Republic of the Philippines

JOSE RIZAL MEMORIAL STATE UNIVERSITY

The Premier University in Zamboanga del Norte
TAMPILISAN CAMPUS
Znac, Tampilisan, Zamboanga del Norte Registration No.
62Q17082

COLLEGE OF BUSINESS ADMINISTRATION

INTERNATIONAL BUSINESS AND TRADE 1st LONG EXAMINATION

GENERAL INSTRUCTIONS: © JRBR

1. ERASURES OR ANY FORM OF ALTERATIONS (i.e. super-impositions) IS ALLOWED AT MOST FOUR TIMES.
2. DO NOT WRITE ANYTHING ON THE TEST QUESTIONNAIRE. A separate answer sheet shall be provided. Use the
back portion of your answer sheet as your scratch paper.

True or False. (2 points each)

1. I. Cross-border transactions also require that money be converted from the firm’s home currency into a
foreign currency and vice versa.
II. Conducting business transactions across national borders do not require understanding
the rules governing the international trading and investment system.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
2. I. An international business is any firm that engages in international trade or investment.
II. A firm does not have to become a multinational enterprise, investing directly in
operations in other countries, to engage in international business, although multinational
enterprises are international businesses.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
3. I. Large segments of the population in many countries believe that globalization has positive effects on
living standards and the environment, and the media have often fed on this fear.
II. An international enterprise (MNE) is any business that has productive activities in two or more
countries.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
4. I. The stock of foreign direct investment refers to the total cumulative value of domestic investments.
II. Technological innovations have also facilitated the globalization of markets.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
5. I. The Internet is the most important factor in facilitating international trade in services.
II. Containerization has revolutionized the transportation business, significantly lowering the costs of
shipping goods over long distances.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
6. I. Moore’s Law, which predicts that the power of microprocessor technology doubles and its cost of
production falls in half every 18 months.
II. The lowering of trade barriers made globalization of markets and production a practical possibility.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
7. I. The globalization of markets and production and the resulting growth of world trade, foreign direct
investment, and imports all imply that firms are finding their home markets under attack from foreign
competitors.
 II. Foreign direct investment (FDI) occurs when a firm invests resources in business activities
domestically.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
8. I. International trade occurs when a firm exports goods or services to consumers in another country.
II. The United Nations was established and commits to preserving peace through international
cooperation and collective security.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect

9. I. As markets globalize and an increasing proportion of business activity transcends national borders,
institutions are needed to help manage, regulate, and police the global marketplace, and to promote the
establishment of multinational treaties to govern the local production of goods.
II. The World Trade Organization (like the GATT before it) is primarily responsible for policing the world
trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by
WTO member states.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
10. I. Factors of production are labor, energy, land, and capital only.
II. The globalization of markets refers to the sourcing of goods and services from locations around the
globe to take advantage of national differences in the cost and quality of factors of production.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
11. I. Globalization refers to the shift toward a more integrated and interdependent world economy.
II. Globalization has only two facets, including the globalization of markets and the globalization of
production.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
12. Which of the following statements is correct?
a. The globalization of markets implies that international markets are merging into one huge
marketplace.
b. The globalization of markets implies that national markets are merging into one huge marketplace.
c. The globalization of markets implies that national markets are merging into one huge economy.
d. The globalization of markets implies that international markets are merging into one huge economy.