International Business solved MCQs

chapters
1 of 8
chapter:   Introduction to International Trade

1. What are the four factor endowments?

a. national resources, labor, physical capital and human capital

B. types of technology

c. material inputs used up in the process of production

d. international differences in climate

2. The Heckscher- Ohlin model is principally focused on what aspect of economics?

a. international trade

B. supply and demand

c. normative economics

d. production possibility frontier

3. A no-trade world will have which of the following characteristics:

a. countries will have same relative endowments of production factors

B. consumers across countries will have identical and homogenous tastes

c. there will be no distortions or externalities

d. all of the above

4. Transportation cost of trade affects:

a. pattern of trade

B. boundaries between tradable and non-tradable goods

c. global supply chains

d. all of the above

5. International Trade is most likely to generate short-term unemployment in:

a. industries in which there are neither imports nor exports

B. import-competing industries

c. industries that sell to domestic and foreign buyers.

d. industries that sell to only foreign buyers

6. What was the first economic theory of international trade to be developed?

a. the theory of mercantilism

B. the theory of comparative advantage

c. the theory of absolute advantage

d. the heckscher-ohlin theory

7. According to Adam Smith, the trade between countries should happen _____.

a. naturally according to the market forces

B. under government regulation

c. using factors that are available

d. only when a country has an absolute advantage

8. If a nation has an open economy it means that the nation:

a. allows private ownership of capital.

B. has flexible exchange rates

c. has fixed exchange rates

d. conducts trade with other countries

9. International trade forces domestic firms to become more competitive in terms of

a. the introduction of new products

B. product design and quality

c. product price

d. all of the above

10. The movement to free international trade is most likely to generate short-term unemployment in whichindustries

a. industries in which there are neither imports nor exports

B. import-competing industries.

c. industries that sell to domestic and foreign buyers

d. industries that sell to only foreign buyers

11. According to the principle of comparative advantage:

a. south korea should export steel

B. south korea should export steel and dvds

c. japan should export steel

d. japan should export steel and dvds

12. Country A has an absolute advantage in

a. product x

B. product y

c. neither x nor y

d. both x and y

13. Globalization refers to:

a. lower incomes worldwide

B. less foreign trade and investment

c. global warming and their effects

d. a more integrated and interdependent world

14. Comparative Cost Trade Theory is given by

a. adam smith

B. david ricardo

c. gottfried haberle

d. heckscher ohlin

15. ……………...is the payment method most often used in International Trade which offers the exporter bestassurance of being paid for the products sold internationally.

a. bill of lading

B. letter of credit

c. open account

d. drafts

16. Key controllable factors in global marketing are:

a. government policy and legislation

B. social and technical changes

c. marketing activities and plans

d. all of the above.

17. The first phase of globalization started around 1870 and ended with …..

a. world war i

B. world war ii

c. the establishment of gatt

d. in 1913 when gdp was high

18. According to this theory, the holdings of a country’s treasure primarily in the form of gold constituted itswealth.

a. gold theory

B. ricardo theory

c. mercantilism

d. hecksher theory

19. The Theory of Absolute Cost Advantage is given by

a. david ricardo

B. adam smith

c. f w taylor

d. ohlin and heckscher

20. The Theory of Relative Factor Endowments is given by

a. david ricardo

B. adam smith

c. c. f w taussig

d. ohlin and hecksher

21. The theory of comparative cost advantage is given by

a. david ricardo

B. adam smith

c. f w taussig

d. ohlin and heckscher

chapter:   Multinational Enterprises

22. A multinational is a firm that controls and manages production facilities in

a. both developed and developing countries

B. at least two countries

c. one country but relies on multiple markets for the consumption of goods it produces

d. at least two developed countries and one developing country

23. Locational advantages are based on which combination of the following specific country characteristics

a. a large reserve of natural resources, a large local market and efficiency opportunities

B. a small reserve of natural resources, a large local market and efficiency opportunities

c. a small reserve of natural resources, a small local market and efficiency opportunities

d. a large reserve of natural resources, a small local market and efficiency opportunities

24. Horizontal integration occurs when

a. firm creates singular country production facilities, each of which produces different good or goods

B. firm creates multiple production facilities, each of which produces the same good or goods.

c. firm creates multiple production facilities, each of which produces different good or goods

d. firm creates singular country facilities, each of which produces the same good or goods

25. Which of the following would be an example of foreign direct investment from the United States toTaiwan?

a. a u.s. bank buys bonds issued by a taiwan computer manufacturer.

B. a u.s. car manufacturer enters into a contract with a taiwan firm to make and sell it spark plugs.

c. microsoft hires a taiwanese computer programmer to debug some software for it.

d. the state of california rents space in taipei for one of its employees to use promoting tourism in

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