MGT439 : Midterm Revision Exam

[CH1] An investor who buys stocks and bonds of a foreign company as financial assets, without acquiring a substantial interest in it, is making a foreign portfolio investment.

[CH1] In international licensing, a firm allows a foreign company to operate a business under its name and system in exchange for a fee.

[CH1] Leveraging core competencies and acquiring resources and supplies are classified as environmental causes of globalization.

[CH2] Within the EU, Germany is described as the most important member economically, while France exerts strong political leadership.

[CH2] The exports of both Singapore and Hong Kong exceeded 100% of their 2017 GDP, reflecting their role as reexporters.

[CH2] South Korea's growth relied on tight cooperation between the government and large conglomerates known as keiretsu, such as Samsung and Hyundai.

[CH6] Mercantilism holds that a country should maximize its holdings of gold and silver by promoting exports and discouraging imports.

[CH6] According to the theory of absolute advantage, trade should still occur even when one country is more productive than the other in both products.

[CH6] The Heckscher-Ohlin theory states that countries export products that use their relatively scarce factors of production.

[CH6] Dunning's eclectic theory states that FDI occurs when ownership, location, and internalization advantages are all present.

[CH8] The demand for Japanese yen in the foreign-exchange market is derived from foreigners' demand for Japanese products.

[CH8] Among the world's foreign-exchange trading centers, the biggest by trading volume is New York, with London ranked second.

[CH10] What a common market adds beyond a customs union is the elimination of barriers to the movement of factors of production among its members.

[CH10] A free trade area minimizes the trade deflection problem because its members adopt common external trade policies toward nonmembers.

[CH10] The catch phrase describing the EU legislative process is: the Parliament proposes, the Commission advises, and the Council disposes.

[CH1] A Bahraini engineering firm allows an Indian manufacturer to use its patented production technology in return for an annual fee. This is an example of:

[CH1] A Saudi petrochemical company buys a 60% stake in a Malaysian plant and appoints its own managers to run it. This investment is best classified as:

[CH1] Which of the following is a change in the technological environment that has contributed to globalization?

[CH1] A Gulf food company expands abroad mainly to exploit a unique recipe and production skill it has already developed at home. Which strategic imperative is it following?

[CH2] Which group correctly lists the Asian economies known as the 'Four Tigers'?

[CH2] Which of the following is identified as a source of Japan's economic success?

[CH2] All of the following are listed as reasons Canada attracts foreign investment EXCEPT:

[CH2] Which of the following is a common characteristic of the five Central Asian republics?

[CH2] Which statement best describes India's 1991 market-opening reforms?

[CH6] In one hour of labor, France produces 2 bottles of wine or 3 clock radios, while Japan produces 1 bottle of wine or 5 clock radios. According to absolute advantage theory, what trade pattern should occur?

[CH6] In one hour of labor, Bahrain produces 6 tons of aluminum or 3 tons of dates, while Oman produces 2 tons of aluminum or 2 tons of dates. According to comparative advantage theory:

[CH6] A Japanese clock radio costs ¥200 to produce. If the exchange rate is 125 yen per euro, what is its cost in euros?

[CH6] Leontief found that U.S. imports were more capital intensive than U.S. exports. This finding contradicted which theory?

[CH6] Which theory incorporates the impact of economies of scale on trade in differentiated goods and predicts that intraindustry trade will be commonplace?

[CH6] A Bahraini policymaker applies Porter's theory of national competitive advantage to the local financial sector. Which of the following is NOT one of the four elements of Porter's diamond?

[CH6] A Japanese carmaker builds a factory inside a regional trade bloc mainly so its cars avoid the bloc's import tariffs. Which FDI factor best explains this decision?

[CH6] Which sequence correctly lists the stages of Vernon's product life cycle theory?

[CH8] A Bahraini car dealer exchanges dinars for yen to pay a Japanese supplier. In the market for yen, this transaction:

[CH8] A trader converts dollars to euros, euros to pounds, and pounds back to dollars, earning a riskless profit from inconsistent exchange rates. This activity is:

[CH8] Under a flexible exchange rate system, the price of foreign exchange is set by:

[CH8] A Bahraini importer sees that the spot rate for the euro is BHD 0.410, while the 90-day forward rate is BHD 0.418. The euro is trading at a:

[CH8] Which of the following is NOT listed as a benefit offered by offshore financial centers?

[CH10] A group of countries removes internal trade barriers, adopts a common external trade policy, and allows labor and capital to move freely, but does not coordinate members' economic policies. This is a:

[CH10] Which EU body proposes legislation, implements treaty provisions, and administers the EU's bureaucracy?

[CH10] Members of a regional agreement eliminate trade barriers among themselves, but each keeps its own tariffs against nonmembers and must rely on rules of origin. This form of integration is a:

[CH1] List and explain the basic forms of international business activities, giving a short example of each.

[CH1] Explain the contemporary causes of globalization, distinguishing between strategic imperatives and environmental changes.

[CH2] Discuss the main economic features of each of the 'Four Tigers' of Asia.

[CH6] Compare the theory of absolute advantage with the theory of comparative advantage. Use the example where one hour of labor produces 4 bottles of wine or 6 clock radios in France, and 1 bottle of wine or 5 clock radios in Japan.

[CH6] Explain the main theories of international investment and the supply, demand, and political factors that influence the FDI decision.

[CH6] Identify the four elements of Porter's theory of national competitive advantage and illustrate them using a country or industry of your choice.

[CH8] Explain how demand and supply determine the price of foreign exchange, using the Japanese yen as an example, and identify the major players in the foreign-exchange market.

[CH10] Compare the five forms of economic integration, from the least to the most integrated.

[CH1] Identify the forms of international business activity that Awal Alloys is using now or is considering, linking each to the case.

[CH6] Using Dunning's eclectic theory, explain why the proposed Vietnamese investment can be justified.

[CH6] Classify the CEO's arguments for investing in Vietnam using the supply, demand, and political factors that influence FDI.

[CH8] Using demand and supply in the foreign-exchange market, explain why the price of the yen in dinars has risen.

[CH8] Explain the difference between the spot market and the forward market, and state what the bank's quotes tell Fatima about the yen.

[CH10] Identify the current form of economic integration of the regional bloc and the form it would become if the proposal is adopted. Then explain the pros and cons for Manama Electronics.