INTB Exam , INTB Exam 1, INTB Exam 2

True or False

The Globalization of Markets (demand side) occurred because the merging of historically distinct and separate national markets into one huge global marketplace. In many markets, the tastes and preferences of consumers in different nations are converging on some global norm, creating a global market. Examples are Coca-Cola, McDonald's, IKEA, Starbucks, and Apple

True

True or False

Specific tariffs are the ones levied as a proportion of the value of an important good, while Ad valorem tariffs are the ones levied as a fixed charge for each unit of an imported good.

False

True or False

One characteristic of High-Income countries is that households have high ownership levels of basic products and the service sector accounts for a high proportion (more than 50%) of the Gross National Income (GNI)

True

True or False

Collectivism is the system that stresses the primacy of collective goals over individual goals

True

True or False

One of the advantages of franchising is the low development cost

True

True or False

The eclectic paradigm for OLI framework explains the internationalization process through ownership of specific advantages (O), location-specific advantages (L), and Internalization advantages (I)

True

True or False

A Local Content Requirement (LCR) is a demand that some specific fractions of a good be produced domestically, LCR can be in physical terms or value terms

True

True or False

The Nordic theory or Uppsala model advocates that the internationalization of firms occurs due to the technological cycle of the products

False

True or False

The "Customs Union" increases trade barriers between member countries and adopts a common external trade policy

False

True or False

Innovation cycles are becoming shorter the the ones in the past

True

True or False

The gravity equation in international trade is one of the most robust empirical findings in economics: bilateral trade between two countries is proportional to their respective economic size, measure by their GDP, and directly proportional to their geographic distance

False

True or False

The subsidiaries of a multinational company are equally integrated and while present different responsiveness level

False

True or False

One of the advantages of Wholly-Owned Subsidiary (WOS) is the total control of the business unit

True

True or False

Foreign Direct investment occurs when a firm exports goods or services to consumers in another country

False

True or False

One of the benefits of the establishment of the EURO is the comparability of prices across Europe

True

True or False

The problem with the Hofstede framework is its generalization

True

True or False

In the "Common Market" mode, there are no barriers to trade between member countries, a common external trade policy, and the free movement of the factors of production (people, equipment, capital, knowledge)

True

True or False

Leaders have zero impact on the establishment of the culture of an organization

False

True or False

One example of the categories of institutional voids is "Capital Market"

True

True or False

Administrative trade policies are bureaucratic rules designed to make it difficult for imports to enter a country. They may hurt consumers by denying access to possibly superior foreign products

True

True or False

In the "Economic Union" mode, countries committed to the free flow of products and factors of production between members, adoption of a common currency, harmonization of tax rates, and pursuit of a common external trade policy. This mode involves sacrificing a significant amount of national sovereignty.

True

True or False

Some examples of common ethical issues in business are (i) employment practices, (ii) human rights, (iii) environmental regulations, and (iv) moral obligations

True

True or False

Human Resource Management (HRM) is more complex in an international business because of the differences between countries in labor markets, culture, legal systems, economic systems, for instance

True

True or False

Due to the competitive business environment in the 21st century, improvements in operational effectiveness are examples of a strategy

False

True or False

A tariff rate quota is a hybrid of a quota and a tariff; a lower tariff is applied to imports within the quota than those over the quota

True

True or False

In Low-income countries, industrialization is limited

True

True or False

Economies of Scale are reductions in unit cost achieved by producing a large volume of a product

True

True or False

Dumping occurs when a company (or country) sells goods in a foreign market above their cost of production or above their "fair" market value

False

True or False

Culture is a static concept. In addition, cross cultural literacy is an understanding of how cultural differences across and within nations can affect the way business is practiced

False

True or False

The Argentine Paradox occurs when a country achieves advanced development and flourishes economically, increasing both GDP and GDP per capita

False

True or False

Tariffs are generally pro-producer and anti-consumer.

True

True or False

Tariffs, subsidies, import quotas, and local content requirements are some of the instruments of international trade policy.

True

True or False

Import tariffs reduce the overall efficiency of the world economy.

True

True or False

The International Monetary Fund (IMF) promotes development using low-interest loans.

