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There are three types of economic integration, namely: global, regional, and local

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There are three types of economic integration, namely: global, regional, and local.

		True
		False

Question 2

 Purchasing power parity is the price of one currency in terms of another.

		True
		False

Question 3

When the United States sells products to China, US exporters often demand that they be paid in the Chinese yuan.

		True
		False

Question 4

 Three EU members—Britain, Denmark and Sweden—do not use the euro as their currency.

		True
		False

Question 5

 NAFTA is an example of a common market.

		True
		False

 

 

 

Question 6

 Which of the following is NOT an advantage of a strong US dollar?

		US consumers benefit from low prices on imports.
		US tourists benefit from lower prices when traveling abroad.
		Lower prices on foreign goods help keep US prices level and inflation low.
		US firms in import-competing industries face more low-cost imports.

Question 7

 Which does “ASEAN” stand for?

		Assembly of Southeast Asian Nations
		Assembly of South American Nations
		Association of Southeast Asian Nations
		Association of South American Nations

Question 8

 In the trade relationship with China, why is the US dollar in more demand than the Chinese yuan?

		More people demand the yuan domestically in China, so it is not used for imports and exports.
		The dollar is the common transaction currency between the two countries.
		The yuan is pegged to the US dollar.
		Formal institutions and regulations demand the trade be conducted in the dollar.

 

 

 

Question 9

 Why was the US dollar chosen as the currency to which other currencies would be pegged?

		The US had high levels of productivity.
		The US was experiencing a large trade surplus.
		The US contributed approximately 70% of the global GDP.
		All of these answers

 

Question 10

 Non-MNE firms can also do business abroad by:

		Licensing and franchising
		Outsourcing and engaging in FDI
		Exporting and importing
		All of these answers

Question 11

 The motto of international business is location, location, location.

		True
		False

Question 12

 Owners, managers, and employees at entrepreneurial firms tend to be more innovative and take more risks than those at large firms.

		True
		False

 

 

 

Question 13

 Late movers face greater technological and market uncertainties.

		True
		False

Question 14

 Sometimes foreign firms are discriminated against:

		Formally
		Informally
		Randomly
		Both formally and informally

Question 15

 First-mover advantages include:

		Opportunity to free ride on first-mover investments
		Resolution of technological and market uncertainties
		Difficulty to adapt to market changes
		Avoidance of a clash with dominant firms at home

Question 16

 Which item is not a late-mover advantage?

		Avoidance of a clash with a dominant firm at home
		Opportunity to free ride on first mover investments
		Resolution of technological and market uncertainty
		First mover’s difficulty to adapt to market changes

 

 

 

Question 17

 Licensing/franchising agreements refer to:

		Outsourcing agreements in R&D firms
		A new corporate entity given birth to and jointly owned by two or more companies
		Efforts among a number of firms to jointly market their products and services
		The licensor/franchiser selling the rights to intellectual property

Question 18

 ____ perform an important "middleman" function by linking sellers and buyers overseas.

		Export intermediaries
		Indirect exporters
		Sporadic exporters
		Alliance partners

Question 19

 Foreign firms crack new markets by:

		Undertaking actions deemed legitimate and appropriate by governing institutions
		Bribing government officials
		Hiring locals to manage the new entity
		Outsourcing production

 

 

 

Question 20

 In a(n) ____, members coordinate and harmonize monetary, fiscal, and taxation policies.

		Monetary union
		Political union
		Economic union
		Custom union

Question 21

 Non-native employees who work and reside in a foreign country are known as:

		Host-country nationals
		Expatriates
		Multinationals
		Repatriates

Question 22

 ___ is leading the world in managerial compensation.

		United States
		Britain
		Japan
		Germany

Question 23

 In home replication strategy, knowledge flow is multidirectional, while in transnational strategy, it is one-way.

		True
		False

 

 

 

Question 24

 The phrase “think global, act local” is a winning formula when it comes to leveraging multinational presence.

		True
		False

 

Question 25

 Which of the following is NOT one of the four strategic choices for MNEs?

		Unionization
		Global standardization
		Home replication