Deck 4: National Market Analysis

Question 1

Rivalries and past conflicts rarely affect a country's relations with other nations

Answer 1

False

Question 2

Communications infrastructure analyses of country markets include national resources, waterways and rail systems

Answer 2

False

Question 3

Transportation infrastructure analyses include energy generation systems, media, highways and water systems

Answer 3

False

Question 4

Linguistic and ethnic differences within nations rarely cause political stability problems

Question 5

International companies use a nation's energy and natural resources but can rarely help a country develop these resources

Question 6

External influences on country behaviors include memberships of international and regional organizations, and past histories with individual nations

Question 7

Countries acquire national cultures as linguistic, ethnic and religious differences erode over time

Question 8

The geographic location of a country in the world has rarely affected its potential for trade and commerce

Question 9

As countries develop, powerful landowning families diminish in political and economic importance and eventually die out

Question 10

Nations with dominant service sectors, with small agricultural and industrial sectors are usually at the lower levels of economic development

Question 11

National infrastructure analysis to assess country energy sources, water and transportation systems are key elements to evaluate when firms enter developing markets

Question 12

Communications infrastructure analyses of country markets include telephone, broadcast and the availability of other media

Question 13

Agricultural, industrial and service sector breakdowns are good indicators of where a country is developmentally

Question 14

A country's climate affects its population concentrations, agricultural development and work habits but rarely affects individual attitudes towards life

Question 15

A country's topography (surface features) has little or no influence on its population or culture

Question 16

Corporate technologies and expertise can help offset the effects of adverse climates

Question 17

Studying a country's history and geography gives executives good insights as to how a nation developed the way it did

Question 18

Nations need three types of resources to develop: agricultural, energy and natural resources such as minerals

Question 19

Countries with small agricultural sectors, moderate industrial sectors and high proportions of people in the service sector are usually at the higher levels of economic development

Question 20

Political structures of countries include type of political system (autocracy-democracy), parliamentary assemblies and political party profiles

Question 21

Analyses of national industries include market size, and market structure factors such as competitors, sector profitability and key success factors

Question 22

The proportions of public versus private expenditures show the extent of government influence in the economy

Question 23

Where currencies float according to market supply and demand, a positive balance of payments will put downward (depreciating) pressures on a national currency

Question 24

Inflation indicators take account of government expenditures and incomes, and GDP per capita

Question 25

Economic problems contributing to political friction include ethnic, religious conflicts and moves towards privatization

Question 26

Persistent trade deficits can result in governments becoming protectionist

Question 27

Outgoing investments in the balance of payments capital account are 'assets', not 'liabilities'

Question 28

Demand analyses of national markets includes suppliers, manufacturing and distribution locations

Question 29

The income account of the balance of payments includes inflows and outflows of corporate profits and individual earnings into and out of a country

Question 30

Direct investments are purchases of securities, bonds, or minority (less than 10 percent) holdings in companies

Question 31

The goods and services account of the balance of payments takes in just manufacturing exports and imports

Question 32

Demand analyses of national markets includes customer concentrations and market segmentation issues

Question 33

Conflicts over country welfare and support systems, taxation levels and pro/anti business legislation are political problems

Question 34

Outgoing investments in the balance of payments capital account are 'liabilities', not 'assets'

Question 35

Persistent trade surpluses may result in governments devaluing their currencies

Question 36

The merchandise trade balance of the balance of payments is the accounting record of all economic transactions between a nation's residents and non-residents over a specified time period (usually one year).

