https://drive.google.com/file/d/1BDS1K-hlfWk5j0GLchptG3SHRrjfx0vn/view?usp=sharing
Possible test/exam questions
National differences in standards, the expression of budgets and performances in one single currency (usually the one of the country where the HQs is located), transfer pricing, the question where to borrow capital, and cash management are some of the accounting and finance challenges MNCs are faced with. Please explain the issues and provide solutions. What role does the Lessard-Lorange-Model play is this context? (25/100)
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Please explain the issues of Global Marketing and provide solutions. (25/100)
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Please explain the source and nature of ethical issues in international business, the different philosophical approaches to business ethics, and the steps managers can take to ensure that ethical issues are respected in international business decisions. (25/100)
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You are a notebook manufacturer in Belgium. You import the screens from Japan for €100 per piece (price in € fixed for next 12 months). Total production costs (all inputs together) are €300 per piece. You have received an order from a Japanese dealer for 1000 notebooks for 35mio¥ which you are able to deliver in 3 months. The notebook would sell in Belgium for 400€ per piece. The Spot Exchange Rate (SER) 1€=100¥, the Forward Exchange Rate (FER) 1€=110¥. A Big Mac costs 1€ in Belgium and 200¥ in Japan. (25/100)
Please calculate and explain briefly what you are doing:
a. the total profit in € when the SER in 3 months is the same as today. (5)
b. an indication of the assumed price per piece in ¥ at PPP today. (5)
c. the assumed difference in nominal interest rates between Belgium and Japan and explain. (5)
d. the total profit when the deal was hedged at the 3-months-FER. A wise decision? (5)
e. the assumed price in € in Germany and explain. (5)
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You are a pencil producer in Belgium. The production costs for 1 pencil are 30 Eurocents. You receive an order from an US dealer for 100000 pieces to be delivered in 3 months. The deal has a value of 100000 US Dollar. The Exchange rate today is 2USD/€. The expected nominal interest rate in Belgium (in the US) in 3 months is 10% (20%). A Big Mac costs in Belgium (in the US) 1€ (3USD). A pencil would sell in Franc for 1€.
Tasks
- Any idea if the US Dollar might be over- or undervalued? Please explain. (20/100 points)
- If you carry out the deal in 3 months, what profit would you expect? Please explain. (20/100 points)
- Would you hedge the deal? Please explain. (20/100 points)
- What would the total profit be if you could do the deal today? (20/100 points)
- For which price would the pencil sell in Germany? Please explain. (20/100 points)
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Time allowed: 30min.
1. Global learning based on the multidirectional transfer of skills between subsidiaries and
the corporate center is a central feature of a firm pursuing a(n) _____ strategy.
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A. |
localization |
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B. |
global standardization |
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C. |
transnational |
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D. |
international |
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2. |
_____ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product.
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3. Which of the following is a first-mover advantage?
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A. |
lower research and development costs and marketing costs than other firms |
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B. |
ability to preempt rivals and capture demand by establishing a strong brand name |
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C. |
ability to capitalize on the work done by other firms |
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D. |
creation of innovative products at lower costs than other firms |
4. The term _____ has been coined to describe the ability of companies to use flexible manufacturing technology to reconcile the goals of low cost and product
personalization.
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A. |
assembly-line production |
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B. |
product standardization |
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C. |
mass customization |
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D. |
Six Sigma production |
5. Which of the following is NOT a successful exporting strategy used by 3M?
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A. |
Add additional products once exporting becomes successful. |
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B. |
Enter many markets at one time to gain maximum exposure. |
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C. |
Hire local to promote the firm's products. |
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D. |
Enter on a small scale to reduce risks. |
6. Which of the following products will most likely have high value-to-weight ratios?
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A. |
Pharmaceuticals |
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B. |
Refined sugar |
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C. |
Bulk chemicals |
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D. |
Petroleum products |
7. Which of the following will help a company hedge against currency fluctuations?
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A. |
Finding a large supplier to supply all the raw materials |
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B. |
In-house manufacturing of raw materials |
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C. |
Basing business in a single country |
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D. |
Dispersing production to different geographic locations |
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8. Responding to pressure for _____ requires that a firm differentiate its product offering and marketing strategy from country to country.
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9. A draft used in international transactions ____.
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A. |
is a document requesting payment |
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B. |
explains the conditions of a contract |
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C. |
is the same as a letter of credit |
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D. |
gives bank guarantee to an exporter |
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10. |
Concentration of production is appropriate when _____.
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11. A firm's _____ determines where in its hierarchy the decision-making power is concentrated.
