C211 SECOND OA TEST QUESTIONS AND ANSWERS
The term "emerging economies" has replaced the term _____. - answer- Developing
countries
The gross domestic product plus the income from non-resident sources abroad gives
the ____. - answer- gross national product
More than 25% of global GDP comes from _____. - answer- BRICS countries
Viewing the global economy as a pyramid, the Triad refers to _____. - answer- North
America, Western Europe, and Japan
People who earn _____ a year comprise the base of the global economic pyramid. -
answer- less than $2,000
Which of the following would be an example of a top down innovation? - answer-
Lowering prices and features of existing products to meet emerging market needs
Which of the following is true of the Group of 20 (G-20)? - answer- It only has 19
member countries.
Which of the following does the institution-based view of global business lay emphasis
on? - answer- Understanding the laws and values of the firm's host nation.
The resource-based view of global business differs from the institution-based view of
global business in that the resource-based view _____. - answer- focuses on the
internal strengths on the firm
The liability of foreignness is the inherent disadvantage faced by _____. - answer-
foreign firms in host nations due to their non-native status
Which of the following is true of globalization according to the "new force" perspective? -
answer- It is a western ideology focused on exploiting and dominating the world through
MNEs
The concept of _____ suggests that barriers to market integration at borders are high,
but not high enough to completely insulate countries from each other. - answer-
Semiglobalization
The strategy of treating each country as a unique market and in total isolation is referred
to as _____. - answer- Localization
In foreign exchange, a(n) _____ is said to have occurred when investors move in the
same direction at the same time, like a herd. - answer- bandwagon effect
,Between 1870 and 1914, the value of most major currencies was maintained by fixing
their prices in terms of _____. - answer- Gold
Which of the following was true of the Bretton Woods system? - answer- All currencies
were pegged at a fixed rate to the dollar.
The weight a member country carries within the IMF, which determines the amount of
its financial contribution, its capacity to borrow from the IMF, and its voting power is
referred to as a(n) _____. - answer- Quota
_____ allow participants to buy and sell currencies now for future delivery. - answer-
Forward transactions
_____ is defined as the conversion of one currency into another at Time 1, with an
agreement to revert it back to the original currency at a specific Time 2 in the future. -
answer- Currency swap
___ refers to non-financial companies spreading out its activities in different currency
zones in order to offset the currency losses in certain regions through gains in other
regions. - answer- Strategic hedging
A currency board is a monetary authority that issues notes and coins convertible into a
key foreign currency at a _____ exchange rate. - answer- Fixed
A manager arguing against currency hedging would most likely argue that _____. -
answer- currency hedging eats into company profits
Liability of foreignness is _____. - answer- the inherent disadvantage foreign firms
experience in host countries
Which of the following conforms to the notion put forward by the school of thought
associated with stage models? - answer- Firms enter culturally distant countries in later
stages when they may gain more confidence
Which of the following is a first-mover advantage? - answer- Avoidance of clash with a
dominant firm at home
____ refers to the amount of resources committed to entering a foreign market. -
answer- Scale of entry
The distinction between _____ is what defines an MNE from a firm that merely exports
or imports. - answer- equity and non-equity modes of entry
Which of the following is a non-equity mode of entry? - answer- Turnkey projects
Which of the following entry modes is a type of strategic alliance? - answer- Licensing
, Which of the following is an advantage of R&D contracts? - answer- Ability to tap into
the best, cost-effective locations
Which of the following is true of indirect exports? - answer- They export through
domestically based export intermediaries.
A(n) _____ is a non-equity mode of entry used to build a longer-term presence by
building and then operating a facility for a period of time before transferring operations
to a domestic agency or firm. - answer- BOT agreement
Greenfield operations are similar to acquisitions in that they are both examples of
_____. - answer- wholly owned subsidiaries
The country-of-origin effect refers to _____. - answer- the positive or negative
perception of firms and products from a certain country
The process of anticipating rivals' actions in order to both revise a firm's plan and
prepare to deal with rivals' response is called _____. - answer- competitor analysis
___ occurs when firms engage the same rivals in numerous markets. - answer-
Multimarket competition
Which of the following industry characteristics contributes to collusion? - answer-
Existence of an industry price leader
Which of the following is defined as the degree of overlap between two rivals' markets?
