MIB Master of International Business MCQ 3

Question 1

Under the Heckscher-Ohlin model, a labor-abundant country will have a comparative advantage in:

Accepted Answer

Labor-intensive goods

Answer

The H-O model predicts countries export goods that intensively use their relatively abundant production factor, so labor-abundant countries export labor-intensive products.

Question 2

A tariff-rate quota (TRQ) combines which two trade policy instruments?

Accepted Answer

A tariff and a quota

Answer

A TRQ allows a set volume of imports at a lower (in-quota) tariff rate, with additional imports subject to a higher (out-of-quota) tariff.

Question 3

When a parent company restates its foreign subsidiaries' financial results into the home-country currency at year-end, this creates:

Accepted Answer

Translation exposure

Answer

Translation (accounting) exposure occurs when consolidating foreign-currency financial statements into the parent's reporting currency.

Question 4

The Uppsala internationalization model proposes that firms expand internationally through:

Accepted Answer

Gradual, incremental commitment starting with psychically close markets

Answer

The Uppsala model describes a sequential learning process where firms first enter culturally and geographically close markets, then gradually increase commitment as knowledge grows.

Question 5

Which of the following BEST describes 'transfer pricing' in a multinational context?

Accepted Answer

Prices set for goods and services transacted between related entities within a corporate group

Answer

Transfer pricing refers to the internal prices multinational firms charge their subsidiaries for goods, services, or intellectual property, which can affect tax liabilities across jurisdictions.

MIB - Master of International Business Practice Test

MIB - Master of International Business Practice Test

MIB Master of International Business MCQ 3