D080 EXAM COMPREHENSIVE
QUESTIONS & UPDATED CORRECT
ANSWERS
Sure Start is starting a new division for rechargeable batteries in different parts of the
world.
What was the globalization driver of this decision? CORRECT ANSWER - Competition
drivers are about entering new markets to beat competitors. Sure Start has identified a
market that does not have a lot of competition since it is a fairly new market.
Which type of globalization is represented by Sure Start expanding into South America,
Europe, and Asia? CORRECT ANSWER - Economic globalization is the globalization of
production, sales, and finance activities in international markets around the world.
Which antilocalization argument could lead to Sure Start continuing to maintain its
current factories instead of moving them to Asia? CORRECT ANSWER - Labor in Asia
can be cheaper than in NC, and critics argue that outsourcing manufacturing could lead
to job loss in the home country.
Which action should the U.S. government take to encourage Sure Start to keep electric
battery production in the country? CORRECT ANSWER - Imposing tariffs on batteries
made in Vietnam will make them more expensive.
Which economic system facilitates the global expansion of Sure Start? CORRECT
ANSWER - The law of supply and demand applies to the market economy, and the
goods are privately owned. Government interference is minimum.
Which type of risk will a company reduce if they offer a warranty to the purchasers of
the battery in case of failure? CORRECT ANSWER - Offering a warranty protects the
company from the legal risk of a product not performing to standard.
Which aspect of the International Monetary Fund (IMF) will assist the newly elected
leader in paying the deficit in U.S. dollars, if agreed on by both countries? CORRECT
ANSWER - The IMF's purpose is to provide a way for countries to easily exchange
money, provide financial help to its members, and supervise international economic
policies.
Which critical distinction should Country A make when choosing between the World
Bank and the International Monetary Fund (IMF) to improve the country's highways?
CORRECT ANSWER - The World Bank is directly associated with this type of
development project.
Which benefit to the newly-elected leader in Country A stems from using the World
Bank to meet a campaign promise? CORRECT ANSWER - The World Bank provides
funds through low interest or interest-free loans, grants, and credits to help the country
develop its infrastructure.
Why should the newly-elected leader of Country A be careful when working with the
World Bank to eliminate the nation's trade deficit? CORRECT ANSWER - Because of
the voting power highly-developed countries have on World Bank policies
, Why should the newly-elected leader of Country A use the World Trade Organization
(WTO) to form favorable trade agreements? CORRECT ANSWER - To receive help
building international exchange capacity. One of the functions of the WTO is to help
developing countries build trade and international exchange capacity so they can have
a presence in the international markets.
Which situation describes how Sure Start is applying the absolute advantage theory?
Adding an office in the South American market to help manage the business throughout
the continent
Expanding into Europe and Asia to supply batteries to electric car manufacturers in
those markets
Moving production of the batteries used in electric cars to Vietnam where labor is less
expensive
Establishing a European headquarters in Germany and moving key leaders to that
country CORRECT ANSWER - The absolute advantage theory states that a country
that can produce a product cheaper or faster than another country should focus on that
advantage. Moving production of the batteries used in electric cars from the United
States to Vietnam where labor is less expensive applies the absolute advantage theory.
Which benefit will Sure Start gain from opening the factory in Vietnam?
They will achieve economies of scale in the production of rechargeable batteries.
It will allow them to move to the production of electric cars in the near future.
The U.S. government will give them subsidies for producing in Vietnam.
The move will allow them to be fully integrated in production of rechargeable batteries.
CORRECT ANSWER - Because the factory in Vietnam will only produce rechargeable
batteries, the company will be able to benefit from minimized production costs
associated with lower labor and dedicated manufacturing operations as they scale up to
mass production.
Which action of Sure Start represents the application of the global strategic rivalry
theory?
Launching a new research division to focus on a rechargeable battery for use in electric
cars
Adding an office in the South American market to help manage the business throughout
the continent
Maintaining production with no investment in batteries for use in traditional vehicles
Expanding into Europe and Asia to supply batteries to electric car manufacturers in
those markets CORRECT ANSWER - Global strategic rivalry theory is about how
multinational companies need to gain a competitive advantage against other
multinational companies in their industry through activities such as research and
development.
What will be the effect of the German trade policy on Sure Start's rechargeable batteries
in the first year?
Sales to German automakers will increase.
Sure Start's profit for rechargeable batteries sold in Germany would increase.
If the German automakers meet the requirement, there will be no impact.
Sure Start will increase prices to German automakers. CORRECT ANSWER - As long
as German automakers meet the requirement that 75% of parts are produced
domestically, there would be no impact to Sure Start's rechargeable battery imports. If
QUESTIONS & UPDATED CORRECT
ANSWERS
Sure Start is starting a new division for rechargeable batteries in different parts of the
world.
