Articles Of Confederation Quiz Questions

1. Fisman (2001) interprets the finding that firms categorized as having weaker ties to Suharto were harmed less by rumors of threats to Suharto's health as evidence that these firms enjoyed less political advantages under Suharto's rule.

True

False

The explanation for the given correct answer is that Fisman (2001) found that firms with weaker ties to Suharto were less affected by rumors of threats to his health. This suggests that these firms did not enjoy as many political advantages under Suharto's rule, as they were not as dependent on his support and therefore were not as vulnerable to potential instability in his regime.

Explanation

The explanation for the given correct answer is that Fisman (2001) found that firms with weaker ties to Suharto were less affected by rumors of threats to his health. This suggests that these firms did not enjoy as many political advantages under Suharto's rule, as they were not as dependent on his support and therefore were not as vulnerable to potential instability in his regime.

2. Hong Kong is part of the country of China.

True

False

Hong Kong is a Special Administrative Region (SAR) of China. It was a British colony until 1997 when it was handed over to China. Under the principle of "One Country, Two Systems," Hong Kong maintains a separate legal and economic system from mainland China, but it is ultimately part of the country. Therefore, the statement that Hong Kong is part of China is true.

Explanation

Hong Kong is a Special Administrative Region (SAR) of China. It was a British colony until 1997 when it was handed over to China. Under the principle of "One Country, Two Systems," Hong Kong maintains a separate legal and economic system from mainland China, but it is ultimately part of the country. Therefore, the statement that Hong Kong is part of China is true.

3. In this week's HBS case, Abraaj Capital wanted the National Transmission and Distribution Council (NTDC) to charge KESC the fixed cost for its power, not the marginal cost.

True

False

Abraaj Capital wanted the National Transmission and Distribution Council (NTDC) to charge KESC the fixed cost for its power, not the marginal cost. This means that Abraaj Capital believed that KESC should pay a set amount for the power it consumed, regardless of the actual cost of producing that power. This approach would ensure that KESC pays a consistent amount for its power, regardless of fluctuations in production costs.

Explanation

Abraaj Capital wanted the National Transmission and Distribution Council (NTDC) to charge KESC the fixed cost for its power, not the marginal cost. This means that Abraaj Capital believed that KESC should pay a set amount for the power it consumed, regardless of the actual cost of producing that power. This approach would ensure that KESC pays a consistent amount for its power, regardless of fluctuations in production costs.

4. Karnani (2007) argues that small, local firms are better positioned than multinationals to address the supply side problem in markets for the poor.

True

False

The explanation for the given correct answer is that Karnani (2007) argues that small, local firms are better positioned than multinationals to address the supply side problem in markets for the poor. This implies that small, local firms have a better understanding of the local market dynamics and are more capable of tailoring their products and services to meet the specific needs of the poor. Additionally, they may have lower costs and be more accessible to the poor population.

Explanation

The explanation for the given correct answer is that Karnani (2007) argues that small, local firms are better positioned than multinationals to address the supply side problem in markets for the poor. This implies that small, local firms have a better understanding of the local market dynamics and are more capable of tailoring their products and services to meet the specific needs of the poor. Additionally, they may have lower costs and be more accessible to the poor population.

5. Have you practiced the Asian Country Map Quiz? Do you know here the Grasberg mine is located?

True

False

The given answer, "True," is correct because the Grasberg mine is indeed located in an Asian country. The Grasberg mine is one of the world's largest gold and copper mines and is situated in the province of Papua in Indonesia, which is located in Southeast Asia. Therefore, the statement is true.

Explanation

The given answer, "True," is correct because the Grasberg mine is indeed located in an Asian country. The Grasberg mine is one of the world's largest gold and copper mines and is situated in the province of Papua in Indonesia, which is located in Southeast Asia. Therefore, the statement is true.

6. MacIntyre (2001) argues that the Indonesian economy suffered from the fact that Suharto could unilaterally order strong and immediate action on any front.

True

False

MacIntyre (2001) argues that the Indonesian economy suffered because Suharto had the power to make strong and immediate decisions without any input or checks from others. This suggests that Suharto's unilateral actions could have had negative consequences for the economy. Therefore, the statement "MacIntyre (2001) argues that the Indonesian economy suffered from the fact that Suharto could unilaterally order strong and immediate action on any front" is true.

Explanation

MacIntyre (2001) argues that the Indonesian economy suffered because Suharto had the power to make strong and immediate decisions without any input or checks from others. This suggests that Suharto's unilateral actions could have had negative consequences for the economy. Therefore, the statement "MacIntyre (2001) argues that the Indonesian economy suffered from the fact that Suharto could unilaterally order strong and immediate action on any front" is true.

7. Hofstede says that culture is a concept that is only valuable as long as it can be used to help predict behavior.

True

False

According to Hofstede, culture is only valuable if it can be used to predict behavior. This suggests that culture is not just an abstract concept, but rather a tool that can be applied practically to understand and anticipate how individuals and groups will behave in different contexts. By emphasizing the importance of predictability, Hofstede implies that culture should have practical utility and be applicable in real-world situations. Therefore, the statement "True" accurately reflects Hofstede's perspective on the value of culture.

Explanation

According to Hofstede, culture is only valuable if it can be used to predict behavior. This suggests that culture is not just an abstract concept, but rather a tool that can be applied practically to understand and anticipate how individuals and groups will behave in different contexts. By emphasizing the importance of predictability, Hofstede implies that culture should have practical utility and be applicable in real-world situations. Therefore, the statement "True" accurately reflects Hofstede's perspective on the value of culture.

8. If you had insider information about Suharto's health during one of the health threat events studied in Fisman (2001) that allowed you to know that Suharto was not going to die, would you want to buy or sell shares in companies owned by the Salim Group?

Buy shares in companies owned by Salim Group

Sell shares in companies owned by Salim Group

If you had insider information about Suharto's health and knew that he was not going to die, it would be advantageous to buy shares in companies owned by the Salim Group. This is because Suharto was a powerful figure in Indonesia and had significant influence over the economy. His continued good health would likely lead to stability and favorable conditions for businesses owned by the Salim Group. As a result, their shares would be expected to perform well, making it a profitable decision to buy them.

Explanation

If you had insider information about Suharto's health and knew that he was not going to die, it would be advantageous to buy shares in companies owned by the Salim Group. This is because Suharto was a powerful figure in Indonesia and had significant influence over the economy. His continued good health would likely lead to stability and favorable conditions for businesses owned by the Salim Group. As a result, their shares would be expected to perform well, making it a profitable decision to buy them.

9. In its March 22, 20110 blog statement, Google annouced that it would no longer be providing search engine services to people based in China.

True

False

The given statement is false. Google did not announce in its March 22, 20110 blog statement that it would no longer be providing search engine services to people based in China.

Explanation

The given statement is false. Google did not announce in its March 22, 20110 blog statement that it would no longer be providing search engine services to people based in China.

10. According to Hofstede, in which of the following countries do children feel the least loyalty for and expect the least protection from their in-group?

Indonesia

West Africa

China

Hong Kong

Hofstede's cultural dimensions theory suggests that Hong Kong is the country where children feel the least loyalty for and expect the least protection from their in-group. This could be due to the influence of Hong Kong's unique history and cultural context, which has been shaped by its colonial past and its current status as a Special Administrative Region of China. The high level of individualism and emphasis on personal achievement in Hong Kong's society may contribute to a lower sense of loyalty and expectation of protection from the in-group.

Explanation

Hofstede's cultural dimensions theory suggests that Hong Kong is the country where children feel the least loyalty for and expect the least protection from their in-group. This could be due to the influence of Hong Kong's unique history and cultural context, which has been shaped by its colonial past and its current status as a Special Administrative Region of China. The high level of individualism and emphasis on personal achievement in Hong Kong's society may contribute to a lower sense of loyalty and expectation of protection from the in-group.

11. According to Krugman's "Myth" piece, sustained growth in a nation's per capita income can only come about through which of the following?

A rise in output per unit of input

A rise in domestic savings rate

A dynamic entrepreneurial class

Government policy promoting export-oriented manufacturing

None of the above

According to Krugman's "Myth" piece, sustained growth in a nation's per capita income can only come about through a rise in output per unit of input. This means that the country needs to increase its productivity and efficiency in order to produce more output with the same amount of input. This can be achieved through technological advancements, innovation, and better utilization of resources. A rise in output per unit of input leads to increased production, which in turn leads to higher income levels for individuals in the country.

Explanation

According to Krugman's "Myth" piece, sustained growth in a nation's per capita income can only come about through a rise in output per unit of input. This means that the country needs to increase its productivity and efficiency in order to produce more output with the same amount of input. This can be achieved through technological advancements, innovation, and better utilization of resources. A rise in output per unit of input leads to increased production, which in turn leads to higher income levels for individuals in the country.

12. Which of the following countries does Stiglitz (2001) claim had strategies that were relatively more focused on domestic investment rather than foreign investment?

Malaysia and Japan

Korea and Japan

Malaysia and Korea

All of the above

None of the above

Stiglitz (2001) claims that Korea and Japan had strategies that were relatively more focused on domestic investment rather than foreign investment.

Explanation

Stiglitz (2001) claims that Korea and Japan had strategies that were relatively more focused on domestic investment rather than foreign investment.

13. In its January 12, 2010 blog statement, Google admitted that attackers were able to read the emails of Chinese human rights activists.

