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Nations engage in the international trade because

A) International trade forces local companies to be well-organized
B) Foreign goods can be purchased more cheaply than the local ones
C) Net prosperity of country is likely to be higher
D) Local people can get access to more sophisticated services and products


Nations make trade barriers in order to

A) Build a sense of the security
B) Stop foreigners from entering their country
C) Protect local business
D) Stop changes from occurring in the lifestyle

Barriers to trade might include

A) Poor quality ports and transportation infrastructure
B) Tariffs
C) Local customs
D) Bi-lateral trade agreements

Some exs of the regional trade agreements comprise

B) European Union
D) China

Which, of the following, was NOT a goal of the European Union

A) Removal of the internal tariffs
B) Common external tariff
C) Development of a common set of the commercial laws
D) Elimination of border controls
E) Development of a common currency

The first agreement in formation of European Union was

A) The Marshall Plan
B) The Treaty of Rome
C) The European Coal and Steel Community
D) The Single European Act
E) The Maastricht Treaty

The formation of WTO added what dimension to GATT

A) Chinas membership
B) A system of setting tariffs
C) A permanent body for resolution of trade disputes
D) A superior position for the United States
E) Acceptance of new member states into the European Union

Currency parity is maintained by the

A) Use of a common base such as gold or platinum
B) Agreed upon rates of exchange between countries
C) The WTO
D) Each country’s reserves of other countries? Currencies
E) Currency exchanges on which currencies are traded

The German form of corporate governance varies from that of the United States in

A) U.S. Companies have a single board while German companies have two boards
B) Shareholders govern U.S. Companies while representatives of banks and government govern German companies
C) U.S. law requires full disclosure of financial information while German law does not
D) Investors invest directly in U.S. companies while intermediaries invest in German companies
E) Stock in U.S. companies is registered to the holder while stock in German companies is in

Corporate governance in Japan or Korea differs from that of United States primarily in that

A) Japanese and Korean firms have a different board structure than do U.S. firms
B) Directors of Japanese and Korean firms usually come from trading group partner companies
C) Japanese and Korean governments have a direct voice in the management of companies there
D) Families who closely control their ownership usually own Japanese and Korean companies

Problems of governance in the United States stem from

A) Too many individual shareholders who do not really understand the management of the companies they invest in
B) Institutional investors who do not actively engage in the company?s governance hold a large portion of the stock of many U.S. companies
C) Executive compensation favors manipulating information about the company?s performance in order to benefit the firm?s management rather than its investors
D) Systems of reporting have become so complex and are so manipulated that investors cannot really understand what is going on in the firm

Global aspects of competition tend to be based on

A) Having strong presence in local markets
B) Effective distribution infrastructure
C) Technology and other aspects where scale factors create advantage
D) Brand recognition and product variety

Local aspects of competition tend to be based on

A) Favourable relationships with government and local business partners
B) Ability to attain lower costs by using local inputs
C) Superior access to technology inputs
D) Lower cost and more flexible labor
E) Capital availability and cost.

Global firms tend to have a structure of

A) Working from a home country to reach outward to foreign markets
B) Some functions centralized with others decentralized
C) Regionalized product research programs
D) Global brand management
E) Manufacturing being their primary activity

A local enterprise facing a global competitor in its market should

A) Diversify into international business in order to match its competitor
B) Try to get local government to pass trade restrictions against the competitor
C) Develop local agreements that exclude foreign competitors from distribution and advertising
D) Seek outside partners to provide more sophisticated products and more efficient sourcing

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