DeVry BUSN 427 Final Exam (**NEW**)

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1
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Question :

(TCO 1) Which are factors that move the world toward more
globalization?

Student Answer:

A. Wide spread use of English as a common language

B. Decline in barriers for capital, services & goods
C. Technology change
D. All of the above
E. Only A & B
None of the above

Question
2.

Question :

Student Answer:

(TCO 2) Which legal system is used in Australia?

Common Law
Civil Law
Theocratic Law
Law of the Bush

Question

Question :

(TCO 3) Which language is most widely spoken throughout the

3.

world?
Student Answer:

Chinese
Hindi
English
Spanish
None of the above

Question
4.

Question :

Student Answer:

(TCO 3) Which theory deals with competitive advantage for

countries?
Herckscher-Ohlin
Adam Smiths Wealth of Nations
Product Life-Cycle Theory
The Leontief Paradox
None of the above

Question
5.

Question :

Student Answer:

(TCO 4) In the last 30 years, the world economy has seen

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.

Question
6.

Question :

Student Answer:

(TCO 5) A common currency was created by which law?

The Treaty of Rome

NAFTA
Maastricht Treaty
The Single European Act

Question
7.

Question :

Student Answer:

(TCO 6) When a firm engages in hedging it is

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 :

Question

Question :

(TCO 8) What are the three staffing policies available to a

multinational corporation?

(TCO 8) Explain what determines the mix between push and pull

2.

strategies and what is emphasized in each.

unclear

Question
3.

Question :

(TCO 3) Indias caste system has been around for many years.
Explain why its influence has diminished among educated urban
middle class Indians.

requires more discussion of caste system and educated, urban

middle class Indians.

Question
4.

Question :

(TCO 3) In 2006, two Chinese journalists reported that the

working conditions at Hongfujin Precision Industries where
Apples 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 Apples 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.

Question
5.

Question :

(TCO 3) Exports are largely responsible for Chinas 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, Chinas 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?

Question
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.
Telefoncia used acquisitions rather than greenfield ventures as an
entry strategy. Why do you think this has been the case? What
are the potential risks associated with this entry strategy?

Question
7.

Question :

Student Answer:

(TCO 7) Which of the following are true about the International

Monetary Fund?
It is an arm of the World Bank to provide loans.

It was formed to minimize monetary cooperation around the

world.
It is a part of the United Nations.
It was created to move from the gold standard to floating rates
for the nations.

1
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Question :

Question
2.

Question :

(TCO 5) Concerning European Unions 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?

(TCO 6) Volkswagen saw a 95% drop in its fourth quarter profits

after an unexpected surge in the value of the euro left the
company with losses of $1.5 billion. Traditionally, Volkswagen,
which produced its vehicles in Germany and exported them to
the United States, hedged some 70% of its foreign exchange
exposure. However, in 2003 the company made the unfortunate
decision to hedge just 30% of its exposure.
Volkswagen saw its fourth quarter 2003 profits tumble 95% after

losing 1.2 billion in currency losses after the euro rose relative
to the U.S. dollar. Why was Volkswagen so vulnerable to the
change in the value of the euro relative to the U.S. dollar?

Question
3.

Question :

(TCO 7) After joining the European Union in 2004, Latvia

established a currency board system that pegged the value of its
currency to the euro. This system came under significant pressure
when the effects of the financial crisis that began in the United
States in 2008 spilled over into the country. Latvia was
eventually forced to ask the International Monetary Fund and the
European Union for assistance in order to get its financial system
and economy back on track. As part of the assistance package,
Latvia was required to make significant changes in its economic
policy.
Why did the initial effort by Latvias government to stabilize the
countrys currency fail? Was the government attempting to stop a
banking crisis or a foreign debt crisis?

Question
4.

Question :

(TCO 8) Vellus Products is a small company that produces

personal care products for dogs. Vellus Products initially began
exporting when a Taiwanese business placed an order for its dog
shampoo. Since then, Vellus Products has expanded its export
business and today, international sales account for about half its
total sales. Vellus Products now sells in 28 countries around the
world.
Why did Vellus Products choose Taiwan for its first export sales?
How important do you think the assistance provided by the
Department of Commerce has been for Vellus Products future

export sales?

Question
5.

Question :

(TCO 8) By 2012, India is expected to export half a million

vehicles a year. South Koreas Hyundai is leading the charge,
exporting over one third of its Indian production. Suzuki and
Nissan have both entered the Indian market more recently. Both
companies see the Indian market as an important component in
their future production and marketing strategies.
Most large automakers have already established or are planning
to establish production facilities in India. What challenges do you
see for these companies? What strategic changes might be
required?

Question
6.

Question :

(TCO 8) Microsoft is meeting the challenges of expanding into

the potentially lucrative Indian market, a market where currently
most people cannot afford a computer nor the Microsoft
programs to run it. Microsoft has changed its highly standardized
approach to markets to develop products specifically designed to
meet the needs of the Indian market. In addition, the company
has established local R & D operations that it hopes will generate
new products for the market.
Why does Microsofts traditional strategy of one-size-fits-all not
work well in emerging markets such as India? What is different
about these markets? How do customers differ both in their
characteristics and in the way they use technology?

DeVry BUSN 427 Final Exam (**NEW**)

Click on the link below for the solution:

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