Which view claims that the phenomenon of globalization was initially driven by the desire of Western economies to exploit their power through multinational enterprises?
The new-force view
The long-run historical view
The balanced surplus-deficit view
The pendulum view
Economic gains come from international trade because one country's exported goods, services, or other items are unique, valuable, and difficult to duplicate to the importing country. Which view does this statement portray?
Institution-based view
Country-based view
City-based view
Resource-based view
What is the aggregation of importing and exporting that leads to the country-level trade surplus or deficit?
Profit
Revenue
Balance of Trade
Loss
What is a cost of foreign direct investment?
Developing countries may be exploited by multinational enterprises (MNE)
Human rights firms may help labor force in host countries with multinational enterprise (MNE) influence
Host countries welcome political interference by multinational enterprises (MNE) when things are not in favor of the foreign company
Local government in host countries may promote corporate social responsibilities on behalf of multinational enterprises (MNEs)
Which type of managerial capability is both challenging and difficult to imitate?
Duplicative capability
Intangible capability
Factual capability
Dualistic Capability
What may precious, rare, and hard-to-duplicate resources and capabilities lead to for a firm?
Sustained competitive disadvantage
Sustained comparative advantage
Sustained influence
Sustained leverage
Which theory of international trade states that poor countries often experience faster rates of economic growth compared to wealthy countries?
The catch-up effect
The sustainability effect
The income effect
The ratchet effect
What is the financial environment in which exchange rates and payments for goods and services are conducted.
Stock exchange
Intercontinental exchange
International monetary system
Commodity exchange
What happens to a country's real exchange rate and nominal interest rate as the price level increases, assuming all other factors are unchanged?
Exchange rate appreciate, interest rates decrease
Exchange rates depreciate, interest rates increase
Exchange rates appreciate, interest rates increase
Exchange rates depreciate, interest rates decrease
What is the easiest method non-financial companies use to handle currency fluctuations?
Foreign direct investment
Commodity trading
Export sales
Currency diversification
Which strategy minimizes the risk of unanticipated changes in future exchange rates?
Sensitivity analysis
Currency swap
Speculation
Spot transaction
A company is looking for a location with an abundance of ground-breaking individuals, firms, and universities. Which type of strategic goal is this company demonstrating?
Efficiency-seeking
Natural-resource seeking
Innovation-seeking
Market-seeking
What advantage comes with not sharing benefits with late entrants?
Early-mover advantage
Laggard advantage
First-mover advantage
Late-mover advantage
Which entry mode is a non-equity arrangement for a company contemplating entry into a foreign market?
Green-fields
Acquisitions
Licensing
Joint-venture
What size commitment is required for a non-equity mode of entry into a foreign market?
Standard commitment
Larger commitment
No commitment
Small commitment
What are two supportive pillars for an informal institution?
Normative
Protection
Regulatory
Cognitive
Coercive
What is the key role of an institution, according to the institution-based view?
To develop a new business culture
To reduce uncertainty
To identify problems
To challenge laws
What are the rules, enforcement mechanisms, and organizations that support market transactions?
Businesses
Companies
Industries
Institutions
What is a core proposition underpinning an institutional-based view of global business?
Substantive rationality
Bounded rationality
Formal rationality
Theoretical rationality
In which type of political system do citizens elect representatives to govern the country on their behalf?
Democracy
Communism
Monarchy
Totalitarianism
Which legal system uses comprehensive lists of rules and written codes?
Property law
Tort law
Common law
Civil law
What are the legal privileges associated with the use of economic property to obtain income and other benefits from its use?
Property propaganda
Property rights
Universal property
Property gains
What is the purpose of having property rights and intellectual property rights?
To legally protect past owners of the property from its future owners after the sale of it
To legally protect the use to tangible and intangible property and allow its lawful owner to derive income and other benefits from it
To legally protect the future and past users of the property and allow its future owners all future benefits
To legally protect the future of property so that one county can derive income from it and the past users cannot
What are the two popular types of economies?
Mixed economies
Market economies
Centrally planned economies
Open economies
In addition to encouraging efficiency, why might a government intervene in a market?
To promote equality
To prop up self-interest
To increase profits
To ensure changes
What is the relationship between total and marginal cost?
Marginal cost is the change in total cost divided by the change in quantity
Marginal cost is total cost divided by quantity
Marginal cost is price multiplied by total cost
Marginal cost is quantity multiplied by total cost
A farmer sells wheat in a perfectly competitive market. Which action should the farmer take to maximize profits?
Produce the quantity that minimizes average variable cost
Produce at a price were marginal cost equals the average total cost
Produce the quantity at the average fixed cost
Produce the quantity where the price equals the farmer's marginal cost
What is the economic profit of a competitive firm?
