International Business 4/28

Front 1

Economic integration

Back 1

Allow you to almost by pass rules and regulations in other countries.

Front 2

Bilateral integration

Back 2

2 Countires intergrading together

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Regional integration

Back 3

Same region have an agreement

Front 4

Global integration

Back 4

Everyone/ all countries

Front 5

World Trade Organization

Back 5

The major body forS reciprocal trade negotiationsS enforcement of trade agreements

Front 6

General Agreement on Tariffs and Trade (GATT)

Back 6

GATTS formed in 1947 to abolish quotas and reduce tariffs

Most favored nation (MFN) clauseS trade without discriminationS Succeeded by WTO in 1995

Front 7

Bilateral agreements

Back 7

can be between two individual countries or caninvolve one country dealing with a group of othercountries

Also known asS Preferential trade agreements (PTAs)S Free trade agreements (FTAs)

Front 8

European Union (EU)

Back 8

Made everyone trade equal

uses common external tariffs

has a common currency

Front 9

The Euro

Back 9

The primairy / most prevalent currency

Front 10

NAFTA - Regional content

Back 10

at least 50% of the net cost of most products mustcome from the NAFTA region

Front 11

Commodity agreements ________.

Back 11

A) were initially established to attempt to stabilize commodity prices

Front 12

"The major trade group in South America involving Brazil, Paraguay, Uruguay, and Argentina is ________."

Back 12

MERCOSUR

Front 13

A ________ results when free mobility of factors of production is added to a customs union.

Back 13

common market

Front 14

Which of the following statements most accurately describes the relationship between trading groups and MNEs?

Back 14

Regional trading groups can define the rules under which companies must operate within that region.

Front 15

"The ________ is a preferential trade agreement that was organized in 1967 and comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam."

Back 15

ASEAN

Front 16

Which of the following is a unique provision of NAFTA?

Back 16

environmental standards

Front 17

Global integration occurs as countries from all over the world decide to cooperate through the ________.

Back 17

WTO

Front 18

Which of the following primarily triggered Toyota's investment in the European Union?

Back 18

The EU lowered trade barriers on foreign auto imports.

Front 19

Which of the following is the primary focus of the African Union (AU)?

Back 19

democracy

Front 20

When the European Union was formed, the size of the market increased for European companies. This is most likely an example of a ________.

Back 20

dynamic effect

Front 21

________ integration is the political and economic agreements among countries that give preference to member countries to the agreement.

Back 21

Economic

Front 22

An NGO is ________.

Back 22

a private institution independent of a government

Front 23

The 27 member EU negotiates trade agreements as one. The EU and Brazil have negotiated a strategic trade alliance which is an example of a ________.

Back 23

bilateral agreement

Front 24

Which of the following is Walmart's competitive advantage in Mexico?

Back 24

" Walmart is able to transfer its ""everyday low prices"" concept to Mexico."

Front 25

"Under the WTO agreement, ________."

Back 25

a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures

Front 26

The role of most commodity agreements now is to ________.

Back 26

discuss issues and disseminate information about commodities

Front 27

Which of the following members of the European Union has NOT adopted the euro?

Back 27

United Kingdom

Front 28

Which of the following groups of countries is most likely to form a regional trading group?

Back 28

" Canada, United States, Mexico"

Front 29

"Outright forward transactions involve the exchange of currency on a future date beyond two business days at a fixed exchange rate, known as the ________."

Back 29

forward rate

Front 30

Why are options most likely so attractive to companies?

Back 30

Options provide companies with more flexibility than a forward contract.

Front 31

"As a center for foreign-exchange trading, London ________."

Back 31

actually trades more U.S. dollars than are traded in the United States

Front 32

"If a foreign currency is quoted in American terms (the direct quote) and the forward rate is greater than the spot rate, the foreign currency is selling at a ________."

Back 32

forward premium

Front 33

The relationship between the value of the Brazilian and Chinese currencies is known as the ________.

Back 33

exchange rate

Front 34

________ involve the exchange of currency the second day after the date on which the two foreign-exchange traders agree to the transaction.

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Spot transactions

Front 35

Which of the following would have the LEAST influence on price setting in the foreign-exchange market?

Back 35

Western Union

Front 36

What has shown an increase in trading activity in recent years?

Back 36

growing emphasis on hedge funds

Front 37

A(n) ________ is the price of a currency.

Back 37

exchange rate

Front 38

The U.S. dollar is most likely traded widely because it is ________.

Back 38

a reserve currency held by many central banks

Front 39

Which of the following is the price at which the trader is willing to sell foreign currency?

Back 39

offer

Front 40

The top location for trading foreign exchange is ________.

Back 40

London

Front 41

Arbitrage is when

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purchasing foreign currency on one market for immediate resale on another market

Front 42

"In foreign-exchange markets, reporting dealers are ________."

