Exam: 500662RR - The Nature of International Business and CoIoperation among N

1. An explanation of how a product begins as a country's export and later becomes an import is the theory of
A. international product life cycles.
B. unfair retaliation.
C. directional trade.
D. supply and demand.

2. The organization established along with the IMF at the Bretton Woods meeting is the
A. Bank for International Settlements.
B. United Nations.
C. International Monetary Fund.
D. World Bank.

3. The economic cooperation of the EU is most accurately described as a
A. free trade area.
B. common market.
C. complete economic integration.
D. customs union.

4. The _______, a collaboration of nations pooling money to lend to countries in debt, is associated with
the United Nations.
A. IMF
B. IBRD
C. GATT
D. OECD

5. What is an economy of scale?
A. The price of scales exceeds the cost of producing them.
B. The price of scales is lower than the cost of producing them.
C. As a plant gets larger, the average cost of producing a unit of output decreases.
D. As a plant gets larger, the average cost of producing a unit of output increases.

6. Which one of the following statements about balance of payment (BOP) accounts is correct?
A. Its outflowing funds are tracked as debits.
B. The merchandise account deals with intangibles-such as royalties and trademarks.
C. The current account tracks the net changes in a nation's assets and liabilities.
D. A country's BOP is stated as a single account balance.

7. Decision making in the international environment is _______ in a purely domestic environment.
A. less demanding than
B. about the same as
C. less complex than
D. more complex than

8. The _______ has had a central role as a main central reserve asset of many countries, as a vehicle
currency, and as an intervention currency.
A. U.S. dollar
B. yen
C. Euro
D. British pound

9. The idea that market forces, not government controls, should determine direction, volume, and the
composition of international trade came from
A. the Ottoman Empire.
B. Milton Friedman.
C. Adam Smith.
D. Salvador Allende.

10. The increased internationalization of business requires _______ to have a basic knowledge of
international business.
A. managers of multinationals
B. managers of transnationals
C. managers of purely domestic operations
D. all managers

11. An evaluation of a country's economic and political risks made by a bank or potential investor is called a/an
A. country risk assessment.
B. benchmark.
C. international credit score.
D. stability appraisal.

12. Which of the following is not one of the primary criticisms of globalization?
A. It's contributed to a decline in environmental and health conditions.
B. It's increased the number of children in the work force.
C. It's produced uneven results across nations and peoples.
D. It's had deleterious effects on labor and labor standards.

13. When market demand and supply regulate the exchange rate with intervention designed to moderate the rate of change, it's called a/an
A. market method.
B. fixed peg.
C. crawling peg.
D. independent float.

14. Defining a standard unit of currency by its equivalent in gold is called
A. the gold standard.
B. par value.
C. coinage.
D. the price specie flow.

15. Treasury and Central Bank representatives met in _______ at the end of World War II and established the IMF, the World Bank, and the gold exchange standard.
A. Bretton Woods
B. Diekirch
C. Berlin
D. Jamaica

16. _______ can be divided into portfolio and direct investment.
A. Production
B. Exchange rate investment
C. Domestic investment
D. Foreign investment

17. Inflation is generally measured by calculating the changes in
A. exchange prices.
B. the balance of payments of 10 nations.
C. the prices of a variety of goods and services.
D. interest rates.

18. The exchange rate for a currency trade for delivery within two days is called the _______ rate.
A. spot
B. cross
C. forward
D. priority

19. An import duty that's a fixed percentage of the invoice value of an imported product is called a/an
_______ duty.
A. ad valorem
B. compound
C. invoice
D. specific

20. A/An _______ is all forces influencing the life and development of the firm.
A. local population
B. group pool
C. environment
D. foreign exchange