Question 37

Analyses of a country's public sector finances include GDP size, GDP per capita and international trade performance

Question 38

Foreign direct investments are investments in factories, plant and machinery in a foreign country

Question 39

Economic causes of political friction include poor economic growth, inflation and trade-related job-loss problems

Question 40

Inflation indicators include upward shifts in wages and money supply (often 'M2') indicators

Question 41

Political risk and the likelihood of political change decrease when:

A) External influences such as privatization movements take hold or are introduced
B) There are major ethnic or religious frictions within countries
C) The national economy is expanding and inflation is low
D) There are major controversies over how governments should allocate public resources

Question 42

Complete cultural analyses of countries should include country history, geography, interpersonal relations, lifestyles and general attitudes

Question 43

Supply chain considerations in national market analyses include infrastructure connections, labor supply availability and availability of information technologies

Question 44

Consumer protection and environmental protection laws are part of national legal infrastructure analyses

Question 45

High national inflation rates:

A) Contribute to a country's political stability
B) Can affect a nation's exchange rates
C) Are difficult to measure
D) Are not usually a problem

Question 46

The relative isolation of China and Japan from western influences until the mid 19^th century is an example of how:

A) Country topographies affect economic development
B) Climate affects national infrastructure development
C) Countries' geographic positions on the world map affect trade and external relations
D) How resource availability affects economic development

Question 47

Powerful landowning families in developing nations tend to:

A) Provide economic but not political leadership
B) Leverage their resources into commerce to maintain their power during the industrialization process
C) Die out during the industrialization process
D) Lose their influence as democracies take root

Question 48

Market affluence is best determined by:

A) Country inflation rates
B) The split between public and private expenditures
C) The size of the Gross Domestic Product and GDP per capita
D) Analyses of government/public sector incomes and expenditures

Question 49

Once a country has suitable intellectual property laws in place, firms should have no problems with counterfeit ('fake') goods

Question 50

The only aspect of a country's capital market that needs evaluation is how well developed the national stock market is

Question 51

Corporate assessments of utilities, energy sources, communications and transportation amenities:

A) Are part of the evaluation of geographic effects on national infrastructures
B) Are always necessary, especially in developed nations
C) Are rarely problematic in developing nations
D) All of the above

Question 52

Country participation in global and regional treaties and organizations are:

A) Part of the industrialization process
B) External factors influencing country behaviors
C) Part of a country's cultural development process
D) None of the above

Question 53

Agricultural-industrial-service sector breakdowns are which of the following:

A) Good indicators of the extent of national economic development
B) Change during the industrialization process
C) Influence governmental education and social welfare programs
D) All of the above
E) None of the above

Question 54

Analyses of country legal infrastructures includes corporate taxation policies and currency considerations

Question 55

Firms should evaluate national capital markets with respect to long, medium and short term financing requirements

Question 56

The study of a country's historical and geographic characteristics helps managers:

A) Gain insights into political, economic and cultural heritages
B) Assess current situations and commercial circumstances
C) Understand how countries developed
D) All of the above
E) None of the above

Question 57

Nelson Mandela (South Africa) and Mikhail Gorbachev (the former USSR) are examples of:

A) Politicians who engineered political change in their countries
B) Leaders who began the industrialization processes in their nations
C) People who culturally united their peoples into a single nation
D) None of the above

Question 58

Historic events and national rivalries among countries:

A) Are always short-lived and soon forgotten
B) Rarely impact governmental policies
C) Can be controversial and last for decades or longer
D) None of the above

Question 59

Analyses of a country's current political situation includes:

A) Whether the nation is a democracy or is under authoritarian rule
B) The profiling of major political parties and their guiding philosophies
C) How elected assemblies such as parliaments affect the political process
D) All of the above

Question 60

Legal infrastructure analyses include industry ownership limitations, anti-trust laws and issues relating to intellectual property rights

Question 61

An international firm's national market analysis shows numerous rules on product warranties, truth-in-advertising and predatory pricing. These are examples of:

A) Environmental protection laws
B) Consumer protection laws
C) Anti-marketing laws
D) Intellectual property protection laws

Question 62

Merchandise exports and imports, inflows and outflows of services, corporate profits, personal incomes, and one-time money transfers are the:

A) Balance of trade on current account
B) Balance of payments
C) Balance of payments on current account
D) Balance of payments on capital account

