and internal environments.
B)define the company's business and mission.
C)formulate scenarios.
D)will make tactical plans but quantify goals.
E)analyze the company's external and internal environments and define the company's business and mission.
Q4) Discuss the global strategic planning process.
Q5) What international strategy is and why it is important?
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Chapter 11: Organizational Design and Control
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Q1) Pricing that is established for transactions between members of the enterprise is called transfer pricing.
A)True
B)False
Q2) Hybrid organizations are often the result of a regionally organized company having introduced a new and different product from what the regionally organized form is accustomed to handling.
A)True
B)False
Q3) A structure organized by more than one dimension at the top level is known as a:
A)hybrid organization.
B)matrix organization.
C)matrix overlay.
D)network corporation.
E)virtual corporation.
Q4) In a typical matrix organization based on area and product dimensions,country managers will be responsible to both the area managers and the product line managers.
A)True
B)False
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Chapter 12: Assessing International Markets
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Sample Questions
Q1) In a personal interview or phone survey situation,some respondents want to help the interviewer out of politeness,or just to please them.This is known as __________
A)market research.
B)response bias.
C)interviewer bias.
D)social desirability bias.
E)observer's bias.
Q2) In __________ screening,the important variables for segmentation are commonalities in needs and wants among consumers across nationalities.
A)country
B)product
C)segment
D)cultural
E)economic
Q3) What is the value of government-sponsored trade missions and trade fairs?
Q4) Environmental scanning provides the firm with information about world opportunities and threats.
A)True
B)False
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Chapter 13: Entry Modes
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Q1) Which of the following are reasons that many firms engage in exporting?
A)Exports can allow the firm to serve markets where it has no or limited production facilities.
B)Exports can offset cyclical sales in the firm's domestic market.
C)Exports eliminate the risk of losing the firm's technology to potential competitors.
D)Exports always ensure that the licensee receives expertise from their own in-house experts.
E)Exports can allow the firm to serve markets where it has no or limited production facilities and can offset cyclical sales in the firm's domestic market.
Q2) Why have more companies,at home and abroad,begun to obtain licenses instead of making illegal copies?
Q3) Trading and pooling alliances are typically different in their goals,optimal structures,and managerial challenges.
A)True
B)False
Q4) What is contract manufacturing and what are the ways in which international firms employ contract manufacturing?
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15
Chapter 14: Marketing Internationally
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Q1) Buyers of industrial goods and luxury products usually act on the same motives the world over,lending themselves to a standardized approach.
A)True
B)False
Q2) The organization of an overseas sales force,sales presentation,and training methods are generally very similar to those employed in the home country.
A)True
B)False
Q3) The promotional mix includes:
A)advertising.
B)sales promotion.
C)publicity.
D)advertising,sales promotion,and publicity.
E)sales promotion and retail chains.
Q4) The experience of suppliers to the youth market indicates that this market is essentially an international market segment.
A)True
B)False
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Page 16
Chapter 15: Global Operations and Supply Chain Management
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Sample Questions
Q1) A typical company's supply chain costs can represent more than ____ percent of assets.
A)20
B)35
C)50
D)60
E)80
Q2) When a country needs new job creation,it follows that government officials will insist on the use of labor-intensive processes.
A)True
B)False
Q3) Activities that are involved in producing a company's products and services and how these activities are linked together are often referred to as:
A)value chains.
B)supply chains.
C)organization design.
D)operations management.
E)subcontracting.
Q4) Discuss the problems associated with global sourcing.
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Chapter 16: Managing Human Resources in an International Context
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Q1) According to the text,approximately ______ of expatriates leave their firms during the course of their overseas assignment.
A)10 percent
B)25 percent
C)31 percent
D)nearly 40 percent
E)81 percent
Q2) Qualifications for a good manager of an overseas operation should include:
A)being bicultural and bilingual,knowing business practices in the home and host countries,and having more and different skills than domestic managers.
B)being bicultural and bilingual.
C)knowing business practices in the home and host countries.
D)having more and different skills than domestic managers.
E)knowing the best ways to travel faster and in time.
Q3) The use of third country nationals has become particularly prevalent in the LDCs because they provide substantial cost savings over the use of home country nationals.
A)True
B)False
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Chapter 17: International Accounting and Financial Management
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Q1) Transfer pricing is what the company charges for transfers within the company.It is a bookkeeping cost of goods transferred across national borders.
A)True
B)False
Q2) The main argument against 3BL is that business is concerned with generating profit,not with social and ecological issues,except where the law requires it to be. A)True
B)False
Q3) Operating in more than five local currencies is unusual for the international firm. A)True
B)False
Q4) In a currency option hedge,the firm covers its downside risk,but,because the contract is an option,can also benefit from any upside. A)True
B)False
Q5) How could an IC benefit from leading and lagging?
Q6) Discuss how culture might impact accounting.
Page 19
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