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Q1: When two firms merge, a situation of ‘relative deprivation’ can occur. This is where

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Answer: One side of the merger feels they have lost out to the other side

Q2: Globalization refers to

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Answer: A more integrated and interdependent world

Q3: Which one of the following is a pull factor in emigration

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Answer: Job opportunities

Q4: Which of the following do NOT facilitate globalization

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Answer: Barriers to trade and investment

Q5: Which of the following constitutes Foreign Direct Investment

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Answer: A UK energy company buying territory abroad where it expects to find oil reserves.

Q6: Which of the following could be defined as a multinational company

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Answer: A firm owning a chain of supermarket outlets outside its country of origin.

Q7: Which of the following is a driver of globalization

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Answer: Technological advance.

Q8: Globalization is beneficial for firms because

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Answer: It opens up new market opportunities.

Q9: The internet facilitates globalization by

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Answer: Cutting the cost for firms of communicating across borders.

Q10: Why might MNCs in the past have focussed their marketing activities on the triad

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Answer: That is where the most lucrative markets were located.

Q11: Globalization can create problems for business because

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Answer: It can result in more competition.

Q12: Calculating the value of GDP of two countries using the Purchasing Power Parity (PPP) method involves

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Answer: Finding out what can be bought in each country with a unit of the local currency.

Q13: Which of the following is included in GDP

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Answer: The value of local government provided social services.

Q14: It has been estimated that Bolivia has a massive shadow economy equivalent to 66% of official GDP estimates. On the other hand, the US shadow economy is the equivalent of 9% of GDP. Use the figures for both countries in Table 2.1 on p 39 to work out how the shadow economy would affect income per capita (PPP) in each country were it to be included in the official calculations. Do your calculations show

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Answer: A reduction in the income gap between Bolivia and the USA in relative terms?

Q15: Fast rates of growth in emerging market economies help international business because

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Answer: It signifies that some markets for goods and services are expanding rapidly.

Q16: The Chinese economy has been growing very rapidly, and much faster than that of the US. This means that

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Answer: the Chinese market for both capital and consumer goods has become increasingly attractive to foreign firms.

Q17: What major weakness did Leontieff identify in the Hecksher-Ohlin theory of international trade

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Answer: The assumption that resources such as labour are homogeneous.

Q18: In Porter’s Diamond it is argued that a nation will NOT be competitive when

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Answer: There is a shortage of ‘created factors’.

Q19: In March 2009, the World Bank reported that 17 out of the 20 largest economies in the world had introduced trade restricting measures. The report identified subsidies to the car industry as an example. Which of the following could be the major reason for countries taking steps to protect their domestic economies from foreign competition in a global recession

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Answer: To avoid increases in unemployment

Q20: Exchange rates determined purely by the forces of supply and demand are

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Answer: Floating exchange rates

Q21: Between 2008 and mid 2011 the value of the £ sterling slumped by 30% against the dollar and by 17% against the euro. Which of the following most accurately reflects the effects of this on business

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Answer: US firms importing from the UK will reap benefits from movements in the dollar against sterling.

Q22: Which of the following need to be identified when defining a market

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Answer: Rival products, competitor firms, geographical boundaries.

Q23: Vertically integrated firms

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Answer: Operate at different stages of production of a product.

Q24: Which of the following firms would you expect to have a high cross elasticity of demand for their goods or services

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Answer: Firms producing cement for the construction industry.

Q25: Which of the options best describes an oligopolistic market structure

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Answer: Few competitors, recognized interdependence among firms, firms having a degree of control over the market.

Q26: Market concentration measures

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Answer: The distribution of market power among firms in the market.

Q27: Which of the following is not a force in the Porter Five Forces model

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Answer: Complementary products

Q28: Industry rivalry is likely to be more intense when

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Answer: The market is growing very slowly.

Q29: Analysts using Porter’s Five Forces model would see which of the following as substitutes for tourist flights to Western Europe offered by airlines such as BA or Air France

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Answer: Travel on the Eurostar.

Q30: According to Porter, suppliers are more able to exercise bargaining power over buyers when

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Answer: The supply industry is dominated by a few large firms.

