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IBUS 401 Test 1 | 2025/2026
Latest Updated Edition | Verified
Questions & Correct Answers | A+
Graded Exam Pack
Which of the following theories identifies the non-transferability of
resources as a reason for international business?
(a) theory of comparative advantage
(b) imperfect markets theory
(c) product cycle theory
(d) non of the above
Ans: imperfect markets theory
TRUE/FALSE: Licensing is the process by which a firm provides its
technology (copyrights, patents, trademarks, or trade names) in
exchange for fees or some other specified benefits.
Ans: True
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TRUE/FALSE: The Sarbanes-Oxley Act (SOX) was enacted in 2002
required MNCs and other firms to implement an internal reporting
process that could be easily monitored by executives and the board
of directors.
Ans: TRUE
TRUE/FALSE: A centralized management style, where major decisions
about a foreign subsidiary are made by the parent company, results
in an increase in agency costs.
Ans: FALSE
The primary component of the current account is the:
(a) balance of trade
(b) balance of money market flows
(c) balance of capital market flows
(d) unilateral transfers
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Ans: balance of trade
Which of the following is mentioned in the text as a possible means
by which the government may attempt to improve its balance of
trade position (increase its exports or reduce its imports)
(a) it could attempt to reduce its home currency's value
(b) the government could require firms to engage in outsourcing
(c) the gov't could require that its local firms pursue outsourcing
(d) all of the above are mentioned
Ans: it could attempt to reduce its home currency's value
T/F: A balance of trade deficit indicates an excess of imports over
exports
Ans: True
IBUS 401 Test 1 | 2025/2026
Latest Updated Edition | Verified
Questions & Correct Answers | A+
Graded Exam Pack
Which of the following theories identifies the non-transferability of
resources as a reason for international business?
(a) theory of comparative advantage
(b) imperfect markets theory
(c) product cycle theory
(d) non of the above
Ans: imperfect markets theory
TRUE/FALSE: Licensing is the process by which a firm provides its
technology (copyrights, patents, trademarks, or trade names) in
exchange for fees or some other specified benefits.
Ans: True
,2|Page
TRUE/FALSE: The Sarbanes-Oxley Act (SOX) was enacted in 2002
required MNCs and other firms to implement an internal reporting
process that could be easily monitored by executives and the board
of directors.
Ans: TRUE
TRUE/FALSE: A centralized management style, where major decisions
about a foreign subsidiary are made by the parent company, results
in an increase in agency costs.
Ans: FALSE
The primary component of the current account is the:
(a) balance of trade
(b) balance of money market flows
(c) balance of capital market flows
(d) unilateral transfers
, 3|Page
Ans: balance of trade
Which of the following is mentioned in the text as a possible means
by which the government may attempt to improve its balance of
trade position (increase its exports or reduce its imports)
(a) it could attempt to reduce its home currency's value
(b) the government could require firms to engage in outsourcing
(c) the gov't could require that its local firms pursue outsourcing
(d) all of the above are mentioned
Ans: it could attempt to reduce its home currency's value
T/F: A balance of trade deficit indicates an excess of imports over
exports
Ans: True
