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BA 60 > UNIT 1 > Flashcards

UNIT 1 Flashcards

1
Q

What is international business?

A
  • legitimate
  • business activity
  • national boundaries
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2
Q

Why do companies go international?

A
  1. cheap labor
  2. availability of resources
    - raw materials
    - labor/manpower
    - management
    - technology
  3. market expansion/emergence of new markets
  4. to compete (globally)
  5. to maximize profits
  6. foreign competition
  7. global competition
  8. tax incentives
    9, avoiding exposure to competitors
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3
Q

the period in the 18th and 19th centuries which, in Western
Eurpe, was characterized by rapid industrialization and the widespread mechanization of production processes

A

Industrial revolution

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4
Q

period in the industrial revolution

A

18th and 19th centuries

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5
Q

T or F. Industrial Revolution – the period in the 18th and 19th centuries which, in North America, was characterized by rapid industrialization and the widespread mechanization of production processe

A

F, Western Europe

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6
Q

improved recording and bookkeeping

A

Commercial documents

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7
Q

the use of commercial and investment papers (e.g. bills of exchange, checks)

A

Commercial documents

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8
Q

Commercial law is the improved recording and bookkeeping; the use of commercial and investment papers

A

F, commercial documents

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9
Q

fair practice by traders to protect the interests of the parties
involved

A

Commercial law

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10
Q

it is because of _______ that goods are able to move
at a faster pace from one nation to another

A

commercial banks (banking institutions)

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11
Q

Example is the use of commercial letters of credit as a means of financing foreign trade shipments

A

Banking institutions

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12
Q

simply a domestic port open to both foreign and coastwise
trade

A

Ports of Entry

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13
Q

T or F. In the Philippines, all articles imported into the country whether subject to duty or not shall not be entered through a customhouse at a port of entry

A

F, shall be entered

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14
Q

a doctrine which demand the minimum interference by the government in economic and political affairs

A

Laissez faire

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15
Q

operate exclusively within a single country

A

Domestic

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16
Q

T or F. Domestic is when it operates exclusively within a single country (host country)

A

F, home country

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17
Q

operate within a geographically defined region that
crosses national boundaries

A

Regional exporter

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18
Q

manufacturing and assembly, marketing and sales are decentralized beyond the home region

A

International

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19
Q

key decisions are made and coordinated from a central office

A

International

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20
Q

T or F. International is centralized.

A

F, decentralized

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21
Q

companies run independent and mainly self-sufficient subsidiaries in a range of countries

A

Multinational

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22
Q

T or F. In multinational, operations are standardized.

A

T

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23
Q

highly decentralized organization operating across a broad range of countries

A

Global

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24
Q

Almost all functions (R&D, manufacturing, marketing and sales) are performed in the location around the world.

A

Global

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25
Q

most common, most fundamental, largest type of international business

A

International trade

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26
Q

Visible physical goods or commodities move between countries as export or import

A

International trade

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27
Q

grants a foreign firm the right to use intangible or intellectual property for a specific period of time in return for a royalty

A

Licensing

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28
Q

T or F. Licensing takes place when a licensor grants a foreign firm the right to use tangible or intellectual property for a specific period of time in return for a royalty

A

F, intangible

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29
Q

a parent company grants another company or firm
the right to do business in a prescribed manner

A

Franchising

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30
Q

there is movement of capital, personnel and other assets

A

Direct investment

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31
Q

much greater level of control over the project or enterprise

A

Direct investment

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32
Q

Form and Method - Past ____, Present _____

A

Simple, Complex

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33
Q

Importance - Past _____, Present _____

A

Seemingly unimportant, very important

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34
Q

Purpose - Past ____, Present _____

A

Capitalizing on new opportunities, vital for survival

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35
Q

Infra that supports IB - Past ____, Present ____

A

Non-motivating, motivating

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36
Q

Capital - Past ____, Present ____

A

Scarce, easier access to funds and resources

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37
Q

Production - Past ____, Present ____

A

Limited, very high production

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38
Q

they are the principal instruments in the expansion of
business on an international scale

A

Multinational Corporations

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39
Q

T or F. In MNCs, control production facilitates in more than one country

A

T

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40
Q

percentage of profits outside the home country for it to be considered an MNC

A

more than 25 percent

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41
Q

the person behind the statement “firms that control operations in at least six countries” under the MNC

A

Raymond Vernon

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42
Q

it is a firm that is structured so that business is conducted or ownership is held across a number of countries or that is organized into global product divisions

A

Multinational Corporations

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43
Q

T or F. Firms that participate in IB solely by exporting or licensing technology are multinational.

A

F, not multinational

44
Q

For firms to become global, they make themselves home in three biggest markets namely _____

A

North America, Europe, Asia

45
Q

T or F. There is a need to develop new products for the whole world for foreign firms to become global.

A

T

46
Q

The term for making global decisions on strategic decisions but letting local units decide tactical questions along packaging, marketing and advertising

A

Glocalize

47
Q

An example of parochial attitude

A

Not invented here syndrome

48
Q

T or F. One of the ways for foreign firms to become global is to open senior ranks to foreign employees.