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A. |
integrating mechanism |
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B. |
vertical differentiation |
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C. |
knowledge network |
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D. |
horizontal differentiation |
12. Which of the following is a distinct advantage of exporting?
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A. |
It avoids the threat of tariff barriers by the host-country government. |
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B. |
Firms benefit from a local partner's knowledge of the host country's competitive conditions. |
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C. |
It avoids the often substantial costs of establishing manufacturing operations in the host country. |
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D. |
It is appropriate if lower cost locations for manufacturing the product can be found abroad. |
13. Under a _____ exchange rate regime, a country will attach the value of its currency to that of a major currency.
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A. |
managed float |
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B. |
pegged |
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C. |
free float |
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D. |
currency board |
14. Switching costs:
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A. |
drive early entrants out of the market. |
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B. |
make it easy for later entrants to win business. |
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C. |
make it difficult for later entrants to win business. |
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D. |
give later entrants a cost advantage over early entrants. |
15. _____ are international bonds, normally underwritten by an international syndicate of banks and placed in countries other than the one in whose currency the bond
is denominated.
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A. |
Micro bonds |
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B. |
Foreign bonds |
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C. |
Eurobonds |
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D. |
Regulatory bonds |
16. Which of the following is an argument favoring centralization?
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A. |
It permits greater flexibility. |
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B. |
Motivational research favors it. |
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C. |
It can avoid the duplication of activities. |
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D. |
It gives top management time to focus on critical issues by delegating routine issues to lower-level managers. |
17. Which of the following is a common criticism against IMF?
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A. |
IMF lacks any real mechanism for accountability. |
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B. |
It is hesitant to help banks when they are in crisis. |
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C. |
IMF has not intervened to resolve the Asian crisis. |
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D. |
It did not try to resolve the Mexican currency crisis. |
18. Which of the following is a disadvantage of the localization strategy?
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A. |
Decrease in the value of the product in the local market |
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B. |
Duplication of functions |
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C. |
Inability to accommodate varying tastes and preferences in different markets |
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D. |
Reduced customization |
19. Which of the following refers to the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates?
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A. |
Currency pairing |
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B. |
Carry trade |
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C. |
Currency exchange |
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D. |
Currency swap |
20. If a firm can realize location economies by moving production elsewhere, it should avoid:
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A. |
exporting. |
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B. |
turnkey contracts. |
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C. |
licensing. |
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D. |
wholly owned subsidiaries. |
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Please explain the strategic role of Global Human Resources Management for International Business. (25/100)
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Where to produce, what to make and what to buy, and how to coordinate a globally dispersed manufacturing and supply chain are three issues central to international production and logistics. Please explain. (25/100)
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Please explain the functions and form of the global capital market, and the implications for international managers. (25/100)
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Please explain the source and nature of ethical issues in international business, the different philosophical approaches to business ethics, and the steps managers can take to ensure that ethical issues are respected in international business decisions. (25/100)
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Please
- Show that trade is beneficial for a country opening up its economy
- Explain major trade theories
- Provide reasons for government intervention
- Discuss instruments of trade policies.
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Please show graphically how the welfare effects ofa country change when it moves from a closed to an open economy.
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Assume that suppliers of a country invest over time more and more outside the country (instead in their own country). How and why would that (tentatively) effect the supply curve and the welfare? Please explain and show graphically.
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In our textbook (Hill, Charles, IB, 10ed) we have read the country focus "India's Economic Transformation". Please sumemrize the main points.
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Please give an overwiew of pros and cons of globalisation.
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Please explain the strategic role of Global Human Resources Management for International Business.
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Where to produce, what to make and what to buy, and how to coordinate a globally dispersed manufacturing and supply chain are three issues central to international production and logistics. Please explain.
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Please explain the functions and form of the global capital market, and the implications for international managers.
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Please explain the source and nature of ethical issues in IB, the different philosophical approaches to business ethics, and the steps managers can take to ensure that ethics are respected in IB decisions.
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Money management in the international business is very important. Please explain why and how, and what the implications for international managers are.
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Very often governments intervene in international trade. Please explain why and how, and what the implications for international managers are.
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Compensation systems vary across nations. Please explain why and how, and what the implications for MNE’s HR policy are.
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Please explain the implications that international trade theory holds for business practice.
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Please discuss the strategic role of HR management in the international business.
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Please explain implications for management practice of national differences in political economy.
Compare and contrast the benefits and risks of the three facets of the Global Capital Market.
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Time allowed: 30min.
1-According to _____, international production should be distributed among countries according to the theory of comparative advantage.
the radical
view (A)
the eclectic view (B)
pragmatic nationalism (C)
the free market view (D)
2. A
common hybrid of a quota and a tariff is known as a(n):
quota rent (A)
voluntary export restraint (B)
ad valorem tariff (C)
tariff rate quota (D)
3. According
to the _____ argument, governments should temporarily support new industries until they have grown strong enough to meet international competition.
retaliatory action (A)
human rights (B)
infant industry (C)
anti-dumping (D)
4. FDI
occurs when a:
domestic firm imports products and services from another country (A)
firm ships its product from one country to another (B)
firm invests in the stock of another company (C)
firm invests directly in facilities to produce or market a product in a foreign country (D)
5. According
to the _____ view of FDI, MNEs extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange.
imperialist (A)
conservative (B)
free market (C)
radical (D)
6. _____ suggests that a government should use subsidies to support promising
firms that are active in newly emerging industries.