Q31: Potential rivals will not find it difficult to enter a market where

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Answer: Economies of scale are insignificant.

Q32: An environment which is increasingly complex and turbulent displays

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Answer: Increased speed of innovation.

Q33: Which of the following is NOT a business opportunity generated by globalization

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Answer: Currency crises.

Q34: Strategy involves which of the following

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Answer: All of the above

Q35: Stakeholders can best be defined as

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Answer: Any individual, group, or organization that is affected by or can affect the activities of a business.

Q36: In stakeholder mapping one with a high level of power but low interest

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Answer: Should be kept satisfied.

Q37: An impact analysis helps firms to

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Answer: Prioritize responses to the forces of the external environment.

Q38: Exploring the strategic implications of global warming is best described as

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Answer: Scenario planning.

Q39: PESTLE is an analytical tool which helps to undertake

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Answer: An external analysis

Q40: An analysis of the external environment enables a firm to identify

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Answer: Opportunities and threats

Q41: Raising income taxes would be included in which section(s) of a PESTLE analysis

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Answer: Political, legal, economic and financial, social

Q42: The Uppsala model of internationalization assumes that firms

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Answer: Take a staged approach to internationalization.

Q43: Born global firms

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Answer: All of the above

Q44: A firm undertaking FDI in an overseas country might do so for which of the following reasons

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Answer: To access growing markets and/or reduce production costs.

Q45: To determine a country’s attractiveness to business requires

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Answer: All of the options given.

Q46: In overseas markets higher returns are usually associated with

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Answer: High risk and high attractiveness

Q47: According to the WEF which of the following is NOT key for efficiency-driven economies

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Answer: Innovation

Q48: Critics of competitiveness indices argue that

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Answer: All of the above

Q49: Which of the following is NOT a problem when dealing with international data

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Answer: Definitional problems because of lack of IMF advice on the compilation of statistics.

Q50: A government wishing to attract business from overseas would NOT introduce

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Answer: Subsidies to home-based producers

Q51: Country risk is usually lowest in

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Answer: Economically advanced democratic nations

Q52: Some British and US firms seem to assume that, since English is the international language of business, their staff can safely ignore foreign languages. This approach could be problematic where

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Answer: All of the options.

Q53: Hofstede argues that

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Answer: National culture is more influential than organizational culture.

Q54: Different cultures sometimes vary in their attitudes to time. In cultures where people follow event time

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Answer: Much time is devoted to having a chat over a coffee during the working day.

Q55: In many countries the ratio of older people to total population is rising rapidly. This is important to business because

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Answer: It could change the pattern of demand for goods and services.

Q56: Ageing of the population is caused by

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Answer: Low birth rates.

Q57: Rapid rates of urbanization are associated with

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Answer: The growth of new religious movements.

Q58: The liberal social model holds that

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Answer: Low taxes lead to a more efficient economy.

Q59: The social democratic welfare model holds that

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Answer: Governments should actively assist people in finding work.

Q60: Researchers have found that attitudes to contracts vary from one culture to another. Which of the following is correct

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Answer: Western cultures see contracts, once signed, as set in stone.

Q61: Hofstede found that some countries have a long-term orientation while others focus on the short term. His results mean that

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Answer: British businesses prefer investments with a quick return.

Q62: Which of the following would not be classified as an innovation advance

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Answer: A company’s R&D facility.

Q63: Tacit knowledge is

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Answer: Lost when employees leave the firm.

Q64: Which of the following can be seen as part of a commercial firm’s intellectual property

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Answer: A brand name such as Coke.

Q65: When looking for new ideas to exploit commercially, multinationals

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Answer: May collaborate with rivals, suppliers or customers.

Q66: Which of the following are likely to be the most active innovators

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Answer: A large Irish producer of optical equipment.

Q67: Technological advance does not

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Answer: Guarantee that business will be successful.

Q68: China raises a problem for Western firms trying to protect their intellectual property rights (IPRs) because of

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Answer: The failure by the Chinese authorities to enforce the law on IPRs.

