Chapter 1 Globalization and the Multinational Corporation
1.1 Multiple Choice Easy
1) Which of the following was created in an effort to promote free trade? A) World Trade Organization
B) the Sarbanes-Oxley Act
C) multilateral development banks
D) the Organization for Economic Cooperation and Development Answer: A
2) Which one of the following is an investment from which the payoff over time is derived from the performance of an underlying asset? A) a common stock certificate
B) a derivative security
C) a corporate bond
D) a mortgage bond
3) What is the name for the shifting of non-strategic functions to specialist firms to reduce costs? A) outsourcing
B) multinational company
D) transnational corporations
4) According to the United Nations Conference on Trade and Development, what percentage of China's GDP in 2009 was attributed to the trade sector? A) 70%
5) The World Bank's main goal is to ensure the stability of
A) the international monetary and financial system only in developed countries. B) the international monetary and financial system in developing countries. C) the international monetary and financial system in both developed and developing countries. D) only the financial system in both developed and developing countries. Answer: C
6) Between 2007 and 2010 the world witnessed a full-blown financial crisis that was attributed to A) subprime mortgage repricing.
B) quantitative easing by the Fed.
C) foreign exchange imbalances.
D) banking failures.
7) Which of the following is NOT a protectionist tendency?
B) comparative advantage
C) non-tariff barriers
8) This organization was established in 1995 to replace the GATT Treaty. A) ASEAN
9) It is the right given to firms to produce specific products in exchange for a ________ fee. A) Joint Venture
10) Which one of the following provides a specialized sales or service strategy, offers support at various levels, and occasionally invests in the firm in exchange for periodic fees? A) joint venture
11) ________ is a company that is commonly owned and operated by two or more firms. A) Joint Venture
12) The legal and financial structure controlling the relationship between a company's shareholders and its management is called the A) Agency Theory.
B) Stakeholder Alternative.
C) Corporate Governance.
D) Concentrated Ownership.
13) Which organization was originally designed to encourage free trade between member states by regulating and reducing tariffs on traded goods? A) NAFTA
14) What is the name of the international organization that was founded to ensure the stability of the international system of payments and exchange rates among national currencies? A) The International Monetary Fund
B) The World Bank
C) The World Trade Organization
D) The International Finance Corporation
15) The main resources of the International Monetary Fund are provided by A) the members of the World Bank.
B) its member countries primarily through payments of quotas. C) members of the Organization for Economic Cooperation and Development. D) the Bank for International Settlements.
16) What is the name for an organization that invests a large pool of money on behalf of another organization such as a bank, insurance company, or a retirement fund? A) hedge fund
B) private equity firm
C) institutional investor
D) mutual fund
17) In 1992, the European Union decided to create an economic as well as a monetary union involving the introduction of A) a pegged...