SOM FINAL EXAM 2025 QUESTIONS
AND ANSWERS
One form of FDI is __________, which involves the establishment of a new operation in a
foreign country. - ANS a Greenfield investment
Custom Cabinetry International needs immediate access to wood in order to produce an order
of 50,000 high-end retail display cases by the end of next year. It cannot afford to wait and
establish a new operation in a foreign country where this species of wood is prevalent, so it
decides to purchase an existing company instead. Why did Custom Cabinetry decide to make
this purchase? - ANS mergers and acquisitions are quicker to execute than greenfield
investments.
Internalization theory is used to explain why a company prefers FDI over __________ as a way
to enter a foreign market. - ANS licensing
It is one of Sanjay's job responsibilities to report the amount of foreign direct investment
undertaken by the government over a one-year time period. Sanjay reports the __________ of
FDI. - ANS flow
According to the eclectic paradigm, __________ is/are of considerable importance in explaining
both the rationale for and the direction of foreign direct investment. - ANS location-specific
advantages
The stock of FDI refers to the - ANS total accumulated value of foreign-owned assets at a
given time.
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, Which political ideology reflects the idea that a multinational enterprise is an instrument of
imperialist domination? - ANS radical view
Fast Tracker Inc., a U.S.-based company, makes custom wearable fitness trackers in Oregon,
which are then shipped to Europe for sale there. Based on this information, Fast Tracker Inc. is
involved in - ANS exporting
Solar Chemical, an industrial cleaning products manufacturing company, has a market share of
30 percent in Brazil. Three of its competitors together control 55 percent of the market.
Whenever Solar Chemical raises or lowers the prices of its products, the other three companies
quickly imitate its action. What is the market structure of this industry in Brazil? -
ANS oligopoly
__________ arises when two or more enterprises encounter each other in different regional
markets, national markets, or industries. - ANS Multipoint competition
The United States imports sugar from several nations. If the NAFTA agreement caused the
United States to import sugar only from Canada, even though it cost more to do so, it would be
an example of - ANS trade diversion.
_________ is a pact among Argentina, Brazil, Paraguay, and Uruguay to establish a free trade
area. - ANS Mercosur
A(n) __________ has no barriers to trade among member countries, includes a common
external trade policy, and allows factors of production to move freely among members, but
does not have a common currency. - ANS common market
The harmonization of member nations' tax rates plus a common monetary and fiscal policy are
all required to form a(n) - ANS economic union
2 Copyright ©2025 THESTAR ALL RIGHTS RESERVED
AND ANSWERS
One form of FDI is __________, which involves the establishment of a new operation in a
foreign country. - ANS a Greenfield investment
Custom Cabinetry International needs immediate access to wood in order to produce an order
of 50,000 high-end retail display cases by the end of next year. It cannot afford to wait and
establish a new operation in a foreign country where this species of wood is prevalent, so it
decides to purchase an existing company instead. Why did Custom Cabinetry decide to make
this purchase? - ANS mergers and acquisitions are quicker to execute than greenfield
investments.
Internalization theory is used to explain why a company prefers FDI over __________ as a way
to enter a foreign market. - ANS licensing
It is one of Sanjay's job responsibilities to report the amount of foreign direct investment
undertaken by the government over a one-year time period. Sanjay reports the __________ of
FDI. - ANS flow
According to the eclectic paradigm, __________ is/are of considerable importance in explaining
both the rationale for and the direction of foreign direct investment. - ANS location-specific
advantages
The stock of FDI refers to the - ANS total accumulated value of foreign-owned assets at a
given time.
1 Copyright ©2025 THESTAR ALL RIGHTS RESERVED
, Which political ideology reflects the idea that a multinational enterprise is an instrument of
imperialist domination? - ANS radical view
Fast Tracker Inc., a U.S.-based company, makes custom wearable fitness trackers in Oregon,
which are then shipped to Europe for sale there. Based on this information, Fast Tracker Inc. is
involved in - ANS exporting
Solar Chemical, an industrial cleaning products manufacturing company, has a market share of
30 percent in Brazil. Three of its competitors together control 55 percent of the market.
Whenever Solar Chemical raises or lowers the prices of its products, the other three companies
quickly imitate its action. What is the market structure of this industry in Brazil? -
ANS oligopoly
__________ arises when two or more enterprises encounter each other in different regional
markets, national markets, or industries. - ANS Multipoint competition
The United States imports sugar from several nations. If the NAFTA agreement caused the
United States to import sugar only from Canada, even though it cost more to do so, it would be
an example of - ANS trade diversion.
_________ is a pact among Argentina, Brazil, Paraguay, and Uruguay to establish a free trade
area. - ANS Mercosur
A(n) __________ has no barriers to trade among member countries, includes a common
external trade policy, and allows factors of production to move freely among members, but
does not have a common currency. - ANS common market
The harmonization of member nations' tax rates plus a common monetary and fiscal policy are
all required to form a(n) - ANS economic union
2 Copyright ©2025 THESTAR ALL RIGHTS RESERVED
