Management 80 Part 2

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The purchase of pysical assets or a significant amount of ownership of a company in another country to gain a degree of management control is referred to as __________ Foreign direct investment Foreign direct investment
Which of these are main reasons that account for the growth of FDI flows over the past decade? Diversity and telecommunications Telecommunications and transportation Globalization and mergers and acquisitions
Reasons why companies seek cross-border M&A deals include _________________ To get a foothold in new geographic areas To increase a firm’s global competitiveness All of the above
As companies realize they can now produce in the most efficient and productive locations in the world, it creates FDI flows into ________ Low-cost newly industrialized and emerged nations Low-cost newly industrialized and emerged nations
Which of the following is not one of the four main theories that attempts to explain why companies engage in foreign direct investment? The international product life cycle theory The ma: The theory of mercantilism
NAFTA’s stipulation that a sufficient portion of a product’s content must originate within Canada, Mexico, or the United States in order for the product to escape tariff charges when it is imported to any of these three ma: A market imperfection
Which of these theories states that firms undertake FDI when the features of particular location combine with ownership and internationalization advantages to make a location appealing for investment? Market po: The eclectic theory
Which of these will occur if Brazil imports more goods, services and income than it exports? A current account deficit A capital account surplus A current account: A current account deficit
Which of the following can motivate FDI? Image appeal Following clients Following rivals All of the above: All of the above
Which of these can be described as a customs union? MERCOSUR EU NAFTA Andean community: MERCOSUR
Which of these refers to the economic integration whereby countries remove all barriers to trade and the movement of labor and capital amongst themselves, but erect a common trade policy against nonmembers? Eco: Common market
A key objective of early integration efforts in Europe in the 1950s was _________ Trade creation Trade diversion Peace Greater consensus: Peace
All of the following are true of trade diversion except ______ It is the opposite of trade creation Economic integration can unintentionally reward a less-efficient producer within the t: Consumers have a wider selection of goods
Which of the following is not true of national sovereignty? The lease amount of sovereignty that must be surrendered to the trading bloc occurs in a free-trade area In a free-trade area: Political union is fairly easy to achieve because it does not result in a significant loss of national sovereignty
All of the following are true of the euro except _______ It eliminates exchange costs by eliminating the cost of converting from one currency to another It makes prices prices between ma: Participating countries include Belgium, Spain, Greece, Denmark, Finland, Germany, France, Ireland, Italy, Luxembourg, and the Netherlands
The European Commission is the ____ body of the EU Legislative Executive Financial Monitoring: Executive
Today, the US exports more to ____ than it does to Britain, France, Germany, and Italy combined China Jaan Mexico South Korea: Mexico
Investment banks do all of the following except ________ Help clients invest excess capital and borrow needed capital Provide new loans for investment projects In: Provide new loans for investment projects
The ease with which bondholders and shareholders may convert their investments into cash is referred to as _____ Barter Hedging arbitrage Liquidity: Liquidity
Rapid growth of the international capital market can be traced to all these factors except ____ Innovative financial instruments Information technology Interbank: Interbank market
All of the following are true of booking centers except ________ Booking centers are small island nations or territories with favorable tax and/or secrecy laws Booking centers are home t: Some important booking centers are Switzerland, Gibraltar, and the Cayman Islands
A bond issued by a Venezuelan company, denominated in US dollars, and sold in Britain, France, and Germany is _________ An international bond A foreign currency bond A Eurobond
The most commonly quoted rate in the Eurocurrency market is _______ LIBOR LIBID CAACM CASCM: LIBOR
Johnstown, a British trading company deposited British pounds in their Japanese bank. These British pounds are referred to as _____ Poundyens Euroen Europounds
An indirect quote on the US dollar is FF5.50/US $. Which of these would be the direct quote? $2.20/FF $0.1819/FF $5.50/FF $0.1819/FF
If the spot for the British pound (GDP) is $1.6950/GBP and the 30-day forward rate of the British pound is $1.6921/GBP, then ________ in the 30-day market. The pound is trading at a premium The pound is trading at a discount
When a country’s currency is weak, the price of its __________. Exports and imports on world markets decline Exports on world markets decline and the price of imports increases: Exports on world markets decline and the price of imports increases
Translating subsidiary earnings from a weak host country currency into a strong home currency ____. Reduces the amount of these earnings when stated in the home currency Increases stated: Reduces the amount of these earnings when stated in the home currency
Suppose a kilogram of coal costs 1.5 Euro in Germany and $1 in the US, _____ The law of one price calculates the expected exchange rate between the euro and the dollar to be 1.5E/$ The l: The law of one price calculates the expected exchange rate between the euro and the dollar to be 1.5E/$
