Your Results for: "Chapter Quiz"

Site Title: International Management: Managing Across Borders and Cultures, 7/e Book Title: International Management: Managing Across Borders and Cultures, 7/e Book Deresky Author: Location on Chapter 1 > Chapter Quiz Site: Date/Time March 19, 2012 at 3:08 AM Submitted: (UTC/GMT)

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Summary of Results
45% Correct of 31 Scored items:
14 Correct: 17 Incorrect: 45% 55%

4 questions not scored. 31 scored questions. More information about scoring

1.

The "Triad" of free-trade blocs includes all of the following except: Your Answer: North American Free Trade Agreement Correct Answer: Russian Federation

2.

The World Economic Forum held in Davos Switzerland in 2009 had as its theme: Your Answer: "Moving to the Future" Correct Answer: "Shaping the Post-Crisis World"

3.

Which country experienced the greatest growth rate in gross domestic product between 2000 and 2006? Your Answer: China

4.

Which country listed below is *not* a member of CAFTA? Your Answer: Nicaragua Correct Answer: Venezuela

5.

Which development has had the greatest impact on international managers? Your Answer: Capital movement Correct Answer: Information technology

6.

When examining trends in the globalization of human capital, Forrester Research, and several other researchers have predicted which effect on the U.S. labor market? Your Answer: The labor market in the U.S. will increase because of increase demand for consumer goods Correct Answer: The labor market in the U.S. will decrease because more jobs will be shifted offshore

7.

The major concern for multi-national corporations is which of the following? Your Answer: Appropriability of technology

8.

If a government were to seize the assets of a MNC and not provide adequate compensation to the owners, the government would be following which practice? Your Answer: Nationalization Correct Answer: Expropriation

9.

If an event occurred that only impacted one industry or only a few companies in a country, the event would most likely be classified as: Your Answer: A nationalization risk event Correct Answer: A micropolitical risk event

10.

Which event would not be considered a political risk event? Your Answer: Forced sale of equity to host-country nationals Correct Answer: Consumer preference toward a national company

11.

An event which affects all foreign firms doing business in a country is called _______________________. Your Answer: A macropolitical risk event

12.

For an MNC, what is the most important resource for current information on

the political environment in the host country? Your Answer: Host-country national managers

13.

What method would most likely be successful in keeping a subsidiary and the host nation dependent on the parent corporation? Your Answer: Localization of the operation Correct Answer: Input control

14.

Which method of analyzing economic risk relies on a few easily measurable and timely criteria believed to reflect or indicate changes in the creditworthiness of the country? Your Answer: The quantitative approach Correct Answer: The checklist approach

15.

Which method of risk reduction would most likely be classified as a hedging technique? Your Answer: Position control Correct Answer: Local debt financing

16.

Which type of law would most likely be defined as a comprehensive set of laws organized into a code? Your Answer: Civil law

17.

China has become the world's largest exporter, surpassing Germany in 2009. Your Answer: True

18.

Emerging-market companies have yet to buy stakes in any of the large scale corporations of the developed countries. Your Answer: True Correct Answer: False

19.

Japan, with a growth rate in GDP of over 9% in 2003, has experienced the fastest growth rate in the world. Your Answer: True Correct Answer: False

20.

The globalization of human capital is predicted to decrease the number of service-sector jobs available in the U.S. Your Answer: True

21.

Nationalization occurs when a government takes possession of the foreign owned assets of a MNC. Your Answer: True Correct Answer: False

22.

Contract law plays a major role in international business transactions because of the complexities arising from differences in legal systems. Your Answer: True

23.

An advantage of quantitative systems of political risk assessment is the use and primary reliance on past events. Your Answer: True Correct Answer: False

24.

Market control, as a method of keeping the subsidiary and the host nation dependent on the parent corporation, involves keeping certain key subsidiary management positions in the hands of expatriate or home-office managers. Your Answer: True Correct Answer: False

25.

Political risk often has a direct effect on the ownership and control of the foreign firm. Your Answer: True

26.

The qualitative approach to evaluating economic risk assesses the competence of that country's leaders and analyzing the types of policies they are likely to implement. Your Answer: True

27.

Under civil law, past court decisions act as precedents to the interpretation of the law and common customs. Your Answer: True Correct Answer: False

28.

Use of patents, trademarks, trade names, copyrights, and trade secrets are the most common methods of protecting proprietary technology. Your Answer: True

29.

Business-to-business transactions provide the greatest opportunities for the use of e-business. Your Answer: True

30.

Equity sharing is a method of managing political risk that includes the initiation of joint ventures with nationals to reduce political risk. Your Answer: True

31.

A country's tax system influences the attractiveness of investing in that country and affects the relative level of profitability for an MNC. Your Answer: True

32.

Clearly, the global business environment has been changing rapidly. In particular, several regional trading blocks have been developed. List and describe the "TRIAD" of regional trading blocks. Also explain why countries are so interested in joining various trading blocks. Your Answer: dfd

Triad of regional trading blocks include: (1) North American Free Trade Agreement (NAFTA); (2) European Union; and (3) Association of Southeast Asian Nations (ASEAN). Much of today's world trade takes place within the three regional free-trade blocks. Countries are interested in joining the various trading blocks in order to increase their access to these markets. Countries within the trading blocks also benefit from the reduction or elimination of internal tariffs and customs as well as the other financial and commercial barriers. Further, as evidenced by Mexico's involvement in NAFTA, countries involved in free-trade agreements can benefit from increases in GDP, and exports.

33.

Explain how the globalization of human capital is predicted to impact the world's labor market. Who do you predict will be the big winners and the big losers? Your Answer: fdf Globalization of Human Capital

While firms have been outsourcing manufacturing jobs for decades, they are now also outsourcing white collar jobs too. Jobs will be moving from higher labor cost countries to lower cost ones. Technology jobs will most likely lead the next wave of outsourcing Big losers (in relation to number of jobs) will be U.S. and other developed countries Big winners will include countries with low cost educated employees (e.g., India, China, Taiwan).

34.

Political risk is one of the major areas of concern with MNCs. Explain the various types of political risk and describe the various ways that political risk can be assessed. Finally, explain the various ways of managing political risk. Your Answer: fdf Political Risks are any governmental action or politically motivated event that could adversely affect the long-run profitability or value of a firm.

Macropolitical risk event - an event that affects all foreign firms doing business in a country or region. Micropolitical risk event - an event that affects one industry or company or only a few companies.

Examples of political risk events:

Expropriation of corporate assets without prompt and adequate compensation Forced sale of equity to host-country nationals, usually at or below depreciated book value Discriminatory treatment against foreign firms in the application of regulations or laws Barriers to repatriation of funds (profits or equity) Loss of technology or other intellectual property (such as patents, trademarks, or trade names) Interference in managerial decision making Dishonesty by government officials, including canceling or altering contractual agreements, extortion demands, and so forth.

Ways of Managing Political Risk:

Adaption o Equity sharing o Participative management o Localization of the operation o Development assistance

Dependency

o Input control o Market control o Position control o Staged contribution strategies Hedging o Political risk insurance o Local debt financing

35.

Why are so many people from Mexico crossing the border from Mexico to USA to find jobs despite the fact that there have been noticeable growths in Mexico's economy including an increase in GDP from $403 billion in 1993 to $893.4 billion in 2007? Your Answer: fd -MNCs displaced farming in Mexico. -Higher wages in the U.S. means that immigrants to the U.S. can send back money to their families. -Competition from China: Recently some manufacturing facilities and some service facilities migrated from Mexico to China in a race for the lowest cost operations. This caused Mexicans to migrate to USA in search for jobs.