PRELIM

Question 1

It refers to the transfer of assets to another country, or acquisition of assets in that country. With trade, products and services cross national borders.

Answer 1

international investment

Question 2

The procurement of products or services from suppliers located abroad for consumption in the home country or a third country.

Answer 2

importing

Question 3

It refers to an internationalization strategy in which the firm establishes a physical presence abroad through acquisition of productive assets such as capital, technology, labor, land, plant and equipment.

Answer 3

foreign trade investment

Question 4

It refers to a situation or event where a cultural miscommunication puts some human value at stake.

Answer 4

cross cultural risk

Question 5

It refers to the potentially adverse effects on company operations and profitability caused by developments in the political, legal, and economic environment in a foreign country.

Answer 5

country risk

Question 6

It refers to the risk of adverse fluctuations in exchange rates.

Answer 6

currency risk

Question 7

It refers to the firm’s potential loss or failure from poorly developed or executed business strategies, tactics, or procedures.

Answer 7

commercial risk

Question 8

A large company with substantial resources that performs various activities through a network of subsidiaries and affiliates located in multiple countries.

Answer 8

multinational enterprise

Question 9

A company with 500 or fewer employees.

Answer 9

small and medium sized enterprise

Question 10

A young entrepreneurial company that initiates international business activity very early in its evolution, moving rapidly into foreign markets.

Answer 10

born global firm

Question 11

They pursue special causes and serve as an advocate for the arts, education, politics, religion, and research.

Answer 11

non governmental organizations?

Question 12

Nations’ collective aspirations and objectives that guide their development and progress.

Answer 12

common goals

Question 13

The quantity of a good or service that consumers are willing to buy at various prices.

Answer 13

demand

Question 14

An entry strategy involving the sale of products or services to customers located abroad, from a base in the home country or a third country.

Answer 14

Exporting

Question 15

A system of institutions and laws that provide the framework for organizing and regulating the nation.

Answer 15

Government

Question 16

It refers to the performance of trade and investment activities across national borders.

Answer 16

International Business

Question 17

It refers to an exchange of products and services across national borders.

Answer 17

International Trade

Question 18

A shared sense of belonging and identification among the people, often based on factors such as language, history, and culture.

Answer 18

National Identity

Question 19

A group of people who share a common identity, culture, and history within that territory.

Answer 19

Population

Question 20

The acknowledgment of a nation’s existence by other nations and international bodies.

Answer 20

Recognition

Question 21

The ability of a nation to govern itself independently, making decisions on domestic and foreign affairs without external interference.

Answer 21

Sovereignty

Question 22

The quantity of a good or service that producers are willing to offer for sale at various prices.

Answer 22

Supply

Question 23

A specific geographical area with recognized borders where the nation resides.

Answer 23

Territory

Question 24

The concept of exchanging goods and services between two people or entities

Answer 24

Trade.

Question 25

The concept of this exchange between people or entities in two different countries

Answer 25

International Trade.

Question 26

This theory stated that a country's wealth was determined by the amount of its gold and silver holdings.

Answer 26

Mercantilism

Question 27

This theory focused on the ability of a country to produce a good more efficiently than another nation.

Answer 27

Absolute Advantage

Question 28

Occurs when a country cannot produce a product more efficiently than the other country.

Answer 28

Comparative Advantage

Question 29

Their theory focused on MNCs and their efforts to gain competitive advantage against other global firms in their industry.

Answer 29

global strategic rivalry theory

Question 30

This theory states that most trade in manufactured goods will be between countries with similar per capita incomes, and intraindustry trade will be common.

Answer 30

Linder's country similarity theory

Question 31

This theory incorporates other product and service factors, including brand and customer loyalty, technology, and quality, into the understanding of trade flows.

Answer 31

firm based theories

Question 32

This theory focused their attention on how a country could gain comparative advantage by producing products that utilized factors that were in abundance in the country.

Answer 32

Heckscher-Ohlin theory

Question 33

This theory in the United States should have been importing labor intensive goods, but instead it was actually exporting them

Answer 33

factor proportions theory

Question 34

The theory assumed that production of the new product will occur completely in the home country of its innovation.

Answer 34

product life cycle theory

Question 35

It states that a nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade.

Answer 35

Competition

Question 36

This occurs when a company sells a product below market price often in order to win market share and weaken a competitor.

Answer 36

anti-dumping rules

Question 37

These are the bureaucratic policies and procedures governments may use to deter imports by making entry or operations more difficult and time consuming.

Answer 37

administrative policies

Question 38

A form of government payment to a producer.

Answer 38

Subsidies

Question 39

These are taxes imposed on imports

Answer 39

Tariff

Question 40

10 FUNDAMENTALS OF TRADE

Answer 40

1. Supply and Demand 2. Market Prices 3. Competition 4. Specialization and Comparative Advantage 5. Trade Surpluses and Deficits 6. Trade Barriers 7. Currency Exchange Rates 8. Trade Agreements 9. Globalization 10. International Institutions