BUAD 2080 EXAM 2 QUESTIONS AND ANSWERS
Which of the following is a major obstacle to economic transition? - CORRECT
ANSWER✅✅environmental degradation
The relative ability of two countries' currencies to buy the same basket of goods in those two countries
is called ________. - CORRECT ANSWER✅✅purchasing power parity
Expropriation is best defined as the ________. - CORRECT ANSWER✅✅transference of ownership from
private to public sector with compensation to private owners for their losses
When Cleanshot USA, a photography products company, decided to enter the international arena, it
chose Russia as its main market. Although Russia has been in transition for years, Cleanshot managers
believe their company has tremendous opportunities there.
Russia is in transition from ________. - CORRECT ANSWER✅✅a centrally planned economy to a free-
market economy
Which of the following statements is true about the political risks in a global marketing environment? -
CORRECT ANSWER✅✅Political risk is a major deterrent for companies that want to invest abroad.
________ is the value of all goods and services produced by the domestic economy over a one-year
period. - CORRECT ANSWER✅✅Gross domestic product (GDP)
Local content regulations are primarily intended to ________. - CORRECT ANSWER✅✅encourage MNEs
to increase production activities in a country
________ is the forced transfer of assets from a company to the government with compensation. -
CORRECT ANSWER✅✅Expropriation
Had the government taken over (with compensation) the assets of Global Trading but not those of any
other company, the government's actions would be an example of ________. - CORRECT
ANSWER✅✅expropriation
,Economic transition is the process of moving from ________. - CORRECT ANSWER✅✅centrally planned
to free-market economies
Which of the following measures the extent to which a government equitably provides its people with a
long and healthy life, an education, and a decent standard of living? - CORRECT ANSWER✅✅human
development index
Himark Enterprises has foreign operations in Taiwan, India, and China. The firm pays an annual
insurance premium to the Overseas Private Investment Corporation. The firm is most likely protecting
itself from ________. - CORRECT ANSWER✅✅nationalization
Christopher Electronics plans to expand into foreign markets. Top executives want the firm to focus only
on locations where the rule of law prevails. Which of the following should most likely be considered by
Christopher? - CORRECT ANSWER✅✅wealthier, westernized countries
Countries often use local content regulations to determine the proportion of the product that must be
made in the local market versus made outside of the local market in order to ________. - CORRECT
ANSWER✅✅favor domestic companies
Had the government taken over the assets of Global Trading without compensation, and not taken over
the assets of any other company, the government's actions would be an example of ________. -
CORRECT ANSWER✅✅confiscation
________ has one of the highest levels of macropolitical risk. - CORRECT ANSWER✅✅Afghanistan
Country risk is considered similar to ________. - CORRECT ANSWER✅✅political risk
An individual from a country with a high degree of political risk would most likely be from ________. -
CORRECT ANSWER✅✅Iraq
________ is the value of goods and services that can be purchased with one unit of a country's currency.
- CORRECT ANSWER✅✅Purchasing power
, ________ is political risk that affects only a specific firm or firms within a specific industry. - CORRECT
ANSWER✅✅Exclusive political risk
Which of the following terms refers to the forced transfer of assets from a company to the government
without compensation? - CORRECT ANSWER✅✅confiscation
CADE Enterprises, a U.S. manufacturer, received assistance from the Overseas Private Investment
Corporation when it expanded operations into Saudi Arabia. Which of the following types of support did
CADE most likely receive from OPIC? - CORRECT ANSWER✅✅political risk insurance
A country that has recently increased the portion of its national production and exports derived from
industrial operations is called a(n) ________. - CORRECT ANSWER✅✅newly industrialized country (NIC)
When Cleanshot USA, a photography products company, decided to enter the international arena, it
chose Russia as its main market. Although Russia has been in transition for years, Cleanshot managers
believe their company has tremendous opportunities there.
