C211 FINAL PAPER UPDATED COMPLETE
QUESTIONS AND CORRECT ANSWERS
BUNDLED REVIEW GUIDE
●● Economic gains come from international trade because one country's
exported goods, services, or other items are unique, valuable, and
difficult to duplicate to the importing countries
Answer: Resource-based view
●● What is the aggregation of importing and exporting that leads to the
country-level trade surplus or deficit?
Answer: Balance of trade
●● What is a cost of foreign direct investment?
Answer: Developing countries may be exploited by multinational
enterprises (MNE).
●● What may precious, rare, and hard-to-duplicate resources and
capabilities lead to for a firm?
Answer: Sustained comparative advantage
●● Which theory states that patterns of international trade change across
new, maturing, and standardized stages?
, Answer: Product life cycle theory
●● What is the financial environment in which exchange rates and
payments for goods and services are conducted?
Answer: International monetary system
●● What happens to a country's real exchange rate and nominal interest
rate as the price level increases, assuming all other factors are
unchanged?
Answer: Exchange rates fall and interest rates rise.
●● What is the easiest method nonfinancial companies use to handle
currency fluctuations?
Answer: Currency diversification
●● Which strategy minimizes the risk of unanticipated changes in future
exchange rates?
Answer: Currency swap
●● A company is looking for a location with an abundance of ground-
breaking individuals, firms, and universities.
Which type of strategic goal is this company demonstrating?
Answer: Innovation-seeking
QUESTIONS AND CORRECT ANSWERS
BUNDLED REVIEW GUIDE
●● Economic gains come from international trade because one country's
exported goods, services, or other items are unique, valuable, and
difficult to duplicate to the importing countries
Answer: Resource-based view
●● What is the aggregation of importing and exporting that leads to the
country-level trade surplus or deficit?
Answer: Balance of trade
●● What is a cost of foreign direct investment?
Answer: Developing countries may be exploited by multinational
enterprises (MNE).
●● What may precious, rare, and hard-to-duplicate resources and
capabilities lead to for a firm?
Answer: Sustained comparative advantage
●● Which theory states that patterns of international trade change across
new, maturing, and standardized stages?
, Answer: Product life cycle theory
●● What is the financial environment in which exchange rates and
payments for goods and services are conducted?
Answer: International monetary system
●● What happens to a country's real exchange rate and nominal interest
rate as the price level increases, assuming all other factors are
unchanged?
Answer: Exchange rates fall and interest rates rise.
●● What is the easiest method nonfinancial companies use to handle
currency fluctuations?
Answer: Currency diversification
●● Which strategy minimizes the risk of unanticipated changes in future
exchange rates?
Answer: Currency swap
●● A company is looking for a location with an abundance of ground-
breaking individuals, firms, and universities.
Which type of strategic goal is this company demonstrating?
Answer: Innovation-seeking