False

True or False

Local content requirements are a demand that some specific fraction of a good be produced domestically, and it benefits domestic customers, but domestic producers face higher prices

False

True or False

In a Market Economy, the goods and services a country produces and the quantities in which they are produced are determined by supply and demand

True

True or False

In Emerging Markets the poor will not "waste" money on non-essential goods

False

In a Command Economy, the goods and services a country produces, the quantities in which they are produced, and the price at which they are sold are determined by supply and demand

False

True or False

The three different legal systems we studied in class are:

Common Law: based on tradition, precedent, and custom (found in most of Great Britain's former colonies, including the US)

Civil Law: based on a denial set of laws organized into codes (found in more than 80 countries, including Germany, France, Japan, and Russia)

Theocratic Law: based on religious teachings (Islamic law is most widely practiced)

True

True or False

The CAGE distances are:

-CULTURAL: languages, ethnicity, religions, and values

-ADMINISTRATIVE: presence/lack of colonial ties, trade blocs, political hostility

-GEOGRAPHIC: physical distance, time zones, weather and common frontiers

-ECONOMIC: type of economy (Service vs manufacturing vs agriculture), openness of the economy, existence/lack of natural resources and infrastucture)

True

True or False

A subsidy is a government tax on a domestic producer generally speaking, subsidies make it harder for domestic produces and makes it harder for them to compete against low-costs important and gain export markets.

False

True or False

One of the mistaken assumptions about Emerging Markets is that global companies always win in Emerging Markets

True

True or False

Foreign Direct Investment occurs when a firm exports goods or services to consumers in another country

False

True or False

The history of innovation cycles has shown that more recent innovation cycles are becoming longer than ones in the past.

False

True or False

Consumers typically absorb the costs of subsidies

True

True or False

The Group of Twenty (G20) became a forum for a coordinated policy response to the financial crisis of 2008 and 2009. They represent 10% of the global GDP.

False

True or False

The United States follow the common law

True

True or False

Specific tariffs: levied as a fixed charge for each unit of imported good

Ad valorem tariffs: levied as a proportion of the value of an imported good

True

True or False

Traditions, language, and architecture are visible aspects of Culture, while ideas about justice are invisible aspects of culture

True

True or False

Dumping occurs when a company (or country) sells goods in a foreign market above their cost of production or above their "Fair" market value

False

True or False

The globalization of Production (supply side) the merging of historically distinct and separate national markets into one huge global marketplace

False

True or False

The "Customs Union" eliminates trade barriers between member countries and adopts a common external trade policy

True

True or False

In a mixed economy the government does not interfere with the market

False

True or False

Culture is a system of values and norms shared among a group of people and when taken together, constitute a design for living

True

True or False

Administrative trade policies are bureaucratic rules designed to make it easer for imports to enter a country. They may hurt consumers by denying access to possibly superior foreign products

False

True or False

The three types of Intellectual Property we studied were:

-Patents: give inventor exclusive rights to the manufacture, use, or sale of that invention

-Copyrights: exclusive legal rights of authors, composers, playwrights, artists and publishers to publish and dispose of their work as they see fit.

-Trademarks: designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products

True

True or False

Characteristics of High-Income countries is that

- households have high ownership levels of basic products

- the service sector is a high proportion (more than 50% of the Gross National Income (GNI).

- Cheap Labor

- Labor intensive industries

False

True or False

Antidumping duties, voluntary export restraints, and import quotas are some of the instruments of international trade policy

True

True or False

In the "Economic Union" mode, countries committed to the free flow of products and factors of production between members, adoption of a common currency, harmonization of tax rates, and pursuit of a common external trade policy. This mode involves increased national sovereignty

False

True or False

We analyzed in class three era of globalization:

- Globalization 1.0: In this era globalization was centered around countries

- Globalization 2.0: In this era, globalization was centered around multinational companies

- Globalization 3.0: In our current era, globalization is centered around the convergence of the personal computer, fiber-optic internet connections, and software, which allows small groups and even individuals to go global

True

True or False

Some of anti-globalization forces are:

-Nationalism (or maybe a distorted version of it)

-Formal and informal trade barriers.

-Barriers to foreign direct investment (FDI).

-Transportation costs.

-Economic and political risk... Geopolitics matter!

-Managerial challenge for coordinating a globally dispersed supply chain.

