Exam 1: Introduction: What Is International Business

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. -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?

The world's largest MNEs are concentrated in emerging economies.

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. -In discussing the expansion effort to India, the CEO reminded shareholders of Black and Decker's move to partner with the Indian auto retailer Bajaj. The CEO was most likely attempting to justify which of the following?

Firms that do not export tend to create jobs more quickly than do exporting firms.

Which of the following is subject to importing and exporting?

________ is the total value of products and services produced in a country over the course of a year.

Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades?

Which of the following best explains why the Japanese firm Canon relocated much of its production to China?

In a short essay, explain the meaning of international trade. Describe the two major forms through which international trade takes place.

Why might firms choose to pursue internationalization strategies? In a short essay, identify five major motivations for expanding overseas. Classify these motivations as strategic or reactive and provide an example of each.

In a short essay, discuss how international firms manage the four types of international business risk. Provide an example that illustrates the process of risk management.

International business is performed not just by individual firms, but also governments and international agencies.

Phillip Hardy, one of the potential investors, expresses the desire to purchase only those types of assets in which he can maintain a relatively short-term interest. Which of the following investment opportunities would be most suited for Mr. Hardy?

What is international business, and how has it transformed the world economy?

A U.S. shoe manufacturer is considering internationalizing to promote growth by diversifying its markets. Which of the following, if TRUE, would most strongly support the claim that moving to France would help the company grow through market diversification?