A

T

49
Q

T or F. In markets that firms cannot penetrate, they find allies

A

T

50
Q

Contributions of MNCs to host countries

A
  1. They contribute to output and employment
    2, They contribute to balance of payments
  2. Technology transfer
  3. Increased productivity and employment
  4. Transfer of human capital
  5. Increased choice for locals
51
Q

Benefits derived by MNCs

A
  1. Superior technical know-how
    2, Large size and economies of scale
  2. Lower input cost
  3. Brand image and goodwill advantage
  4. Access to low cost financing
  5. Financial flexibility - transfer pricing
  6. Information advantage
  7. Management experience and expertise
  8. Diversification of risk
52
Q

the price of a foreign currency that one dollar can buy is ____

A

Exchange rate

53
Q

it makes importation expensive but stimulates export

A

Weaker currency

54
Q

a problem encountered by MNCs that talks about exchange rate and weaker currency

A

Business risks

55
Q

government policies that restrict international trade to help domestic industries

A

Protectionism

56
Q

Reasons why host countries adopt protectionist policies

A

a. Protection of an infant industry.
b. Protection of home market.
c. The need to keep the money at home. (local currency/foreign reserves) - US
d. Encouragement of capital accumulation.
e. Conservation of natural resources.
f. Industrialization of a low-wage nation.
g. Maintenance of employment and reduction of unemployment.
h. National security.
i. Increase of business size.
j. Retaliation and bargaining.

57
Q

the transformation of a society from an agrarian economy to an industrial one

A

Industrialization

58
Q

Trade Barriers

A
  1. Tariff
  2. Quota
  3. Voluntary export restraints
    4, Boycotts and embargoes
  4. Inconvertible currency. non convertible/blocked currency
  5. Host country’s standards along health, safety and product quality
  6. Antidumping penalties
59
Q

tax or duty imposed by a government on imported or exported goods

A

Tariff

60
Q

two purposes of tariffs

A

protecting domestic industries from foreign competition and generating revenue for the government

61
Q

tariffs are used for various purposes, which includes three namely:

A

a) according to purpose (protective and revenue)
b) according to what is being taxed (import and export)
c) according to how the duty amount is valued (ad valorem, specific duty and compound duty)

62
Q

latin term which means according to value or in proportion to the value; based on a fixed percentage of the value of the good

A

Ad valorem

63
Q

tax imposed on a stipulated amount per unit weight or some other measure of quantity

A

Specific Duty

64
Q

combination of ad valorem and specific duty

A

Compound duty

65
Q

a specific unit or peso limit applied to a particular type of good

A

Quota

66
Q

country imposes absolute restriction against the purchase and importation of certain goods from other countries

A

Boycott

67
Q

refusal to sell to a specific country

A

Embargo

68
Q

money in which exchanges into another country’s currency is not allowed

A

Inconvertible currency, non-convertible or blocked currency

69
Q

Reasons why product quality standards are imposed

A

• satisfy the customers’ quality requirements;
• ensure that the products and services are safe;
• comply with regulations;
• meet environmental objectives;
• protect products against climatic or other adverse conditions; and
• ensure that internal processes are defined and controlled

70
Q

selling exports at a price that is less than “normal value.”

A

Product Dumping

71
Q

Problems encountered by MNCs

A

Business Risks
Host country regulations and policies
Different legal systems
Operational difficulties
Cultural difficulties

72
Q

satisfy both the regulations of the home country and host country

A

legitimate

73
Q

T or F. Intention is not necessary for it to be called international business.

A

F, there must be intention

74
Q

A country/continent that provide the cheapest labor

A

African Continent

75
Q

A country/continent that provide the highest pay (mean salary)

A

European countries

76
Q

Something which we cannot copy

A

Absolute advantage

77
Q

movie out to a country where competition is luxier

A

Market Expansion

78
Q

this is to bar potential competitors

A

Hedging

79
Q

A niche under maximization of profits

A

lesser level of competition

80
Q

take advantage of tax holiday

A

Tax incentives

81
Q

4IR means ____

A

Fourth Industrial Revolution

82
Q

4 examples under banking institutions

A
  • multi
  • interbank
  • payment
  • system
83
Q

there are only two ports of entry, what are these?

A

airport and seaport

84
Q

there is artificial shortage of supplies

A

Smuggled goods

85
Q

this is the reason behind the success of first world countries that is not observed in the Philippines

A

continuity of programs and plans

86
Q

3 regional exporters

A

NAFTA
LAFTA
ASEAN

87
Q

research and development is decentralized

A

Global

88
Q

this occurs when there are more exports than imports

A

Trade surplus

89
Q

this occurs when there are more imports than exports

A

Trade deficit

90
Q

everything is provided for by the HQ to the host country

A

Direct investment

91
Q

MNCs have something to do with _____

A

regulation

92
Q

three freely convertible currencies

A

dollar, euro, yen

93
Q

it depends on the volume of transaction

A

Balance of payment

94
Q

T or F. Balance of payment is reciprocal

A

F, not reciprocal

95
Q

higher production, lesser cost per unit

A

Economies of scale

96
Q

T or F. Depreciation on the part of the exporter is a disadvantage.

A

F, advantage

97
Q

T or F. Appreciation on the part of the importer is a disadvantage.

A

F, advantage

98
Q

T or F. Protectionism is an absolute advantage

A

T

99
Q

T or F. MNCs are prohibited from localizing their products

A

F, not prohibited

100
Q

movement of foreign currency

A

Balance of payments

101
Q

is foreign currency going out an import or an export?

A

export

102
Q

if we have much foreign currencies by bsp, we have ___

A

BOP surplus

103
Q

one reason why we allow peza zones

A

technology transfer

104
Q

this is prohibited by law as it includes bribery for private or personal gain

A

booty capitalism

105
Q

T or F. exporter’s pov: peso depreciates, positive effect

A

T

106
Q

T or F. peso appreciates, negative effect

A

T

BA 60 (3 decks)

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