True

True or False

The Argentine Paradox is when a country has achieved advanced development and flourishes economically, with increasing GDP and GDP per capita

False

True or False

Culture is a static concept. In addition, cross-cultural literacy is an understanding of how cultural differences across and within nations can affect the way business is practiced

False

True or False

The gravity equation in international trade is one of the most robust empirical findings in economics: bilateral trade between two countries is proportional to their respective economic size, measure by their GDP, and inversely proportional to their geographic distance

True

True or False

Leaders have no impact on the establishment of the culture of an organization

False

True or False

Countries with high degree of corruption, foreign direct investment falls, international trade falls, and economic growth increase

False

True or False

Some of the drivers of globalization are:

- Less companies dispersing parts production

- Economies of nation-states becoming less intertwined

- The world is becoming less wealthier

False

True or False

The World Trade Organization (WTO) policies the world trade system and ensures nation0states adhere to the rules established

True

True or False

In Low-Income countries. Industrialization is limited and the service sector is more than 50% of GNI

False

True or False

A Local Content Requirement (LCR) is a demand that some specific fraction of a good be produced domestically. LCR can be in physical terms or in value terms. Additionally, local content requirement benefits foreign producers

False

True or False

Ethics is a set of accepted principles of right or wrong that govern conduct of a person, members of a profession, or actions of an organizations

True

True or False

Economic transactions never take place in a vacuum, but rather are always integrated into a specific social and cultural context

True

True or False

PESTEL:

P: Government Policy, political stability, corruption, foreign trade policy, tax policy, labour law, trade restrictions

E: Economic growth, exchange rates, interest rates, inflation rates, disposable income, unemployment rates

S: Population growth, Age distribution, Career attitudes, safety emphasis, health consciousness, lifestyle attitudes, cultural barriers

T: Technology Incentives, Level of innovation, automation, R&D activity, technological changes, technological awareness

E: Weather, Climate, environmental policies, climate change, pressures from NGOs

L: Discrimination laws, antitrust law, employment laws, consumer protection laws, copyright and patent laws, health and safety laws

True

True or False

The three expansion decisions are:

1. Which market to enter?

2. When to enter?

3. Scale of entry

True

True or False

The international expansion of multinationals can never be reversed

False

True or False

Strategy is a combination of ends (goals) for which the firm is striving and the means (policies by which it is seeking to there)

True

True or False

The causes of the problems of the Chiquita company can be divided into three categories:

a. Industry causes

b. Managerial causes

c. Political causes

True

True or False

Small firms should focus on the area marked in red

True

True or False

On the one hand, external factors lead firms to disperse geographically R&D activities to exploit the attractiveness of locations. Firms may want to locate close to other firms/customers (co-location between firms). On the other hand, internal factors may drive firms to co-locate their value chain activities (e.g, production, sourcing) in the same location (co location within the firm - manufacturing and procurement in most firms).

True

True or False

One example of the categories of institution voids is "Capital Market"

True

True or False

The Eclectic paradigm (or OLI) explains foreign investment activities by ownership of specific advantages (O), location-specific advantages (L), and internalization advantages (I).

True

True or False

Due to the competitive business environment in the 21st century, improvements in operational effectiveness are examples of a strategy

False

True or False

Protectionism remains a key feature of the global trading system. Countries have always used protectionism, and will continue to sue protectionism, to serve their policy objectives

True

True or False

One of the challenges of Merger & Acquisitions is the post merger integration

True

True or False

These are financial reasons for internationaliztion strategies:

-To reduce cost

-To Enter New Markets

-To improve efficiency

True

True or False

Embeddedness is the extent to which the firm is anchored in a particular space to be integrated into local networks of economic and social relations

True

True or False

In modes of services, Mode 1: the service provider does not leave its home territory, and serves are prodivded virtually

True

True or False

One of the advantages of Wholly-Owned Subsidiary (WOS) is the total control of the business unit

True

True or False

Early entry is when a firm enters a foreign market at the same time as everyone else

False

True or False

Companies deal with Institutional voids in two ways: Shape and Adapt

False

True or False

In modes of services mode 2: the service provider opens a subsidiary or a representative office in another member country

False

True or False

One of advantages of "Licensing and Franchising" is the dependence on licensees during the contract

False

True or False

Operational effectiveness means performing similar activities better than rivals perform them and it is a strategy

False

True or False

Multinational companies need to understand the political forces that give rise to protectionist impulse; they will need to survey the landscape in which they operate for signs of impeding protectionism; and they will need to rehearse various scenarios - both commercial and political - for dealing with protectionism when it arises

True

True or False

The Uppsala Model for internationalization advocates that international expansion should occur in countries with large markets

False

True or False

Human Resource Management (HRM) is more expel in an international business because of differences between countries in labor markets, culture, legal systems, economic systems, for instance

True

True or False

Michael Porter's Basic strategies are

- Differentiation

- Low cost

- Niche

True

True or False

Experience curve: systematic increases in productions costs that occur over a products life

False

True or False

Economies of scale are reductions in unit cost achieved by producing a large volume of a product

True