Suppose the exchange rate at the beginning of the year between the French Franc and US dollar is 5FF/US $. The annual inflation rate in France is 12% whereas the annual US inflation rate is about 2%.: FF5.49/US$
According to the Fisher effect, ______ Nominal Interest Rate = Real Interest Rate + Inflation Rate Real Interest Rate = Nominal Interest Rate + Inflation Rate Nom: Nominal Interest Rate = Real Interest Rate + Inflation Rate
Under the gold standard, if the US dollar was fixed at $30/oz of gold and Japan was fixed at Y75/ox of gold, what would be the Yen/dollar exchange rate? Y2.50/US$ $.2.50/Y Y2.50/US$
Which of these was created by the Bretton Woods Agreement to enforce the rules of the international monetary system? IMF IBRD SDR The Worl: IMF
A system in which currencies float against one another, with government intervening to stablize their currency at a particular target exchange rate is called ________ A managed float system A managed float system
Which of the following would most likely have an objective of being the largest global company in each industry in which it competes? Individual business units Individual departments: Global headquarters
Core competencies are all of the following except ____ A special ability of a company that competitors find extremely difficult or impossible to equal Easy to teach: Easy to teach
Which of these divides a company’s activities into primary and support activities central to creating customer value? Mission statement Location economies M: Value chain analysis
Companies often establish largely independent, self-contained units in each national market under which of these strategies? Retrenchment Global Multinational: Multinational
The main benefit of a global strategy is ______ It allows companies to closely monitor buyer preferences in each local markets Its cost savings due to product and marketing standardizati: Its cost savings due to product and marketing standardization
Organic growth refers to corporate strategy relying on _____ Mergers and acquisitions Joint ventures Internally generated growth Strategic: Internally generated growth
Companies with centralized production facilities are usually in pursuit of _______ Low-cost strategies Multidomestic strategies Differentiation strategies: Low-cost strategies
Decentralized decision-making is beneficial when ____ One subsidiary’s output is another’s input Fast-changing national business environments put a premium on local responsiv: Fast-changing national business environments put a premium on local responsiveness
Locating production facilities within regional markets is popular because ______ Producing in one of a regions’ countries provides duty-free access to every consumer in the whole trade bloc Producing in one of a regions’ countries provides duty-free access to every consumer in the whole trade bloc
The first step in the screening process for potential markets and sites is to _____ Select the market/site Obtain government approval for research Identify basic: Identify basic appeal
Quality of workforce, materials and infrastructure is part of which step in the screening process for potential markets and sites? Step 1: identify basica appeal Step 2: asses the nation: Step 3: measure market or site potential
Which of these is essential to produce in any country? Availability of labor Tariffs and quotas Government control Local financing: Availability of labor
Potential loss of economies of scale due to producing in several locations other than just one to better serve customers’ special needs in a target market can be minimized through the use of ___ Focus gro: Flexible manufacturing methods
Events with a negative impact_____ Are always bad for companies Usually create new opportunies for companies Are seen as negative only if the company has failed t: Are seen as negative only if the company has failed to adequately plan and take the necessary precautions
Which of the following does not typically lower investor confidence and force international companies to scale back or cancel proposed investments? High rates of inflation Increasing bud: Appreciating currencies
If the income-eslaticity coefficient for coffee is .5, the demand for coffee will _____ Increase .5 percent for every 1.0 percent increase in income: Increase .5 percent for every 1.0 percent increase in income
Industry data cannot tell us how individuals feel about a company or its products: TRUE-
One source that takes a fairly unbiased view of markets is the World Factbook published by the CIA: TRUE-
Companies considering entry into emerging markets often face special problems related to a lack of information: TRUE-
A differentiation strategy tends to force a company into a higher market share position because it generally involves the perception of exclusivity: FALSE-
Countries that don’t spend much on R&D tend to be less prosperous: TRUE-
Many of the concerns facing managers when formulating a strategy are different for domestic as compared to international companies.: FALSE-
The intentional raising of the value of a currency by the nation’s government is called devaluation: FALSE-
If the law if one price is applied and upheld, an arbitrage opportunity arises: FALSE-
PPP states that economic forces will push the actual market exchange rate toward that determined by purchasing power parity.: TRUE-
When the government buys its own securities on the open market, cash is infused into the economy and the money supply increases.: TRUE-

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Deck Info

Number of cards 60

Created By sgo1