International Entrepreneurship Exam
Bank
Course Introduction
International Entrepreneurship explores the unique challenges and opportunities faced by entrepreneurs operating in a global context. The course covers key topics such as international opportunity recognition, market entry strategies, cross-cultural management, legal and ethical considerations, and building global networks. Students will analyze case studies of successful international ventures, examine global trends impacting entrepreneurship, and develop practical skills for launching and managing startups across borders. Emphasis is placed on adapting business models to diverse markets and navigating the complexities of international business environments.
Recommended Textbook
International Business Competing in the Global Market Place 9th editon by Charles W. L. Hill
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Page 2
Chapter 1: Globalization
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Sample Questions
Q1) Globalization of markets results in markets becoming _____.
A) less interdependent
B) less diverse
C) more protected
D) less competitive
Answer: B
Q2) Innovations in transportation have had a major impact on global trade.Consider one of these innovations: containerization.Why is this innovation so significant?
Answer: Containerization has revolutionized the transportation business,significantly lowering the costs of shipping goods over long distances.Since 1980,the world's containership fleet has more than quadrupled,reflecting in part the growing volume of international trade and in part the switch to this mode of transportation.As a result of the efficiency gains associated with containerization,transportation costs have plummeted,making it much more economical to ship goods around the globe,thereby helping to drive the globalization of markets and production.
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3
Chapter 2: National Differences in Political Economy
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Q1) Patents discourage companies from committing themselves to extensive basic research.
A)True
B)False
Answer: False
Q2) In a totalitarian country,there are safeguards to protect an individual's right to freedom of expression,opinion,and organization.
A)True
B)False
Answer: False
Q3) It is possible to have a democratic political system that emphasizes a mix of collectivism and individualism.
A)True
B)False
Answer: True
Q4) Most modern democratic states practice representative democracy.
A)True
B)False
Answer: True
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Chapter 3: Political Economy and Economic Development
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Q1) Peruvian development economist Hernando de Soto has argued that the chronic inability of property owners to establish legal title to the property they own is a key problem for innovation,and entrepreneurial activity in developing nations.
A)True
B)False
Answer: True
Q2) What are the factors that determine the long-run monetary benefits of doing business in a country?
Answer: The long-run monetary benefits of doing business in a country are a function of the size of the market,the present wealth (purchasing power)of consumers in that market,and the likely future wealth of consumers.While some markets are very large when measured by number of consumers (e.g.,China and India),low living standards may imply limited purchasing power and therefore a relatively small market when measured in economic terms.
Q3) New information and communication technologies have enabled the spread of democratic ideals.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Differences in Culture
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Q1) Which of the following is a closed system of stratification in which social position is determined by the family into which a person is born,and change in that position is usually not possible during an individual's lifetime?
A) Caste system
B) Class system
C) Social system
D) Cultural system
Q2) Discuss the relationship between culture and national competitive advantage?
Q3) Hindus believe:
A) that there is but the one true omnipotent God.
B) in reincarnation,or rebirth into a different body,after death.
C) in the importance of individual religious freedom.
D) that material quest is more important than spiritual quest.
Q4) Both Hindus and Buddhists stress the afterlife and spiritual achievement rather than involvement in this world.
A)True
B)False
Q5) What is Buddhism? Compare Buddhism with Hinduism.
Q6) What are the implications of cultural differences for international businesses?
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Chapter 5: Ethics in International Business
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Sample Questions
Q1) The Foreign Corrupt Practices Act originally allowed "facilitating payments" to secure contracts that would not otherwise be secured.
A)True
B)False
Q2) What is considered normal practice in one country may be considered unethical in others.Discuss.
Q3) Cultural relativism suggests that even if slavery is culturally acceptable in a country,a foreign firm operating in that country should avoid using slave labor.
A)True
B)False
Q4) According to the _____ approach,the best decisions are those that produce the greatest good for the greatest number of people.
A) naive immoralist
B) Friedman doctrine
C) Kantian ethics
D) utilitarian
Q5) What is the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions?
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Chapter 6: International Trade Theory
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Q1) Ricardo's theory makes fewer simplifying assumptions compared to Heckscher-Ohlin theory.
A)True
B)False
Q2) Which of the following is a theory that can be used to justify limited government intervention to support the development of certain export-oriented industries?
A) Comparative advantage theory
B) Ricardo's theory
C) New trade theory
D) Heckscher-Ohlin theory
Q3) David Ricardo's theory of comparative advantage explains global trade in terms of the _____.
A) first mover advantage that certain countries and firms enjoy
B) geographical differences between various countries
C) international differences in labor productivity
D) late mover advantage that certain countries and firms possess
Q4) Explain how the theories of trade differ in terms of their support to governmental intervention.
Q5) Explain Smith's theory of absolute advantage.
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Chapter 7: The Political Economy of International Trade
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Q1) What is strategic trade policy? Provide an example.
Q2) A key goal of the 1986 Uruguay Round was to extend GATT to cover trade in commodities.
