D080 STUDY GUIDE
A company would like to obtain the benefits of outsourcing and focus solely on marketing activities
and research and development. Which advantage is this company hoping to achieve?
Enhanced core business activities
A company is considering using a direct distribution strategy.
What is a disadvantage of this distribution strategy?
Required to arrange for transportation
A car manufacturing company manufacturers tires in Countries A, B, and C. Country A has significant
political turmoil that has resulted in a lengthy labor strike. Countries B and C have ramped up
production resulting in sustained tire production for the company.
Which practice has the company used to optimize its production efficiency?
Multinational production
A company in the United States is considering a joint venture with a French supplier and needs to
learn about the accounting standards used in France. How should the U.S. company approach this
situation?
Study the International Financial Reporting Standards (IFRS) online
A multinational company moves key production assets to a country with lower tax rates to avoid
paying more taxes in the home country.
Which type of pricing should be used to reduce taxes during production?
Transfer
A German company is considering outsourcing the manufacturing process to Japan. Some of the
executive board directors are concerned that the Japanese company may not follow the exact
production processes the German company normally uses. Which risk represents this concern?
Loss of control
A company is considering using a direct distribution strategy.
What is a disadvantage of this distribution strategy?
Required to arrange for transportation
Which source of funding uses technology platforms to invite consumers to invest small amounts in
support of a business idea or venture?
Crowdsourcing
Which type of risk refers to the impact of random change in the value of one currency with respect to
other currencies?
Currency risk
, Which term defines using currency derivatives to reduce potential currency risks due to currency
exchange rate movement that could lead to losses for a firm?
Hedging
A company has achieved a monetary advantage by using a fronting loan with a subsidiary in a country
with a low corporate income tax rate. Which type of tax situation in this country allows the company
to achieve this monetary advantage?
A company has achieved a monetary advantage by using a fronting loan with a subsidiary in a country
with a low corporate income tax rate. Which type of tax situation in this country allows the company
to achieve this monetary advantage?
Two countries agree to open their borders to international business transactions with one another
without tariffs.
How does this affect global business?
It leads to developing free trade policies with strategic partners.
A country uses its established technology infrastructure to produce a good. What is the impact of this
infrastructure on trade?
It will create barriers to entry for other nations.
What was the economic impact of the North American Free Trade Agreement (NAFTA)?
The shift of jobs away from low comparative advantage industries
A company that is located in Country A would like to sell products in Country B. The government of
Country B is pushing for a tariff-based international trade agreement on the product. What is the
reasoning behind Country B's decision?
Country B seeks to protect its economy and give it the opportunity for long-term expansion.
Countries A and B participate in trade agreements that allow free trade among participant countries.
However, Country A imposed quotas on several imported products to protect its domestic products.
What is the effect, if any, on the domestic prices of these products?
Increases
Two countries decide to open up trade with each other. What is likely to happen when trade opens
up?
Jobs will increase in comparative advantage industries.
What is a purpose of a country implementing trade protectionism?
To protect an infant industry
Which negative outcome on political systems comes from globalization?
Creation of isolationist policies
Which factor results in a higher rate of globalization?
Reduced trade barriers
A company would like to obtain the benefits of outsourcing and focus solely on marketing activities
and research and development. Which advantage is this company hoping to achieve?
Enhanced core business activities
A company is considering using a direct distribution strategy.
What is a disadvantage of this distribution strategy?
Required to arrange for transportation
A car manufacturing company manufacturers tires in Countries A, B, and C. Country A has significant
political turmoil that has resulted in a lengthy labor strike. Countries B and C have ramped up
production resulting in sustained tire production for the company.
Which practice has the company used to optimize its production efficiency?
Multinational production
A company in the United States is considering a joint venture with a French supplier and needs to
learn about the accounting standards used in France. How should the U.S. company approach this
situation?
Study the International Financial Reporting Standards (IFRS) online
A multinational company moves key production assets to a country with lower tax rates to avoid
paying more taxes in the home country.
Which type of pricing should be used to reduce taxes during production?
Transfer
A German company is considering outsourcing the manufacturing process to Japan. Some of the
executive board directors are concerned that the Japanese company may not follow the exact
production processes the German company normally uses. Which risk represents this concern?
Loss of control
A company is considering using a direct distribution strategy.
What is a disadvantage of this distribution strategy?
Required to arrange for transportation
Which source of funding uses technology platforms to invite consumers to invest small amounts in
support of a business idea or venture?
Crowdsourcing
Which type of risk refers to the impact of random change in the value of one currency with respect to
other currencies?
Currency risk
, Which term defines using currency derivatives to reduce potential currency risks due to currency
exchange rate movement that could lead to losses for a firm?
Hedging
A company has achieved a monetary advantage by using a fronting loan with a subsidiary in a country
with a low corporate income tax rate. Which type of tax situation in this country allows the company
to achieve this monetary advantage?
A company has achieved a monetary advantage by using a fronting loan with a subsidiary in a country
with a low corporate income tax rate. Which type of tax situation in this country allows the company
to achieve this monetary advantage?
Two countries agree to open their borders to international business transactions with one another
without tariffs.
How does this affect global business?
It leads to developing free trade policies with strategic partners.
A country uses its established technology infrastructure to produce a good. What is the impact of this
infrastructure on trade?
It will create barriers to entry for other nations.
What was the economic impact of the North American Free Trade Agreement (NAFTA)?
The shift of jobs away from low comparative advantage industries
A company that is located in Country A would like to sell products in Country B. The government of
Country B is pushing for a tariff-based international trade agreement on the product. What is the
reasoning behind Country B's decision?
Country B seeks to protect its economy and give it the opportunity for long-term expansion.
Countries A and B participate in trade agreements that allow free trade among participant countries.
However, Country A imposed quotas on several imported products to protect its domestic products.
What is the effect, if any, on the domestic prices of these products?
Increases
Two countries decide to open up trade with each other. What is likely to happen when trade opens
up?
Jobs will increase in comparative advantage industries.
What is a purpose of a country implementing trade protectionism?
To protect an infant industry
Which negative outcome on political systems comes from globalization?
Creation of isolationist policies
Which factor results in a higher rate of globalization?
Reduced trade barriers
