Partnership
Venture-Joint
159. Computer manufacturing firm (US), invests in a microprocessor manufacturing plant in Taiwan.
Foreign direct investment
Insourcing
Product differentiation
Stock consolidation
160. Advantage(s) of acquisitions
Provides quick and efficient access to new markets
Companies face new and unknown culture and traditions
Cumbersome government regulations can slow a negotiation
All answers are correct
161. Reason(s) for forming joint ventures
To share complementary skills and expertise
To gain access to technology and new products
To obtain local expertise
All answers are correct
162. Advantage(s) of a joint venture
They use pre-existing distribution networks
The firm reputation is tied to the partner’s reputation
The local partner often hires local staff
All answers are correct
163. Purchase of physical assets or ownership of a company in another country to gain control is referred to as:
International Trade
Foreign Portfolio Investment
International Business
Foreign Direct Investment
164. If BMW (a German car manufacturer) would purchase Firestone (a US tire manufacturer), this transaction is:
International Trade
Foreign Direct Investment
International Joint Venture
Unilateral Transfer
165. Listed is the reason for FDI inflows in the U.S except:
Frequent changes in economic policy
Openness to FDI
Wealthy domestic markets
Large region
166. Determine one of the reasons for firms to proceed with acquiring existing assets (acquisition):
Quicker to execute than Greenfield investment
Worthless strategic assets
Inefficient
All of the above
167. McDonald’s could purchase a large-scale farm in Canada to produce meat for their restaurants
Horizontal FDI
Vertical FDI
Conglomerate FDI
Platform FDI
168. Which of the following would be an example of FDI from the United States to Taiwan?
U.S bank buys bonds issued by a Taiwan computer manufacturer
Microsoft hires a Taiwanese programmer to debug its software
U.S bank sells bonds issued by a Taiwan computer manufacturer
Warren Buffet buys a controlling share in a Taiwanese firm
169. Ford Motors purchased manufacturing plants in Ireland for exporting cars to other countries in the EU
Horizontal FDI
Vertical FDI
Platform FDI
Conglomerate FDI
170. What is the connection between comparative advantage (CA) and FDI?
Comparative advantage has nothing to do with FDI.
Countries invest in industries where the country has comparative advantage
A country’s firms invest abroad create comparative advantage
Countries invest in countries with a comparative disadvantage
171. Which of the following is a Foreign Direct Investment
The long-term lease of land
An investment under 10% into another nation
The wiping off of debt of a nation
Called an outward flow when FDI transfers enter a nation
172. Foreign investment by the official sector is primarily in the form of:
Borrowing
Sale of government assets
Direct Investment
Equity Investment
173. One major disadvantage of portfolio investment is that it can;
Lead to a depreciation of the currency
Result in a deficit on the financial account
Reduce the level of direct investment
Be speculative and destabilizing
174. Which of the following is not a possible advantage of direct investment:
New managerial skills
New technology
Increased employment opportunities
Increased remittance of profits
175. Virgin Group, which is based in the United Kingdom, acquired a clothing line in France
Platform FDI
Horizontal FDI
Conglomerate FDI
Vertical FDI
176. Which international organization can help mediate a dispute related to International Trade between countries?
World Trade Organization
NAFTA
International Monetary Fund
World Trade Committee
177. What is the underlying characteristic of the WTO?
The promotion of free international trade
It facilitates the development of less developed countries
It resolves disputes between economic trade blocks
It facilitates economic co-operation between different countries
178. Theoretically, what is the most significant organ of the WTO?
The General Council
The Council for Trade in Goods
The Ministerial Conference
The Committee on Trade and Development
179. Practically, what is the most significant organ of the WTO?
The Committee on Trade and Development
The Council for Trade in Goods
The Ministerial Conference
The General Council
180. Where is provision made with regard to the WTO’s institutional arrangements?
In the WTO Agreement
In the GATT
In the UN Charter
In the WTO Agreement on Subsidies and Countervailing Measures
181. With regard to the WTO, subsidies are covered in two separate international economic law agreements. Which are they?
The Reform Treaty and the Treaty of Rome
NAFTA and the Organization of American States Charter
The IMF’s Articles of Agreement and the European Central Bank’s Statute
The GATT and the Agreement on Subsidies and Countervailing Measures
182. What does the World Trade Organization Do?
They build skyscrapers
They Trade Regularly
Establish trading centers
Regulates International Trade
183. What year WTO was it formed?
1959
1995
1998
1945
184. How many member states are involved in the WTO?
141
150
164
139
185. How many observers are involved in the WTO?
25
20
30
15
186.Which one of these is a way that WTO promotes trade?
