Week 1

Question 1

What is an international business

Answer 1

A business that engages in intentional economic activities or doing business abroad

Question 2

What is a global business

Answer 2

A business that does both domestic and international business activities

Question 3

What is an MNE?

Answer 3

A Multi-national enterprise that engages in foreign direct investment and operates in multiple countries

Question 4

What is FDI?

Answer 4

Foreign Direct Investment is when a business invests in another country, for example, a USA car manufacturer launching dealerships in Japan

Question 5

What is GNP?

Answer 5

Gross national product is the value added by domestic firms, households and government operating in an economy

Question 6

What is GDP?

Answer 6

Gross Domestic Product is the total value of goods and services from within a country usually measured in a year

Question 7

What is GNI?

Answer 7

It is GDP plus income from international sources abroad

Question 8

What is PPP?

Answer 8

Purchasing Power Parity is a metric that used a basket of goods to compare the value between different currencies

Question 9

What is globalization?

Answer 9

Where the advancements in technology/transportation lead to businesses operating on international scales

Question 10

What is globalization?

Answer 10

Where the advancements in technology/transportation lead to businesses operating on international scales

Question 11

What is an institution-based view?

Answer 11

That formal and informal institutions are behind the performance of businesses

Question 12

What are formal institutions?

Answer 12

Contracts, governments, laws and policies for example.

Question 13

What are informal institutions?

Answer 13

Cultural values, socially shared rules, usually things that are unwritten.

Question 14

What is a resource-based view?

Answer 14

It is the premise that a firms performance is based upon its internal resources and capabilities leading to the sucess

Question 15

What is the difference between resource-based and institution-based views?

Answer 15

Institution-based focuses on the external environment and resource-based focuses on the internal environment.

Question 16

What does the ‘liability of outsidership’ infer?

Answer 16

It infers that when a business enters a foreign market, problems arise because of the limitations of networks and contacts in those international markets

Question 17

What is mercantilism?

Answer 17

The idea that a nations wealth is best if exports are high and imports are low

Question 18

What is absolute advantage?

Answer 18

The ability one or a group has to carry out an economic activity more efficiently than another

Question 19

What is the theory of comparative advantage?

Answer 19

It is the theory that an economies ability to produce a good or service at a lower opportunity cost than it’s trading partners

Question 20

What is an opportunity cost?

Answer 20

The loss in benefit or value when making a certain decision

Question 21

What is the theory of the product life cycle?

Answer 21

It divides products into three categories, new, maturing, and standardized. With five stages in the products life cycle

Question 22

What is the strategic trade theory?

Answer 22

Defined as government policy which attempts to shift oligopolistic profits from international markets towards the home country