International Business Quiz

Which of the following is NOT a key area where international business decisions differ from domestic business?

International business is limited to the exchange of tangible products like merchandise.

What are the two primary forms of international trade?

The procurement of products or services from suppliers located abroad for consumption in the home country is known as _____.

Match the following roles in international business with their descriptions:

What does 'country risk' refer to in the context of international business?

Commercial risk refers to the possibility of a company losing money due to the failure of its own business strategies.

What is a key factor contributing to currency risk in international business?

The tendency of companies to deepen their international business activities systematically is known as _____.

Which of the following is NOT a dimension of international business?

Match the following terms with their definitions:

A ______ is a venture that is jointly owned and operated by two or more firms.

Which of the following is NOT a way that firms penetrate foreign markets?

The balance of payments is a summary of transactions between domestic and foreign residents for a specific country over a specific period of time.

What is one benefit of a firm establishing new foreign subsidiaries?

What is the significance of the International Flow of Funds for MNCs?

The balance of payments can indicate potential shifts in specific exchange rates.

Why is the valuation model for an MNC relevant to both its shareholders and debt holders?

Which of the following is a component of factor income, as defined in the context of international finance?

The balance of trade is calculated by subtracting total imports from total exports.

What is the primary goal of managers when making decisions within a firm?

The valuation of a purely domestic firm is typically calculated as the present value of its expected ______.

Match the following trade-related terms with their definitions:

Which of the following factors can negatively impact the return on investments in foreign securities due to currency fluctuations?

A country's government imposing a tax on imported goods can increase the prices of domestic goods to consumers.

What is the primary reason why a weak home currency may NOT be a perfect solution to a balance-of-trade deficit?

The lack of restrictions on ______ in a country can negatively impact international trade flows.

Match the following scenarios with the impact they have on international trade:

A balance-of-trade deficit is always a negative indicator for a country's economy.

Which of the following is NOT a factor that can limit the effectiveness of a weak home currency in boosting exports?

Explain how a balance-of-trade deficit can lead to a transfer of jobs to foreign countries.

Which of the following is NOT a characteristic of a lender in a financial institution?

The product cycle theory suggests that firms initially establish themselves in the domestic market due to a perceived advantage over competitors.

What is the primary difference between stocks and bonds?

The sum of the products of cash flows denominated in each currency j times the expected exchange rate at the end of period t represents the _______ for the MNC.

International trade is a highly aggressive approach to expanding a firm's market reach.

Which of the following factors contributes to imperfect market conditions in international trade?

What is the significance of the 'product cycle theory' in explaining the emergence of multinational corporations (MNCs)?