Which of the following challenges is Cleanshot most likely to face in Russia? - CORRECT
ANSWER✅✅organized crime
An individual from a country with a low degree of political risk would most likely be from ________. -
CORRECT ANSWER✅✅Canada
Which of the following terms is used to refer to the exchange of goods and services for other goods and
services instead of money? - CORRECT ANSWER✅✅barter
_______ refers to governmental action to dispossess a company or investor. - CORRECT
ANSWER✅✅Expropriation
Which of the following is a major obstacle to economic transition? - CORRECT
ANSWER✅✅environmental degradation
The relative ability of two countries' currencies to buy the same basket of goods in those two countries
is called ________. - CORRECT ANSWER✅✅purchasing power parity
Expropriation is best defined as the ________. - CORRECT ANSWER✅✅transference of ownership from
private to public sector with compensation to private owners for their losses
When Cleanshot USA, a photography products company, decided to enter the international arena, it
chose Russia as its main market. Although Russia has been in transition for years, Cleanshot managers
believe their company has tremendous opportunities there.
Russia is in transition from ________. - CORRECT ANSWER✅✅a centrally planned economy to a free-
market economy
Which of the following statements is true about the political risks in a global marketing environment? -
CORRECT ANSWER✅✅Political risk is a major deterrent for companies that want to invest abroad.
________ is the value of all goods and services produced by the domestic economy over a one-year
period. - CORRECT ANSWER✅✅Gross domestic product (GDP)
Local content regulations are primarily intended to ________. - CORRECT ANSWER✅✅encourage MNEs
to increase production activities in a country
________ is the forced transfer of assets from a company to the government with compensation. -
CORRECT ANSWER✅✅Expropriation
Had the government taken over (with compensation) the assets of Global Trading but not those of any
other company, the government's actions would be an example of ________. - CORRECT
ANSWER✅✅expropriation
,Economic transition is the process of moving from ________. - CORRECT ANSWER✅✅centrally planned
to free-market economies
Which of the following measures the extent to which a government equitably provides its people with a
long and healthy life, an education, and a decent standard of living? - CORRECT ANSWER✅✅human
development index
Himark Enterprises has foreign operations in Taiwan, India, and China. The firm pays an annual
insurance premium to the Overseas Private Investment Corporation. The firm is most likely protecting
itself from ________. - CORRECT ANSWER✅✅nationalization
Christopher Electronics plans to expand into foreign markets. Top executives want the firm to focus only
on locations where the rule of law prevails. Which of the following should most likely be considered by
Christopher? - CORRECT ANSWER✅✅wealthier, westernized countries
Countries often use local content regulations to determine the proportion of the product that must be
made in the local market versus made outside of the local market in order to ________. - CORRECT
ANSWER✅✅favor domestic companies
Had the government taken over the assets of Global Trading without compensation, and not taken over
the assets of any other company, the government's actions would be an example of ________. -
CORRECT ANSWER✅✅confiscation
________ has one of the highest levels of macropolitical risk. - CORRECT ANSWER✅✅Afghanistan
Country risk is considered similar to ________. - CORRECT ANSWER✅✅political risk
An individual from a country with a high degree of political risk would most likely be from ________. -
CORRECT ANSWER✅✅Iraq
________ is the value of goods and services that can be purchased with one unit of a country's currency.
- CORRECT ANSWER✅✅Purchasing power
, ________ is political risk that affects only a specific firm or firms within a specific industry. - CORRECT
ANSWER✅✅Exclusive political risk
Which of the following terms refers to the forced transfer of assets from a company to the government
without compensation? - CORRECT ANSWER✅✅confiscation
CADE Enterprises, a U.S. manufacturer, received assistance from the Overseas Private Investment
Corporation when it expanded operations into Saudi Arabia. Which of the following types of support did
CADE most likely receive from OPIC? - CORRECT ANSWER✅✅political risk insurance
A country that has recently increased the portion of its national production and exports derived from
industrial operations is called a(n) ________. - CORRECT ANSWER✅✅newly industrialized country (NIC)
When Cleanshot USA, a photography products company, decided to enter the international arena, it
chose Russia as its main market. Although Russia has been in transition for years, Cleanshot managers
believe their company has tremendous opportunities there.
Which of the following challenges is Cleanshot most likely to face in Russia? - CORRECT
ANSWER✅✅organized crime
An individual from a country with a low degree of political risk would most likely be from ________. -
CORRECT ANSWER✅✅Canada
Which of the following terms is used to refer to the exchange of goods and services for other goods and
services instead of money? - CORRECT ANSWER✅✅barter
_______ refers to governmental action to dispossess a company or investor. - CORRECT
ANSWER✅✅Expropriation
