Types of economic integration

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Reference no: EM13733276

QUESTION 1

There are three types of economic integration, namely: global, regional, and local.

True

False

QUESTION 2

Purchasing power parity is the price of one currency in terms of another.

True

False

QUESTION 3

When the United States sells products to China, US exporters often demand that they be paid in the Chinese yuan.

True

False

QUESTION 4

Three EU members-Britain, Denmark and Sweden-do not use the euro as their currency.

True

False

QUESTION 5

NAFTA is an example of a common market.

True

False

QUESTION 6

Which of the following is NOT an advantage of a strong US dollar?

US consumers benefit from low prices on imports.

US tourists benefit from lower prices when traveling abroad.

Lower prices on foreign goods help keep US prices level and inflation low.

US firms in import-competing industries face more low-cost imports.

QUESTION 7

Which does "ASEAN" stand for?

Assembly of Southeast Asian Nations

Assembly of South American Nations

Association of Southeast Asian Nations

Association of South American Nations

QUESTION 8

In the trade relationship with China, why is the US dollar in more demand than the Chinese yuan?

More people demand the yuan domestically in China, so it is not used for imports and exports.

The dollar is the common transaction currency between the two countries.

The yuan is pegged to the US dollar.

Formal institutions and regulations demand the trade be conducted in the dollar.

QUESTION 9

Why was the US dollar chosen as the currency to which other currencies would be pegged?

The US had high levels of productivity.

The US was experiencing a large trade surplus.

The US contributed approximately 70% of the global GDP.

All of these answers

QUESTION 10

Non-MNE firms can also do business abroad by:

Licensing and franchising

Outsourcing and engaging in FDI

Exporting and importing

All of these answers

QUESTION 11

The motto of international business is location, location, location.

True

False

QUESTION 12

Owners, managers, and employees at entrepreneurial firms tend to be more innovative and take more risks than those at large firms.

True

False

QUESTION 13

Late movers face greater technological and market uncertainties.

True

False

QUESTION 14

Sometimes foreign firms are discriminated against:

Formally

Informally

Randomly

Both formally and informally

QUESTION 15

First-mover advantages include:

Opportunity to free ride on first-mover investments

Resolution of technological and market uncertainties

Difficulty to adapt to market changes

Avoidance of a clash with dominant firms at home

QUESTION 16

Which item is not a late-mover advantage?

Avoidance of a clash with a dominant firm at home

Opportunity to free ride on first mover investments

Resolution of technological and market uncertainty

First mover's difficulty to adapt to market changes

QUESTION 17

Licensing/franchising agreements refer to:

Outsourcing agreements in R&D firms

A new corporate entity given birth to and jointly owned by two or more companies

Efforts among a number of firms to jointly market their products and services

The licensor/franchiser selling the rights to intellectual property

QUESTION 18

____ perform an important "middleman" function by linking sellers and buyers overseas.

Export intermediaries

Indirect exporters

Sporadic exporters

Alliance partners

QUESTION 19

Foreign firms crack new markets by:

Undertaking actions deemed legitimate and appropriate by governing institutions

Bribing government officials

Hiring locals to manage the new entity

Outsourcing production

QUESTION 20

In a(n) ____, members coordinate and harmonize monetary, fiscal, and taxation policies.

Monetary union

Political union

Economic union

Custom union

QUESTION 21

Non-native employees who work and reside in a foreign country are known as:

Host-country nationals

Expatriates

Multinationals

Repatriates

QUESTION 22

___ is leading the world in managerial compensation.

United States

Britain

Japan

Germany

QUESTION 23

In home replication strategy, knowledge flow is multidirectional, while in transnational strategy, it is one-way.

True

False

QUESTION 24

The phrase "think global, act local" is a winning formula when it comes to leveraging multinational presence.

True

False

QUESTION 25

Which of the following is NOT one of the four strategic choices for MNEs?

Localization

Global standardization

Home replication

Reference no: EM13733276

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