True

False

The statement claims that Google admitted that attackers were able to read the emails of Chinese human rights activists. However, the correct answer is False because the statement is incorrect. Google did admit that their systems were targeted by attackers, but they stated that only limited information was accessed and there was no evidence to suggest that any Gmail accounts were accessed or compromised. Therefore, the attackers were not able to read the emails of Chinese human rights activists.

Explanation

The statement claims that Google admitted that attackers were able to read the emails of Chinese human rights activists. However, the correct answer is False because the statement is incorrect. Google did admit that their systems were targeted by attackers, but they stated that only limited information was accessed and there was no evidence to suggest that any Gmail accounts were accessed or compromised. Therefore, the attackers were not able to read the emails of Chinese human rights activists.

14. Stuart and Wang (2016) show statistical evidence that investment by a venture capital firm has which of the following effects on the likelihood of fraudulent behavior by Chinese firms?

VC investment increases the likelihood of fraudulent behavior by Chinese firms.

VC investment decreases the likelihood of fraudulent behavior by Chinese firms.

VC investment does not have a clear effect on the likelihood of fraudulent behavior by Chinese firms.

The correct answer suggests that according to Stuart and Wang (2016), there is statistical evidence showing that investment by a venture capital firm increases the likelihood of fraudulent behavior by Chinese firms.

Explanation

The correct answer suggests that according to Stuart and Wang (2016), there is statistical evidence showing that investment by a venture capital firm increases the likelihood of fraudulent behavior by Chinese firms.

15. The ultimate conclusion reached in the Singh (2007) article is that culture does not have any impact on business strategy.

True

False

The explanation for the answer "False" is that the Singh (2007) article actually concludes that culture does have an impact on business strategy. This means that culture influences the way businesses develop and implement their strategies.

Explanation

The explanation for the answer "False" is that the Singh (2007) article actually concludes that culture does have an impact on business strategy. This means that culture influences the way businesses develop and implement their strategies.

16. In the Yasheng Huang TED blog article, Dr. Huang notes that most of the countries that both have higher average income than China and are ruled by authoritarian governments have which of the following in common?

They have Confucian-based cultures

They have substantial natural resources

They have fast growing economies

All of the above

None of the above

In the Yasheng Huang TED blog article, Dr. Huang points out that most countries with higher average income than China and ruled by authoritarian governments have substantial natural resources in common. This suggests that the presence of natural resources may contribute to their higher income levels. The article does not mention Confucian-based cultures or fast-growing economies as common factors among these countries.

Explanation

In the Yasheng Huang TED blog article, Dr. Huang points out that most countries with higher average income than China and ruled by authoritarian governments have substantial natural resources in common. This suggests that the presence of natural resources may contribute to their higher income levels. The article does not mention Confucian-based cultures or fast-growing economies as common factors among these countries.

17. According to Hofstede, people are most "easy going" in which of the following countries?

Holland (where Hofstede is from)

Hong Kong

Indonesia

USA

According to Hofstede, people are most "easy going" in Hong Kong. This is because Hong Kong has a high level of individualism and a low level of uncertainty avoidance, which are two cultural dimensions that Hofstede identified. Individualism refers to the extent to which individuals prioritize their own goals and interests over those of the group, while uncertainty avoidance refers to the extent to which individuals feel uncomfortable with ambiguity and uncertainty. Hong Kong's high individualism and low uncertainty avoidance suggest that people in this country are more relaxed and open-minded, hence being considered "easy going".

Explanation

According to Hofstede, people are most "easy going" in Hong Kong. This is because Hong Kong has a high level of individualism and a low level of uncertainty avoidance, which are two cultural dimensions that Hofstede identified. Individualism refers to the extent to which individuals prioritize their own goals and interests over those of the group, while uncertainty avoidance refers to the extent to which individuals feel uncomfortable with ambiguity and uncertainty. Hong Kong's high individualism and low uncertainty avoidance suggest that people in this country are more relaxed and open-minded, hence being considered "easy going".

18. Rodrik and Subramian (2003) advocate a specific constellation of institutions that will achieve the optimum benefits.

True

False

Rodrik and Subramian (2003) do not advocate a specific constellation of institutions that will achieve the optimum benefits. Therefore, the statement is false.

Explanation

Rodrik and Subramian (2003) do not advocate a specific constellation of institutions that will achieve the optimum benefits. Therefore, the statement is false.

19. MacIntyre (2001) argues that Thailand's crisis began on July 2nd, 1997, when its pegged exchange rate collapsed.

True

False

MacIntyre (2001) argues that Thailand's crisis did not begin on July 2nd, 1997, when its pegged exchange rate collapsed. The correct answer is False.

Explanation

MacIntyre (2001) argues that Thailand's crisis did not begin on July 2nd, 1997, when its pegged exchange rate collapsed. The correct answer is False.

20. When it comes to monetary policy, Singapore's government is primarily focused on managing which of the following?

Interest rate

Inflation rate

Exchange rate

Tarrif rate

The Singaporean government is primarily focused on managing the exchange rate. This means that they aim to control the value of their currency in relation to other currencies. By managing the exchange rate, the government can influence the competitiveness of their exports, control inflation, and maintain stability in their economy. This is important for Singapore as it heavily relies on international trade and has a small open economy.

Explanation

The Singaporean government is primarily focused on managing the exchange rate. This means that they aim to control the value of their currency in relation to other currencies. By managing the exchange rate, the government can influence the competitiveness of their exports, control inflation, and maintain stability in their economy. This is important for Singapore as it heavily relies on international trade and has a small open economy.

21. Porter and Kramer (2005) argue that Corporate Social Responsibility programs are the most important thing that companies can do for society.

True

False

Porter and Kramer (2005) do not argue that Corporate Social Responsibility programs are the most important thing that companies can do for society. While they do emphasize the importance of CSR, they also highlight the need for companies to create shared value by aligning their business goals with societal needs. They argue that this approach can lead to long-term sustainability and competitive advantage. Therefore, the correct answer is False.

Explanation

Porter and Kramer (2005) do not argue that Corporate Social Responsibility programs are the most important thing that companies can do for society. While they do emphasize the importance of CSR, they also highlight the need for companies to create shared value by aligning their business goals with societal needs. They argue that this approach can lead to long-term sustainability and competitive advantage. Therefore, the correct answer is False.

22. In Krugman's "Competitiveness" piece, he shows evidence that which of the following types of sectors have the highest value-added per worker?

Labor-intensive manufacturing industries

High-technology industries

Capital-intensive industries

Export-oriented industries

None of the above

In Krugman's "Competitiveness" piece, he provides evidence that capital-intensive industries have the highest value-added per worker. This means that these industries generate more value or output for each worker employed compared to labor-intensive manufacturing industries, high-technology industries, and export-oriented industries. The term "capital-intensive" refers to industries that require a significant amount of capital investment, such as machinery, equipment, and infrastructure, to produce goods or services. Krugman's evidence suggests that these industries are more efficient and productive in utilizing their capital resources and therefore have a higher value-added per worker.

Explanation

In Krugman's "Competitiveness" piece, he provides evidence that capital-intensive industries have the highest value-added per worker. This means that these industries generate more value or output for each worker employed compared to labor-intensive manufacturing industries, high-technology industries, and export-oriented industries. The term "capital-intensive" refers to industries that require a significant amount of capital investment, such as machinery, equipment, and infrastructure, to produce goods or services. Krugman's evidence suggests that these industries are more efficient and productive in utilizing their capital resources and therefore have a higher value-added per worker.

23. MacIntyre (2001) argues that a greater number of veto players leads to:

Higher likelihood of economic crisis

Greater policy risk for investors

Greater policy flexibility

greater policy stability

None of the above

MacIntyre (2001) argues that a greater number of veto players leads to greater policy stability. This means that when there are more veto players, it becomes more difficult for any one individual or group to make significant changes to existing policies. This can lead to a more stable and predictable policy environment, as it requires a larger consensus to make any alterations. Therefore, the presence of more veto players can contribute to a higher level of policy stability in a given system.

Explanation

MacIntyre (2001) argues that a greater number of veto players leads to greater policy stability. This means that when there are more veto players, it becomes more difficult for any one individual or group to make significant changes to existing policies. This can lead to a more stable and predictable policy environment, as it requires a larger consensus to make any alterations. Therefore, the presence of more veto players can contribute to a higher level of policy stability in a given system.

24. Stiglitz (2001) explains which of the following about the argument put forward by Krugman and Young about limited growth in Total Factor Productivity in Asia?

Their claim is that fast growing Asian countries got closer to the technology frontier because investments into education led to more domestic innovation.

Their claim is that fast growing Asian countries got closer to the technology frontier by investing into acquisition of technologies created in advanced economies.

Their claim is that fast growing Asian countries made very little progress in getting closer to the technological frontier.

Their claim is that fast growing Asian countries lack of progress in getting closer to the technology frontier caused the 1997 financial crisis.

None of the above.

Stiglitz (2001) explains that Krugman and Young argue that fast growing Asian countries achieved closer proximity to the technology frontier by investing in the acquisition of technologies developed in advanced economies. This implies that these countries were able to adopt and adapt existing technologies to drive their economic growth, rather than relying solely on domestic innovation. This explanation suggests that the transfer and adoption of advanced technologies played a crucial role in the rapid growth of these Asian countries.

Explanation

Stiglitz (2001) explains that Krugman and Young argue that fast growing Asian countries achieved closer proximity to the technology frontier by investing in the acquisition of technologies developed in advanced economies. This implies that these countries were able to adopt and adapt existing technologies to drive their economic growth, rather than relying solely on domestic innovation. This explanation suggests that the transfer and adoption of advanced technologies played a crucial role in the rapid growth of these Asian countries.

