MIB Master of International Business: Global Business Environment 4

Question 1

Which international monetary system replaced the gold standard after World War II and pegged currencies to the US dollar?

Accepted Answer

The Bretton Woods system

Answer

The Bretton Woods system (1944–1971) fixed currencies to the dollar, which was itself convertible to gold at $35 per ounce.

Question 2

A country imposes a voluntary export restraint (VER). From a trade policy perspective, VERs are typically:

Accepted Answer

Agreements where the exporting country limits its own shipments under pressure

Answer

VERs are negotiated arrangements in which the exporting country self-limits exports, often to avoid harsher import restrictions.

Question 3

The concept of 'psychic distance' in international market entry refers to:

Accepted Answer

The perceived differences in language, culture, education, and business practices between countries

Answer

Psychic distance captures how unfamiliar a foreign market feels to managers based on cultural, linguistic, and institutional differences.

Question 4

Which type of regional trade agreement eliminates internal tariffs but allows member countries to set their own external tariffs independently?

Accepted Answer

Free trade area

Answer

A free trade area removes tariffs among members but each country retains sovereignty over its tariff schedule with non-members.

Question 5

A multinational expanding into an emerging market faces 'institutional voids,' meaning:

Accepted Answer

Absence of well-functioning market-supporting institutions like credit bureaus or contract enforcement

Answer

Institutional voids are the missing intermediaries (legal systems, credit agencies, regulators) that facilitate market transactions in developed economies.

MIB - Master of International Business Practice Test

MIB - Master of International Business Practice Test

MIB Master of International Business: Global Business Environment 4