prelim♥️

Question 1

motive of earning profit

Answer 1

business

Question 2

enterprising entity engaged in commercial activities

Answer 2

business

Question 3

exchange of goods and services between countries

Answer 3

international business

Question 4

all transactions that occur between nations

Answer 4

international business

Question 5

allows better use of available resources

Answer 5

international business

Question 6

stimulate the growth of economy worldwide

Answer 6

international business

Question 7

benefits of international business - benefit to. . .

Answer 7

benefits to nations
benefits to firms

Question 8

benefits to nations

Answer 8

1. earning of foreign exchange
2. more efficient use of resources
3. improving growth prospects and employment potential
4. increase in standards of living

Question 9

benefits to firms

Answer 9

1. Prospect for higher profit
2. Increased capacity utilization
3. Prospect for growth
4. Decrease competition
5. Improved business vision

Question 10

helps a country to earn foreign exchange

Answer 10

earning of foreign exchange

Question 11

the goods they produced efficiently with their own resources and import the rest of the goods

Answer 11

more efficient use of resources

Question 12

countries can increase their production capacity to supply goods to foreign countries

Answer 12

Improving growth prospects and employment potential

Question 13

it becomes possible for people to consumer goods and services of other countries and improve their standard of living

Answer 13

increase in standards of living

Question 14

firms can sell their product in other countries where prices are higher

Answer 14

prospect for higher profit

Question 15

it increases the firm’s production capacity

Answer 15

increased capacity utilization

Question 16

can enhance or expand their business by approaching the international market

Answer 16

prospects for growth

Question 17

companies can sell their products in the international market or in any other country where there is less competition

Answer 17

decrease competition

Question 18

makes firm’s competitive and diversified

Answer 18

improved business vision

Question 19

where short-term financial assets are bought and sold

Answer 19

money market

Question 20

transferring short-term funds from lenders to borrowers

Answer 20

money markets

Question 21

where securities that mature in a year or less are traded

Answer 21

money markets

Question 22

over-the-counter market for trading of currencies

Answer 22

foreign exchange market

Question 23

determine foreign exchange rates for every country

Answer 23

foreign exchange market

Question 24

all aspects of buying selling and exchanging currencies at current or determined prices

Answer 24

foreign exchange market

Question 25

it is by far the largest market in the world

Answer 25

foreign exchange market

Question 26

factors driving exchange rate movements

Answer 26

1. balance of payments position 2. speculation over future currency values 3. domestic economic and political conditions 4. central bank interventions

Question 27

trade deficit usually faces downwards

Answer 27

balance of payments position

Question 28

buy or sell currencies when they see profitable opportunities

Answer 28

speculation over future currency values

Question 29

deteriorating economic conditions and inflations

Answer 29

domestic economic and political conditions

Question 30

buy or sell currencies to influence the value of their currency

Answer 30

central bank interventions

Question 31

foreign trade purchase or sale of goods and services outside the national geographic borders

Answer 31

international trade

Question 32

satisfy the demand of local consumers allows countries to expand their markets

Answer 32

international trade

Question 33

purchase and sale of goods and services by companies in different countries

Answer 33

international trade

Question 34

supply and demand and thus prices both impact and are impacted by global events

Answer 34

global economy

Question 35

sold to the global market

Answer 35

export

Question 36

bought from the global market

Answer 36

import

Question 37

if a country can efficiently produce an item, it can obtained by trading with another country that can

Answer 37

specialization

Question 38

two types of trade that complement each other

Answer 38

foreign trade and international business

Question 39

classical theory of international trade

Answer 39

1. theory of mercantilism 2. theory of absolute advantage 3. theory of comparative cost advantage 4. endowment theory/ Hecksher-Ohlin model

Question 40

-encourage export and discourage import -expert minus import

Answer 40

theory of mercantilism

Question 41

adam smith book

Answer 41

"an enquiry into the nature and causes of the wealth of nations" 1776

Question 42

when one country can produce a unit of good with less cost than another countries

Answer 42

theory of absolute advantage

Question 43

nation's wealth shouldn't be judged by how much gold and silver it had

Answer 43

theory of absolute advantage

Question 44

by david ricardo: if the opportunity cost of producing that goods in terms of other goods is lower in the country compared to other country

Answer 44

theory of comparative cost advantage

Question 45

whereas absolute advantage looks at the absolute productivity

Answer 45

theory of comparative cost advantage

Question 46

assumes that labor is the only factor of production in two countries

Answer 46

theory of comparative cost advantage

Question 47

nation with export the commodity whose production requires intensive use of the nations relatively abundant

Answer 47

endowment theory/ Hecksher-Ohlin model

Question 48

with an abundance of cheap labor would export labor intensive products vice versa

Answer 48

endowment theory/ Hecksher-Ohlin model

Question 49

trade of all goods and services worldwide

Answer 49

international trade

Question 50

fundamental to transactions of a country with the rest of the world

Answer 50

foreign trade

Question 51

covers much broader scope since it refers to commercial transactions that are carried out in the world

Answer 51

international business

Question 52

encompasses socio-economic reform process of eliminating trade investment, information technology. .. . across the world

Answer 52

globalization

Question 53

how trade and technology have made the world into a more connected and interdependent place

Answer 53

globalization

Question 54

countries that are implementing more open trade and free market policies

Answer 54

emerging economies

Question 55

fundamental global shift in which industrialized country dependent developing economies begin to grow

Answer 55

decoupling

Question 56

two-way flow of export and imports of goods and services

Answer 56

trade

Question 57

in flow of capital from abroad for investing in domestic plant and equipment for the production of goods or services

Answer 57

foreign direct investment

Question 58

investment made by a company or individual in one country into business interests located in other country (example mcdonald)

Answer 58

foreign direct investment

Question 59

corporate practice of acquiring or producing quality goods or services abroad at a lower cost thereby eliminating domestic production

Answer 59

outsourcing