Q69: Information and communications technology (ICT) means that international firms

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Answer: Can monitor their employees more closely.

Q70: The development of the World Wide Web can result in

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Answer: Big multinationals facing more competition from small and medium-sized rivals.

Q71: The World Wide Web means that

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Answer: Goods and services that would have previously failed can now be successfully marketed internationally.

Q72: Which of the following statements best describe systems of liberal democracy

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Answer: Liberal democratic governments protect basic civil liberties.

Q73: In which political system does one person or a small group of people hold absolute power

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Answer: Authoritarian systems

Q74: Which political system is the basis of China’s government today

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Answer: Communism

Q75: Which of the following are important for business in influencing government bodies in China

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Answer: All of the options above.

Q76: In countries with a federal system of government like the US, firms wanting public contracts

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Answer: May have to persuade decision makers at different levels of the federation to award them contracts.

Q77: What role does the executive branch play in liberal democracies

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Answer: It puts laws and regulations into effect and ensures that the desired outcomes are achieved.

Q78: China is described as ‘one-nation two-systems’ because

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Answer: Hong Kong operates with more freedoms and democracy than mainland Chna.

Q79: Big multinational pharmaceutical firms try to exercise influence over the policy decisions made by government departments and regulatory agencies. Which of the following does not reflect how the companies try to exercise their influence

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Answer: Ignoring their regulatory agencies.

Q80: The State performs various functions, many of which are important for international business. Which of the following functions, performed by the State, would be the most important for firms like Boeing and Airbus

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Answer: As a customer

Q81: Tax rates on profits have been falling. Select one of the reasons below that help explain why governments are doing this

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Answer: To retain and attract investment by multinational companies.

Q82: Which of the following statements on civil law systems would be seen as an advantage by business

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Answer: Relevant areas of law are much easier to find than in common law systems.

Q83: Which of the following is the legal basis for Common law systems

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Answer: Precedents and statutes

Q84: Sharia law allows which of the following business activities

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Answer: Distributing high performance cars

Q85: Which of the following could be seen as a breach of contract

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Answer: Supplying computer chips that do not match the agreed product specifications.

Q86: Tort law allows business to

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Answer: Take counterfeiters of their products to court.

Q87: How does international law facilitate international trade and investment

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Answer: It makes it easier to resolve contract disputes for firms involved in international trade and investment.

Q88: Why might arbitration be an attractive option for settling disputes in international trade and investment cases

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Answer: The decisions of the arbitrator can be widely enforced.

Q89: Laws relating to The Single Market Programme allow EU-based companies to

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Answer: All of the options given.

Q90: Competition Law in the EU means that firms

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Answer: May be refused permission to take over a US competitor.

Q91: The law relating to E-Commerce fits which of the following descriptions

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Answer: The law lacks clarity for business.

Q92: The existence of money is a beneficial to international business because

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Answer: Money avoids costly cross-border bartering of goods and services.

Q93: The International Monetary Fund is important because

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Answer: It has sufficient financial resources to help individual countries facing balance of payments problems.

Q94: Between 2009 and mid 2011 inflation globally was on the rise. By June 2011 it was at an annual rate of 6.4% in China and 3.6% in the US. Given China’s desire to maintain a stable exchange rate against the US dollar, this means that

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Answer: US exporters to China will find it easier to sell there.

Q95: Which of the following characterize the early stages of a financial crisis

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Answer: Excessive euphoria about the future price of certain assets.

Q96: Which of the following are characteristic of the period when financial bubbles burst

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Answer: Excessive pessimism about future asset prices.

Q97: The financial crisis of 2007/08 started in the USA. It spread to other countries because

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Answer: Foreign banks had bought securities based on US sub-prime mortgages.

Q98: How do financial institutions facilitate international trade and investment

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Answer: They offer payment systems making it easier to export and import goods and services.

Q99: What functions do financial institutions traditionally perform

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Answer: They spread risk.

Q100: Why has there been much cross-border restructuring in the financial sector

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Answer: Financial institutions wanted to take advantage of expanding markets in S. E. Asia.