MIB Master of International Business MCQ 4

Question 1

Porter's Diamond model identifies four determinants of national competitive advantage. Which of the following is NOT one of them?

Accepted Answer

Exchange rate stability

Answer

Porter's Diamond includes factor conditions, demand conditions, related/supporting industries, and firm strategy/structure/rivalry — exchange rate stability is not a determinant.

Question 2

An 'export processing zone' (EPZ) is designed primarily to:

Accepted Answer

Attract foreign investment by offering tax incentives and streamlined regulations for export production

Answer

EPZs offer incentives such as tax holidays, duty-free imports of inputs, and relaxed labor regulations to attract FDI oriented toward export manufacturing.

Question 3

Which concept refers to the competitive disadvantage that arises when a multinational firm operates abroad due to unfamiliarity with local culture, laws, and business practices?

Accepted Answer

Liability of foreignness

Answer

Liability of foreignness (Zaheer, 1995) describes the extra costs and disadvantages MNEs face compared to local firms because of their outsider status.

Question 4

A currency is said to be 'overvalued' when:

Accepted Answer

Its exchange rate is above purchasing power parity equilibrium

Answer

An overvalued currency trades at a higher price than PPP suggests, making exports expensive and imports cheap — often unsustainable without intervention.

Question 5

Which international trade term (Incoterm) means the seller delivers when goods are placed on board the vessel nominated by the buyer, with risk transferring at that point?

Accepted Answer

FOB – Free On Board

Answer

Under FOB, the seller's obligation ends and risk transfers to the buyer once the goods are loaded on the vessel at the named port of shipment.

MIB - Master of International Business Practice Test

MIB - Master of International Business Practice Test

MIB Master of International Business MCQ 4