C211 Global Economics Reviewed Questions With Correct
Answers
What are costs to home countries of foreign direct investment? Choose two.
a) capital outflow
b) job loss
c) Reduced standard of living
d) Loss of intellectual property
e) Loss of sovereignty
f) Cultural disintegration☑️Correct Ans-a) capital outflow
b) job loss
Which strategy for responding to MNEs is appropriate in a situation in which there is low
industry pressure to globalize, and competitive assets are customized to home markets?
a) Defender strategy
b) Contender strategy
c) Responder strategy
d) Retainer strategy☑️Correct Ans-a) Defender strategy
What is one of the factors that is used to predict the rivalry between a pair of competitors?
a) Resource similarity
b) Imitative behavior
c) Cost structure
,d) Organizational structure☑️Correct Ans-a) Resource similarity
What is one of the elements of the Porter Diamond in the theory of national competitive
advantage of industries?
a) Domestic demand conditions
b) Foreign supply markets
c) Trade deficits
d) Firm opportunity costs☑️Correct Ans-a) Domestic demand conditions
What is the bandwagon effect?
a) The movement of investors in the same direction at the same time
b) A theory suggesting that the price for identical products sold in different countries must be the
same in the absence of trade barriers
c) The idea that a country's exchange rate is an indicator of socioeconomic well-being
d) The gain from taking advantage of inefficient exchange rates☑️Correct Ans-a) The
movement of investors in the same direction at the same time
A country has seen a decrease in inflation.What is the effect on the country's currency exchange
rate?
a) It increases.
b) It decreases
c) It remains same
d) It changes, but in an unknown direction☑️Correct Ans-a) It increases.
, What is one of the three primary types of foreign exchange transactions?
a) Spot transactions
b) Straddles
c) Rooted transactions
d) Covered calls☑️Correct Ans-a) Spot transactions
Who are the primary and largest participants in the foreign exchange market?
a) Large international banks
b) Individual investors
c) Governments
d) Local banks☑️Correct Ans-a) Large international banks
Which company has a natural resource-seeking strategic goal?
a) A company searching for a location where there is an abundance of oil
b) A company searching for a location where there are several other ground-breaking firms
c) A company searching for a location where the cost of unskilled labor is low
d) A company searching for a location where there is a culture of technological
advancement☑️Correct Ans-a) A company searching for a location where there is an
abundance of oil
Which entrant is able to erect significant barriers for other entrants?
a) First mover
Answers
What are costs to home countries of foreign direct investment? Choose two.
a) capital outflow
b) job loss
c) Reduced standard of living
d) Loss of intellectual property
e) Loss of sovereignty
f) Cultural disintegration☑️Correct Ans-a) capital outflow
b) job loss
Which strategy for responding to MNEs is appropriate in a situation in which there is low
industry pressure to globalize, and competitive assets are customized to home markets?
a) Defender strategy
b) Contender strategy
c) Responder strategy
d) Retainer strategy☑️Correct Ans-a) Defender strategy
What is one of the factors that is used to predict the rivalry between a pair of competitors?
a) Resource similarity
b) Imitative behavior
c) Cost structure
,d) Organizational structure☑️Correct Ans-a) Resource similarity
What is one of the elements of the Porter Diamond in the theory of national competitive
advantage of industries?
a) Domestic demand conditions
b) Foreign supply markets
c) Trade deficits
d) Firm opportunity costs☑️Correct Ans-a) Domestic demand conditions
What is the bandwagon effect?
a) The movement of investors in the same direction at the same time
b) A theory suggesting that the price for identical products sold in different countries must be the
same in the absence of trade barriers
c) The idea that a country's exchange rate is an indicator of socioeconomic well-being
d) The gain from taking advantage of inefficient exchange rates☑️Correct Ans-a) The
movement of investors in the same direction at the same time
A country has seen a decrease in inflation.What is the effect on the country's currency exchange
rate?
a) It increases.
b) It decreases
c) It remains same
d) It changes, but in an unknown direction☑️Correct Ans-a) It increases.
, What is one of the three primary types of foreign exchange transactions?
a) Spot transactions
b) Straddles
c) Rooted transactions
d) Covered calls☑️Correct Ans-a) Spot transactions
Who are the primary and largest participants in the foreign exchange market?
a) Large international banks
b) Individual investors
c) Governments
d) Local banks☑️Correct Ans-a) Large international banks
Which company has a natural resource-seeking strategic goal?
a) A company searching for a location where there is an abundance of oil
b) A company searching for a location where there are several other ground-breaking firms
c) A company searching for a location where the cost of unskilled labor is low
d) A company searching for a location where there is a culture of technological
advancement☑️Correct Ans-a) A company searching for a location where there is an
abundance of oil
Which entrant is able to erect significant barriers for other entrants?
a) First mover
