DEVRY BUS427 FINAL EXAM

Page 1

Question
1.1.(TCO 1) For emerging nations, what is the
level of income per capita where greater environmental protection
causes pollutant levels to decline? (Points : 5)

$2,500
$8,000
$15,500
$20,000

Question
2.2.(TCO 2) According to Francis Fukuyama, the
collapse of communism in eastern Europe was followed by which of the
following? (Points
: 5)

The
new world order
The
end of history
The universalization of Western
democracy
None
of the above
All
of the above

Question
3.3.(TCO 3) The values and norms of culture are
determined by which of the following? (Points : 5)

Religion
News
media
Freedom
of travel
Geography

Question
4.4.(TCO 3) Which theory deals with competitive
advantage for countries? (Points
: 5)

Herckscher-Ohlin
Adam
Smith’s Wealth of Nations
Product
Life-Cycle Theory
The Leontief Paradox
None
of the above

Question
5.5.(TCO 4) In the last 30 years, the world
economy has seen (Points
: 5)

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
6.6.(TCO 5) Chile is included in which of the
following regional integrations organizations? (Points : 5)

MERCCOSUR
Andean
Community
NAFTA
APEC
None
of the above

Question
7.7.(TCO 6) When a firm engages in hedging it is (Points : 5)

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.

Page 2

Question
1. 1. (TCO 8) What are the various types of countertrade available? (Points :
10)

Question
2. 2. (TCO 8) In distribution strategy, what are the four main differences
between countries? (Points : 10)

Question
3. 3. (TCO 3) Are the concerns of those opposing Turkey’s admittance to the
European Union well-founded? Can Islam, capitalism, and globalization coexist?
(Points : 20)

Question
4. 4. (TCO 3) In 2006, two Chinese journalists reported that the working
conditions at Hongfujin Precision Industries where Apple’s 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 Apple’s 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.

Should
Apple be responsible for ensuring that its suppliers are safeguarding the basic
rights and dignity of its employees? How can Apple be sure that its suppliers
do not employ sweatshop labor? (Points : 20)

Question
5. 5. (TCO 3) Bangladesh, a very poor country, has been able to grow even
during the most recent global recession thanks to its strong textile industry.
Bangladesh, with its low wages, large investments in textile technology, and
strong network of supporting industries is now one of the world’s lowest cost
producers of textiles. The country has been able to capitalize on these
advantages to increase its exports of textiles to $10.7 billion, up from $9.3
billion in 2007.

How
has Bangladesh benefitted from free trade and globalization? What did the end
of the quota system mean for the country? (Points : 20)
Question
6. 6. (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.
What
changes in political and economic environment allowed Telefoncia to start
expanding globally? Why did Telefonica initially focus on Latin America? Why
was it slower to expand in Europe even though Spain is a member of the European
Union? (Points : 20)

Question
7.7. (TCO 7) Why did the world shift from a gold standard to fixed exchange
rates? (Points : 5)
Gold is expensive to ship around the
world.
A more convenient means of financing
world trade was needed.
The volume of world trade increased.
All of the above

Page
3

Question
1. 1. (TCO 5) Under the North American Free Trade Agreement (NAFTA), Mexican
truckers were to have been allowed to drive their trucks directly into the
United States and avoid the costly and time-consuming border unloading and
loading that took place prior to the agreement. However, fearing job losses in
the industry, the U.S. Teamsters Union rigorously opposed the legislation.
Although the group ultimately lost its fight, the United States still did not
give Mexican truckers freedom to deliver their goods, prompting Mexico to
institute retaliatory measures affecting $2.4 billion of goods exported from
the United States.

Why
did the United States respond to the concerns of the Teamsters? Why are those
affected by Mexico’s retaliatory tariffs not lobbying congress for relief?
Should the United States protect the Teamsters at the expense of agricultural
exporters in California and Washington? (Points : 20)

Question
2. 2. (TCO 6) In the 1980s, Caterpillar was negatively affected by a strong
dollar and lost significant market share to Japanese competitor Komatsu. The
situation prompted Caterpillar to revise its global strategy and by the 2000s,
the company was in a much better position to deal with volatile currency
values. More recently, a strong dollar has actually helped boost Caterpillar’s
bottom line.

In
the 1980s, a stronger dollar hurt Caterpillar’s competitive position, but in
2008 a stronger dollar did not seem to have the same effect. What had changed?
(Points : 20)

Question
3. 3. (TCO 7) In 2008, oil prices reached new highs as a result of higher than
expected demand, tight supplies, and perceived geopolitical risks. Because oil
is priced in dollars, oil producers have seen their dollar reserves increase
significantly. Now, speculation abounds as to what will happen to the
petrodollars. Some believe that the dollars will go toward public
infrastructure projects, others think that it is more likely that investments
will be made in dollar denominated assets like U.S. bonds, stocks, and real
estate, or in nondollar denominated assets such as European or Japanese bonds
and stocks.

With
oil prices at record highs, there is significant speculation as to what oil
producing states will do with the dollars they are earning. Discuss how a
decision to invest in nondollar denominated assets could affect the value of
the U.S. dollar. (Points : 30)

Question
4. 4. (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.

Can
other small companies learn from the experiences of Vellus Products? Reflect on
the tips of Vellus Products’ founder Sharon Doherty for beginning the export
process. (Points : 30)

Question
5. 5. (TCO 8) Boeing made the decision to outsource much of the production of
the 787 in the hopes of significantly reducing the time to get the product to
market. Boeing also anticipated that its outsourcing strategy would allow it to
generate additional sales from the countries that were partners in the process
and reduce its costs and risks. Although Boeing’s strategy worked for some
components, for other parts the strategy was a disaster. Suppliers were late
and some produced poor-quality parts, forcing Boeing to commit additional
resources to the project.

What
are the benefits to Boeing of outsourcing so much work on the 787 to foreign
suppliers? What are the potential risks? Do the benefits outweigh the risks?
(Points : 30)

Question
6. 6. (TCO 8) By 2015, Ford hopes to compete in North America, Europe, and Asia
by offering several global models including the Fiesta, the Fusion, and the
Mondeo. The company, which refers to its new strategy as One Ford, anticipates
that its global models will share the same components and looks and be
positioned in a similar way in each market in which they are sold.

What
is behind Ford’s One Ford vision? What is the company hoping to accomplish with
this strategy? (Points : 30)