ECO 410 Week 2 Quiz – Strayer NEW
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Chapter 1
Current Multinational Challenges
and the Global Economy
True/False
1) BRICs
is a term used in international finance to represent assets that are considered
to be inexpensive and sturdy, but fundamentally unsound and and incapable of
coping with the upheavals now apparent in international financial markets.
2)
Multinational enterprises (MNEs) are firms, both for profit companies and
not-for-profit organizations, that have operations in more than one country,
and conduct their business through foreign subsidiaries,
branches,
or joint ventures with host country firms.
3)
Ownership, control, and governance changes radically across the world. The
publicly traded company is not the dominant global business organization—the
privately held or family-owned business is the prevalent structure—and their
goals and measures of performance differ dramatically.
Multiple Choice
1) A
well-established, large U.S.-based MNE will probably NOT be able to overcome
which of the following obstacles to maximizing firm value?
A) an
open market place
B) high
quality strategic management
C)
access to capital
D) none
of the above
2) A
well-established, large China-based MNE will probably be most adversely
affected by which of the following elements of firm value?
A) an
open marketplace
B)
high-quality strategic management
C)
access to capital
D)
access to qualified labor pool
3) A
well-established, large, Brazil-based MNE will probably be most adversely
affected by which of the following elements of firm value?
A) an
open marketplace
B)
high-quality strategic management
C)
access to capital
D)
access to qualified labor pool
True/False
1)
Comparative advantage is one of the underlying principles driving the growth of
global business.
2) Your
authors suggest that one way to characterize the global financial marketplace
is through its assets, institutions, and linkages.
3)
Eurocurrencies are domestic currencies of one country on deposit in a second
country.
4) A
eurodollar deposit is a demand deposit.
5) Eurocurrency
markets serve two valuable purposes: 1) Eurocurrency deposits are an efficient
and convenient money market device for holding excess corporate liquidity; and
2) the Eurocurrency market is a major source of short-term bank loans to
finance corporate working capital needs, including the financing of imports and
exports.
6) The
key factor attracting both depositors and borrowers to the Eurocurrency loan
market is the narrow interest rate spread within that market.
7) The
Eurocurrency market continues to thrive because it is a large international
money market relatively free from governmental regulation and interference.
Recent events may lead to greater regulation.
Essay
1) List
and explain three strategic motives why firms become multinationals and give an
example of each.
Multiple Choice
1) The
theory that suggests specialization by country can increase worldwide
production is:
A) the
theory of comparative advantage.
B) the
theory of foreign direct investment.
C) the international
Fisher effect.
D) the
theory of working capital management.
2) Which
of the following is NOT a reason governments interfere with comparative
advantage?
A)
Governments attempt to achieve full employment.
B)
Governments promote economic development.
C)
national self-sufficiency in defense-related industries
D) All
are reasons governments interfere with comparative advantage.
3) Which
of the following factors of production DO NOT flow freely between countries?
A) raw
materials
B)
financial capital
C)
(non-military) technology
D) All
of the above factors of production flow freely among countries.
4) Which
of the following would NOT be a way to implement comparative advantage?
A) IBM
exports computers to Egypt.
B)
Computer hardware is designed in the United States but manufactured and
assembled in Korea.
C) Water
of the greatest purity is obtained from wells in Oregon, bottled, and exported
worldwide.
D) All
of the above are examples of ways to implement comparative advantage.
5) Of
the following, which would NOT be considered a way that government interferes
with comparative advantage?
A)
tariffs
B)
managerial skills
C)
quotas
D) other
non-tariff restrictions
True/False
1) The
theory of comparative advantage owes it origins to Ben Bernanke as described in
his book The Wealth of Bankers.
2)
International trade might have approached the comparative advantage model in
the 19th century, and it does so even more today.
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