International Business and Trade by Michelle M.

Esperal
MIDTERM EXAM
Time taken 48 mins 1 sec

Grade50.00 out of 50.00 (100%)

Question 1

Governments can restrict inward FDI by way of using ownership restraints and performance
requirements.

True

Question 2

It is granting a foreign entity the right to produce and sell the firm’s product in return for a royalty fee
on every unit that the foreign entity sells.

licensing

Question 3

It refers to a philosophy that an individual should have freedom in his or her economic and political
pursuits.

individualism

Question 4

In a _________________, certain sectors of the economy are left to private ownership and free market
mechanisms while other sectors have significant state ownership and government planning.

mixed economy

Question 5
A payment to a domestic producer can be:

all of the above

Question 6

The growth of FDI is a result of the following except:

Economic integration

Question 7

Free trade is beneficial because it allows country to specialize in the manufacture and export of
products and services that it can produce efficiently.

True

Question 8

How can foreign direct investment (FDI) be best described?

When an investor starts or acquires a business in a foreign country

Question 9

Government policy can't affect demand through product standards.

False

Question 10

According to the theory of comparative advantage, which of the following is not a reason why
countries trade?

Exports give a country a political advantage over other countries that export less.

Question 11
Foreign direct investment involves

Tangible good

Question 12

Which of the following is not one of the benefits of inward FDI for a host country?

Perceived loss of national sovereignty and autonomy

Question 13

The ________________of a country refers to the rules, or laws, that regulate behavior along with the
process by which the law are enforced and through which redress for grievances is obtained.

legal system

Question 14

Demand conditions is one of the determinants of National Competitive Advantage.

True

Question 15

It is the process of producing goods at home and then shipping them to the receiving country for sale.

exporting

Question 16

It refers to the sourcing of goods and services from location around the globe to take advantage of
national differences in the cost of production.

Globalization of Production
Question 17

Zero sum game is one in which a gain by one country results in a loss by another.

True

Question 18

If all prices in one country (country A) are higher than all prices in another country (B) when compared
at the wage rates that happen to prevail in the two countries, and if the countries share the same
currency, then if the nominal wage rate in country B remains fixed

The nominal wage rate in country A will have to fall

Question 19

It is primarily responsible for policing the world trading systems and making sure nation-state adhere
to the rules laid down in trade treaties.

World Trade Organization

Question 20

Maan live in The Philippines and she wants to mak a greenfield investment in Singapore, which is a
developing country. What type of investment does Maan want to make?

She will be creating a new foreign enterprise

Question 21

Capitalism views trade as a zero-sum game.

False

Question 22

It refers to a philosophy that an individual should have freedom in his or her economic and political
pursuits.
individualism

Question 23

Which of the following best defines a multinational corporation?

A company that operates in many different countries

Question 24

Strategy to integrate larger gains with smaller losses involved

cancellation principle

Question 25

Governments can restrict outward FDI through limiting capital outflows, manipulate tax rules, or
outright prohibit FDI.

True

Question 26

Governments can't encourage inward FDI that will offer incentives to foreign firms to invest in their
countries.

False

Question 27

The following are political arguments for intervention except:

Global warming

Question 28

According to this vie, the MNE is an instrument of imperialist domination and a tool for exploiting host
countries to the exclusive benefit of their capitalist-imperialist home countries
radical view

Question 29

A host government’s attitude toward FDI is an important variable in decisions about where to locate
foreign production facilities and where to make a foreign direct investment.

True

Question 30

It was established to maintain order in the international monetary system.

International Monetary Fund

Question 31

It is committed to preserving peace through international cooperation and collective security.

United Nations

Question 32

It is based on a detailed set of laws organized into codes.

civil law

Question 33

Most successful products are those which are

all of above

Question 34

Trade is a positive sum game.

True
Question 35

In a ________, certain sectors of the economy of the economy are left to private ownership and free
market mechanisms while other sectors have significant state ownership and government planning.

mixed economy

Question 36

Foreign policy decision makers for spreading their information they rely on

Media

Question 37

Which of the following is not considered as GATT criticism?

none of the above

Question 38

It is where citizens' right to freedom of expression and organization, a free media, and regular
elections are all denied.

totalitarianism

Question 39

Which of the following statements would a mercantilist not agree with?

Imports are desirable.

Question 40

According to the theory of comparative advantage, a country will export a good only if

All of the above.

Question 41

It is where all productive activities are privately owned, as opposed to being owned by the state.

market economy

Question 42

________________is based on tradition, precedent, and custom.

common law

Question 43

A person, who offers informal reviews or advice about specific category is called as

opinion leader

Question 44

Which of the following is not one of the costs of inward FDI for a host country?

Effects on competition and economic growth

Question 45

Factors that affect Company's ability to maintain customer relationships are known as

Marketing environment

Question 46

The _______________refers to the merging of historically distinct and separate national markets into
one huge global marketplace.

Globalization of Markets
Question 47

It is where citizens' right to freedom of expression and organization, a free media, and regular
elections are all denied.

totalitarianism

Question 48

It was established to maintain order in the international monetary system.

none of the above

Question 49

It is where all productive activities are privately owned, as opposed to being owned by the state.

market economy

Question 50

Consumer's seek, for answer of 'how we like to view ourselves' is a concept named by

ideal self-concept