Multiple Choice Questions -

Q1. Globalisation of markets results in markets becoming

1. Less interdependent

2. More diverse

3. More protected

4. Less competitive

Q2. The______is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states.

1. International development association

2. World bank

3. International court of justice

4. World trade organization

Q3. In a pure market economy:

1. All productive activities are owned by the states

2. Production is determined by the interaction of supply and demand.

3. Collectivist goals are given priority over individual goals

4. The prices at which goods are sold is determined by the government

Q4. A _____system is based on a very detailed set of laws organised into codes.

1. Traditional law

2. Theocratic law

3. Civil law

4. Common law

Q5. Which of the following is a closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime?

1. Caste system

2. Class system

3. Social system

4. Cultural system

Q6. Which of the following is a measure that is developed by the United Nations to measure the quality of life in different nations?

1. Gross national income

2. Human development index

3. Purchasing power parity

4. Gross domestic product

Q7. Which of the following observations is consistent with Michael Porter's theory of national competitive advantage?

1. Factors such as domestic demand and domestic rivalry determine nations' dominance on production.

2. Countries should produce only those goods for which they have a comparative advantage.

3. Interplay between the factors of production cause international marketing decisions

4. International differences in labour productivity determine nations' supremacy in production.

Q8. Which of the following is a major flaw associated with mercantilism?

1.  Mercantilists do not support government intervention in trade

2.  Mercantilists view trade as a zero-sum game

3.  Mercantilists recommend policies to maximise imports

4.  Mercantilists recommend countries to maintain a negative trade balance

Q9. According to the____argument, governments should temporarily support new industries until they have grown strong enough to meet international competition

1.  Retaliatory action

2.  Human rights

3.  Infant industry

4.  Antidumping

Q10. A French wind power company gives an Indonesian company the right to produce and sell wind turbines in return for a royalty fee on every unit sold. Which business practice is this an example of?

1.  Acquisition

2.  Licensing

3.  Exporting

4.  Greenfield investment

Q11. Assume that the yen/dollar exchange rate quoted in Tokyo at 5:00 p.m is $ 110 = $1 ,and the yen/dollar exchange rate quoted in New York at the same time is $120=$1, A dealer in New York uses dollars to purchase yen and then immediately sells the yen to buy dollars in Tokyo, thereby making a profit. The dealer has engaged in a(n):

1.  Currency swap

2.  Arbitrage

3.  Carry trade

4.  Straddle

Q12. Which of the following observation is true of the Bretton Woods agreement?

1.  All countries agreed to fix the value of their currency in terms of gold under the agreement

2.  The system accepted Pound as the official reference currency against gold

3.  The agreement established a floating system of monetary exchange

4.  Two multinational institutions, World Economic Forum and WTO , were formed under the agreement.

Q13. When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow a(n)___strategy.

1.  Global standardisation

2.  Localisation

3.  International

4.  Customisation

Q14. Which of the following is not true of a strong corporate culture?

1.  Almost all managers share a relatively consistent set of values and norms that have a clear impact on the way work is performed

2.  A strong culture leads to high performance

3.  Outsiders see firms with a strong culture as having a certain way of doing things

4.  A strong culture can be a bad culture

Q15. Flexible manufacturing technology is also known as___

1.  Six sigma production

2.  Line production

3.  Standardisation

4.  Lean production

Q16. A wholly owned subsidiary is appropriate when:

1.  The firm wants to share the cost and risk of developing a foreign market

2.  The firm wants 100 percent of the profits generated in a foreignmarket

3.  The firm wants a plant that is ready to operate

4.  The firm wants to test a market

Q17. The term___has been coined to describe the ability of companies to use flexible manufacturing technology to reconcile the goals of low cost and product personalisation

1.  Assembly-line production

2.  Product standardisation

3.  Mass customisation

4.  Six Sigma production

Q18. According to Levitt, which of the following statements is true?

1. Technology drives the world toward a converging commonalty

2. There are accustomed differences in national preferences

3. The multinational corporation operates in a number of countries at low relative cost

4. The global corporation operates with resolute consistency at high relative costs.

Q19. _____ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product.

1. Technology drives the world toward a converging commonalty.

2. There are accustomed differences in national preferences.

3. The multinational corporation operates in a number of countries at low relative costs.

4. The global corporation operates with resolute consistency at high relative costs.

Q20. As investors increase the number of stocks in their portfolio, the portfolio's risk ____.

1. increases initially and declines later

2. declines slowly and steadily

3. increases exponentially beyond a point

4. declines rapidly in the beginning

Questions -

1. Explain what is meant by the globalization of markets. Provide an example. What are the most global markets?

2. What are state-owned companies? Why do they usually perform poorly?

3. Identify the three types of economic system. How do these three types of economic systems differ from each other? How are they the same?

4. What are first-mover advantages? Explain with an example.

5. Describe the four dimensions of culture as identified by Geert Hofstede.

6. Explain Vernon's product life-cycle theory. Provide an example.

7. Discuss the economic reasons for government intervention in markets.