Question 1

The one reason MNC can be harmful for the host country is:

Question 1 options:

They pay less than local labor rates

They often avoid taxes

They obtain strong negotiating power with local government

They raise unemployment levels

Question 2

A company might put money in FDI because:

Question 2 options:

High return

Cheap labor

Tax advantage

All of these answers

Question 3

One of the downsides of outsourcing for a company is that it:

Question 3 options:

Raises energy costs

Raises costs

Raises taxes

Reduces confidentiality

Question 4

One of the most underestimated challenges encountered by companies when entering a new global region is recognition. For example, Best Buy failed in China as a direct result of not localizing their brand and product offerings. This is a failure of:

Question 4 options:

Public relations

Ethics

Organizational structure

Leadership

Question 5

Each country will specialize in making the good that it can make most efficiently, relative to the other country. This description best defines which of the following?

Question 5 options:

Global advantage

Fiscal advantage

Comparative advantage

Absolute advantage

Question 6

Which of the following circumstances might influence a business not to invest in a specific foreign country?

Question 6 options:

The country's currency is susceptible to high inflation.

The country's neighbors have lower inflation rates.

All of these answers.

The country's laws provide inadequate protection for intellectual property.

Question 7

Which of the following is a correct definition of an exchange rate?

Question 7 options:

All of these answers.

A spot rate is a contract where currency is exchanged approximately two days after the trade.

A forward rate is a contract where currency is exchanged at some point in the future.

The forward rate is a function of the spot rate, the time until settlement, and a growth rate.

Question 8

A company is concerned that the value of its accounts receivable from overseas will decrease due to a shift in exchange rate. What type of exchange exposure is the company concerned about?

Question 8 options:

Long-run exposure.

Short-run exposure.

Translation exposure.

Economic exposure.

Question 9

Mary went on vacation from the UKto the US, so she had to purchase some dollars ($).How many pounds sterling (L) did she exchange for US dollars if she now has $135?The exchange rate is L 1 = $1.5542?Give your answer to the nearest pound sterling?

Question 9 options:

L 209.1

L 209.0

L 86.9

L 86.5

Question 10

Latisha wants to go to Australia.She has $1200 which she wants to exchange for Australian dollars (AUD) Hoow many Australian dollars are her USD worth.The exchange rate is $1 = AUD1.4939.Giver your answer to the nearest Australian dollar.

Question 10 options:

AUD 1792

AUD 803

AUD 1793

AUD 802