Back 42

financial institutions that actively participate in local and global foreign-exchange markets

Front 43

A foreign-exchange contract that is an agreement between two parties to buy or sell a particular currency at a particular price at a particular date in the future as specified in a standardized contract to all participants in the specified market is known as a(n) ________.

Back 43

futures contract

Front 44

The interbank market in foreign exchange is where ________.

Back 44

banks trade currency with each other

Front 45

"The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9100. Pounds are selling at a ________."

Back 45

forward discount

Front 46

"If a foreign currency is quoted in American terms (the direct quote) and the forward rate for a foreign currency is less than the spot rate, the foreign currency is selling at a ________."

Back 46

forward discount

Front 47

"Compared with a forward contract, a futures contract ________."

Back 47

is only traded on an exchange

Front 48

A(n) ________ is the right but not the obligation to buy or sell a foreign currency within a certain time period or on a specific date at a specific exchange rate.

Back 48

option

Front 49

A black market exists when ________.

Back 49

people pay more for hard currency than the official rate

Front 50

Many economists have predicted that Hong Kong will change its currency system to the ________.

Back 50

yuan

Front 51

The purchasing power parity theory claims that a change in relative ________ between two countries must cause a change in ________ in order to keep the prices of goods in two countries fairly similar.

Back 51

inflation; exchange rates

Front 52

The ________ theory seeks to define the relationship between currencies based on relative inflation.

Back 52

purchasing power parity

Front 53

The ________ is the currency most widely used as a reserve asset.

Back 53

U.S. dollar

Front 54

The International Fisher Effect implies that ________.

Back 54

the currency of the country with the lower interest rate will strengthen in the future

Front 55

The central bank in the United States is the ________.

Back 55

Federal Reserve System

Front 56

Which of the following links together the central banks of the world and acts as a central banker's bank?

Back 56

the BIS

Front 57

" If a Big Mac costs $3.41 in the United States and $2.67 in Argentina (the price of a Big Mac in Argentine pesos converted into dollars at the spot exchange rate), which of the following is most likely true?"

Back 57

The dollar is overvalued against the peso.

Front 58

Hard currencies are usually ________.

Back 58

highly liquid

Front 59

Which EU country has NOT adopted the euro?

Back 59

Sweden

Front 60

________ is a form of locking the value of a country's currency onto another currency.

Back 60

Dollarization

Front 61

Which of the following is used as an illustration of the PPP theory for estimating exchange rates?

Back 61

the Big Mac Index

Front 62

Which of the following countries has a soft peg currency?

China

Brazil

Japan

India

Back 62

China

Front 63

The global financial crisis has pushed China closer to ________.

Back 63

liberalizing its currency

Front 64

The value of the SDR is currently based on the ________.

Back 64

weighted average of four currencies

Front 65

"According to the text, which currency is expected to experience the most change in the upcoming years?"

Back 65

yuan

Front 66

Special drawing right?

Back 66

an international reserve asset created to supplement members' existing reserve assets

Front 67

"In a country with a currency that is not freely floating, the timing of an exchange rate change is often a ________ decision."

Back 67

political

Front 68

A price on goods and services sold by one member of a corporate family to another is known as a(n) ________.

Back 68

transfer price

Front 69

Acquiring and allocating financial resources among the company's activities and projects is the responsibility of the ________.

Back 69

CFO

Front 70

The degree to which a firm funds the growth of a business by debt is known as ________.

Back 70

leveraging

Front 71

The principle by which the tax authorities allow firms to reduce their tax liability by the amount of income taxes paid to foreign governments is known as ________.

Back 71

a tax credit

Front 72

What is the primary concern about offshore financial centers?

Back 72

political stabilityDepositary receipts traded outside the United States are called ________ depositary receipts.

Front 73

The international bond market is a major source of debt financing for which of the following?

Back 73

world governments

Front 74

MNEs most likely use offshore debt markets ________.

Back 74

to take advantage of their ability to access capital in different countries

Front 75

________ focus on offering banking and other financial services to nonresident customers.

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Offshore financial centers

Front 76

A city or country that provides large amounts of funds in currencies other than its own is a(n) ________.

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offshore financial center

Front 77

What is a Eurodollar?

Back 77

a U.S. dollar deposited in a European bank

Front 78

Which of the following is NOT an advantage associated with Eurocurrencies?

Back 78

tighter U.S. regulation

Front 79

Depositary receipts traded outside the United States are called ________ depositary receipts.

Back 79

Global (GDS)

Front 80

The concept of leveraging in finance refers to ________.

Back 80

the degree to which a firm funds the growth of a business by debt

Front 81

Which of the following countries has the largest market for domestic bonds?

Back 81

the U.S.

Front 82

Which of the following is NOT a likely reason for companies to act more ethically?

Back 82

The U.N. Global Compact enforces fines on global firms that fail to act ethically.

Front 83

How has the Kyoto Protocol affected U.S. companies operating in Europe?

Back 83

U.S. companies are changing the way they do business in order to comply with new emissions standards in Europe.

