The term "emerging economies" has replaced the term _____. Correct ans - Developing countries
The gross domestic product plus the income
... [Show More] from non-resident sources abroad gives the ____. Correct ans - gross national product
More than 25% of global GDP comes from _____. Correct ans - BRICS countries
Viewing the global economy as a pyramid, the Triad refers to _____. Correct ans - North America, Western Europe, and Japan
People who earn _____ a year comprise the base of the global economic pyramid. Correct ans - less than $2,000
Which of the following would be an example of a top down innovation? Correct ans - 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)? Correct ans - It only has 19 member countries.
Which of the following does the institution-based view of global business lay emphasis on? Correct ans - 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 _____. Correct ans - focuses on the internal strengths on the firm
The liability of foreignness is the inherent disadvantage faced by _____. Correct ans - 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? Correct ans - 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. Correct ans - Semiglobalization
The strategy of treating each country as a unique market and in total isolation is referred to as _____. Correct ans - Localization
MNEs from the Triad dominate the list of the 500 largest MNEs; their share has been _____. Correct ans - Shrinking
A conversion that determines the equivalent amount of goods and services that different currencies can buy is known as _____. Correct ans - purchasing power parity
Which of the following countries would be characterized as an emerging economy? Correct ans - Brazil
Which of the following countries is represented in the Triad of the global economic pyramid? Correct ans - Japan
People who earn _____ a year comprise the base of the global economic pyramid. Correct ans - less than $2,000
A _____ is defined as an innovation that is adopted first in emerging economies and then diffused around the world. Correct ans - reverse innovation
The _____ view suggests that the success and failure of firms are largely determined by their environments. Correct ans - institution-based
The _____ view of global business focuses on internal factors that can help a firm overcome its external environment. Correct ans - resource-based
Which of the following is true of globalization according to the "pendulum view" perspective? Correct ans - Globalization is a not a one-directional phenomenon
The concept of _____ suggests that barriers to market integration at borders are high, but not high enough to completely insulate countries from each other. Correct ans - semiglobalization
_____ is the strategy of treating the entire world as one market. Correct ans - Standardization
Protectionism is similar to mercantilism as they both advocated _____. Correct ans - government involvement in international trade
The _____ principle advocated that governments should actively protect domestic industries from imports and vigorously promote exports. Correct ans - Protectionism
Which of the following is a modern trade theory? Correct ans - National competitive advantage
Which of the following trade theories divides the nations of the world into three categories? Correct ans - Product life cycle
Which of the following was the first international trade theory to account for changes in the patterns of trade over time? Correct ans - Product life cycle theory
In the third stage of the product life cycle theory, the _____. Correct ans - product is standardized
Which of the following describes resource mobility as assumed by the classical theories of international trade? Correct ans - It is the assumption that a resource used in producing a product for one industry can be shifted and put to use in another industry
The theory of comparative advantage _____. Correct ans - explains patterns of trade based on factor endowments
Deadweight costs are net losses that occur when _____ are imposed. Correct ans - import tariffs
_____ are government payments to domestic firms. Correct ans - Subsidies
Which of the following is true of voluntary export restraints? Correct ans - It is an export quota levied by a country on the quantity of its exports.
_____ are tariffs levied on imports sold below costs to drive domestic firms out of business. Correct ans - Antidumping duties
FPI refers to the _____. Correct ans - investment in a portfolio of foreign securities that do not entail the active management of foreign assets
A vertical FDI refers to a type of FDI in which _____. Correct ans - a firm moves upstream or downstream at different value chain stages in a host country
_____ refers to the total accumulation of inbound FDI in a country or outbound FDI from a country. Correct ans - FDI stock
OLI advantages refer to a firm's quest for _____via FDI. Correct ans - ownership advantages, location advantages, and internalization advantages
____ refers to the replacement of cross-border markets with one firm locating in two or more countries. Correct ans - Internalization
Firms prefer FDI to licensing because FDI_____. Correct ans - provides the firm with direct ownership to its foreign assets
_____ refers to the clustering of economic activities in certain locations. Correct ans - Agglomeration
The television industry in the United States is controlled by seven giant corporations: The Walt Disney Company, CBS Corporation, Viacom, Comcast, Hearst Corporation, Time Warner, and News Corporation. Thus, the television industry in the U.S. is a typical _____ industry. Correct ans - Oligopolistic
Which of the following economic perspectives on FDI has its principles rooted in Marxism? Correct ans - The radical view
Which of the following is a benefit of FDI to home countries? Correct ans - Learning from operations
_____ refers to the deal struck by MNEs and host governments, which change their requirements after the initial FDI entry. Correct ans - Obsolescing bargain
Costs that a firm has to endure even when its investment turns out to be unsatisfactory are referred to as _____. Correct ans - sunk costs
A _____ is the price of one currency, such as the dollar, in terms of another, such as the euro. Correct ans - foreign exchange rate
Which of the following conditions will attract foreign funds into a country? Correct ans - If the country's interest rate is relatively high compared to other countries
_____ is a country's international transaction statement, which includes merchandise trade, service trade, and capital movement. Correct ans - Balance of payments
Which of the following types of exchange rate policies is apt for a pure free market economy? Correct ans - Clean float
The fixing of East and West Germany's currencies at a 1:1 ratio to each other during the German unification in 1990 is an example of a _____. Correct ans - fixed exchange rate policy
In foreign exchange, a(n) _____ is said to have occurred when investors move in the same direction at the same time, like a herd. Correct ans - bandwagon effect
Between 1870 and 1914, the value of most major currencies was maintained by fixing their prices in terms of _____. Correct ans - Gold
Which of the following was true of the Bretton Woods system? Correct ans - 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) _____. Correct ans - Quota
_____ allow participants to buy and sell currencies now for future delivery. Correct ans - 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. Correct ans - 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. Correct ans - Strategic hedging [Show Less]