The difference between average fixed cost and price
The different between marginal revenue and marginal cost
The difference between total revenue and price
The difference between total revenue and total cost
Which condition applies when a competitive firm decides to temporarily shut down?
Average variable costs are above the price
Marginal costs are above average total costs
Marginal costs are above average variable costs
Fixed costs are above variable costs
What is the producer's demand curve if the producer sells a differentiated product?
Horizontal
Vertical
Downward sloping
Upward sloping
Which statement describes a competitive firm's demand curve?
It is identical to a monopoly's demand curve
It is perfectly inelastic
It lies above the marginal cost curve
It is more elastic than a monopoly's demand curve
What is the point at which a monopoly maximizes profit?
Where demand equals marginal cost
Where marginal cost equals price
Where marginal cost equals marginal revenue
Where price equals total cost
What is a characteristic of monopolistic competition?
A few firms and identical products
A few firms and differentiated products
Many firms and differentiated products
Many firms and identical products
What is a likely outcome of the standard prisoner's dilemma game?
Neither prisoner confesses
Both prisoners benefit
Only one prisoner confesses
Both prisoners confess
How does the prisoner's dilemma help in understanding company behavior in an oligopoly?
Companies lack strategic thinking
Companies always reach cooperative solutions
Company strategies must consider actions by rival firms
Company success is hampered by too many decision makers
What do economists use to represent a consumer's preferences?
Relative prices
Budget constraints
Indifferent curves
Supply curves
What can be assumed that the consumer will buy if it is observes that the consumer's budget constraint has shifted inward?
Fewer normal goods and more inferior goods
Fewer normal goods and fewer inferior goods
More normal goods and more inferior goods
More normal goods and fewer inferior goods
What will happen to the market price and quantity in the short run if there is an increase in market demand in a perfectly competitive market?
The equilibrium price will decrease, and the equilibrium quantity will decrease
The equilibrium price will remain unchanged, and the equilibrium quantity will increase
The equilibrium price will increase, and the equilibrium quantity will remain unchanged
The equilibrium price will increase, and the equilibrium quantity will increase
What will happen to the output of a particular factory when there are negative externalities?
The quantity produced by that factor will be less than the optimal quantity
The quantity produced by that factory will be equal to its average total cost
The quantity produced by that factory will be greater than the optimal quantity
The quantity produced by that factory will be at the optimal quantity
What happens to demand quantity for normal goods as percentage change in income increases?
Demand stays the same
Demand increases
Demand decreases
Demand increases and then decreases
What do the positive or negative numbers of cross-price elasticity of demand represent?
Normal or inferior
Substitutes or complements
Necessities or luxuries
Expensive or inexpensive
What is one way the Federal Reserve influences the reserve ratio?
By altering deposit requirements
By altering reserve requirements
By altering capital requirements
By altering interest requirements
Which fiscal policy would be most effective at raising consumer spending and expanding aggregate demand?
Reducing government spending
Enacting a permanent income tax cut
Lowering target interest rates
Repeating the tax cut for capital investment
What is the effect of an increase in the money supply in the short run?
Interest rates increase and stock prices increase
Interest rates decrease and aggregate demand for goods and services increase
Interest rates decrease and stock prices decrease
Interest rates increase and aggregate demand for goods and services decrease
How is consumer surplus represented on a graph?
The area between the supply and demand curves
The area below the demand curve and above price
The area below the demand curve and to the right of the equilibrium point
The area below the price and above the supply curve
Which two statements define producer surplus?
The value to buyers minus the cost to sellers
The area between the demand and supply curve on a graph
The area below the price and above the supply curve on a graph
The amount the seller is paid minus the cost of production
The value to the sellers multiplied by the cost to sellers
A painter spends $200 on paint. He then bills the homeowner $1,000 to cover his time and his expenses. What is the amount of these transactions that is added to gross domestic product (GDP)?
$1,200
$1,000
$800
$200
A U.S. state purchases a fleet of new highway patrol vehicles manufactured in Japan. Which two statements correctly describe how the components of U.S. gross domestic product (GDP) are affected?
Net exports decrease
Net investment decreases
Imports decrease
Consumption increases
Government expenditures increase
A nation ends a tariff on bananas, which is an imported product. What will be the effect on banana prices within that nation?
The price will remain the same
The price will be set at a fair standard by importers
The price will match the global market price
The price will increase
What effect does implementing a new tariff have on the government that implements it?
Tax revenue increases
Tax revenue variance is unpredictable
Tax revenue remains the same
Tax revenue decreases
