1) An economic theory that accounts for changes in the patterns of trade over time is
known as:
a. Strategic trade theory
b. First-mover advantage theory
c. Product life cycle theory
d. Strategic trade policy
2) ____ is the structures, processes, and systems that actively develop, advance, and
transfer knowledge.
a. Absorptive capacity c. Explicit knowledge
b. Tacit knowledge d. Knowledge management
3) Which of the following statements is correct?
a. Capital inflow can help improve a host country’s balance of payments
b. Technology, especially more advanced technology from abroad, can create
technology spillovers
c. FDI creates jobs directly and indirectly
d. All of these answers are correct
4) Which best describes what is meant by the phrase “value of innovation”?
a. It is important for a firm to add concrete value
b. Structural changes are focused on finding new value
c. Not all innovation is valuable, so finding profitable innovation is crucial
d. How an organization is structured is directly related to how valuable it is
5) A(n) ____ is a set of guidelines for helping a firm make ethical decisions:
a. Control audit c. Employee relation book
b. Corporate policy d. Code of conduct
6) Which of the following terms best describes foreign direct investment?
a. Directly investing in, controlling, and managing value-added activities in other
countries
b. Directly investing in, controlling, and managing value-added activities in other
markets
c. Directly investing in shares of multinational enterprise
d. All of these answers
7) One disadvantage for non-equity modes contractual agreements is:
a. Low development costs
b. Low risk in overseas expansion
c. Difficult to negotiate and enforce contracts
d. Ability to reach more customers
8) Widely practiced during the 1600s and 1700s, ____ viewed international trade as a
zero-sum game.
a. protectionism c. classical trade theories
b. the theory of mercantilism d. free trade
9) In order to better compare/contrast costs of living in the various environments
GNP/GDP may be adjusted to:
a. PPP (purchasing power parity)
b. Foreign exchange rate
c. Country’s inflation rate
d. Five-year national bond appreciation/depreciation
10) In a(n) ____, members coordinate and harmonize monetary, fiscal, and taxation
policies.
a. Monetary union c. Economic union
b. Political union d. Custom union
11) More than half of the world GDP growth in recent years comes from ____.
a. The Four Tigers (Hong-Kong, Singapore, South Korea, and Taiwan)
b. Latin America
c. Central and Eastern Europe
d. Emerging economies, such as BRIC (Brazil, Russia, India, and China)
12) What are the benefits of FDI to home countries?
a. Repatriated earnings from profits from FDI
b. Increased exports of components and services to host countries
c. Learning via FDI from operations abroad
d. All of these answers
13) The birth of modern economics and the forerunner of the free trade movement are
strengths and influences of:
a. Absolute advantage c. National competitive advantage
b. Comparative advantage d. Mercantilism
14) The United States is often classified as a collective society.
15) Executives, policymakers, and scholars have carefully evaluated the social,
political, and environmental costs associated with globalization.
16) In a free market approach to the purpose of a firm, the shareholder is the single
most important stakeholder, while in a CSR approach argues that all stakeholders have
a right to bargain for a fair deal.
17) Non-tariff barriers include subsidies, import quotas, export restraints, local content
requirements, administrative policies, and antidumping duties.
18) The negotiations sponsored by WTO in Doha, Qatar, were aimed directly at the
economic development of developing countries.
19) Informal institutions include laws, regulations, and rules.
20) Globalization is a relatively new phenomenon triggered by the information
revolution of the late 1980s.
21) The top executives at the highest level of an MNE are usually host-country
nationals.
22) To reach the top at most MNEs today, international experience is optional.