C211 Global Economics EXAM AND PRACTICE EXAM
NEWEST ACTUAL EXAM COMPLETE 700
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
One view of globalization claims that human civilization has always had some type of
globalization. Which view is it?
a) The long-run historical view
b) The pendulum view
c) The business-over-culture view
d) The unique-role view - CORRECT ANSWER a) The long-run historical view
The benefit attributed to firms that enter a market before other firms in the same market
segment is best described by which term?
a) First-mover advantage
b) Trade advantage
c) Absolute advantage
d) Scale advantage - CORRECT ANSWER a) First-mover advantage
What is opportunity cost?
a) The lost potential from pursuing one activity at the expense of another activity, given
the alternatives
b) The extent to which different countries possess various factors of production such as
labor, land, and technology
c) A government payment to a domestic firm
d) A net loss that occurs in an economy as a result of tariffs - CORRECT ANSWER a)
The lost potential from pursuing one activity at the expense of another activity, given the
alternatives
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 ANSWER 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 ANSWER 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 ANSWER 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 ANSWER 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 ANSWER
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 ANSWER 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 ANSWER 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 ANSWER 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 ANSWER 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
b) Frequent mover
c) Late mover
d) Paired mover - CORRECT ANSWER a) First mover
Direct exports have which advantage?
a) Capitalization of economies of scale in production in the home country
b) An ability to tap into the best locations for certain innovations at low costs
c) Avoidance of export processes
d) An ability to focus primarily on production - CORRECT ANSWER a) Capitalization
of economies of scale in production in the home country
Which mode of entry is a non-equity mode?
a) R&D contracts
b) Strategic alliances
c) Acquisitions
d) Minority joint ventures - CORRECT ANSWER a) R&D contracts
Which pillar of formal institutions represents the coercive power of governments?
a) Regulatory
b) Moral
c) Protective
d) Informal - CORRECT ANSWER a) Regulatory
What are represented by formal institutions?
a) Laws
b) Norms
c) Cultures
d) Ethics - CORRECT ANSWER a) Laws
What is the necessity of making sensible decisions in the absence of complete
information?
a) Bounded rationality
b) Narrow selection
c) Modest determination
d) Restricted analysis - CORRECT ANSWER a) Bounded rationality
, Managers and firms rationally pursue their interests and make choices within
institutional constraints. This is one of the two core propositions underpinning an
institution-based view of global business. Which situation illustrates this proposition?
a) When the minimum wage increases in a country, a major multinational moves most
of its production to another country because the cost of labor is substantially lower.
b) Two failing banks are pursuing the option of being acquired by another institution.
One bank is able to leverage political relationships to result in a successful acquisition.
The other bank pursues no such political solution and eventually files for bankruptcy.
c) Government corruption is rampant in a particular country, leading to a high cost of
doing business. However, some smaller companies have figured out how to legally
evade the most fraudulent abuses, and for them the cost of doing business beco -
CORRECT ANSWER a) When the minimum wage increases in a country, a major
multinational moves most of its production to another country because the cost of labor
is substantially lower.
Which type of economic system allows businesses to be privately owned with a strong
individualistic profit orientation?
a) Totalitarianism
b) Democracy
c) Communism
d) Capitalism - CORRECT ANSWER d) Capitalism
What is a characteristic of common law as compared to civil law?
a) Common law is more reliant on precedents.
b) Common law covers issues with more comprehensive law codes.
c) Common law has laws that are more defined.
d) Common law has judges with less interpretational power. - CORRECT ANSWER a)
Common law is more reliant on precedents.
Which protection of intellectual property is used for the design of a logo?
a) Trademark
b) Patent
c) Copyright
d) Title - CORRECT ANSWER a) Trademark
What are examples of intellectual property? Choose two.
a) A patent
b) A trademark
c) A parcel of land
d) A factory
e) An office
f) A natural resource - CORRECT ANSWER a) A patent
b) A trademark
What is a characteristic of a market economy?
a) It involves the government in a hands-off level approach known as laissez-faire.
