D270 Midterm Davis Exam QUESTIONS AND
CORRECT ANSWERS
Globalization - CORRECT ANSWER A ;process of broadening of interdependent
relationships among people who are divided into national borders.
International Business - CORRECT ANSWER Any commercial transactions between 2
or more countries
Extent of Globalization - CORRECT ANSWER 1. Increase in and application of
technology
2. Liberalization of cross-border trade
3. Development of services that support international business
4. growing consumer pressures
5. Increased global competition
6. Changing political situation and gov policies
7. Expand cross nation cooperation
Negative side of globaliztion - CORRECT ANSWER -Threats to National Sovereignty
-Emotional Stress
-Growing Income inequality
Why go International - CORRECT ANSWER -Expand sales
-Acquire Resources
-Minimize Risk
How many countries are there? - CORRECT ANSWER 193
Modes of International Business - CORRECT ANSWER Exports/imports and
investments
, What type is a Foreign Direct Investment - CORRECT ANSWER Controlling interest
investment
What type is a portfolio investment - CORRECT ANSWER Non-controlling interest
investment
Direct exports - CORRECT ANSWER Taking orders in home market and shipping
them direct to a customers in a new market
Exporting via Local Distributor - CORRECT ANSWER Entering an agreement for a
local distributor to sell goods produced in home market in a new market
Licensing and Franchising - CORRECT ANSWER Entering an agreement for local
manufacturer to produce and sell goods in a new market.
Sales Operation - CORRECT ANSWER Setting up a sales team in a new market to sell
goods produced in home market
Equity Investment - CORRECT ANSWER Purchase minority stake in an existing firm
in a new market, enter an agreement to work with the firm in that market.
Joint Venture - CORRECT ANSWER Creation of new entity in a new market with one
or more other firms as joint owners in the new entity.
Acquisition - CORRECT ANSWER Purchasing a majority stake in an existing firm
operating in a new market (Foreign Direct Investment)
Foreign Direct Investment Def - CORRECT ANSWER Taking a majority interest in a
foreign corporation
CORRECT ANSWERS
Globalization - CORRECT ANSWER A ;process of broadening of interdependent
relationships among people who are divided into national borders.
International Business - CORRECT ANSWER Any commercial transactions between 2
or more countries
Extent of Globalization - CORRECT ANSWER 1. Increase in and application of
technology
2. Liberalization of cross-border trade
3. Development of services that support international business
4. growing consumer pressures
5. Increased global competition
6. Changing political situation and gov policies
7. Expand cross nation cooperation
Negative side of globaliztion - CORRECT ANSWER -Threats to National Sovereignty
-Emotional Stress
-Growing Income inequality
Why go International - CORRECT ANSWER -Expand sales
-Acquire Resources
-Minimize Risk
How many countries are there? - CORRECT ANSWER 193
Modes of International Business - CORRECT ANSWER Exports/imports and
investments
, What type is a Foreign Direct Investment - CORRECT ANSWER Controlling interest
investment
What type is a portfolio investment - CORRECT ANSWER Non-controlling interest
investment
Direct exports - CORRECT ANSWER Taking orders in home market and shipping
them direct to a customers in a new market
Exporting via Local Distributor - CORRECT ANSWER Entering an agreement for a
local distributor to sell goods produced in home market in a new market
Licensing and Franchising - CORRECT ANSWER Entering an agreement for local
manufacturer to produce and sell goods in a new market.
Sales Operation - CORRECT ANSWER Setting up a sales team in a new market to sell
goods produced in home market
Equity Investment - CORRECT ANSWER Purchase minority stake in an existing firm
in a new market, enter an agreement to work with the firm in that market.
Joint Venture - CORRECT ANSWER Creation of new entity in a new market with one
or more other firms as joint owners in the new entity.
Acquisition - CORRECT ANSWER Purchasing a majority stake in an existing firm
operating in a new market (Foreign Direct Investment)
Foreign Direct Investment Def - CORRECT ANSWER Taking a majority interest in a
foreign corporation