25. Fisman and Khanna (2004) provide evidence that Indian business groups help to make underdeveloped regions more attractive to other investors.

True

False

The statement suggests that Fisman and Khanna (2004) provide evidence that Indian business groups help to make underdeveloped regions more attractive to other investors. However, the correct answer is False. The explanation for this answer could be that Fisman and Khanna (2004) do not provide evidence supporting the idea that Indian business groups make underdeveloped regions more attractive to other investors. It is possible that their research findings contradict or do not support this claim.

Explanation

The statement suggests that Fisman and Khanna (2004) provide evidence that Indian business groups help to make underdeveloped regions more attractive to other investors. However, the correct answer is False. The explanation for this answer could be that Fisman and Khanna (2004) do not provide evidence supporting the idea that Indian business groups make underdeveloped regions more attractive to other investors. It is possible that their research findings contradict or do not support this claim.

26. Which of these is NOT an economic institution considered by Rodrik and Subramian (2003):

Market-augmenting

Market-stabilizing

Market-creating

Market-regulating

Market-legitimizing

Rodrik and Subramanian (2003) discuss various economic institutions, including market-stabilizing, market-creating, market-regulating, and market-legitimizing institutions. However, they do not consider market-augmenting institutions.

Explanation

Rodrik and Subramanian (2003) discuss various economic institutions, including market-stabilizing, market-creating, market-regulating, and market-legitimizing institutions. However, they do not consider market-augmenting institutions.

27. In this week's HBS case, the Abraaj Capital investment into KESC represents the first time Arif Naqvi is buying a stake in a Pakistani company.

True

False

The given statement is false because the Abraaj Capital investment into KESC does not represent the first time Arif Naqvi is buying a stake in a Pakistani company.

Explanation

The given statement is false because the Abraaj Capital investment into KESC does not represent the first time Arif Naqvi is buying a stake in a Pakistani company.

28. In his "Lessons" article, Stiglitz argues that benefits of government interventions in East Asia are evident, given that growth frequently occured in precisely the industries that were targeted by government policies.

True

False

Stiglitz argues in his "Lessons" article that the benefits of government interventions in East Asia are not evident. He states that while growth did occur in industries targeted by government policies, it was often at the expense of other industries. Additionally, he argues that the interventions led to distortions in the market and created inefficiencies. Therefore, the correct answer is false.

Explanation

Stiglitz argues in his "Lessons" article that the benefits of government interventions in East Asia are not evident. He states that while growth did occur in industries targeted by government policies, it was often at the expense of other industries. Additionally, he argues that the interventions led to distortions in the market and created inefficiencies. Therefore, the correct answer is false.

29. In the Yasheng Huang TED blog article, Dr. Huang argues that Eric Li's support for single party rule in China would be more logically consistent if he also supported which of the following feature(s) of the political systems in many advanced economies?

Direct popular elections of the top political leader

The powerful influence of who can raise the most money on who gets elected

Efforts to make it more difficult for people of certain cultures to be able to vote

All of the above

None of the above

In the Yasheng Huang TED blog article, Dr. Huang argues that Eric Li's support for single party rule in China would be more logically consistent if he also supported the powerful influence of who can raise the most money on who gets elected in the political systems of many advanced economies. This is because the concentration of power and influence in the hands of a few wealthy individuals or corporations is a common feature in such political systems. By supporting this feature, Li would align his support for single party rule with the concentration of power and influence in the hands of a few in advanced economies.

Explanation

In the Yasheng Huang TED blog article, Dr. Huang argues that Eric Li's support for single party rule in China would be more logically consistent if he also supported the powerful influence of who can raise the most money on who gets elected in the political systems of many advanced economies. This is because the concentration of power and influence in the hands of a few wealthy individuals or corporations is a common feature in such political systems. By supporting this feature, Li would align his support for single party rule with the concentration of power and influence in the hands of a few in advanced economies.

30. In the wake of the Plaza Agreement, which of the following happened to Asian currencies relative to the US dollar?

All Asian currencies discussed in the Bernard and Ravenhill (1995) article increased in value relative to the US dollar.

All Asian currencies discussed in the Bernard and Ravenhill (1995) article decreased in value relative to the US dollar.

All Northeastern Asian currencies discussed in the Bernard and Ravenhill (1995) article increased in value relative to the US dollar, while the Southeast Asian currencies mentioned decreased in value relative to the US dollar.

All Northeastern Asian currencies discussed in the Bernard and Ravenhill (1995) article decreased in value relative to the US dollar, while the Southeast Asian currencies mentioned increased in value relative to the US dollar.

None of the above

The correct answer is that all Northeastern Asian currencies discussed in the Bernard and Ravenhill (1995) article increased in value relative to the US dollar, while the Southeast Asian currencies mentioned decreased in value relative to the US dollar. This means that after the Plaza Agreement, the currencies of Northeastern Asian countries appreciated compared to the US dollar, while the currencies of Southeast Asian countries depreciated.

Explanation

The correct answer is that all Northeastern Asian currencies discussed in the Bernard and Ravenhill (1995) article increased in value relative to the US dollar, while the Southeast Asian currencies mentioned decreased in value relative to the US dollar. This means that after the Plaza Agreement, the currencies of Northeastern Asian countries appreciated compared to the US dollar, while the currencies of Southeast Asian countries depreciated.

31. Which of the Types of FDI listed in the Appendix Week 5 best fits these Southeast Asian companies on the BCG Global Challengers list?

Market Seeking

Resource Seeking

Efficiency Seeking

Strategic Asset Seeking

The correct answer is Market Seeking. Market seeking FDI refers to companies that invest in foreign markets to expand their customer base and increase sales. Southeast Asian companies on the BCG Global Challengers list are likely looking to enter new markets and attract customers in order to grow their business. Therefore, Market Seeking FDI best fits these companies' objectives.

Explanation

The correct answer is Market Seeking. Market seeking FDI refers to companies that invest in foreign markets to expand their customer base and increase sales. Southeast Asian companies on the BCG Global Challengers list are likely looking to enter new markets and attract customers in order to grow their business. Therefore, Market Seeking FDI best fits these companies' objectives.

32. In which decade did labor inputs account for the greatest share of GDP growth in Singapore?

1970s

1980s

1990s

2000s

In the 2000s, labor inputs accounted for the greatest share of GDP growth in Singapore. This means that the increase in the country's GDP during this decade was primarily driven by the growth in the labor force and their productivity. This could be attributed to various factors such as increased investments in human capital, technological advancements, and favorable government policies that encouraged labor participation and efficiency.

Explanation

In the 2000s, labor inputs accounted for the greatest share of GDP growth in Singapore. This means that the increase in the country's GDP during this decade was primarily driven by the growth in the labor force and their productivity. This could be attributed to various factors such as increased investments in human capital, technological advancements, and favorable government policies that encouraged labor participation and efficiency.

33. What does Hofstede argue is the main limitation on the size of businesses owned by Chinese-Americans?

Their limited ambitions.

Their inability to trust non-family members.

Their limited intelligence and capabilities.

Their lack of access to credit from US banks.

Hofstede argues that the main limitation on the size of businesses owned by Chinese-Americans is their inability to trust non-family members. This implies that Chinese-Americans tend to rely heavily on family members for business partnerships and collaborations, which restricts their ability to expand their businesses beyond a certain size. This limitation may stem from cultural values and preferences for close-knit family relationships and trust within the Chinese-American community.

Explanation

Hofstede argues that the main limitation on the size of businesses owned by Chinese-Americans is their inability to trust non-family members. This implies that Chinese-Americans tend to rely heavily on family members for business partnerships and collaborations, which restricts their ability to expand their businesses beyond a certain size. This limitation may stem from cultural values and preferences for close-knit family relationships and trust within the Chinese-American community.

34. Which of the main four Southeast Asian country discussed in MacIntyre (2001) was least hard hit by the Southeast Asian crisis in the late 1990s?

Philippines

Thailand

Malaysia

Indonesia

The Philippines was the least hard hit by the Southeast Asian crisis in the late 1990s. This can be inferred from the information provided in MacIntyre's (2001) discussion of the main four Southeast Asian countries.

Explanation

The Philippines was the least hard hit by the Southeast Asian crisis in the late 1990s. This can be inferred from the information provided in MacIntyre's (2001) discussion of the main four Southeast Asian countries.

35. What is the main Dependent Variable used in Fisman (2001)?

Return on Assets

Revenues

Profits

Share price returns

All of the above

The main dependent variable used in Fisman (2001) is share price returns. This means that the study focuses on analyzing the changes in the price of shares over a particular period of time. The researcher is interested in understanding how various factors or independent variables might affect the fluctuations in share prices. By studying share price returns, the researcher can gain insights into the market's perception of a company's performance and its potential for future growth.

Explanation

The main dependent variable used in Fisman (2001) is share price returns. This means that the study focuses on analyzing the changes in the price of shares over a particular period of time. The researcher is interested in understanding how various factors or independent variables might affect the fluctuations in share prices. By studying share price returns, the researcher can gain insights into the market's perception of a company's performance and its potential for future growth.

36. The findings on financial reporting by Chinese firms in Stuart and Wang (2016) provide support for which of the following arguments?

State-owned enterprises in China are more profitable than Chinese private companies.

Venture capital firms in China are misreporting their earnings to the Chinese government.

Chinese entrepreneurs with political connections have less fear of being punished for misreporting their finances to Chinese government offices.

University backed entrepreneurs are more likely to commit fraud in China.