Raising Trade Barriers
Lowering Trade Barriers
Selling Trade Barriers on Ebay
None of the Above
187. Which one of these is a trade barrier?
Weather
Lack of Money
A navy blockade
Tariffs
188. What does WTO stand for?
World Trading Organization
Why Trade Organization
World Trade Organization
World Trade Outsourcing
189. From what did the WTO branch off of?
GTA
CAT
GATT
GATs
190. Where are the WTO Headquarters?
Geneva, Switzerland
London, G.B.
New York, U.S.
Seattle, Washington.
191. Function of the WTO?
Set rules for global trading & resolve disputes
Argue about what is allowed to trade
Decides the quantities that countries are allowed to trade
Decides which countries can trade and when
192. Which one of this is NOT part of the WTO functions?
Dispute settlements
Implements and monitoring
Impose trade tariffs
Building trade capacity
193. Which one of these is NOT part of the Doha Round?
Subsidies
Intellectual property
Transparency
Reduction of tariffs
194. Which of the following is NOT a WTO principle?
Non-discrimination
Self-profitability
Reciprocity
Liberalization
195. Before the GATT, what was the average tariffs?
33%
27%
40%
37%
196.When the General Agreement on Tariffs and Trade signed? And how many nations involved in?"
1945 / 23 nations
1948 / 23 nations
1948 / 32 nations
1945 / 32 nations
197. Which of these agreements facilitates trade in knowledge, creativity, innovation, technology and Intellectual Property"
GATT
GATS
TRIPS
WTO
198. Which of these agreements creates a credible and reliable system of international services trade rules
GATS
TRIPS
GAAT
GATT
199. What is the difference between WTO and GATT?
The dispute settlement mechanism is more effective in WTO
GATT only dealt with goods WTO covers services and intellectual property
WTO agreements formally ratified by the Member states
All the above
200. Most complaints about the WTO are from?
China
Developed Countries
U.S.
Developing Countries
201. What is the name of the current round of negotiations?
Doha round
Tokyo round
Berlin round
Uruguay round
202. What is a major stimulus to world trade?
Multinational companies
The Internet
Computers
Foreign trade
203. Removal of trade barriers so goods can freely flow between countries.
Inter-Trade
Commerce
Tariff
Free Trade
204. The first international Agreement to promote free trade
GATT
NAFTA
EU
GAAT
205. A country to provide - any privileges granted to one nation in a trade agreement - to all other WTO member countries
Most-Favored-Nation
Liberalization
Non-discrimination
Reciprocity
206. How many countries are members of the European Union?
42
36
27
25
207. In the years after World War II the world economy was dominated by which region or country?
China
Western Europe
United States
Russia
208. A mother countries sells goods to colonies in exchange for raw materials.
Mercantilism
Capitalism
Manorialism
Communism
209.Economic rivalry that exists among businesses selling products that are similar
Competition
Opportunity cost
Absolute advantage
Comparative advantage
210. A limit on the exchange of goods from one country to another
Competition
Trade surplus
Trade deficit
Trade barrier
211. Occurs when a country sells more than it buys
Trade deficit
Budget surplus
Trade surplus
Budget deficit
212. The value of what a country gives up to specialize
Absolute advantage
Comparative advantage
Balance of payments
Opportunity cost
213. When a nation can provide a product cheaper than its trading partner
Absolute advantage
Comparative advantage
Absolute disadvantage
Competitive advantage
214. The record of a country's income and payments between consumers, businesses, and governments
Balance of payments
Reserve requirement
Opportunity cost
Tight money policy
215. The method of determining which products or services to offer a nation the greater advantage
Absolute advantage
Absolute disadvantage
Competitive advantage
Comparative advantage
216. Tariffs, import quotas, and embargoes are all examples of
Trade barriers
Interdependence
Reciprocal trade agreements
Opportunity costs
217. If Mexico is able to grow grapes better than any other country, when it comes to growing grapes
An import quota
A comparative advantage
An absolute advantage
A trade barrier
218. International trade is made possible by
The Fed
The United Nations
Self-sufficient countries
Specialization
219. Countries may choose to employ a voluntary trade restrictions in order to
Help domestic businesses
Encourage global competition
Raise revenue through tariffs
Lower inflation rates
220. a sovereign state that has a high quality of life, developed economy and advanced technological infrastructure relative to other less industrialized nations.
Developed country
Developing country
Newly industrialized country
Emerging market
221. In which country the service sector provides more wealth than the industrial sector
Developing country
Least developed country
Developed country
Newly industrialized country
222. Which of the following is a component of the Human Development Index (HDI) criteria
Life expectancy at birth
Average education level
Standard of living
All the above
223. An empirical relationship helps to make sense of the value of trade between any pair of countries
Supply and demand model
The Keynesian model
Gravity model
Invisible hand model
224. The exchange of goods and services between countries
International trade
Exports
Imports
Protectionism
225. Goods produced domestically and sold abroad
Exports
Imports
International trade
Protectionism
226. Goods produced abroad and sold domestically
Exports
Imports
International trade
Protectionism
227. The difference between the amount produced and the amount traded.
Consumption
Production
Export
Import
228. The ability to produce a good using fewer inputs than another producer
Comparative advantage
Competitive advantage
Absolute Disadvantage
Absolute advantage
229. The ability to produce a good at a lower opportunity cost than another producer
Absolute advantage
Comparative advantage
Competitive advantage
Absolute Disadvantage
230. A trade theory holding that a country’s wealth is measured by its holdings of “treasure”, which usually means its gold.