- answer- Market commonality
__ is an attack on a competitor's other markets if this competitor attacks a firm's original
market. - answer- Cross-market retaliation
The act of setting prices below cost to eliminate rivals while intending to raise them in
the long run to make up for the initial losses is known as _____. - answer- predatory
pricing
A _____ antirust policy would protect established firms that have already invested and
nurtured an industry from new entrants. - answer- pro-incumben
Which combination of resource similarity and market commonality results in the most
intense competition? - answer- High resource similarity, low market commonality
Which of the following sets of words describes the initial set of actions a firm uses to
gain competitive advantage and the other firm's response to it? - answer- Attack,
counterattack
The term "emerging economies" has replaced the term _____. - answer- Developing
countries
The gross domestic product plus the income from non-resident sources abroad gives
the ____. - answer- gross national product
More than 25% of global GDP comes from _____. - answer- BRICS countries
Viewing the global economy as a pyramid, the Triad refers to _____. - answer- North
America, Western Europe, and Japan
People who earn _____ a year comprise the base of the global economic pyramid. -
answer- less than $2,000
Which of the following would be an example of a top down innovation? - answer-
Lowering prices and features of existing products to meet emerging market needs
Which of the following is true of the Group of 20 (G-20)? - answer- It only has 19
member countries.
Which of the following does the institution-based view of global business lay emphasis
on? - answer- Understanding the laws and values of the firm's host nation.
The resource-based view of global business differs from the institution-based view of
global business in that the resource-based view _____. - answer- focuses on the
internal strengths on the firm
The liability of foreignness is the inherent disadvantage faced by _____. - answer-
foreign firms in host nations due to their non-native status
Which of the following is true of globalization according to the "new force" perspective? -
answer- It is a western ideology focused on exploiting and dominating the world through
MNEs
The concept of _____ suggests that barriers to market integration at borders are high,
but not high enough to completely insulate countries from each other. - answer-
Semiglobalization
The strategy of treating each country as a unique market and in total isolation is referred
to as _____. - answer- Localization
In foreign exchange, a(n) _____ is said to have occurred when investors move in the
same direction at the same time, like a herd. - answer- bandwagon effect
,Between 1870 and 1914, the value of most major currencies was maintained by fixing
their prices in terms of _____. - answer- Gold
Which of the following was true of the Bretton Woods system? - answer- All currencies
were pegged at a fixed rate to the dollar.
The weight a member country carries within the IMF, which determines the amount of
its financial contribution, its capacity to borrow from the IMF, and its voting power is
referred to as a(n) _____. - answer- Quota
_____ allow participants to buy and sell currencies now for future delivery. - answer-
Forward transactions
_____ is defined as the conversion of one currency into another at Time 1, with an
agreement to revert it back to the original currency at a specific Time 2 in the future. -
answer- Currency swap
___ refers to non-financial companies spreading out its activities in different currency
zones in order to offset the currency losses in certain regions through gains in other
regions. - answer- Strategic hedging
A currency board is a monetary authority that issues notes and coins convertible into a
key foreign currency at a _____ exchange rate. - answer- Fixed
A manager arguing against currency hedging would most likely argue that _____. -
answer- currency hedging eats into company profits
Liability of foreignness is _____. - answer- the inherent disadvantage foreign firms
experience in host countries
Which of the following conforms to the notion put forward by the school of thought
associated with stage models? - answer- Firms enter culturally distant countries in later
stages when they may gain more confidence
Which of the following is a first-mover advantage? - answer- Avoidance of clash with a
dominant firm at home
____ refers to the amount of resources committed to entering a foreign market. -
answer- Scale of entry
The distinction between _____ is what defines an MNE from a firm that merely exports
or imports. - answer- equity and non-equity modes of entry
Which of the following is a non-equity mode of entry? - answer- Turnkey projects
Which of the following entry modes is a type of strategic alliance? - answer- Licensing
, Which of the following is an advantage of R&D contracts? - answer- Ability to tap into
the best, cost-effective locations
Which of the following is true of indirect exports? - answer- They export through
domestically based export intermediaries.
A(n) _____ is a non-equity mode of entry used to build a longer-term presence by
building and then operating a facility for a period of time before transferring operations
to a domestic agency or firm. - answer- BOT agreement
Greenfield operations are similar to acquisitions in that they are both examples of
_____. - answer- wholly owned subsidiaries
The country-of-origin effect refers to _____. - answer- the positive or negative
perception of firms and products from a certain country
The process of anticipating rivals' actions in order to both revise a firm's plan and
prepare to deal with rivals' response is called _____. - answer- competitor analysis
___ occurs when firms engage the same rivals in numerous markets. - answer-
Multimarket competition
Which of the following industry characteristics contributes to collusion? - answer-
Existence of an industry price leader
Which of the following is defined as the degree of overlap between two rivals' markets?
- answer- Market commonality
__ is an attack on a competitor's other markets if this competitor attacks a firm's original
market. - answer- Cross-market retaliation
The act of setting prices below cost to eliminate rivals while intending to raise them in
the long run to make up for the initial losses is known as _____. - answer- predatory
pricing
A _____ antirust policy would protect established firms that have already invested and
nurtured an industry from new entrants. - answer- pro-incumben
Which combination of resource similarity and market commonality results in the most
intense competition? - answer- High resource similarity, low market commonality
Which of the following sets of words describes the initial set of actions a firm uses to
gain competitive advantage and the other firm's response to it? - answer- Attack,
counterattack
