MIB Master of International Business: Global Business Environment 5

Question 1

Which foreign market entry mode gives a firm the highest degree of control over overseas operations but also carries the greatest resource commitment and risk?

Accepted Answer

Wholly owned subsidiary

Answer

Exporting

Answer

Licensing

Answer

Joint venture

Question 2

The principle of 'comparative advantage' implies that global welfare is maximized when each country:

Accepted Answer

Specializes in goods with the lowest opportunity cost relative to other countries

Answer

Produces all goods domestically to avoid import dependence

Answer

Imposes tariffs on goods in which it holds an absolute advantage

Answer

Diversifies production equally across all sectors

Question 3

A 'greenfield investment' in the context of FDI means:

Accepted Answer

Building new production facilities from scratch in a foreign country

Answer

Acquiring an existing foreign company outright

Answer

Merging with a local firm to share market risk

Answer

Purchasing minority stakes in foreign publicly listed companies

Question 4

Which organization serves as the lender of last resort to member countries facing balance-of-payments crises?

Accepted Answer

International Monetary Fund

Answer

World Bank

Answer

Bank for International Settlements

Answer

Asian Development Bank

Question 5

In international business, 'country risk' analysis typically encompasses:

Accepted Answer

Political, economic, financial, and social risks that could affect business operations in a country

Answer

Only the likelihood of sovereign debt default

Answer

Natural disaster exposure and climate-related physical risks only

Answer

Currency transaction costs and hedging instrument availability

Question 6

The 'Uppsala model' of internationalization suggests that firms typically expand internationally by:

Accepted Answer

Gradually increasing commitment, starting with psychically close markets

Answer

Entering the largest markets first regardless of cultural proximity

Answer

Using a born-global strategy to enter multiple markets simultaneously

Answer

Prioritizing low-cost manufacturing locations before consumer markets

Question 7

Which term describes a government policy that intentionally devalues its currency to gain an export price advantage over trading partners?

Accepted Answer

Competitive devaluation (beggar-thy-neighbor policy)

Answer

Sterilized intervention

Answer

Quantitative easing

Answer

Managed float adjustment