MIX REVIEW

Question 1

● One of the drawbacks of regional economic integration where in trading was diverted
away from nations not belonging to a trading bloc and toward member nations

Answer 1

Trade Diversion

Question 2

● Firms can reduce the problems associated with Acquisitions through

Answer 2

○ Due diligence

Question 3

Economic integration by which countries remove all barriers to trade and to the
movement of labor and capital among themselves and set a common trade policy
against nonmembers.

Answer 3

○ Common Market

Question 4

Economic and political integration by which countries coordinate aspects of their
economic and political systems, and have common stance on economic and political
matters to non- members

Answer 4

○ Political Union

Question 5

One of the benefits of regional economic integration where in companies save a great
deal of money annually from the removal of import tariffs or supplying entire regions from
one or several factories, Savings can then be passed on to consumers in the form of
lower prices

Answer 5

○ Corporate savings

Question 6

a unique form of FDI—businesses invest in a foreign company to manufacture goods.
They then sell the finished product in a third country

Answer 6

○ Platform FDI

Question 7

The treaty that formally established the European Union, setting the path for deeper
economic and monetary union and called for banking in a single, common currency after
January 1, 1999.

Answer 7

○ Maastricht Treaty

Question 8

A business acquires a complementary business in another country relevant to its existing
business

Answer 8

○ Vertical FDI

Question 9

A company invests in a foreign business that is unrelated to its core business

Answer 9

○ Conglomerate FDI

Question 10

Implemented to promote trade between the U.S., Canada, and Mexico, however issues
and criticisms regarding labor and environmental issues resulted to creation of USMCA

Answer 10

○ North American Free Trade Agreement

Question 11

A company establishes the same type of business operation in a foreign country as it
operates in its home country

Answer 11

○ Horizontal FDI

Question 12

The purchase of physical assets or significant amount of the ownership(stock) of a
company in another country to gain level of management control

Answer 12

○ Foreign Direct Investment

Question 13

Economic integration by which countries remove barriers to trade and the movement of
labor and capital among members, set a common trade policy against nonmembers, and
coordinate their economic policies

Answer 13

○ Economic Union

Question 14

● The OLI framework

Answer 14

○ Ownership, Location, Internalization

Question 15

Form of external expansion where one company acquires one company by the other,
which is quick to execute.

Answer 15

○ Acquisition

Question 16

An economic and business method for analyzing the attractiveness of making a foreign
direct investment (FDI) which follows the OLI framework

Answer 16

○ Eclectic paradigm

Question 17

The cornerstone of regional integration in Southeast Asia, focusing on economic,
political, and security cooperation

Answer 17

○ Association of Southeast Asian Nations

Question 18

One of the benefits of regional economic integration where in it is easier to gain
consensus from fewer members as a member of the group, as a whole, can have more
say when negotiating with other countries in bigger forum

Answer 18

○ Political Cooperation

Question 19

Economic integration by which countries remove all barriers to trade among themselves,
but country determines its own barriers against nonmembers

Answer 19

○ Free Trade Area

Question 20

One of the theories why companies engaged in FDI

Answer 20

○ Remove market imperfections

Question 21

Bond issued outside the country in whose currency it is denominated

Answer 21

○ Eurobond

Question 22

The analysis that employs charts of past trends in currency prices and other factors to
forecast exchange rates

Answer 22

○ Technical analysis

Question 23

an exchange rate between two nations’ currencies is equal to the ratio of their price
levels.

Answer 23

○ Purchasing Power Parity

Question 24

Rate at which one currency is exchanged for another

Answer 24

○ d.) exchange rate

Question 25

Bond sold outside the borrower’s country and denominated in the currency of the country in which it is sold.

Answer 25

○ Foreign bond

Question 26

Market consisting of all the world’s currencies that are banked outside their countries of origin

Answer 26

○ Eurocurrency market

Question 27

Market consisting of all bonds sold by issuing companies, governments, or other organizations outside their own countries

Answer 27

○ International Bond Market

Question 28

The intentional lowering of a currency’s value by a nation’s government is called

Answer 28

○ Devaluation

Question 29

Interest rates that the world’s largest banks charge one another for loans

Answer 29

○ c.) interbank interest rates

Question 30

Market in which currencies are bought and sold and their prices are determined

Answer 30

○ a.) foreign exchange market

Question 31

The statistical models based on economic indicators to forecast exchange rates between currenciesThe statistical models based on economic indicators to forecast exchange rates between currencies

Answer 31

○ Fundamental analysis

Question 32

● The intentional raising of a currency’s value by a nation’s government is called

Answer 32

○ Revaluation

Question 33

System that allocates financial resources in the form of debt and equity according to their most efficient uses.

Answer 33

○ Capital market

Question 34

Market consisting of all stocks bought and sold outside the issuer’s home country

Answer 34

○ International equity market

Question 35

Network of individuals, companies, financial institutions, and governments that invest and borrow across national boundaries

Answer 35

○ International Capital Market

Question 36

The _______ a nation to fix the value (price) of its currency to an ounce of gold, which also indirectly linked currencies to each other.

Answer 36

○ a.) Gold standard

Question 37

● ________states that when price is expressed in a common currency, an identical product must have an identical price in all countries

Answer 37

○ a.) Law of one price

Question 38

One of the international strategy that emphasizes responsiveness to local requirements within each of its markets.

Answer 38

○ b.) Multi-Domestic Strategy

Question 39

A written statement of why a company exists and what it plans to accomplish, often guides decisions such as which industries to enter or exit and how to compete in chosen segments

Answer 39

○ d.) Mission Statement

Question 40

Strategy in which a company focuses on serving the needs of a narrowly defined market segment by being the low - cost leader, by differentiating its product, or both.

Answer 40

○ a.) Focus strategy

Question 41

Process of dividing a company’s activities into primary and support activities and identifying those that create value for customers.

Answer 41

○ c.) Value Chain Analysis

Question 42

Strategy designed to increase the scale (size of activities) or scope (kinds of activities) of a corporation’s operations

Answer 42

○ a.) Growth Strategy

Question 43

The analysis that can help a company identify areas where it needs to improve and areas where it has a competitive advantage

Answer 43

○ d.) Company Analysis

Question 44

The ________ controls currency printing and helps cap inflation.

Answer 44

○ d.) Currency board

Question 45

Offering the same products using the same marketing strategy in all national markets.

Answer 45

○ c.) Global Strategy

Question 46

Strategy in which a company designs its products to be perceived as unique by buyers throughout its industry.

Answer 46

○ b.) Differentiation strategy

Question 47

Process of identifying and selecting an organization’s objectives and deciding how the organization will achieve those objectives

Answer 47

○ a.) Planning

Question 48

The ________ created an international monetary system based on the value of the US dollar and used the gold standard to link paper currencies to specific values of gold.

Answer 48

○ b.) Bretton Woods Agreement

Question 49

Special ability of a company that competitors find extremely difficult or impossible to equal.

Answer 49

○ a.) Core competency

Question 50

Set of planned actions taken by managers to help a company meet its objectives.

Answer 50

○ b.) Strategy

Question 51

The value of a currency expressed in terms of gold is called its___________.

Answer 51

○ b.) Par value