None of the above.

The correct answer suggests that the findings in Stuart and Wang (2016) support the argument that Chinese entrepreneurs with political connections have less fear of being punished for misreporting their finances to Chinese government offices. This implies that there may be a lack of accountability and enforcement for those with political connections, allowing them to engage in fraudulent financial reporting without significant consequences.

Explanation

The correct answer suggests that the findings in Stuart and Wang (2016) support the argument that Chinese entrepreneurs with political connections have less fear of being punished for misreporting their finances to Chinese government offices. This implies that there may be a lack of accountability and enforcement for those with political connections, allowing them to engage in fraudulent financial reporting without significant consequences.

37. Which of the following most accurately reflects the main point Eric Li (2011) wants to communicate with his story about the rise of the Vice Party Secretary of Yunan Province, Qiu He?

Some political scandals have indeed hurt the Chinese Communist Party's facade of unity.

The secret to China's rapid economic growth has been low taxes, strategic land concessions, and high levels of foreign investment.

China has systematically promoted its most creative and skilled government officials to the highest levels of government.

The Chinese Communist Party has changed strategies many times.

The main point Eric Li (2011) wants to communicate with his story about the rise of Qiu He is that China has systematically promoted its most creative and skilled government officials to the highest levels of government. This implies that the Chinese Communist Party values talent and innovation in its leadership positions, and this is a key factor in China's success.

Explanation

The main point Eric Li (2011) wants to communicate with his story about the rise of Qiu He is that China has systematically promoted its most creative and skilled government officials to the highest levels of government. This implies that the Chinese Communist Party values talent and innovation in its leadership positions, and this is a key factor in China's success.

38. IKEA knew that joining India’s Rugmark certification program would mean it could not be accused of selling any rugs that had been produced by child labor.

True

False

The statement suggests that IKEA joined India's Rugmark certification program to avoid accusations of selling rugs produced by child labor. However, the correct answer is False because the statement does not provide any information about whether IKEA joined the certification program or not.

Explanation

The statement suggests that IKEA joined India's Rugmark certification program to avoid accusations of selling rugs produced by child labor. However, the correct answer is False because the statement does not provide any information about whether IKEA joined the certification program or not.

39. In the BCG Global Challengers report, both of the Southeast Asian firms among the 13 newcomers were categorized under which of the three main themes among newcomers?

Capturing middle class consumers

Meeting digitial needs

Building and supplying the world

None of the above

The BCG Global Challengers report categorized the Southeast Asian firms among the 13 newcomers under the theme of "Capturing middle class consumers." This suggests that these firms are focusing on targeting and serving the growing middle class population in their respective markets.

Explanation

The BCG Global Challengers report categorized the Southeast Asian firms among the 13 newcomers under the theme of "Capturing middle class consumers." This suggests that these firms are focusing on targeting and serving the growing middle class population in their respective markets.

40. Rodrik and Subramian (2003) feel obligated to address the question of endogeneity in their analysis of the impact of institutions on growth: What is the specific endogeneity problem they are concerned about?

Resource endowments generate both good institutions and economic growth.

People migrate from poor to rich countries.

Highly contagious diseases would affect the extent of colonial activity and economic growth.

Institutions may cause growth, but richer countries can afford to create and maintain higher quality institutions.

None of the above.

Rodrik and Subramian (2003) are concerned about the endogeneity problem of institutions causing growth. They argue that while institutions may have a positive impact on growth, it is also possible that richer countries are able to create and maintain higher quality institutions because they have more resources and wealth. This creates a potential bias in the analysis, as the relationship between institutions and growth may be influenced by the wealth of a country. Therefore, they feel obligated to address this endogeneity issue in their analysis.

Explanation

Rodrik and Subramian (2003) are concerned about the endogeneity problem of institutions causing growth. They argue that while institutions may have a positive impact on growth, it is also possible that richer countries are able to create and maintain higher quality institutions because they have more resources and wealth. This creates a potential bias in the analysis, as the relationship between institutions and growth may be influenced by the wealth of a country. Therefore, they feel obligated to address this endogeneity issue in their analysis.

41. MacIntyre (2001) argues that, of the four main Southeast Asian countries, the country with the most veto points at the time of the crisis was:

Indonesia

Philippines

Malaysia

Thailand

MacIntyre (2001) argues that Thailand had the most veto points among the four main Southeast Asian countries during the crisis. Veto points refer to the number of institutional actors or decision-making bodies that possess the power to block or veto policy changes. This suggests that Thailand had a more complex and fragmented political system compared to the other countries, with multiple actors having the ability to influence and hinder policy decisions.

Explanation

MacIntyre (2001) argues that Thailand had the most veto points among the four main Southeast Asian countries during the crisis. Veto points refer to the number of institutional actors or decision-making bodies that possess the power to block or veto policy changes. This suggests that Thailand had a more complex and fragmented political system compared to the other countries, with multiple actors having the ability to influence and hinder policy decisions.

42. Fisman and Khanna (2004) test their theory with a Dependent Variable measuring whether or not a business group entered a particular Indian state.

True

False

The given answer is False because the explanation states that Fisman and Khanna (2004) tested their theory with a Dependent Variable measuring whether or not a business group entered a particular Indian state. This implies that the theory was tested based on the presence or absence of business groups in a state, not whether or not they entered a state.

Explanation

The given answer is False because the explanation states that Fisman and Khanna (2004) tested their theory with a Dependent Variable measuring whether or not a business group entered a particular Indian state. This implies that the theory was tested based on the presence or absence of business groups in a state, not whether or not they entered a state.

43. Which of the following best characterizes the results in Kogut and Singh (1988)?

Multinational enterprises are more likely to choose to enter a country through an acquisition than a greenfield investment when Uncertainty Avoidance is a greater

Multinational enterprises are more likely to choose to enter a country through a joint venture than an acquisition when Uncertainty Avoidance is a greater

Multinational enterprises are more likely to choose to enter a country through a greenfield investment than a joint venture when Uncertainty Avoidance is a greater

The analyses did not provide any evidence that Uncertainty Avoidance has any effect on entry mode decision

None of the above

The correct answer suggests that in Kogut and Singh's study, multinational enterprises are more likely to choose to enter a country through a joint venture than an acquisition when Uncertainty Avoidance is greater. This means that when there is a higher level of uncertainty and risk in a foreign market, companies prefer to form partnerships or collaborations with local firms rather than acquiring existing businesses. This strategy allows them to share risks and resources, and gain local knowledge and expertise, which helps them navigate the uncertain business environment more effectively.

Explanation

The correct answer suggests that in Kogut and Singh's study, multinational enterprises are more likely to choose to enter a country through a joint venture than an acquisition when Uncertainty Avoidance is greater. This means that when there is a higher level of uncertainty and risk in a foreign market, companies prefer to form partnerships or collaborations with local firms rather than acquiring existing businesses. This strategy allows them to share risks and resources, and gain local knowledge and expertise, which helps them navigate the uncertain business environment more effectively.

44. Countries that ratified the ILO’s Convention 138 were all certified to have eliminated the problem of child labor within their borders.

True

False

The statement suggests that countries that ratified the ILO's Convention 138 have eliminated the problem of child labor within their borders. However, this is not necessarily true. Ratifying the convention means that a country has agreed to certain standards and principles regarding child labor, but it does not guarantee that the problem has been completely eliminated. The certification process involves various factors and assessments, and not all countries that ratified the convention may have successfully eliminated child labor. Therefore, the answer is false.

Explanation

The statement suggests that countries that ratified the ILO's Convention 138 have eliminated the problem of child labor within their borders. However, this is not necessarily true. Ratifying the convention means that a country has agreed to certain standards and principles regarding child labor, but it does not guarantee that the problem has been completely eliminated. The certification process involves various factors and assessments, and not all countries that ratified the convention may have successfully eliminated child labor. Therefore, the answer is false.

45. Among the explanations offered by Indian managers and executives in Fisman and Khanna (2004) for why group affiliated firms are more likely to locate in underdeveloped states, which of the following do the authors say is not consistent with their core hypothesis that this happens because these firms were good at overcoming market failures.

Weak local markets for financing

Weak local development of supporting industries

Weak local development of infrastructure

Weak local markets for human resources

All of the above explanations are consistent with the core hypothesis in Fisman and Khanna (2004)

The authors state that all of the explanations offered by Indian managers and executives in Fisman and Khanna (2004) are consistent with their core hypothesis that group affiliated firms are more likely to locate in underdeveloped states because these firms are good at overcoming market failures. This means that weak local markets for financing, weak local development of supporting industries, weak local development of infrastructure, and weak local markets for human resources all contribute to the likelihood of group affiliated firms locating in underdeveloped states.

Explanation

The authors state that all of the explanations offered by Indian managers and executives in Fisman and Khanna (2004) are consistent with their core hypothesis that group affiliated firms are more likely to locate in underdeveloped states because these firms are good at overcoming market failures. This means that weak local markets for financing, weak local development of supporting industries, weak local development of infrastructure, and weak local markets for human resources all contribute to the likelihood of group affiliated firms locating in underdeveloped states.

46. Which of the following best reflects how the data on entry mode decisions by Japanese multinational enterprises influences the overall study findings in Kogut and Singh (1988)?

