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INB 302 FINAL EXAM QUESTIONS AND CORRECT ANSWERS
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Globalization the widening set of interdependent relationships among people from different parts of a world tat happens to be divided into nations
Merchandise exports tangible products that are sent out of a country
Merchandise Imports goods brought into a country
franchising one party allows another to use a trademark as an essential asset of the franchisee's business
Foreign direct investment the investor takes a controlling interest in a foreign company
Joint Venture two or more companies share ownership of a FDI
Portfolio investment non controlling financial interest in another country
Creolization
mixing of cultural elements
cultural imperialism forced on elements of another country
Hierarchy of needs theory individuals will fill lower-level before moving to higher needs
Political system the structural dimensions and power dynamics of its governments that specify institutions, organizations, and interest groups, and define the norms that govern political activities
Political ideology stipulates how society ought to function and outlines the methods by which it will do so
Totalitarianism subordinates the individual to the interest of the collective
individualism primacy of the rights and role of the individual
collectivism primacy of the rights and role of the community
rule of man legal rights derive from the individual who commands the power to impose them associated with a totalitarianism system
command economy the visible hand of the state supersedes the invisible hand of individuals
mixed economies fall between market and command economies
socialism regulate economic activity with a focus on social equality and a fair distribution of wealth
state capitalism refers to a system in which the government explicitly manipulates market outcomes for political purpose
gross national income the broadest measure of economic activity for a country
gross national product the total value of all final goods and services produced within a nation in a particular year
gross domestic product the total market value of goods and services produced by workers and capital with a nation's borders
green economies gauge economic performance in terms of the effect of current choices on long-term sustainability
sustainable development meet the needs of the present without compromising the ability of future generations to meet their own needs
happynomics importance of emotional prosperity in additional to financial prosperity
human development index function of life expectancy at birth, educational attainment, and whether average incomes are sufficient to meet the basic needs of life in a country
inflation a measure of the increase in the cost of living
rates to keep the prices of goods in the country fairly similar
marketing when the value of a country's currency rises, exporting becomes more difficult as the product becomes more expensive in foreign markets
production might locate production in a weak currency country because the initial investment is cheaper and it will make a good base for exports
factor mobility theory focuses on why production factors move, the effects of that movement on transforming factor endowments, and the impact of international factor mobility on world trade
laissez faire one that allows market forces to determine trading relations
absolute advantage different countries produce some goods more efficiently than others, and questions why the citizens of any country should have to buy domestically produced goods when they can buy them more cheaply from abroad
comparative advantage
global efficiency gains may still result from trade if a country specializes in what it can produce most efficiently regardless of other countries' absolute advantage
mercantilism holds that a country's wealth is measured by its holdings of "treasure" which usually means gold
trade surplus exporting more than importing
trade deficit importing more than exporting
neomercantilism the approach of countries that try to run favorable balances of trade in attempt to achieve some social or political objective
new trade theory countries specializes in the production and export of particular products not because of underlying differences in factor endowments (land, labor, capital)
theory of country size
presumes that the unregulated importation of lower priced, manufactures presents the development of a domestic industry
dumping companies sometimes export below cost or below their home-country price
optimum-tariff theory a foreign producer will lower its prices if the importing country places a tax on its products
tariffs refer to a government levied tax on goods shipped internationally
subsidies direct assistance to companies to make them more competitive
quotas limit the quantity of a product that can be imported or exported in a given time frame
countertrade government requirements in the importing country whereby the exporter usually in sales to a foreign government, must provide additional economic benefits such as jobs or technology as part of the transaction
bilateral agreements can be between two individual countries of can involve one country dealing with a group of other countries
regional trade agreements integration confined to a region and involving more than two countries
global integration countries from all over the world decide to cooperate through the world trade organization
static effects shifting of resources from inefficient to efficient companies
dynamic effects overall growth in the market
economies of scale the average cost per unit falls as the number of units produced increases
distributing value chain activities around the world-to achieve location economies
core competencies special outlook, skill, capability, or technology that runs through the firm's operations, threading disconnected activities into an integrated value chain
conventional where we learn role conformity, first from our peers, then from societal laws
local responsiveness the process of disaggregating a standardized whole into differentiated parts
brand an identifying mark for a product or service
ethnocentric fill key management positions with home-country nationals
polycentric use host-country nationals to manage local subsidiaries
geocentric seek the best people for key jobs throughout the organization, regardless of nationality
expatriate failure a managers premature return home due to poor performance
International Business as all commercial transactions, including sales, investment, and transportation that takes place between two or more countries
6Which of the following is NOT one of the phases of the U-shaped curve of expatriate adjustment? repatriation 2 multiple choice options
6which of the following is NOT a reason companies engage in international business? none of the above 3 multiple choice options
6the Gini coefficient does which of the following? measures the extent to which the distribution of resources deviates from a perfectly equal distribution
low-cost production
6the EU is an example of a common market T/F True
6the british airport authority assists and trains the security personnel at airports around the world. this exemplifies a turnkey operation T/F True
the comparative advantage theory holds that a country will gain from trade ____________. even though it can produce all goods more efficiently than other countries.
6companies pursue local responsiveness in their strategy to maximize efficiencies T/F False
comparative advantage theory that states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently
the factor proportions theory holds that countries should improve their competitiveness by importing capital and skilled employees from abroad. T/F False
Factor Proportions Theory factors in relative abundance are cheaper than factors that are relatively scarce. differences in countries endowments of the factors of production explain which products a country exports.