The infant industry argument (A)
Strategic trade policy (B)
Retaliation policy (C)
The national security argument (D)
7. The WTO argues that by removing all tariff barriers and subsidies to
agriculture, all of the following would occur except:
the overall level of trade would increase (A)
there would be overproduction of products that are heavily subsidized (B)
prices would fall for consumers (C)
global economic growth would rise (D)
8. All of the
following are true of tariffs except:
they reduce the revenue for the government (A)
they can be levied as a proportion of the value of the imported good (B)
they can be levied as a fixed charge for each unit of a good imported (C)
they impose significant costs on domestic consumers (D)
9. In a
licensing arrangement, the _____ bears the risk and cost of opening a foreign market.
licensee (A)
licensor (B)
acquiring firm (C)
greenfield investor (D)
10. The stock
of FDI is:
the amount of FDI undertaken over a given period of time (A)
the total accumulated value of foreign-owned assets at a given time (B)
the flow of FDI out of a country (C)
the flow of FDI into a country (D)
11. FDI
has been rising for all of the following reasons except:
the globalization of the world economy (A)
the general increase in trade barriers over the past 30 years (B)
firms are trying to circumvent trade barriers (C)
there is a shift toward democratic political institutions and free market economies (D)
12. When
strategic assets such as brand loyalty, customer relationships, or distribution systems are important, _____ investments are more appropriate
merger and acquisition (A)
greenfield (B)
portfolio (C)
new construction (D)
13. This is a
direct restriction on the quantity of some good that may be imported into a country.
Specific tariff (A)
Import quota (B)
Subsidy (C)
Ad valorem tariff (D)
14. A
distinctive aspect of _____ is the tendency to aggressively court FDI believed to be in the national interest by, for example, offering subsidies to foreign MNEs in the form of tax breaks or
grants.
the dogmatic view (A)
pragmatic nationalism (B)
the radical view (C)
the conservative view (D)
15. The rise
in FDI in the services sector is a result of all of the following except:
the general move in many developed countries away from manufacturing and toward services (A)
accelerating regulations of services (B)
many services cannot be traded internationally (C)
many countries have liberalized their regimes governing FDI in services (D)
16.
_____ involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit sold
Horizontal FDI (A)
Licensing (B)
Vertical FDI (C)
Greenfield investment (D)
17. If a
government grants preferential trade terms to a country it wants to build strong relations with, the government is employing a policy:
of retaliation (A)
of human rights protection (B)
to protect national security (C)
to further foreign policy objectives (D)
18. The product life cycle suggests that:
often the same firms that pioneer a product in their home markets undertake FDI to produce a product for consumption in foreign markets (A)
when a firm that is part of an oligopolistic industry expands into a foreign market, other firms in the industry will be compelled to make similar investments (B)
combining location-specific assets or resource endowments and the firm's own unique assets often requires FDI (C)
impediments to the sale of know-how increase the profitability of FDI relative to licensing (D)
19. The _____
suggests that a firm will establish production facilities where foreign assets or resource endowments that are important to the firm are located.
product life cycle (A)
strategic behavior theory (B)
multipoint competition theory (C)
eclectic paradigm (D)
20. Advantages that arise from using resource endowments or assets that are tied
to a particular location and that a firm finds valuable to combine with its own unique assets are known as:
location-specific advantages (A)
resource-specific advantages (B)
competitive advantages (C)
directional advantages (D)
21. Import tariffs:
reduce the price of foreign goods (A)
reduce the overall efficiency of the world economy (B)
create efficient utilization of resources (C)
are unambiguously pro-consumer and anti-producer (D)
22. A
quota on trade imposed by the exporting country, typically at the request of the importing country's government is referred to as a(n):
voluntary export restraint (A)
specific tariff quota (B)
trade reconciliation (C)
ad valorem tariff (D)
23. Foreign producers typically agree to voluntary export restrictions
because:
their manufacturing capacity is limited (A)
they can divert their exports to other countries and charge more for their products (B)
they fear far more damaging punitive tariffs or import quotas might follow if they do not (C)
they are required to by the World Trade Organization (D)
24. Which of the following statements concerning a voluntary export restraint is
false?
It benefits domestic producers by limiting import competition (A)
In most cases, it benefits consumers (B)
It raises the domestic price of an imported good (C)
It is a variant of the import quota (D)
25.
Administrative trade policies are:
requirements that some specific fraction of a good be produced domestically (A)
quotas on trade imposed by the exporting country (B)
bureaucratic rules designed to make it difficult for imports to enter a country (C)
designed to punish foreign firms that engage in dumping (D)
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Druckversion 