The evidence in favor of the paper's hypotheses disappears entirely when Japan is removed

The evidence in favor of the paper's hypotheses appears only when Japan is removed

The studied relationship between culture, as studied in this paper, and entry mode choice is reversed in the data for Japan

The relationship between culture, as studied in this paper, and entry mode choice is relatively consistent for Japan and the rest of the sample

None of the above

The correct answer suggests that the relationship between culture and entry mode choice is consistent for both Japan and the rest of the sample. This means that the findings of the study hold true for Japanese multinational enterprises as well as for other multinational enterprises in the sample. The evidence in favor of the paper's hypotheses remains consistent even when Japan is included in the analysis.

Explanation

The correct answer suggests that the relationship between culture and entry mode choice is consistent for both Japan and the rest of the sample. This means that the findings of the study hold true for Japanese multinational enterprises as well as for other multinational enterprises in the sample. The evidence in favor of the paper's hypotheses remains consistent even when Japan is included in the analysis.

47. In his "Lessons" article, Stiglitz argues that key government policies that characterized the East Asian Miracle included all but which of the following?

Promotion of export-orientation through infrastructure and preferential access to capital

Exclusion of the private sector from non-productive areas like real estate

Investing in human capital development

Promotion of technology programs to provide research and development to the private sector

All of the above were said by Stiglitz to be key to the Asian Miracle

In his "Lessons" article, Stiglitz argues that key government policies that characterized the East Asian Miracle included promotion of export-orientation through infrastructure and preferential access to capital, investing in human capital development, and promotion of technology programs to provide research and development to the private sector. However, Stiglitz did not mention the exclusion of the private sector from non-productive areas like real estate as a key policy in the Asian Miracle.

Explanation

In his "Lessons" article, Stiglitz argues that key government policies that characterized the East Asian Miracle included promotion of export-orientation through infrastructure and preferential access to capital, investing in human capital development, and promotion of technology programs to provide research and development to the private sector. However, Stiglitz did not mention the exclusion of the private sector from non-productive areas like real estate as a key policy in the Asian Miracle.

48. In Porter's "New global strategies" piece, which of the following does he argue is a constructive strategy for company wishing to be an innovation leader?

Lobbying against home country regulation that limit strategic options

Maintaining strong leverage over suppliers

Seeking out customers that are particularly difficult to serve well

Seeking out countries with low taxes and regulations

None of the above

In Porter's "New global strategies" piece, he argues that seeking out customers that are particularly difficult to serve well is a constructive strategy for a company wishing to be an innovation leader. By targeting customers with unique needs or challenges, a company can differentiate itself from competitors and develop innovative solutions to meet those specific demands. This approach allows the company to become a leader in serving these difficult customers and gain a competitive advantage in the market.

Explanation

In Porter's "New global strategies" piece, he argues that seeking out customers that are particularly difficult to serve well is a constructive strategy for a company wishing to be an innovation leader. By targeting customers with unique needs or challenges, a company can differentiate itself from competitors and develop innovative solutions to meet those specific demands. This approach allows the company to become a leader in serving these difficult customers and gain a competitive advantage in the market.

49. Rodrik and Subramian (2003) conclude from their econometric analysis that:

The impact of institutions on national wealth is conditional on geography.

Only institutions have a direct positive effect on national wealth.

Integration has weak indirect effects on growth, but strong direct effect

All three main factors discussed in the paper have significant direct effects on national wealth.

None of the above

The correct answer suggests that according to Rodrik and Subramanian's econometric analysis, only institutions have a direct positive effect on national wealth. This means that the presence and quality of institutions, such as the rule of law, property rights, and governance, play a crucial role in determining a country's wealth. Other factors, such as geography and integration, may have indirect effects on growth, but institutions are the primary driver of national wealth.

Explanation

The correct answer suggests that according to Rodrik and Subramanian's econometric analysis, only institutions have a direct positive effect on national wealth. This means that the presence and quality of institutions, such as the rule of law, property rights, and governance, play a crucial role in determining a country's wealth. Other factors, such as geography and integration, may have indirect effects on growth, but institutions are the primary driver of national wealth.

50. What does it mean when Rodrik and Subramanian say that geography is an exogenous factor in their analysis of the factors that shape national wealth?

Geography has no effect on national wealth.

Geography's effect on national wealth is indirect.

Geography is not itself shaped by national wealth.

Geography does not change over time.

None of the above.

Rodrik and Subramanian argue that geography is an exogenous factor in their analysis, which means that it is not influenced or shaped by national wealth. In other words, the geographical characteristics of a country, such as its location, climate, natural resources, and terrain, are not determined by the level of national wealth. This implies that a country's wealth or poverty cannot be solely attributed to its geographical features, but rather to other endogenous factors such as governance, institutions, and policies.

Explanation

Rodrik and Subramanian argue that geography is an exogenous factor in their analysis, which means that it is not influenced or shaped by national wealth. In other words, the geographical characteristics of a country, such as its location, climate, natural resources, and terrain, are not determined by the level of national wealth. This implies that a country's wealth or poverty cannot be solely attributed to its geographical features, but rather to other endogenous factors such as governance, institutions, and policies.

51. MacIntyre (2001) assigns two veto points for Malaysia to represent the dueling policy positions of Prime Minister Mahathir and his Finance Minister Anwar Ibrahim but reduces this to one when Mahathir had Anwar fired and arrested in the second half of 1998.

True

False

The statement is false because MacIntyre (2001) assigns two veto points for Malaysia to represent the dueling policy positions of Prime Minister Mahathir and his Finance Minister Anwar Ibrahim, regardless of Anwar's firing and arrest in the second half of 1998.

Explanation

The statement is false because MacIntyre (2001) assigns two veto points for Malaysia to represent the dueling policy positions of Prime Minister Mahathir and his Finance Minister Anwar Ibrahim, regardless of Anwar's firing and arrest in the second half of 1998.

52. Stiglitz (2001) highlights the positive effect of a government postal savings program for people in the countryside in which fast growing Asian country?

Singapore

Malaysia

Japan

China

None of the above

Stiglitz (2001) highlights the positive effect of a government postal savings program for people in the countryside in Japan.

Explanation

Stiglitz (2001) highlights the positive effect of a government postal savings program for people in the countryside in Japan.

53. Which of the below statements is not supported by statistical evidence presented in Stuart and Wang (2016)?

Politically connected entrepreneurs pay more in profit taxes than entrepreneurs without political connections.

Politically connected entrepreneurs are more likely to misreport their profits to the Chinese government than entrepreneurs without political connections.

Politically connected entrepreneurs are more likely to receive innovation grants from the government than entrepreneurs without political connections.

None of the above statements is supported in Stuart and Wang (2016).

All of the above statements are supported in Stuart and Wang (2016).

The correct answer is "Politically connected entrepreneurs pay more in profit taxes than entrepreneurs without political connections." This statement is not supported by statistical evidence presented in Stuart and Wang (2016). The study does not provide any data or findings that suggest politically connected entrepreneurs pay more in profit taxes compared to their counterparts without political connections.

Explanation

The correct answer is "Politically connected entrepreneurs pay more in profit taxes than entrepreneurs without political connections." This statement is not supported by statistical evidence presented in Stuart and Wang (2016). The study does not provide any data or findings that suggest politically connected entrepreneurs pay more in profit taxes compared to their counterparts without political connections.

54. Which of the following most accurately reflects the hypotheses presented in the Taussig and Delios (2015) article?

A firm's host country resources are worth MORE when host country contracting institutions and when host country financial institutions are MORE developed.

A firm's host country resources are worth LESS when host country contracting institutions and when host country financial institutions are MORE developed.

A firm's host country resources are worth MORE when host country contracting institution are MORE developed and when host country financial institutions are LESS developed.

A firm's host country resources are worth MORE when host country contracting institution are LESS developed and when host country financial institutions are MORE developed.

The correct answer states that a firm's host country resources are worth more when host country contracting institutions are less developed and when host country financial institutions are more developed. This implies that when contracting institutions are less developed, there may be less competition and more opportunities for firms to access and utilize resources. On the other hand, when financial institutions are more developed, firms may have better access to capital and financial resources, enhancing the value of their host country resources.

Explanation

The correct answer states that a firm's host country resources are worth more when host country contracting institutions are less developed and when host country financial institutions are more developed. This implies that when contracting institutions are less developed, there may be less competition and more opportunities for firms to access and utilize resources. On the other hand, when financial institutions are more developed, firms may have better access to capital and financial resources, enhancing the value of their host country resources.

55. What is the label given to the type of foreign direct investment when a firm invests in a new country in order to strengthen its innovation capabiliteies?

Market seeking

Resource seeking

Efficiency seeking

Strategic asset seeking

None of the above

Strategic asset seeking is the label given to the type of foreign direct investment when a firm invests in a new country in order to strengthen its innovation capabilities. This means that the firm is seeking to acquire or develop strategic assets such as technology, intellectual property, or research and development capabilities in the new country. This type of investment is driven by the desire to gain a competitive advantage through innovation and enhance the firm's long-term growth prospects.

Explanation

Strategic asset seeking is the label given to the type of foreign direct investment when a firm invests in a new country in order to strengthen its innovation capabilities. This means that the firm is seeking to acquire or develop strategic assets such as technology, intellectual property, or research and development capabilities in the new country. This type of investment is driven by the desire to gain a competitive advantage through innovation and enhance the firm's long-term growth prospects.

56. Which of the following most accurately reflects Singaporean trade policy over the country's history?

Singapore has been one of the most open economies in the world since its founding.

Singapore experimented briefly with significant trade restrictions in its earliest years, but has since been a very open economy.

Singapore has introduced more trade restrictions over time.

Singapore has been one of the least open economies in the world since its founding.