A)True
B)False
Q3) Until 1995,GATT rules applied to all of the following EXCEPT:
A) manufactured goods.
B) services.
C) textiles.
D) agricultural products.
Q4) A company that sells its product in a foreign market below the cost of production may be accused of dumping.
A)True
B)False
Q5) Antidumping actions are concentrated in certain sectors of the economy such as basic metal industries,chemicals,plastics,and machinery and electrical equipment.
A)True
B)False
Q6) What is the TRIPS agreement? Why was it established?
Page 9
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Chapter 8: Foreign Direct Investment
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Q1) The largest source country for FDI has been China.
A)True
B)False
Q2) _____ is essentially the service-industry version of licensing,although it normally involves much longer term commitments.
A) Franchising
B) Subsidizing
C) Greenfield investment
D) Patenting
Q3) Knickerbocker's theory explains why the first firm in an oligopoly decides to undertake FDI rather than to export or license.
A)True
B)False
Q4) Mergers and acquisitions are quicker to execute than greenfield investments.
A)True
B)False
Q5) John Dunning pioneered the eclectic paradigm.
A)True
B)False
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Chapter 9: Regional Economic Integration
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Q1) What is the political case for integration? How did political arguments influence the establishment of the European Union?
Q2) Once barriers to trade and investment are removed,companies can treat a group of integrated countries like the EU as a single market and produce standardized products for it.
A)True
B)False
Q3) The East African Community (EAC)has been a successful integration effort in Africa during the last three decades.
A)True
B)False
Q4) There are two main trading blocs in Europe,the European Union and the European Free Trade Association.
A)True
B)False
Q5) Describe the disadvantages of economic integration for international businesses.How can firms protect themselves from these threats?
Q6) What prompted the formation of the European Union?
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Chapter 10: The Foreign Exchange Market
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Sample Questions
Q1) Explain the difference between fundamental analysis and technical analysis.
Q2) Which of the following occurs when the quantity of money in circulation in a country rises faster than the country's stock of goods and services?
A) Inflation
B) Credit squeeze
C) Deflation
D) Production surplus
Q3) The International Fisher Effect has proven to have substantial power at predicting short-run changes in spot exchange rates.
A)True
B)False
Q4) Where is the foreign exchange market located? What is the nature of the market? Is the market growing or shrinking on a global basis?
Q5) The PPP theory tells us that a country with a high inflation rate will see depreciation in its currency exchange rate.
A)True
B)False
Q6) What is the law of one price?
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Chapter 11: The International Monetary System
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Q1) A country that introduces a currency board commits itself to converting its domestic currency on demand into _____.
A) another currency at a fixed exchange rate
B) gold or silver at a fixed exchange rate
C) gold or silver at a floating exchange rate
D) another currency at a floating exchange rate
Q2) Discuss the criticism that IMF is exacerbating a problem called moral hazard.
Q3) The monetary autonomy argument holds that _____.
A) each country should be allowed to choose its own inflation rate
B) inflation is beneficial to a country's economy and growth
C) inflation is detrimental to a country's economy and growth
D) countries should restrict inflation based on the global standards
Q4) With the help of an example,explain how balance-of-trade equilibrium is maintained under the gold standard.
Q5) Which of the following is a factor that initiated the collapse of the fixed exchange rate system?
A) Worsening of Great Britain's balance of trade
B) Recession in third world countries
C) Price inflation in Europe
D) Worsening of U.S.foreign trade position
Page 13
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Chapter 12: The Global Capital Market
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Q1) How can a borrower hedge against unpredictable movements in exchange rates?
Q2) Systematic risk refers to the movements in a stock portfolio's value that are attributable to macroeconomic forces affecting all firms in an economy.
A)True
B)False
Q3) Which of the following statements is true of debt loans?
A) Management has the discretion in paying the amount to investors.
B) Debt loans should be repaid at regular intervals.
C) Returns from debt loans are variable in nature.
D) Corporations need not pay back the debt loans if they incur losses.
Q4) What are the advantages of global capital market in comparison with a purely domestic capital market?
Q5) Eurocurrency can be created anywhere in the world.
A)True
B)False
Q6) An investor purchases the right to receive a specified fixed stream of income from the corporation when he purchases a share of stock.
A)True
B)False
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Chapter 13: The Strategy of International Business
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Q1) A firm facing low pressures for cost reductions and low pressures for local responsiveness,is most likely to follow a(n)_____ strategy.
A) global standardization
B) localization
C) international
D) transnational
Q2) Discuss the evolution of strategy.How does cost become important in the long term?
Q3) Pressures for local responsiveness imply that it may not be possible to leverage skills and products associated with a firm's core competencies wholesale from one nation to another.
A)True
B)False
Q4) Discuss Michael Porter's interpretation of value creation and competitive advantage.
Q5) What is an experience curve?
Q6) Top management should be viewed as part of the firm's infrastructure
A)True
B)False
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Page 15
Chapter 14: The Organization of International Business
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Q1) Consider the use of personal controls in international firms.In which type of firm is this control most common?