Question 63

An international firm is assessing prospects in a foreign market by evaluating market sizes, growth rates, segments, competitors, key success factors and sector profitability. The company is performing a(n):

A) Industry analysis
B) Business environment analysis
C) Legal infrastructure analysis
D) Supply chain analysis

Question 64

Dating, marriage customs, personal appearance, visiting formalities, greetings, eating habits etc. are important aspects of:

A) Lifestyle analysis
B) Interpersonal relations
C) National background analysis
D) General attitudes

Question 65

Foreign trade zones (FTZs) allow firms to:

A) Do business in parts or regions of countries where others cannot
B) Assemble, store, process goods without being subject to national tariffs and other trade regulations
C) Arrange international trade deals outside of the country's trade laws
D) All of the above

Question 66

When countries have independently floating currencies and their overall balance of payments show a major surplus, their national currency is:

A) Not likely to be affected
B) Likely to appreciate in value
C) Likely to depreciate in value
D) Showing a surplus supply of the home currency over demand

Question 67

A global firm is evaluating a national market's suppliers, manufacturing site possibilities, infrastructure connections, labor laws, labor availability, and information technology issues. The company is analyzing:

A) Industry characteristics
B) Supply chain issues
C) Customer demand characteristics
D) All of the above

Question 68

When a company buys shares in a foreign firm without wishing to participate in that firm's management, it is recorded in the balance of payments as a:

A) Portfolio investment
B) Capital investment
C) Direct investment
D) All of the above

Question 69

The financial account of the balance of payments comprises:

A) The current and capital accounts
B) Trade in goods, services, income from investments and one-time transfers
C) Direct, portfolio, 'other' investments and financial derivatives
D) All of the above

Question 70

When a firm builds a factory in a foreign market, this is recorded in the balance of payments as:

A) A portfolio investment
B) A direct investment asset
C) A direct investment liability
D) A financial derivative

Question 71

An international telecommunications firm finds that it is forbidden to purchase more than 49 percent of a local telecommunications company. This is an example of a:

A) A legal obstacle to investment
B) A capital market impediment to investment
C) An accounting obstacle to investment
D) All of the above

Question 72

Cost chain considerations:

A) Are financial breakdowns of supply chain activities
B) Include supplier, manufacturer, and distributor costs
C) Are affected by wage rates, depreciation laws and sales taxes
D) All of the above

Question 73

When a country's inflation rate is significantly above that of the international economy generally, which of the following is likely to occur:

A) Imports become less competitive
B) Capital flight is likely
C) The government is likely to revalue its national currency upwards (revalue or appreciate it)
D) All of the above

Question 74

Labor quality and availability in a country is most affected by:

A) The national educational infrastructure
B) National wages rates
C) Labor laws
D) Trade unions

Question 75

National capital markets are important to international firms for:

A) Long term capital from stock markets, banks
B) Special financing of warehouses, research projects
C) Financing of exports, inventories
D) All of the above

Question 76

Legal infrastructure analyses of national markets includes:

A) How firms finance long, medium and short term capital needs
B) Intellectual property protection rules
C) Labor force quality and availability
D) None of the above

Question 77

Currency considerations that international firms must take account of include:

A) Whether currencies are 'hard' or 'soft'
B) Whether national currencies are appreciating, depreciating or stable
C) Currency effects on financing, importing, and balance sheet values
D) All of the above

Question 78

When a country has an independently floating currency and its overall balance of payments shows a major deficit, which of the following is occurring:

A) National currency demand exceeds supply and the currency should depreciate
B) National currency supply exceeds demand and the currency should depreciate
C) National currency demand exceeds supply and the currency should appreciate
D) National currency supply exceeds demand and the currency should appreciate

Question 79

An accounting record of all economic transactions between residents of a country and foreign residents over a specific time period is a definition of the:

A) Merchandise trade balance
B) Balance of payments on current account
C) Balance of payments
D) Investment account