IB 300 Exam 2 - Practice Questions

Informal institutions are composed of sets of:

a. mandatory agreements a bit like the mind’s software

b. orthodox accords whose goal is to establish rigor

c.agreements that are for the most part taken for granted

d. voluntary agreements

d. voluntary agreements

The main difference between free trade area and a custom union is that in a custom union there is:

a. no need for passport controls

b. a shared border patrol

c. shared currency

d. a common external tariff

d. a common external tariff

Institutions are vitally important for international business decision makers because:

a. they provide ways to settle conflicts

b. they provide methods for moving trade forward

c. they are the foundation for our interactions

d. they hold power of trade process

a. they provide ways to settle conflicts

European Union (EU) began as common market for:

a. all imported goods from beyond Europe

b. the textile and dairy industries

c. the transportation industries

d. the coal and steel industries

d. the coal and steel industries

When governments nationalize a firm, they don’t seek to:

a. extract more money from the firm

b. increase the firm’s profitability

c. preserve jobs

d. sell the firm to foreign investors

d. sell the firm to foreign investors

Import duties can be set to encourage:

a. increased imports based on sales volumes

b. local input

c. price fixing

d. imports from other suppliers

b. local input

Non-quantitative, non tariff barriers:

a. are not counted as non tariff barriers

b. often involve government participation in trade, especially in customs and other administrative procedures

c. often involve ownership

d., are virtual barriers

b. often involve government participation in trade, especially in customs and other administrative procedures

A patent gives the inventor:

a. property rights for 10 years

b. the right to use the invention until development costs are recouped

c. exclusive right to manufacture, exploit, use, and sell the invention for a given time period

d. the right to keep the patented process but not the product for five years

c. exclusive right to manufacture, exploit, use, and sell the invention for a given time period

The existence of the rule of law in a foreign market suggests that:

a. lawyers will be necessary in any substantive business transaction

b. personal relationships will be less effective than in a country governed outside the rule of law system

c. legal rulings will be the basis of any dispute resolution

d. foreign investors can assume that their interests will be protected

d. foreign investors can assume that their interests will be protected

Patent trolling is a process of:

a. looking for loopholes in patent protection and exploiting them

b. recording and registering of patents in foreign countries to protect the firm’s IP

c. searching out patents that have expired and negotiating their replacements

d. legal research that uncovers obscure, deceased patent holder and liberates their inventions

a. looking for loopholes in patent protection and exploiting them

Arbitration is:

a. often preferred by foreign litigants in the U.S. for speed and privacy

b. avoided by foreign litigants because it is costly and perceived to be biased

c. a way to increase the likelihood of a partial ruling

d. a favored forum for foreign divorce in the U.S.

a. often preferred by foreign litigants in the U.S. for speed and privacy

According to the book, what is the purpose of economic analyses?

a. to anticipate political developments within and across countries

b. to forecast exchange rates

c. to assess the overall outlook for the economy and the impact of economic changes on the firm

d. to anticipate the rate at which companies will develop new competitive strategies

e. to provide well-paying jobs for economics graduates

c. to assess the overall outlook for the economy and the impact of economic changes on the firm

When an international manager is considering where to do business, one of the first considerations is:

a. whether the country has a democratically elected government

b. the dominant religion in the country

c. the size of the country

d. whether the country has a manufacturing sector

e. the size of the economy

e. the size of the economy

A measure of an economy’s size based on the market value of goods and services produced within a nation in a year is:

a. net national income

b. gross domestic product

c. gross national product

d. gross national income

e. the Gini coefficient

b. gross domestic product

_____ is a measure of the number of inhabitants per area unit.

a. urbanization

b. population size

c. population distribution

d. population density

e. population

d. population density

Country risks can be responded to, in part, by:

a. employee training programs

b. a positive attitude and awareness of cultural differences

c. defensive posturing in most public settings

d. avoiding assignments in the country and using locals only

b. a positive attitude and awareness of cultural differences