Singapore initially implemented trade restrictions in its early years, but it quickly shifted towards becoming a very open economy. This is evident from its history, as it actively pursued free trade agreements, established special economic zones, and implemented policies to attract foreign investment. As a result, Singapore has become one of the most open economies in the world, promoting international trade and economic growth.

Explanation

Singapore initially implemented trade restrictions in its early years, but it quickly shifted towards becoming a very open economy. This is evident from its history, as it actively pursued free trade agreements, established special economic zones, and implemented policies to attract foreign investment. As a result, Singapore has become one of the most open economies in the world, promoting international trade and economic growth.

57. Porter and Kramer (2005) argue that companies are best served by seeing social responsibility as being primarily about:

Building shared social value.

Damage control for harm caused to society.

Public relations that improve firm reputation.

None of the above.

Porter and Kramer (2005) argue that companies should prioritize building shared social value as their main focus of social responsibility. This means that companies should aim to create economic value while also addressing social and environmental issues. By actively contributing to the well-being of society, companies can enhance their long-term success and create positive impacts that benefit both the company and the community. This approach goes beyond damage control or public relations, as it emphasizes the creation of sustainable value that is beneficial for all stakeholders involved.

Explanation

Porter and Kramer (2005) argue that companies should prioritize building shared social value as their main focus of social responsibility. This means that companies should aim to create economic value while also addressing social and environmental issues. By actively contributing to the well-being of society, companies can enhance their long-term success and create positive impacts that benefit both the company and the community. This approach goes beyond damage control or public relations, as it emphasizes the creation of sustainable value that is beneficial for all stakeholders involved.

58. Which Asian country that grew more than 5 percent from 1970 to 1993 had the lowest level of income inequality inequality? Which Asian country in this group had the highest?

Japan had the lowest and Malaysia had the highest

Japan had the lowest and Singapore had the highest

Indonesia had the lowest and Singapore had the highest

Bangladesh had the lowest and Philippines had the highest

None of the above

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Explanation

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59. How do Rodrik and Subramian (2003) deal with the issue of endogeneity in their statistical analysis?

They carefully code and test each institution separately.

They don't say.

They use instruments used in previous research.

There are no statistical methods for dealing with the issue of endogeneity.

Rodrik and Subramanian (2003) address the issue of endogeneity in their statistical analysis by utilizing instruments that have been previously used in research. This implies that they employ variables or factors that are known to have a causal relationship with the endogenous variable of interest but are not affected by it. By incorporating these instruments, they aim to mitigate the potential bias caused by endogeneity and strengthen the validity of their analysis.

Explanation

Rodrik and Subramanian (2003) address the issue of endogeneity in their statistical analysis by utilizing instruments that have been previously used in research. This implies that they employ variables or factors that are known to have a causal relationship with the endogenous variable of interest but are not affected by it. By incorporating these instruments, they aim to mitigate the potential bias caused by endogeneity and strengthen the validity of their analysis.

60. Which of Hofstede's 5 independent dimensions of national culture was based on questions in the Chinese Value Survey and relates to the teachings of Confucius?

Long-term vs. Short-term Orientation

Uncertainty Avoidance

Masculinity vs. Femininity

Individualism

Power Distance

Long-term vs. Short-term Orientation is the correct answer because this dimension of national culture, based on the Chinese Value Survey, relates to the teachings of Confucius. Confucianism emphasizes long-term goals, perseverance, and thriftiness, which align with a long-term orientation. This dimension reflects a society's focus on either immediate gratification and short-term gains or long-term planning and delayed gratification.

Explanation

Long-term vs. Short-term Orientation is the correct answer because this dimension of national culture, based on the Chinese Value Survey, relates to the teachings of Confucius. Confucianism emphasizes long-term goals, perseverance, and thriftiness, which align with a long-term orientation. This dimension reflects a society's focus on either immediate gratification and short-term gains or long-term planning and delayed gratification.

61. Which of the following best describes the dependent variable used in Taussig and Delios (2015)?

The return on an individual private equity deal

The profitability of an individual private equity firm

The capital raised by an individual private equity firm

The reputation of an individual private equity firm

None of the above

In the study by Taussig and Delios (2015), the dependent variable used is the profitability of an individual private equity firm. This means that the researchers are interested in measuring and analyzing the financial performance of these firms. They want to understand how profitable these firms are and what factors may influence their profitability. The return on an individual private equity deal, the capital raised by a firm, and the reputation of a firm are all related variables, but they are not the main focus of the study. Therefore, the correct answer is the profitability of an individual private equity firm.

Explanation

In the study by Taussig and Delios (2015), the dependent variable used is the profitability of an individual private equity firm. This means that the researchers are interested in measuring and analyzing the financial performance of these firms. They want to understand how profitable these firms are and what factors may influence their profitability. The return on an individual private equity deal, the capital raised by a firm, and the reputation of a firm are all related variables, but they are not the main focus of the study. Therefore, the correct answer is the profitability of an individual private equity firm.

62. Which of the following is the main reason that Bernard and Ravenhill (1995) give for why domestic ownership of firms is probably better for a country's economic development than foreign ownership?

Domestic firms are more likely than foreign firms to allow new technologies to spillover to other firms in the host country.

Domestic firms tend to pay higher levels of taxes to the host country government than foreign firms.

Domestic firms care more about host country economic development than do foreign firms.

The profits in the host country of domestic firms count more towards economic development than do those of foreign firms.

None of the above.

The main reason given by Bernard and Ravenhill (1995) for why domestic ownership of firms is probably better for a country's economic development than foreign ownership is that domestic firms are more likely than foreign firms to allow new technologies to spillover to other firms in the host country. This implies that domestic firms contribute to the overall technological advancement and innovation within the country, which in turn stimulates economic growth and development.

Explanation

The main reason given by Bernard and Ravenhill (1995) for why domestic ownership of firms is probably better for a country's economic development than foreign ownership is that domestic firms are more likely than foreign firms to allow new technologies to spillover to other firms in the host country. This implies that domestic firms contribute to the overall technological advancement and innovation within the country, which in turn stimulates economic growth and development.

63. Stiglitz (2001) argues that economic success in fast growing Asian economies led to their governments to become more confident and therefore to increase their role in guiding resource allocation.

True

False

Stiglitz (2001) argues that economic success in fast growing Asian economies did not lead to their governments becoming more confident and increasing their role in guiding resource allocation.

Explanation

Stiglitz (2001) argues that economic success in fast growing Asian economies did not lead to their governments becoming more confident and increasing their role in guiding resource allocation.

64. Listed firms affiliated with the Bakrie brothers and Julius Tahija were given scores of one in the Castle Group measure of political connectedness used by Fisman (2001) because of their strong ties to Suharto.

True

False

The explanation for the given answer "False" is that the statement mentions that the listed firms affiliated with the Bakrie brothers and Julius Tahija were given scores of one in the Castle Group measure of political connectedness used by Fisman (2001) because of their strong ties to Suharto. However, without any additional information or context, it is not possible to determine the accuracy of this statement. Therefore, the answer is false as we cannot confirm the given statement's validity.

Explanation

The explanation for the given answer "False" is that the statement mentions that the listed firms affiliated with the Bakrie brothers and Julius Tahija were given scores of one in the Castle Group measure of political connectedness used by Fisman (2001) because of their strong ties to Suharto. However, without any additional information or context, it is not possible to determine the accuracy of this statement. Therefore, the answer is false as we cannot confirm the given statement's validity.

65. Rodrik and Subramian (2003) test the impact of three factors on long-term economic growth. What are they?

Culture, colonial influence, economic openness

Geography, culture, foreign investment

Geography, integration, institutions

Size of domestic market, quality of infrastructure, institutions

None of the above

Rodrik and Subramian (2003) tested the impact of three factors on long-term economic growth: geography, integration, and institutions. This means that they examined how geographical factors, such as natural resources and climate, influenced economic growth. They also looked at the level of integration a country had in the global economy, including trade and investment flows. Lastly, they analyzed the role of institutions, such as the legal and political framework, in promoting or hindering economic growth.

Explanation

Rodrik and Subramian (2003) tested the impact of three factors on long-term economic growth: geography, integration, and institutions. This means that they examined how geographical factors, such as natural resources and climate, influenced economic growth. They also looked at the level of integration a country had in the global economy, including trade and investment flows. Lastly, they analyzed the role of institutions, such as the legal and political framework, in promoting or hindering economic growth.

66. Which of the following is NOT one of the pressures faced by MNEs (hint: and touched on during the Week 6 lecture session) that counterbalances pressures for local responsiveness to host country conditions?

Cost reduction

Multinational competitors

Differences in local distribution channels

Need for raw materials and energy

None of the above

The pressures faced by MNEs that counterbalance pressures for local responsiveness to host country conditions include cost reduction, multinational competitors, and the need for raw materials and energy. However, differences in local distribution channels do not counterbalance these pressures. This means that MNEs still need to adapt to local distribution channels in order to be responsive to host country conditions.

Explanation

The pressures faced by MNEs that counterbalance pressures for local responsiveness to host country conditions include cost reduction, multinational competitors, and the need for raw materials and energy. However, differences in local distribution channels do not counterbalance these pressures. This means that MNEs still need to adapt to local distribution channels in order to be responsive to host country conditions.

