International Business Final Exam
Questions with Verified Answers
List 5 examples of Political Risk. - ANSWER-(1) Corrupt/Poor political leadership
(2) Frequent changes in the form of government
(3) Unstable political system
(4) Conflict among race, religion
(5) Poor relations with other countries
Name 5 events that can cause political risk. - ANSWER-(1) Conflict/Violence
(2) Terrorism/Kidnapping
(3) Property Seizure
(4) Policy Change
(5) Local Content Requirements
List 3 methods to help manage political risk for a business. - ANSWER-(1)
Adaptation
(2) Information Gathering
(3) Influencing Local parties.
List 5 ways for a company to completely adapt to political risk? - ANSWER-(1)
Localization
(2) Development assistance
(3) Partnership
(4) Insurance
(5) Local Equity and debt
What is a legal system? - ANSWER-Consists of laws and regulations, processes by
which those are enforced.
What are legal systems influenced by? - ANSWER-Cultural variables like religion,
social structure.
Name 3 types of legal systems. - ANSWER-(1) Common Law
(2) Civil Law
(3) Theocratic Law
What is Common Law based on? - ANSWER-Legal History
What is Civil Law based on? - ANSWER-Tradition
What is Theocratic Law based on? - ANSWER-Religious teachings
What are 5 global legal and ethical ways to help protect businesses? - ANSWER-(1)
Standardization
(2) Intellectual Property
,(3) Product safety and liability
(4) Taxation
(5) Antitrust Policies
What can legal differences cause for businesses? - ANSWER-Problems in ethical
issues.
What is ethical behavior? - ANSWER-A personal behavior in accordance with rules
and standards for high conduct and morality.
What is Social Responsibility? - ANSWER-The practice of going beyond legal
obligation as a company.
Give 5 examples of social responsibility. - ANSWER-(1) Respect for CONSUMER
rights
(2) Guard WORKERS rights
(3) Protect the ENVIRONMENT
(4) Improve HEALTH
(5) Support EDUCATION
Name 3 Economic Systems - ANSWER-(1) Market Economy
(2) Mixed Economy
(3) Centrally Planned Economy
What are the features of a centrally planned economy? - ANSWER-Factors of
production owned by the government.
Name 3 reasons why Centrally planned economy is declining? (It fails to...) -
ANSWER-(1) Create economic Value
(2) Achieve rapid growth
(3) Satisfy consumer needs
Who owns factors of production in a mixed economy? - ANSWER-Equal split
between private sector and the government.
Name 2 problems with Mixed economy. - ANSWER-(1) Government control results
in lack of responsibility, accountability, rising costs...
(2) Move towards privatization to increase efficiency and productivity.
Who owns factors of production in a market economy? - ANSWER-Privately owned
firms.
What is the governments role in a market economy? (4) - ANSWER-(1) Enforcing
Antitrust Law
(2) Political Stability
(3) Protecting Property rights
(4) Fiscal and Monetary policy
High economic development reflects... - ANSWER-High economic well-being
, How do you measure economic well-being? - ANSWER-output, infrastructure,
health, education.
Name 2 key economical figures. - ANSWER-GDP and GNP
What are 4 different classifications of countries in development? - ANSWER-
Developed countries
Newly Industrialized
Emerging markets
Developing countries
Name 3 characteristics of developed countries. - ANSWER-Highly industrialized
Highly efficient
High quality of life
Describe characteristics of newly industrialized countries. - ANSWER-Increased
national production and exports from industrial operations.
Characteristics of emerging markets... - ANSWER-Newly industrialized
Those with the the potential to be newly industrialized.
Characteristics of developing countries - ANSWER-Poor infrastructure
Extremely low personal income (Low GDP/Capita)
Define economic transition. - ANSWER-The process of changing a nation's
economic fundamentals.
What are 4 obstacles in economic transition? - ANSWER-(1) Lack of managerial
expertise
(2) shortage of capital
(3) Cultural differences
(4) Economic degregation
Define International trade - ANSWER-The purchase, sale, exchange of
goods/services across national borders.
What is Mercantilism? - ANSWER-Encourages exports
Discourages imports
What is absolute advantage - ANSWER-Advantage in efficiency in producing a good
over another country.
What are 3 assumptions of absolute advantage? - ANSWER-(1) 2 Countries
(2) 2 products
(3) No transportation costs.
What is Comparative Advantage? - ANSWER-When costs are lower for one country
to produce a good than another country.