What was the globalization driver of this decision? CORRECT ANSWER - Competition
drivers are about entering new markets to beat competitors. Sure Start has identified a
market that does not have a lot of competition since it is a fairly new market.
Which type of globalization is represented by Sure Start expanding into South America,
Europe, and Asia? CORRECT ANSWER - Economic globalization is the globalization of
production, sales, and finance activities in international markets around the world.
Which antilocalization argument could lead to Sure Start continuing to maintain its
current factories instead of moving them to Asia? CORRECT ANSWER - Labor in Asia
can be cheaper than in NC, and critics argue that outsourcing manufacturing could lead
to job loss in the home country.
Which action should the U.S. government take to encourage Sure Start to keep electric
battery production in the country? CORRECT ANSWER - Imposing tariffs on batteries
made in Vietnam will make them more expensive.
Which economic system facilitates the global expansion of Sure Start? CORRECT
ANSWER - The law of supply and demand applies to the market economy, and the
goods are privately owned. Government interference is minimum.
Which type of risk will a company reduce if they offer a warranty to the purchasers of
the battery in case of failure? CORRECT ANSWER - Offering a warranty protects the
company from the legal risk of a product not performing to standard.
Which aspect of the International Monetary Fund (IMF) will assist the newly elected
leader in paying the deficit in U.S. dollars, if agreed on by both countries? CORRECT
ANSWER - The IMF's purpose is to provide a way for countries to easily exchange
money, provide financial help to its members, and supervise international economic
policies.
Which critical distinction should Country A make when choosing between the World
Bank and the International Monetary Fund (IMF) to improve the country's highways?
CORRECT ANSWER - The World Bank is directly associated with this type of
development project.
Which benefit to the newly-elected leader in Country A stems from using the World
Bank to meet a campaign promise? CORRECT ANSWER - The World Bank provides
funds through low interest or interest-free loans, grants, and credits to help the country
develop its infrastructure.
Why should the newly-elected leader of Country A be careful when working with the
World Bank to eliminate the nation's trade deficit? CORRECT ANSWER - Because of
the voting power highly-developed countries have on World Bank policies
, Why should the newly-elected leader of Country A use the World Trade Organization
(WTO) to form favorable trade agreements? CORRECT ANSWER - To receive help
building international exchange capacity. One of the functions of the WTO is to help
developing countries build trade and international exchange capacity so they can have
a presence in the international markets.
Which situation describes how Sure Start is applying the absolute advantage theory?
Adding an office in the South American market to help manage the business throughout
the continent
Expanding into Europe and Asia to supply batteries to electric car manufacturers in
those markets
Moving production of the batteries used in electric cars to Vietnam where labor is less
expensive
Establishing a European headquarters in Germany and moving key leaders to that
country CORRECT ANSWER - The absolute advantage theory states that a country
that can produce a product cheaper or faster than another country should focus on that
advantage. Moving production of the batteries used in electric cars from the United
States to Vietnam where labor is less expensive applies the absolute advantage theory.
Which benefit will Sure Start gain from opening the factory in Vietnam?
They will achieve economies of scale in the production of rechargeable batteries.
It will allow them to move to the production of electric cars in the near future.
The U.S. government will give them subsidies for producing in Vietnam.
The move will allow them to be fully integrated in production of rechargeable batteries.
CORRECT ANSWER - Because the factory in Vietnam will only produce rechargeable
batteries, the company will be able to benefit from minimized production costs
associated with lower labor and dedicated manufacturing operations as they scale up to
mass production.
Which action of Sure Start represents the application of the global strategic rivalry
theory?
Launching a new research division to focus on a rechargeable battery for use in electric
cars
Adding an office in the South American market to help manage the business throughout
the continent
Maintaining production with no investment in batteries for use in traditional vehicles
Expanding into Europe and Asia to supply batteries to electric car manufacturers in
those markets CORRECT ANSWER - Global strategic rivalry theory is about how
multinational companies need to gain a competitive advantage against other
multinational companies in their industry through activities such as research and
development.
What will be the effect of the German trade policy on Sure Start's rechargeable batteries
in the first year?
Sales to German automakers will increase.
Sure Start's profit for rechargeable batteries sold in Germany would increase.
If the German automakers meet the requirement, there will be no impact.
Sure Start will increase prices to German automakers. CORRECT ANSWER - As long
as German automakers meet the requirement that 75% of parts are produced
domestically, there would be no impact to Sure Start's rechargeable battery imports. If