67. Which of the following best describes Singapore's Financial Account over the period of 2006-2013?

Consistent inflows of FDI and portfolio investments

Consistent inflow of FDI but outflow of portfolio investments

Consistent outflow of FDI but inflow of portfolio investments

Consistent outflow of FDI and portfolio investments

The correct answer is consistent inflow of FDI but outflow of portfolio investments. This means that Singapore consistently received foreign direct investment (FDI) during the period of 2006-2013, indicating that foreign investors were investing in businesses and projects within Singapore. However, there was also a consistent outflow of portfolio investments, which suggests that Singaporean investors were investing in foreign financial assets such as stocks and bonds. This combination indicates that Singapore was attracting foreign investment for its businesses and projects, but its own investors were diversifying their portfolios by investing abroad.

Explanation

The correct answer is consistent inflow of FDI but outflow of portfolio investments. This means that Singapore consistently received foreign direct investment (FDI) during the period of 2006-2013, indicating that foreign investors were investing in businesses and projects within Singapore. However, there was also a consistent outflow of portfolio investments, which suggests that Singaporean investors were investing in foreign financial assets such as stocks and bonds. This combination indicates that Singapore was attracting foreign investment for its businesses and projects, but its own investors were diversifying their portfolios by investing abroad.

68. Which of the following is NOT one of the reasons cited in Stiglitz (2001) for why he thought growth in Asia after the crisis might not be as fast as growth before the crisis?

Growing inequalities would increasingly require government to focus more on redistribution of growth benefits instead of maximizing growth.

Opening up financial markets to foreign capital made it more difficult to pursue high leverage growth strategies and more likely that domestic companies would have to rely on their own internal funds for growth.

Governments did so much deregulating already in the lead up to the crisis and immediately after the crisis that there are not many more benefits to be had from further deregulation.

Stiglitz (2001) cites all of the above.

Stiglitz (2001) cites none of the above.

The reason cited in Stiglitz (2001) for why he thought growth in Asia after the crisis might not be as fast as growth before the crisis is that governments did so much deregulating already in the lead up to the crisis and immediately after the crisis that there are not many more benefits to be had from further deregulation.

Explanation

The reason cited in Stiglitz (2001) for why he thought growth in Asia after the crisis might not be as fast as growth before the crisis is that governments did so much deregulating already in the lead up to the crisis and immediately after the crisis that there are not many more benefits to be had from further deregulation.

69. Which of the following accurately describes how the data used in Henisz (2000) represents the country of Papua New Guinea?

Policy change is relatively very EASY and corruption is HIGHER than expected

Policy change is relatively very EASY and corruption is LOWER than expected

Policy change is relatively DIFFICULT and corruption is HIGHER than expected

Policy change is relatively DIFFICULT and corruption is LOWER than expected

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Explanation

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70. Which of the following do Kogut and Singh (1988) say about the Hofstede measures of culture that they use in their study?

The Hofstede measure is valuable for comparisons across countries, but not for single country studies

The Hofstede measure may not be perfect, but it is tailor made for their study

The flaws in the Hofstede measure make it more difficult for them to find evidence in favvor of their hypotheses

The Hofstede measure was constructed by surveying local firms in many different countries

None of the above

Kogut and Singh (1988) state that the flaws in the Hofstede measure make it more difficult for them to find evidence in favor of their hypotheses. This suggests that they acknowledge the limitations of the Hofstede measure in their study and recognize that these limitations may hinder their ability to support their hypotheses.

Explanation

Kogut and Singh (1988) state that the flaws in the Hofstede measure make it more difficult for them to find evidence in favor of their hypotheses. This suggests that they acknowledge the limitations of the Hofstede measure in their study and recognize that these limitations may hinder their ability to support their hypotheses.

71. Which of the following countries does Bernard and Ravenhill (1995) argue to be most dependent on foreign direct investment?

Japan

South Korea

Taiwan

Malaysia

Bernard and Ravenhill (1995) argue that Malaysia is the most dependent on foreign direct investment. The explanation for this could be that Malaysia has actively sought foreign investment to drive its economic growth and development. The country has implemented various policies and incentives to attract foreign investors, such as tax breaks and streamlined regulations. Additionally, Malaysia has a well-developed infrastructure and a skilled workforce, making it an attractive destination for foreign companies looking to expand their operations.

Explanation

Bernard and Ravenhill (1995) argue that Malaysia is the most dependent on foreign direct investment. The explanation for this could be that Malaysia has actively sought foreign investment to drive its economic growth and development. The country has implemented various policies and incentives to attract foreign investors, such as tax breaks and streamlined regulations. Additionally, Malaysia has a well-developed infrastructure and a skilled workforce, making it an attractive destination for foreign companies looking to expand their operations.

72. Which countries were the five countries that settle on the Plaza Agreement in 1985 on a strategy for how to depreciate the US dollar relative to its most important trading partners?

Indonesia, Malaysia, Singapore, Thailand, and the Philippines

Japan, South Korea, Taiwan, Malaysia, and Thailand

United States, Canada, Japan, South Korea, Taiwan

United States, United Kingdom, Germany, France, and Japan

None of the above

The Plaza Agreement in 1985 was an agreement between the United States, United Kingdom, Germany, France, and Japan. These five countries came together to strategize on how to depreciate the US dollar relative to its most important trading partners. By depreciating the US dollar, they aimed to improve their own economies and address the global trade imbalances at the time.

Explanation

The Plaza Agreement in 1985 was an agreement between the United States, United Kingdom, Germany, France, and Japan. These five countries came together to strategize on how to depreciate the US dollar relative to its most important trading partners. By depreciating the US dollar, they aimed to improve their own economies and address the global trade imbalances at the time.

73. According to the Freeport Indonesia case, which of the following best describes the big decision faced by Freeport's management in March 1996?

Whether or not to invest a substantial amount of money into building a large new copper processing factory

Whether or not to expand the Grasberg mine into underground mining operations

Whether or not to invest into digging a new open pit mine near to the Grasberg mine

Whether or not to invest in the ability to extract copper out of ore less rich in copper

In the Freeport Indonesia case, the big decision faced by Freeport's management in March 1996 was whether or not to invest in the ability to extract copper out of ore less rich in copper. This suggests that Freeport had to decide whether to invest in technology or methods that would allow them to extract copper from lower-grade ore, which would potentially be less profitable compared to extracting copper from ore with higher copper content.

Explanation

In the Freeport Indonesia case, the big decision faced by Freeport's management in March 1996 was whether or not to invest in the ability to extract copper out of ore less rich in copper. This suggests that Freeport had to decide whether to invest in technology or methods that would allow them to extract copper from lower-grade ore, which would potentially be less profitable compared to extracting copper from ore with higher copper content.

74. The BCG Global Challengers report makes which of the following claims about the tendency of both state-owned and concentrated family owned members of the global challengers list?

Their profits are lower

They are more likely to be in natural resources sectors

They are more domestically oriented

They are more likely to expand through acquisitions

The BCG Global Challengers report claims that both state-owned and concentrated family owned members of the global challengers list are more domestically oriented. This means that these companies focus more on their domestic markets rather than expanding internationally.

Explanation

The BCG Global Challengers report claims that both state-owned and concentrated family owned members of the global challengers list are more domestically oriented. This means that these companies focus more on their domestic markets rather than expanding internationally.

75. MacIntyre (2001) argues that the intermediate number of veto points in the Philippines helps to explain why its economic growth and ability to attract foreign direct investment had been among the best in Southeast Asia over the past two decades.

True

False

The given statement is False. MacIntyre (2001) argues that the high number of veto points in the Philippines actually hinders its economic growth and ability to attract foreign direct investment. The presence of multiple veto points makes it difficult for the government to implement policies and reforms, leading to a slow and inefficient decision-making process. This can discourage foreign investors and hinder economic development. Therefore, the intermediate number of veto points in the Philippines does not help to explain its economic growth and ability to attract foreign direct investment.

Explanation

The given statement is False. MacIntyre (2001) argues that the high number of veto points in the Philippines actually hinders its economic growth and ability to attract foreign direct investment. The presence of multiple veto points makes it difficult for the government to implement policies and reforms, leading to a slow and inefficient decision-making process. This can discourage foreign investors and hinder economic development. Therefore, the intermediate number of veto points in the Philippines does not help to explain its economic growth and ability to attract foreign direct investment.

76. The fact that Indonesia has a huge population that is spread across many islands and, more importantly, many provinces led by powerful local leaders made it an ideal setting for the Fisman (2001) study of the value of political connections.

True

False

The explanation for the answer "False" is that the given statement suggests that Indonesia's large population and decentralized governance structure makes it an ideal setting for studying the value of political connections. However, the answer is false because the statement does not provide any evidence or reasoning to support this claim. It is important to critically evaluate the information provided and not assume that a certain condition automatically makes a setting ideal for a specific study.

Explanation

The explanation for the answer "False" is that the given statement suggests that Indonesia's large population and decentralized governance structure makes it an ideal setting for studying the value of political connections. However, the answer is false because the statement does not provide any evidence or reasoning to support this claim. It is important to critically evaluate the information provided and not assume that a certain condition automatically makes a setting ideal for a specific study.

77. Stuart and Wang (2016) provide statistical support for which of the following statements about China's Innofund program?

Grants are more likely to go to funds operating in industries highlighted by China's government as important to the country's economic development.

Grants are more likely to go to entrepreneurs who are personally more dedicated to the country's economic development.

Grants are more likely to go to entrepreneurs in industries closer to the global innovation frontier.

Grants are more likely to go to entrepreneurs who report different profit levels to different government ministries in China.

None of the above.

Stuart and Wang (2016) provide statistical support for the statement that grants are more likely to go to entrepreneurs who report different profit levels to different government ministries in China. This suggests that entrepreneurs who manipulate their reported profit levels may have a higher chance of receiving grants from the Innofund program.