4 Assumptions of Comparative Advantage? - ANSWER-(1) 2 Countries
Questions with Verified Answers
List 5 examples of Political Risk. - ANSWER-(1) Corrupt/Poor political leadership
(2) Frequent changes in the form of government
(3) Unstable political system
(4) Conflict among race, religion
(5) Poor relations with other countries
Name 5 events that can cause political risk. - ANSWER-(1) Conflict/Violence
(2) Terrorism/Kidnapping
(3) Property Seizure
(4) Policy Change
(5) Local Content Requirements
List 3 methods to help manage political risk for a business. - ANSWER-(1)
Adaptation
(2) Information Gathering
(3) Influencing Local parties.
List 5 ways for a company to completely adapt to political risk? - ANSWER-(1)
Localization
(2) Development assistance
(3) Partnership
(4) Insurance
(5) Local Equity and debt
What is a legal system? - ANSWER-Consists of laws and regulations, processes by
which those are enforced.
What are legal systems influenced by? - ANSWER-Cultural variables like religion,
social structure.
Name 3 types of legal systems. - ANSWER-(1) Common Law
(2) Civil Law
(3) Theocratic Law
What is Common Law based on? - ANSWER-Legal History
What is Civil Law based on? - ANSWER-Tradition
What is Theocratic Law based on? - ANSWER-Religious teachings
What are 5 global legal and ethical ways to help protect businesses? - ANSWER-(1)
Standardization
(2) Intellectual Property
,(3) Product safety and liability
(4) Taxation
(5) Antitrust Policies
What can legal differences cause for businesses? - ANSWER-Problems in ethical
issues.
What is ethical behavior? - ANSWER-A personal behavior in accordance with rules
and standards for high conduct and morality.
What is Social Responsibility? - ANSWER-The practice of going beyond legal
obligation as a company.
Give 5 examples of social responsibility. - ANSWER-(1) Respect for CONSUMER
rights
(2) Guard WORKERS rights
(3) Protect the ENVIRONMENT
(4) Improve HEALTH
(5) Support EDUCATION
Name 3 Economic Systems - ANSWER-(1) Market Economy
(2) Mixed Economy
(3) Centrally Planned Economy
What are the features of a centrally planned economy? - ANSWER-Factors of
production owned by the government.
Name 3 reasons why Centrally planned economy is declining? (It fails to...) -
ANSWER-(1) Create economic Value
(2) Achieve rapid growth
(3) Satisfy consumer needs
Who owns factors of production in a mixed economy? - ANSWER-Equal split
between private sector and the government.
Name 2 problems with Mixed economy. - ANSWER-(1) Government control results
in lack of responsibility, accountability, rising costs...
(2) Move towards privatization to increase efficiency and productivity.
Who owns factors of production in a market economy? - ANSWER-Privately owned
firms.
What is the governments role in a market economy? (4) - ANSWER-(1) Enforcing
Antitrust Law
(2) Political Stability
(3) Protecting Property rights
(4) Fiscal and Monetary policy
High economic development reflects... - ANSWER-High economic well-being
, How do you measure economic well-being? - ANSWER-output, infrastructure,
health, education.
Name 2 key economical figures. - ANSWER-GDP and GNP
What are 4 different classifications of countries in development? - ANSWER-
Developed countries
Newly Industrialized
Emerging markets
Developing countries
Name 3 characteristics of developed countries. - ANSWER-Highly industrialized
Highly efficient
High quality of life
Describe characteristics of newly industrialized countries. - ANSWER-Increased
national production and exports from industrial operations.
Characteristics of emerging markets... - ANSWER-Newly industrialized
Those with the the potential to be newly industrialized.
Characteristics of developing countries - ANSWER-Poor infrastructure
Extremely low personal income (Low GDP/Capita)
Define economic transition. - ANSWER-The process of changing a nation's
economic fundamentals.
What are 4 obstacles in economic transition? - ANSWER-(1) Lack of managerial
expertise
(2) shortage of capital
(3) Cultural differences
(4) Economic degregation
Define International trade - ANSWER-The purchase, sale, exchange of
goods/services across national borders.
What is Mercantilism? - ANSWER-Encourages exports
Discourages imports
What is absolute advantage - ANSWER-Advantage in efficiency in producing a good
over another country.
What are 3 assumptions of absolute advantage? - ANSWER-(1) 2 Countries
(2) 2 products
(3) No transportation costs.
What is Comparative Advantage? - ANSWER-When costs are lower for one country
to produce a good than another country.
4 Assumptions of Comparative Advantage? - ANSWER-(1) 2 Countries
