International Business: The New Realities 5th edition by S Tamer Cavusgil test bank
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
9) Which of the following would NOT be considered an example of foreign direct investment (FDI)?
A) cross-border purchase of a textile plant
B) cross-border purchase of stocks
C) purchase of capital assets of a foreign company
D) purchase of foreign land for business operations
Answer: B
Diff: 2: Moderate
Skill: Application
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
10) ________ is the total value of products and services produced in a country over the course of a year.
A) GDP
B) CAD
C) FDI
D) PPP
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
11) Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades?
A) Both world exports and domestic production have grown significantly over the past 30 years.
B) The cost to import products is generally higher than the cost to produce domestic products.
C) Growth in gross domestic product in most countries has steadily increased since 1970.
D) Advanced economies now source many of their consumable products from low-cost manufacturing nations.
Answer: D
Diff: 3: Hard
Skill: Critical Thinking
Objective: 1-1: Describe the key concepts in international business
AACSB: Analytical Thinking
12) Each of the following has contributed to the rapid growth of trade among nations EXCEPT ________.
A) the growth of emerging market countries
B) the increase in trade barriers
C) advances in information technology
D) the liberalization of markets
Answer: B
Diff: 2: Moderate
Skill: Application
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
Freehold Investment Corp. (Scenario)
Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures.
13) At the meeting, Dan explains to the attendees that Freehold direct investment projects differ from international trade in that ________.
A) the firm itself is crossing international borders to purchase foreign assets
B) the firm is restricting its investments to stocks and does not purchase mutual funds
C) the firm has chosen to focus strictly on the technology sector
D) the firm is engaging in the transfer of products across national borders
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
14) Dan discusses an investment opportunity that involves the purchase of selected securities from the Chinese stock market. This opportunity represents which type of international investment?
A) indirect production
B) international portfolio
C) foreign direct
D) domestic securities
Answer: B
Diff: 2: Moderate
Skill: Application