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86) It may be more costly to do business in relatively primitive or undeveloped economies because
of
A) international trade restrictions.
B) the lack of governmental support.
C) difficulty obtaining workers.
D) the lack of infrastructure and supporting businesses.
87) One visible indicator of ________ tends to be a country's inflation rate.
A) economic mismanagement
B) high GNI
C) political risks
D) low HDI
88) The overall attractiveness of a country as a potential market or investment site for an
international business depends on
A) if the country has a high gross national income.
B) balancing the benefits, costs, and risks associated with doing business in that country.
C) whether the company can be the first mover in the market.
D) whether the government can be greased.
89) The likelihood that a trading partner will opportunistically break a contract or expropriate
property rights is called a(n)
A) economic risk.
B) legal risk.
C) cultural risk.
D) political risk.
90) A change in political regime in a country can result in laws that ________ to international
businesses.
A) are more favorable
B) are less favorable
C) provide less incentives
D) provide more incentives
91) By identifying and investing early in a potential future economic star, international firms can
________ and gain experience in that country's business practices.
A) build brand loyalty
B) learn which government officials need to receive kickbacks
C) begin to stockpile that country's currency
D) build infrastructure
92) Economic growth appears to be a function of a country's capacity for growth and its
A) previous economic success.
B) political environment.
C) free market system.
D) mixed economy.
93) ________ are the handicaps that late entrants to a market might suffer.
A) Government regulations
B) Late-mover disadvantages
C) Black economy
D) Purchasing power disparity
94) Which of the following is a first-mover advantage?
A) International firms may gain experience in that country's business practices.
B) An international firm can reap the rewards of growth in a new market without incurring the
risks.
C) A firm may have the opportunity to be the first to introduce generic brands to a market.
D) A firm can gauge how well their product will do in the market without taking the risk of
investing there.
95) What is the philosophy of Amartya Sen?
96) Why does education lead to economic development?
97) Discuss Samuel Huntington's views on Islamic fundamentalism.
98) Since the 1980s, there has been a transformation from centrally planned command economies
to market-based economies. What is the rationale for this transformation?
99) Is privatization by itself enough to guarantee economic growth? Why? Explain using an
example.
100) What are the factors that determine the long-run monetary benefits of doing business in a
country?
101) What are the factors that determine the costs of doing business in a country?
102) Why does doing business in a country with a relatively unsophisticated economy result in
increased costs?
103) What are the factors that contribute to the risks of doing business in a country?
