(TCO 4) In the last 30 years, the world economy has seen
Student Answer:
a marked increase in both the flow and stock of FDI.
a slowing of FDI overall.
FDI grow but more slowly than world trade.
a shift away from free-market economies.
6.
Question :
(TCO 5) Chile is included in which of the following regional integrations organizations?
Student Answer:
MERCCOSUR
Andean Community
NAFTA
APEC
None of the above
7.
Question :
(TCO 6) When a firm engages in hedging it is
Student Answer:
ensuring against a risk in the foreign exchange.
violating a law on foreign speculations.
in danger of violating the Foreign Corrupt Practices Act.
investing in a hedge fund to maximize its return to shareholders.
1.
Question :
(TCO 8) What are the three staffing policies available to a multinational corporation?
2.
Question :
(TCO 8) In distribution strategy, what are the four main differences between countries?
3.
Question :
(TCO 3) India’s caste system has been around for many years. Explain why its influence has diminished among educated urban middle class Indians.
4.
Question :
(TCO 3) In 2006, two Chinese journalists reported that the working conditions at Hongfujin Precision Industries where Apple’s iPods are produced were substandard. According to the report, not only were workers at the plant poorly paid, but they were also forced to work overtime. Apple immediately responded to the allegations and audited the factory in question. However, managers at the factory filed a defamation lawsuit against the two journalists. Despite the fact that Apple’s audit did indeed show substandard working conditions at the factory, Hongfujin did not withdraw the lawsuit. Eventually the Reporters Without Borders group took up the case for the two reporters and the lawsuit was dropped. The allegations against Hongfujin Precision Industries were made by two Chinese reporters. Discuss the implications of this for other Chinese companies.
5.
Question :
(TCO 3) Exports are largely responsible for China’s recent rapid economic growth. The country, capitalizing on its cheap labor force, has focused on converting raw materials into products that are exported to developed countries such as the United States. In 2008, China’s trade surplus was a record $280 billion, and its holdings of foreign exchange reserves were over $1.95 trillion. Some critics have suggested that China is following a neomercantilist policy. Are the claims that China is following a neomercantilist policy valid? Why or why not?
6.
Question :
(TCO 4) Telefonica is a Spanish telecommunications firm. For decades, Telefonica had operated as a typical state-owned enterprise, but privatization and deregulation changed that path in the 1990s. Telefonica began to aggressively pursue expansion opportunities in Latin America where it quickly became the number one or two player in nearly every country. Later, Telefonica turned its sights on Europe where its acquisitions helped transform the company into the second biggest mobile phone operator in the world. What changes in political and economic environment allowed Telefoncia to start expanding globally? Why did Telefonica initially focus on Latin America? Why was it slower to expand in Europe even though Spain is a member of the European Union?
7.
Question :
(TCO 7) Why did the world shift from a gold standard to fixed exchange rates?
Student Answer:
Gold is expensive to ship around the world.
A more convenient means of financing world trade was needed.
The volume of world trade increased.
All of the above
1.
Question :
(TCO 5) Concerning European Union’s progress toward creating a single financial market, the quest started in 1999 was to have been completed by 2005, however, progress has been slowed by various factors related to the tradition of each member country operating autonomously. By 2007, significant progress had been made. Some 41 measures designed to create a single market were in place and others were in the pipeline. The current issue facing the EU revolves around the enforcement of the rules that have been established as law. Some experts believe that it will be at least another decade before the benefits of the new rules become apparent. Discussion of this feature can begin with the following questions. What are the benefits of creating a single financial market in the European Union for companies? Does it make sense for consumers?
2.
Question :
(TCO 6) In the 1980s, Caterpillar was negatively affected by a strong dollar and lost significant market share to Japanese competitor Komatsu. The situation prompted Caterpillar to revise its global strategy and by the 2000s, the company was in a much better position to deal with volatile currency values. More recently, a strong dollar has actually helped boost Caterpillar’s bottom line.
In the 1980s, a stronger dollar hurt Caterpillar’s competitive position, but in 2008 a stronger dollar did not seem to have the same effect. What had changed?
3.
Question :
(TCO 7) In May 2001, the IMF agreed to lend $8 billion to Turkey to help stabilize its economy and halt a sharp slide in the value of its currency. Although initially the Turkish government resisted IMF mandates on economic policy, in 2003 the government passed an austerity budget. By 2005, significant progress had been made and today, the country appears to be on track for recovery, with lower inflation rates, an increase in privatization, and a budget surplus. What led to Turkey’s financial crisis? What goals did the IMF establish as part of the loan agreement?
4.
Question :
(TCO 8) MD International is an export intermediary for U.S. medical equipment manufacturers. The company has been able to capitalize on falling trade barriers, as well as expand healthcare programs in the Latin American region. MD International currently represents more than 30 companies and sells to some 600 regional distributors. How does an intermediary such as MD International create value for the manufacturers who use it to sell medical equipment in foreign markets? Why do they want to use MD International rather than export directly themselves?
5.
Question :
(TCO 8) Boeing made the decision to outsource much of the production of the 787 in the hopes of significantly reducing the time to get the product to market. Boeing also anticipated that its outsourcing strategy would allow it to generate additional sales from the countries that were partners in the process and reduce its costs and risks. Although Boeing’s strategy worked for some components, for other parts the strategy was a disaster. Suppliers were late and some produced poor-quality parts, forcing Boeing to commit additional resources to the project.
What are the benefits to Boeing of outsourcing so much work on the 787 to foreign suppliers? What are the potential risks? Do the benefits outweigh the risks?
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6.
Question :
(TCO 8) By 2015, Ford hopes to compete in North America, Europe, and Asia by offering several global models including the Fiesta, the Fusion, and the Mondeo. The company, which refers to its new strategy as One Ford, anticipates that its global models will share the same components and looks and be positioned in a similar way in each market in which they are sold.
What is behind Ford’s One Ford vision? What is the company hoping to accomplish with this strategy?
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