IBUS 401 FINAL EXAM USC 2026 FINAL PAPER
QUESTIONS WITH VERIFIED ANSWERS
◉ Corporate Governance. Answer: The economic, legal, and
institutional framework in which corporate control and cash flow
rights are distributed among shareholders, managers, and other
stakeholders of the company
◉ European Union (EU). Answer: A regional economic integration in
Western Europe, currently with 15 member states, in which all
barriers to the free flow of goods, capital, and people have been
removed. It plans to complete economic unification including a
single currency
◉ General Agreement on Tariffs and Trade (GATT). Answer: A
multilateral agreement between member countries to promote
international trade. It played a key role in reducing international
trade barriers
◉ Market Imperfections. Answer: Various frictions, such as
transaction costs and legal restrictions, that prevent the markets
from functioning perfectly
◉ Multinational Corporation (MNC). Answer: Refers to a firm that
has business activities and interests in multiple countries
,◉ North American Free Trade Agreement (NAFTA). Answer: Created
in 1994, it includes the United States, Canada, and Mexico as
members in a free trade area. It aimed to eliminate tariffs and
import quotas over a 15-year period
◉ Political Risk. Answer: Potential losses to the parent firm resulting
from adverse political developments in the host country
◉ Privatization. Answer: Act of a country divesting itself of
ownership and operation of business ventures by turning them over
to the free market system
◉ Shareholder Wealth Maximization. Answer: This represents the
most important objective of corporate management that managers
of companies should keep in mind when they make important
corporate decisions. Managers can maximize shareholder wealth by
maximizing the market value of the firm
◉ Systemic Risk. Answer: The risk of collapse of the entire financial
system, as opposed to the risk associated with any one individual
component, market, or sector
◉ Theory of Comparative Advantage. Answer: An argument that
supports the existence of international trade. This theory states that
, it is mutually beneficial for countries to specialize in the production
of goods that they can produce most efficiently and then engage in
trade
◉ World Trade Organization (WTO). Answer: Permanent
international organization created by the Uruguay Round to replace
GATT. It has the power to enforce international trade rules
◉ Bimetallism. Answer: A double standard maintaining free coinage
for both gold and silver
◉ Bretton Woods System. Answer: An international monetary
system created in 1944 to promote postwar exchange rate stability
and coordinate international monetary policies
◉ Currency Board. Answer: An extreme form of the fixed exchange
rate regime under which local currency is fully backed by the U.S.
dollar or another chosen standard currency
◉ Euro. Answer: The common European currency introduced in
1999 of the 11 countries of the EU that make up the EMU
◉ European Central Bank (ECB). Answer: The central bank of the 11
countries that make up the EMU, responsible for maintaining price
stability via monetary policy
QUESTIONS WITH VERIFIED ANSWERS
◉ Corporate Governance. Answer: The economic, legal, and
institutional framework in which corporate control and cash flow
rights are distributed among shareholders, managers, and other
stakeholders of the company
◉ European Union (EU). Answer: A regional economic integration in
Western Europe, currently with 15 member states, in which all
barriers to the free flow of goods, capital, and people have been
removed. It plans to complete economic unification including a
single currency
◉ General Agreement on Tariffs and Trade (GATT). Answer: A
multilateral agreement between member countries to promote
international trade. It played a key role in reducing international
trade barriers
◉ Market Imperfections. Answer: Various frictions, such as
transaction costs and legal restrictions, that prevent the markets
from functioning perfectly
◉ Multinational Corporation (MNC). Answer: Refers to a firm that
has business activities and interests in multiple countries
,◉ North American Free Trade Agreement (NAFTA). Answer: Created
in 1994, it includes the United States, Canada, and Mexico as
members in a free trade area. It aimed to eliminate tariffs and
import quotas over a 15-year period
◉ Political Risk. Answer: Potential losses to the parent firm resulting
from adverse political developments in the host country
◉ Privatization. Answer: Act of a country divesting itself of
ownership and operation of business ventures by turning them over
to the free market system
◉ Shareholder Wealth Maximization. Answer: This represents the
most important objective of corporate management that managers
of companies should keep in mind when they make important
corporate decisions. Managers can maximize shareholder wealth by
maximizing the market value of the firm
◉ Systemic Risk. Answer: The risk of collapse of the entire financial
system, as opposed to the risk associated with any one individual
component, market, or sector
◉ Theory of Comparative Advantage. Answer: An argument that
supports the existence of international trade. This theory states that
, it is mutually beneficial for countries to specialize in the production
of goods that they can produce most efficiently and then engage in
trade
◉ World Trade Organization (WTO). Answer: Permanent
international organization created by the Uruguay Round to replace
GATT. It has the power to enforce international trade rules
◉ Bimetallism. Answer: A double standard maintaining free coinage
for both gold and silver
◉ Bretton Woods System. Answer: An international monetary
system created in 1944 to promote postwar exchange rate stability
and coordinate international monetary policies
◉ Currency Board. Answer: An extreme form of the fixed exchange
rate regime under which local currency is fully backed by the U.S.
dollar or another chosen standard currency
◉ Euro. Answer: The common European currency introduced in
1999 of the 11 countries of the EU that make up the EMU
◉ European Central Bank (ECB). Answer: The central bank of the 11
countries that make up the EMU, responsible for maintaining price
stability via monetary policy