NEWEST ACTUAL EXAM COMPLETE 700
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
One view of globalization claims that human civilization has always had some type of
globalization. Which view is it?
a) The long-run historical view
b) The pendulum view
c) The business-over-culture view
d) The unique-role view - CORRECT ANSWER a) The long-run historical view
The benefit attributed to firms that enter a market before other firms in the same market
segment is best described by which term?
a) First-mover advantage
b) Trade advantage
c) Absolute advantage
d) Scale advantage - CORRECT ANSWER a) First-mover advantage
What is opportunity cost?
a) The lost potential from pursuing one activity at the expense of another activity, given
the alternatives
b) The extent to which different countries possess various factors of production such as
labor, land, and technology
c) A government payment to a domestic firm
d) A net loss that occurs in an economy as a result of tariffs - CORRECT ANSWER a)
The lost potential from pursuing one activity at the expense of another activity, given the
alternatives
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 ANSWER 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 ANSWER 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 ANSWER 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 ANSWER 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 ANSWER
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 ANSWER 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 ANSWER 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 ANSWER 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 ANSWER 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
b) Frequent mover
c) Late mover
d) Paired mover - CORRECT ANSWER a) First mover
Direct exports have which advantage?
a) Capitalization of economies of scale in production in the home country
b) An ability to tap into the best locations for certain innovations at low costs
c) Avoidance of export processes
d) An ability to focus primarily on production - CORRECT ANSWER a) Capitalization
of economies of scale in production in the home country
Which mode of entry is a non-equity mode?
a) R&D contracts
b) Strategic alliances
c) Acquisitions
d) Minority joint ventures - CORRECT ANSWER a) R&D contracts
Which pillar of formal institutions represents the coercive power of governments?
a) Regulatory
b) Moral
c) Protective
d) Informal - CORRECT ANSWER a) Regulatory
What are represented by formal institutions?
a) Laws
b) Norms
c) Cultures
d) Ethics - CORRECT ANSWER a) Laws
What is the necessity of making sensible decisions in the absence of complete
information?
a) Bounded rationality
b) Narrow selection
c) Modest determination
d) Restricted analysis - CORRECT ANSWER a) Bounded rationality
, Managers and firms rationally pursue their interests and make choices within
institutional constraints. This is one of the two core propositions underpinning an
institution-based view of global business. Which situation illustrates this proposition?
a) When the minimum wage increases in a country, a major multinational moves most
of its production to another country because the cost of labor is substantially lower.
b) Two failing banks are pursuing the option of being acquired by another institution.
One bank is able to leverage political relationships to result in a successful acquisition.
The other bank pursues no such political solution and eventually files for bankruptcy.
c) Government corruption is rampant in a particular country, leading to a high cost of
doing business. However, some smaller companies have figured out how to legally
evade the most fraudulent abuses, and for them the cost of doing business beco -
CORRECT ANSWER a) When the minimum wage increases in a country, a major
multinational moves most of its production to another country because the cost of labor
is substantially lower.
Which type of economic system allows businesses to be privately owned with a strong
individualistic profit orientation?
a) Totalitarianism
b) Democracy
c) Communism
d) Capitalism - CORRECT ANSWER d) Capitalism
What is a characteristic of common law as compared to civil law?
a) Common law is more reliant on precedents.
b) Common law covers issues with more comprehensive law codes.
c) Common law has laws that are more defined.
d) Common law has judges with less interpretational power. - CORRECT ANSWER a)
Common law is more reliant on precedents.
Which protection of intellectual property is used for the design of a logo?
a) Trademark
b) Patent
c) Copyright
d) Title - CORRECT ANSWER a) Trademark
What are examples of intellectual property? Choose two.
a) A patent
b) A trademark
c) A parcel of land
d) A factory
e) An office
f) A natural resource - CORRECT ANSWER a) A patent
b) A trademark
What is a characteristic of a market economy?
a) It involves the government in a hands-off level approach known as laissez-faire.