Q2) Discuss the location of decision-making in a firm that is following a transnational strategy.
Q3) What are output controls?
Q4) Norms are abstract ideas about what a group believes to be good,right,and desirable.
A)True
B)False
Q5) A firm's _____ determines where in its hierarchy the decision-making power is concentrated.
A) integrating mechanism
B) vertical differentiation
C) knowledge network
D) horizontal differentiation
Q6) Firms pursuing a global standardization strategy are more centralized than enterprises pursuing a localization or international strategy.
A)True
B)False
Page 16
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Chapter 15: Entry Strategy and Strategic Alliances
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Sample Questions
Q1) The most typical joint venture is a _____ venture.
A) 50/50
B) 60/40
C) 75/25
D) 10/90
Q2) An arrangement whereby a firm grants the right of intangible property to another entity for a specified time period in exchange for royalties is a(n)_____ agreement.
A) turnkey
B) licensing
C) greenfield
D) acquisition
Q3) The costs and risks associated with doing business in a foreign country are typically high in an economically advanced and politically stable democratic nation.
A)True
B)False
Q4) Educating customers is a part of pioneering costs.
A)True
B)False
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Chapter 16: Exporting, Importing, and Countertrade
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Q1) The Export-Import Bank _____.
A) is an international financial institution that provides loans for capital programs
B) provides finance to facilitate trade between United States and other countries
C) is an independent agency of the United Nations
D) focuses on policies that have an impact on the exchange rate and the balance of payments
Q2) The bill of lading does not serve as a document of title as such.
A)True
B)False
Q3) Explain countertrade and its purpose.
Q4) Which of the following statements is true of export credit insurance?
A) Exporter will require more insurance if a letter of credit is used in transactions.
B) The FCIA provides coverage against commercial risks and political risks.
C) Private associations cannot offer export insurance in the United States.
D) Organizations do not receive coverage against political risks of global trade.
Q5) Discuss the disadvantages of countertrade.
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18
Chapter 17: Global Production, Outsourcing, and Logistics
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Q1) The major cost saving associated with JIT systems comes from _____.
A) early delivery of raw materials to production
B) decentralization of manufacturing
C) speeding up inventory turnover
D) reduced spending on CRM activities
Q2) The Six Sigma methodology _____.
A) is used to compare and benchmark the performances of competing firms
B) gives more importance to productivity than product quality
C) is a direct descendant of the total quality management philosophy
D) recommends that only one product should be defective in thousand products
Q3) Explain why a firm might adopt the just-in-time system.Why might a firm choose a different inventory system?
Q4) A flexible machine cell is used to perform a standardized operation.
A)True
B)False
Q5) Flexible manufacturing technology is also known as _____.
A) Six sigma production
B) line production
C) standardization
D) lean production
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Chapter 18: Global Marketing and RD
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Q1) If market segments transcend national borders:
A) the company should develop unique products for each national market.
B) the company can view the global market as a single entity and pursue a global strategy.
C) a localization strategy would be appropriate.
D) consumers will have differing purchasing behavior in different nations.
Q2) The use of price as a competitive weapon to drive weaker competitors out of a national market is known as predatory pricing.
A)True
B)False
Q3) When a company charges whatever the market will bear,the company is using:
A) strategic pricing.
B) price discrimination.
C) a push strategy.
D) a pull strategy.
Q4) The goal of market segmentation is to optimize the fit between the purchasing behavior of consumers in a given segment and the marketing mix,thereby maximizing sales to that segment.
A)True
B)False
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Chapter 19: Global Human Resource Management
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Q1) Mendenhall and Oddou identified cultural toughness as one of the dimensions in their study on dimensions that predict success in foreign jobs postings.This dimension refers to the:
A) expatriate's self-esteem,self-confidence,and mental well-being.
B) expatriate's ability to interact effectively with host-country nationals.
C) expatriate's ability to understand why people of other countries behave the way they do.
D) relationship between the country of the assignment and how well an expatriate adjusts to a particular posting.
Q2) Bringing managers together in one location for extended periods and rotating them through different jobs in several countries is a part of:
A) the ethnocentric approach.
B) the global standardization strategy.
C) cultural toughness programs.
D) management development programs.
Q3) A firm's performance appraisal systems are an important element of its control systems.
A)True
B)False
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Page 21
Chapter 20: Accounting and Finance in the International Business
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Q1) Royalties represent the remuneration paid to the owners for the use of technology or the right to manufacture and/or sell products under patents or trade names.
A)True
B)False
Q2) Explain the three types of decisions in international business.
Q3) Studies have shown that a country's relative inflation rates and changes in exchange rates are not related to each other.
A)True
B)False
Q4) _____ costs are incurred every time a firm changes cash from one currency into another currency.
A) Dividend
B) Capital
C) Fixed
D) Transaction
Q5) Explain why the evaluation of a subsidiary should be kept separate from the evaluation of its manager.
Q6) What is capital budgeting?
22
Q7) Describe the structure of the International Accounting Standards Board (IASB).
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