Front 84

Ethical dilemmas tend to be ________ for MNE managers than for domestic managers.

Back 84

more complicated

Front 85

Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes?

Back 85

society

Front 86

"According to Transparency International, companies from which of the following countries are more likely to pay bribes?"

Back 86

China

Front 87

Medco Pharmaceuticals charges a market price for heart medication to distributors in Italy and a discounted price for the same medication to distributors in Bangladesh. Medco is most likely using ________.

Back 87

tiered pricing

Front 88

The U.N. Global Compact is best described as a(n) ________.

Back 88

external code of conduct

Front 89

The Ethical Trading Initiative (ETI)is primarily focused on ________.

Back 89

employment practices of MNEs

Front 90

Which of the following is a primary business objective for pursuing ethical behavior?

Back 90

avoiding being perceived as a socially irresponsible firm

Front 91

"Which level of moral development involves an individual learning role-conformity from peers, parents, and laws?"

Back 91

conventional

Front 92

The requirement by the U.S. government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of ________.

Back 92

extraterritoriality

Front 93

Which of the following has been the primary reason for the recent growth of India's pharmaceutical industry?

Back 93

patent-protection laws

Front 94

All of the following are levels of moral development EXCEPT the ________.

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internalized level

Front 95

A manager practicing relativism would most likely ________.

Back 95

adapt to local conditions instead of implementing home-country practices

Front 96

Which of the following is a primary business objective for pursuing ethical behavior?

Back 96

developing competitive advantages

Front 97

According to the Ethical Trading Initiative (ETI), ________.

Back 97

no harsh or inhumane treatment of workers should be allowed

Front 98

A government that enforces its own laws on foreign subsidiaries of its domestic companies practices ________.

Back 98

extraterritoriality

Front 99

Which of the following statements is most likely true about the postconventional level of moral development?

Back 99

Individuals behave morally because they believe such actions are right.

Front 100

The 1997 Kyoto Protocol is best described as an agreement that requires ________.

Back 100

the signatory countries to cut greenhouse gas emissions to 5.2 percent below 1990 levels

Front 101

Which of the following most likely complicates ethical behavior for firms that expand overseas?

Back 101

local laws and values

Front 102

"Political, legal, economic, monetary, and institutional forces comprise the ________ of international business and influence managers' actions."

Back 102

environment

Front 103

"An MNE in which new knowledge and capabilities are developed in both domestic and foreign locations, both independently and jointly, and then diffused throughout the worldwide organization, is following a ________ strategy."

Back 103

transnational

Front 104

________ is the framework that managers apply to determine the competitive moves and business approaches that run the company.

Back 104

Strategy

Front 105

A company that employs a ________ strategy creates value by generating customer insights and translating those insights into innovations.

Back 105

differentiation

Front 106

A distinct advantage of an international strategy is ________.

Back 106

transferring core competencies to foreign markets

Front 107

Which of the following is NOT a disadvantage of the international strategy?

Back 107

The transfer of core competencies to foreign markets is complicated by the need to adapt to local needs.

Front 108

The Industry Organization (IO) paradigm assumes which of the following?

Back 108

perfect competition

Front 109

Google essentially views the entire world as one market and assumes that there are no fundamental differences among countries with regard to consumers' preferences. Google is engaging a(n) ________ strategy.

Back 109

global

Front 110

Firms that pursue a(n) ________ strategy create value by transferring core competencies from the home market to foreign markets in which local rivals lack a competitive alternative.

Back 110

international

Front 111

Which of the following is the primary limitation of the transnational strategy?

Back 111

cross-unit coordination difficulties

Front 112

Firms that compete in the global marketplace typically face the asymmetric forces of pressures for ________ and ________.

Back 112

global integration; local responsiveness

Front 113

The MNE that applies a global strategy aims to ________.

Back 113

compete essentially the same way wherever the company does business

Front 114

A differentiation strategy works well when ________.

Back 114

a company can continually develop products that have unique features

Front 115

Which of the following is the purpose of a company's value proposition?

Back 115

to explain why a consumer should buy the company's products

Front 116

"In the global environment, firms use an international strategy, a multidomestic strategy, a global strategy, or a ________ strategy."

Back 116

transnational

Front 117

A strategy that focuses on lowering operating costs is referred to as a ________ strategy.

Back 117

cost leadership

Front 118

Which of the following is NOT among the five forces in the Five-Forces Model of Industry Structure?

Back 118

governments

Front 119

Which of the following is the most important constraint on the explanatory power of the IO paradigm?

Back 119

Many industries are imperfectly competitive.

Front 120

A useful way to understanding the purpose of strategy is to think of the firm as a(n) ________, composed of a series of distinct activities, including production, marketing, materials management, R&D, human resources, information systems, and the firm infrastructure.

Back 120

value chain

Front 121

"Which of the following refers to the means by which management applies the systems that link a company's value activities, whether those activities are performed in one or in many countries?"

Back 121

coordination