Final Examination Semester 3 / Year 2012

Transcription

1 Final Examination Semester 3 / Year 2012 COURSE : INTERNATIONAL BUSINESS COURSE CODE : IBUS 2003 TIME : 2 1/2 HOURS DEPARTMENT : MANAGEMENT LECTURER : HO SOK CHING Student s ID : Batch No : Notes to candidates: 1) The question paper consists of 6 pages and 6 questions. 2) Students are required to answer ONLY Four Questions. 3) Return the question paper with your answer booklet

2 Question 1 (Multiple Choice Questions) (25 x 1 mark = 25 marks) 1) Gross national product (GNP), often regarded as a yardstick for the economic activity of a country, is defined as. a. the total of all consumption and investment that takes place in a national economy b. the total of all economic activity in one country, regardless of who owns the productive assets c. the total of all economic activity in one country less services, such as government administration, health services, and education d. the market value of final goods and services produced by domestic factors of production, whether done at home or abroad 2) A measure of value of production that occurs within a country's borders without regard to whether the production is done by domestic or foreign factors of production is commonly referred to as. a. net national product (NNP) b. net material product (NMP) c. gross domestic product (GDP) d. gross national product (GNP) 3) The Human Development Index measures the average achievements in a country on three basic dimensions of human development, including. a. mortality b. quality of diversions c. extent of knowledge d. social externalities 4) occurs due to a pervasive and sustained rise in the aggregate level of prices as measured by an index of the cost of various goods and services. a. Deflation b. Inflation c. Expansion d. Contraction 5 is the price of a currency. a. Tariff b. Quota c. Exchange rate d. Subsidy 1/6

3 6. The is the most important currency in the foreign exchange market. a. U.S. dollar b. yen c. pound d.. Malaysia Ringgit 7 Another name for the equity capital market is the. a. international bond market b. London Stock Exchange c. stock market d. New York Stock Exchange 8 Currencies that float freely respond to. a. supply and demand conditions free from government intervention b. a government-determined exchange rate c. the black market d. a pegged exchange rate 9 The theory seeks to define the relationship between currencies based on relative inflation. a. inflation growth rate b. revaluation c. purchasing power parity d. interest rate 10 Most economists agree that PPP measures provide a picture of the relative size of economies than market exchange rates. a. less realistic b. similar c. more understandable d. more realistic 11 The ability to compare production costs among countries in an effort to determine where to locate production is hampered by. a. the number of ways the same product can be made b. restrictions on the international flow of data c. different tax rates d. restrictions on the remission of earnings 2/6

4 12 Companies may reduce operating risks by first and later. a. entering many countries simultaneously; continuing to expand to other countries b. entering countries similar to the home country; entering countries dissimilar to the home country c. handling foreign operations themselves; having other firms handle foreign operations for them d. starting out with foreign direct investment abroad; simply exporting 13 All of the following are approaches companies use to predict political risk except to. a. analyze past patterns b. obtain opinions of experts c. examine social and economic conditions that might lead to risk d. engage in regular public opinion polls 14 To predict political risk, companies sometimes examine the level of a country's frustration. In this case frustration refers to. a. the general public's growing dissatisfaction with the difference between its level of aspirations and its level of welfare and expectations b. partisan politics that inhibit the enactment of legislative reforms c. investors' inability to extract profits from the country because of currency inconvertibility d. home country constituents' concern about the loss of jobs resulting from offshoring 15 Companies may gain advantages by locating near competitors for all the following reasons except to. a. take advantage competitors' research to pick an ideal location b. attract multiple suppliers and personnel with specialized skills by clustering with competitors c. agree with competitors on production limitations that prevent oversupplies d. attract buyers who want to compare among suppliers 16 Which of the following is a trend seen in the modern international economy? a. firms from both advanced and emerging economies employ FDI b. emerging markets are the only recipient countries for FDI c. companies primarily use acquisitions to enter foreign markets d. firms in the service sector use e-commerce to enter foreign markets 3/6

5 17 Takeovers by foreign firms most likely raise concerns about which of the following? a. the new owners may decrease wages b. interest rates c. national security d. foreign immigrants 18. Each of the following is one of the three major types of cross-border transactions except. a. foreign direct investment b. exporting or importing products c. exporting or importing services d. local economic development 19. The increase in the number of international business facilitators has been driven by all of the following except. a. technological advances b. complexity of international business operations c. intense competition d. falling trade in international services 20 Which of the following best characterizes the purpose of a global marketing strategy? a. direct international advertising campaigns b. provide managers with demographic data c. implement standardized distribution methods d. guide firms in targeting customer groups 21 The growth of international business activity coincides with which of the following? a. the decline of Soviet communism b. the advent of computer technology c. the growth of developing countries d. the globalization of markets 22 Which of the following are subject to importing and exporting? a. finished products b. raw materials c. intermediate goods d. all of the above 4/6

6 23 Consumers may prefer domestically made products over imports for all the following reasons except. a. a desire not to have part of the price go to government tax collection b. nationalistic sentiments c. a negative image associated with products from a certain country d. fears that parts and service will be difficult to obtain for foreign products 24 In which of the following circumstances would a company be most likely to cease exporting and, instead, serve the foreign market through foreign production? a. There is little need to alter the product for the foreign market. b. The company is nearing capacity utilization in its home country plant. c. The foreign country has lowered its import restrictions. d. Transportation costs have become low relative to production costs. 25 International marketing is different from domestic marketing in that. a. principles are different b. consumers prefer domestically made merchandise c. environmental differences often cause managers to apply principles differently d. low prices are a more important competitive factor abroad Essay Questions 2 List and explain any four trends that provide evidence for the globalization of markets. Provide an example to illustrate one of the trends. (25 marks) 3 (a) Explain the meaning of international trade. (5 Marks) 3 (b) Describe the two major forms through which international trade takes place. (20 Marks) 4 List and explain any five elements that companies should include in their international plans. (25 Marks) 5/6

7 5 (a) Explain why consumers prefer global brands. (10 Marks) 5 (b) Explain, why global branding is beneficial to firms? (10 Marks) 5 (c) Provide any five examples of global brands. (5 Marks) 6 (a) List any three the variables used to identify the best markets for FDI entry. (15 Marks) 6 (b) List any two countries that are popular for FDI entry and explain why are they popular. (10 Marks) 6/