Mercantilism
Theory of Country Size
Factor-Proportions Theory
Product Life Cycle Theory
231. A theory proposed that a country should try to achieve a favorable balance of trade to receive an influx of gold.
Absolute advantage
Theory of Country Size
Mercantilism
Product Life Cycle Theory
232. Rulers encourages exports by putting limitations on imports. This approach is called …….
Protectionism
Interdependence
Mercantilism
Liberalization
233. His theory points out that trade between countries can be profitable for all, even if one of the countries can produce every commodity more cheaply.
Adam Smith
David Ricardo
Karl Marx
John Maynard Keynes
234. Countries produce and export goods that require resources in abundance, and import goods that require resources in short supply.
Theory of Country Size
Product Life Cycle Theory
Competitive advantage theory
Factor-Proportions Theory
235. The country with the world's highest capital-per worker has a lower capital-labor ratio in exports than in imports.
Leontief Paradox
Factor-Proportions Theory
Theory of Country Size
Hecksher-Ohlin Theory
236. According to the country-similarity theory, most trade today occurs among developed countries because they share similar market characteristics and because they produce and consume so much more than developing economies.
Theory of Country Size
Country Similarity Theory
Product Life Cycle Theory
Hecksher-Ohlin Theory
237. A statement of all transactions made between entities in one country and the rest of the world over a defined period
Balance of Payments
Balance of Trade
Balance Sheet
Account Balance
238. A trading account which records all the transactions made between one country and the rest of the world
Financial Account
Capital Account
Balance of Payments
Current Account
239. One-sided transaction transfers characterized by a resident entity in one nation providing a non-resident entity with an economic value.
Current Account
Capital Account
Current transfers
Account Balance
240. Records the net flow of investment transaction and the international undertakings of assets into an economy
Capital Account
Current transfers
Current Account
Balance of Trade
241. Any one of the types in which wealth can be held
Asset
Bank account
Money
Gold
242. Operated by a nation's central bank to buy and sell foreign currencies
Reserve account
Bank account
Current Account
Capital Account
243. The difference between the value of a country's exports and the value of its imports
Balance of Payments
Balance of Trade
Balance Sheet
Account Balance
244. An arrangement among nations that typically includes the reduction or elimination of trade barriers and the coordination of monetary and fiscal policies.
Balance of Trade
Trade Liberalization
Economic Integration
Protectionism
245. In a ……….., countries would offer tariff reductions, though perhaps not eliminations, to a set of partner countries in some product categories.
Preferential Trade Agreement
Free Trade Area
Economic Union
Common market
246. A group of countries agrees to eliminate tariffs among themselves but maintain their own external tariff on imports from the rest of the world.
Preferential Trade Agreement
Single market
Economic Union
Free Trade Area
247. McDonald’s opening restaurants in Japan would be considered a
Horizontal FDI
Vertical FDI
Conglomerate FDI
Platform FDI
248. McDonald’s could purchase a large-scale farm in Canada to produce meat for their restaurants
Vertical FDI
Platform FDI
Horizontal FDI
Conglomerate FDI
249. If Virgin Group, which is an entertainment company based in UK, acquired a clothing line in France
Vertical FDI
Horizontal FDI
Conglomerate FDI
Platform FDI
250. If Ford purchased manufacturing plants in Ireland with the primary purpose of exporting cars to other countries in the EU
Conglomerate FDI
Platform FDI
Vertical FDI
Horizontal FDI
251. A type of foreign direct investment (FDI) in which a parent company creates a subsidiary in a different country, building its operations from the ground up
Green-field FDI
Brownfield FDI
Platform FDI
Vertical FDI
252. A type of foreign direct investment (FDI) where a company invests in an existing facility to start its operations in the foreign country
Brownfield FDI
Green-field FDI
Vertical FDI
Platform FDI
253. Commercial enterprise in which two or more organizations combine their resources to gain a tactical and strategic edge in the market
Green-field FDI
Platform FDI
Conglomerate FDI
Joint Venture
254. An investment into a foreign firm is considered an FDI if an investor obtains at least ….. of the voting power in a firm.
50%
10%
20%
51%
255. An example of monetary union
EU
NAFTA
EUROZONE
ASEAN
256. How many country members of the EU use the EURO as their currency?
19
20
18
21
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