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| Section | Objectives |
|---|---|
| Topic 1: Competency 2: Political and Economic Forces | - Market Economy vs. Command Economy - Property Rights and the Rule of Law |
| Topic 2: Competency 3: Economic Decision-Making by Firms and Customers | - Firm Behavior Under Different Market Structures (Perfect Competition, Monopoly, Oligopoly) - Consumer Behavior (Budget Constraint, Indifference Curves) |
| Topic 3: Competency 1: International Trade and Currency Exchange | - Impact of Interest Rates on Financial Flows and Exchange Rates - Introduction to International Trade Theories - Currency Exchange Rate Determination |
| Topic 4: Key Topics Across All Competencies | - International Trade Policies (Tariffs, Quotas) - Currency Appreciation and Depreciation - Global Business Strategies and Porter's Framework - Foreign Direct Investment (FDI) Impacts - Elastic vs. Inelastic Goods - Supply and Demand Shifts |
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NEW QUESTION # 24
Which company has a natural resource-seeking strategic goal?
Answer: B
Explanation:
InGlobal Economics for Managers, anatural resource-seeking strategyrefers to firms that engage in foreign direct investment toaccess specific natural resourcesthat are unavailable or costly in their home country.
Option C correctly reflects this motive.
Companies in industries such as oil, gas, mining, agriculture, and timber often locate operations where resources are naturally abundant. The primary objective is to secure reliable and cost-effective access to essential inputs for production.
Option A describes a cost-seeking strategy, option B a market-seeking strategy, and option D a strategic asset- seeking strategy.
Thus, option C correctly identifies a natural resource-seeking strategic goal.
NEW QUESTION # 25
Which statement characterizes an institution-based view of global business?
Answer: B
Explanation:
The institution-based view of global business argues that firm behavior and strategy are shaped by the interaction between firms and institutions. Option A is correct because it captures the central proposition:
firms do not make decisions in isolation; they operate within formal and informal institutional constraints.
Formal institutions include laws, regulations, property rights, and political systems. Informal institutions include norms, ethics, customs, and cultural expectations. These institutions reduce uncertainty and influence what strategies are acceptable, legitimate, and profitable. Option B is too narrow because institutions include more than government regulation. Option C is incorrect because firms still make strategic choices. Option D is wrong because financial motivations remain important, but they operate within institutional limits.
NEW QUESTION # 26
Which statements concerning property rights are true? (Choose TWO.)
Answer: B,D
Explanation:
InGlobal Economics for Managers, property rights are fundamental to economic development and global competitiveness, making optionsC and Fthe correct answers.
Option F correctly definesproperty rightsas the legal rights governing the use of an economic resource and the ability to derive income and benefits from it. These rights specify ownership, control, transferability, and enforcement, providing clarity and predictability for economic actors.
Option C is also correct becauseprotection of property rights is widely recognized as a key driver of economic progress, especially in developing countries. Secure property rights encourage investment, innovation, and long-term planning by reducing the risk of expropriation or misuse. Firms are more willing to invest in capital-intensive production and research and development when their assets and returns are legally protected.
Option A is incorrect because secure property rights encourage-not discourage-long-term investment and capital-intensive industries. Option B is incorrect because insecure property rights undermine economies of scale and R&D by increasing uncertainty. Option D contradicts extensive evidence showing that weak property rights constrain sustainable growth. Option E is partially normative but not emphasized as a core analytical statement in managerial economics texts.
Thus, options C and F accurately reflect the role and definition of property rights in global economics.
NEW QUESTION # 27
Direct exports have which advantage?
Answer: C
Explanation:
InGlobal Economics for Managers,direct exportingallows firms tocapitalize on economies of scale in production in the home country, making option B correct.
By concentrating production domestically, firms can achieve lower average costs, maintain quality control, and leverage existing facilities and expertise. Direct exporting avoids the fixed costs of establishing foreign production facilities.
Options A, C, and D are incorrect because exporting typically involves transportation costs, limited distribution control, and exposure to exchange rate risk.
Thus, option B correctly identifies a key advantage of direct exporting.
NEW QUESTION # 28
Which quantity measures the market value of all final goods and services produced within a country in a given period of time?
Answer: D
Explanation:
InGlobal Economics for Managers,gross domestic product (GDP)is defined asthe market value of all final goods and services produced within a country's borders during a specific period, making option C correct. GDP is the most widely used indicator of a country's economic performance and size.
GDP includes onlyfinal goods and servicesto avoid double counting. Intermediate goods used in production are excluded because their value is already embedded in final goods. GDP also measures productionwithin national borders, regardless of whether the producers are domestic or foreign-owned firms.
Option A, GNI, includes income earned by citizens abroad and excludes income earned domestically by foreign firms. Option B subtracts depreciation from GDP. Option D is not a standard national income measure.
Managers use GDP to evaluate market potential, economic growth, and country risk. Therefore, option C correctly identifies GDP.
NEW QUESTION # 29
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