Explanation

Stuart and Wang (2016) provide statistical support for the statement that grants are more likely to go to entrepreneurs who report different profit levels to different government ministries in China. This suggests that entrepreneurs who manipulate their reported profit levels may have a higher chance of receiving grants from the Innofund program.

78. Which of the following is NOT one of the defining characteristics listed by the authors by Taussig and Delios (2015) as differentiating between private equity in emerging economies and private equity as it has traditionally been practiced in advanced economies?

Venture capital makes up a larger share of private equity activity in advanced economies than in emerging economies.

Private equity firms in advanced economies find it more difficult and less useful to replace the managers of their investee companies than do their counterparts in emerging economies.

Private equity firms in advanced economies are more likely to take a stake of at least 50 percent in their investees than their counterparts in emerging economies.

Private equity firms find it easier to use debt when investing in advanced economies than when investing in emerging economies.

Private equity firms in advanced economies find it more difficult and less useful to replace the managers of their investee companies than do their counterparts in emerging economies. This suggests that one of the defining characteristics of private equity in advanced economies is the reluctance to replace managers, whereas in emerging economies, private equity firms are more inclined to do so. This difference may be attributed to cultural, legal, or operational factors that vary between advanced and emerging economies.

Explanation

Private equity firms in advanced economies find it more difficult and less useful to replace the managers of their investee companies than do their counterparts in emerging economies. This suggests that one of the defining characteristics of private equity in advanced economies is the reluctance to replace managers, whereas in emerging economies, private equity firms are more inclined to do so. This difference may be attributed to cultural, legal, or operational factors that vary between advanced and emerging economies.

79. According to Hofstede, in which of the following countries are people most comfortable with inequality between people?

Japan

Hong Kong

Indonesia

China

China is the correct answer because according to Hofstede's cultural dimensions theory, China has a high power distance index. This means that people in China are more accepting and comfortable with social inequality and hierarchical structures. In such societies, there is a clear distinction between those in power and those who are not, and people generally accept and expect this inequality.

Explanation

China is the correct answer because according to Hofstede's cultural dimensions theory, China has a high power distance index. This means that people in China are more accepting and comfortable with social inequality and hierarchical structures. In such societies, there is a clear distinction between those in power and those who are not, and people generally accept and expect this inequality.

80. According to Porter in his "New global strategies" article, which component of his "National Diamond" is most likely to shape the product development paths of firms from a particular country?

Firm strategy, structure, and rivalry

Demand conditions

Related and supporting industries

Factor conditions

None of the above

According to Porter's "National Diamond" framework, demand conditions are most likely to shape the product development paths of firms from a particular country. This means that the characteristics and demands of the domestic market play a significant role in driving innovation and product development strategies. Firms are likely to respond to the unique needs and preferences of their local customers, which can lead to the development of new products and technologies. Additionally, strong domestic demand can also create incentives for firms to invest in research and development, further driving product development.

Explanation

According to Porter's "National Diamond" framework, demand conditions are most likely to shape the product development paths of firms from a particular country. This means that the characteristics and demands of the domestic market play a significant role in driving innovation and product development strategies. Firms are likely to respond to the unique needs and preferences of their local customers, which can lead to the development of new products and technologies. Additionally, strong domestic demand can also create incentives for firms to invest in research and development, further driving product development.

81. In Henisz (2000), the way that political hazards influence the choice of multinationals to enter a country through minority or majority ownership is tested using variables that are calculated at which of the following levels of analysis?

Country-specific venture

Multinational firm

Local country-specific venture partner

Host country

None of the above

The correct answer is host country. In Henisz (2000), the study examines how political hazards affect the decision of multinational corporations to enter a country through minority or majority ownership. The variables used in the analysis are calculated at the level of the host country. This suggests that the study focuses on understanding how political factors within the country influence the choice of ownership structure for multinational corporations.

Explanation

The correct answer is host country. In Henisz (2000), the study examines how political hazards affect the decision of multinational corporations to enter a country through minority or majority ownership. The variables used in the analysis are calculated at the level of the host country. This suggests that the study focuses on understanding how political factors within the country influence the choice of ownership structure for multinational corporations.

82. Which of the following predictions did Porter and Kramer (2005) make that proved to quite on target?

Abraaj Capital's investment into KESC would prove challenging due to the difficulty of reducing excess labor in a former state-owned enterprise.

Google's entry into China could be complicated by the feelings of US customers about the way business is done in China.

Freeport's relationship with the Indonesian military could hurt its relationship with indigenous people around the Grasberg mine.

American Rice's illegal incentive program for farmers in Vietnam would help them increase the quality and quantity of rice they put through their processing facilities, while also improving the lives of local farmers.

None of the above.

Porter and Kramer (2005) predicted that Google's entry into China could be complicated by the feelings of US customers about the way business is done in China. This means that they anticipated that US customers might have concerns or negative perceptions about the business practices and policies in China, which could impact Google's operations and reputation in the US market. This prediction proved to be quite accurate as Google faced criticism and backlash from US customers and human rights organizations for complying with Chinese censorship laws and restrictions on freedom of speech.

Explanation

Porter and Kramer (2005) predicted that Google's entry into China could be complicated by the feelings of US customers about the way business is done in China. This means that they anticipated that US customers might have concerns or negative perceptions about the business practices and policies in China, which could impact Google's operations and reputation in the US market. This prediction proved to be quite accurate as Google faced criticism and backlash from US customers and human rights organizations for complying with Chinese censorship laws and restrictions on freedom of speech.

83. How is political connectedness measured in Fisman (2001)?

Data on family ties to Suharto

A subjective index created by a consulting company

Data on cash payments to Suharto

Accounts of public appearances by firm managers with Suharto

None of the above

The correct answer is "A subjective index created by a consulting company." In Fisman (2001), the measurement of political connectedness is done through a subjective index that was created by a consulting company. This index likely includes various factors and indicators that assess the level of political connections a firm has, such as relationships with politicians, access to government resources, or influence over policy-making processes. This subjective index provides a quantifiable measure of political connectedness, allowing for comparisons and analysis across different firms or industries.

Explanation

The correct answer is "A subjective index created by a consulting company." In Fisman (2001), the measurement of political connectedness is done through a subjective index that was created by a consulting company. This index likely includes various factors and indicators that assess the level of political connections a firm has, such as relationships with politicians, access to government resources, or influence over policy-making processes. This subjective index provides a quantifiable measure of political connectedness, allowing for comparisons and analysis across different firms or industries.

84. The Economist "paper tiger" article claims all but which of the following to be true in China?

The private sector contributes about two thirds of China's GDP.

The return on assets of private firms in China is higher than that of state owned firms.

Private Chinese firms are able to invest in a wider range of eocnoimc sectors than foreign firms are in China.

All of the above.

None of the above.

Private Chinese firms are not able to invest in a wider range of economic sectors than foreign firms in China.

Explanation

Private Chinese firms are not able to invest in a wider range of economic sectors than foreign firms in China.

85. Which of the following accurately reflects the ways that Henisz (2000) believes the entry mode decision by multinational enterprises is shaped?

Choosing a MINORITY owned venture increases the chances of contractual hazards because it means greater need for negotiation with the local partner(s)

Choosing a MAJORITY owned venture increases the chances of contractual hazards because it means greater need for negotiation with the local partner(s)

Choosing a MINORITY owned venture decreases the chances of contractual hazards because it takes better advantage of the host country knowledge and capabilities of the local partners(s)

Choosing a MAJORITY owned venture decreases the chances of contractual hazards because it takes better advantage of the host country knowledge and capabilities of the local partners(s)

None of the above

According to Henisz (2000), choosing a MINORITY owned venture increases the chances of contractual hazards because it means greater need for negotiation with the local partner(s). This is because in a minority owned venture, the multinational enterprise has less control and decision-making power, which can lead to conflicts and difficulties in reaching agreements with the local partner(s).

Explanation

According to Henisz (2000), choosing a MINORITY owned venture increases the chances of contractual hazards because it means greater need for negotiation with the local partner(s). This is because in a minority owned venture, the multinational enterprise has less control and decision-making power, which can lead to conflicts and difficulties in reaching agreements with the local partner(s).

86. Which of the following best describes the type of cultural effect on a multinational enterprise's entry mode decision that Kogut and Singh (1988) study?

Host country culture

Home country culture

Distance between host country and home country culture

Distance between company-specific culture and host country culture

None of the above

Kogut and Singh (1988) study the effect of the distance between the host country and home country culture on a multinational enterprise's entry mode decision. This means that they investigate how the cultural differences between the country where the company is based and the country where it wants to expand influence its decision on how to enter the new market. They analyze how these cultural differences affect factors such as communication, negotiation, and adaptation strategies, ultimately shaping the entry mode chosen by the multinational enterprise.

Explanation

Kogut and Singh (1988) study the effect of the distance between the host country and home country culture on a multinational enterprise's entry mode decision. This means that they investigate how the cultural differences between the country where the company is based and the country where it wants to expand influence its decision on how to enter the new market. They analyze how these cultural differences affect factors such as communication, negotiation, and adaptation strategies, ultimately shaping the entry mode chosen by the multinational enterprise.

87. Which of the following does Karnani (2007) advocate for as a means for bettering the lives of the poor in India, in particular?

Innovation by multinationals to create new markets for consumption among the poor

Scaling up of microcredit programs to allow more women to start up their own sewing businesses

Greater focus on India's competitive advantages in skill intesnive industries like Information Technology

More efficient markets for financing the growth of companies

None of the above

Karnani (2007) advocates for more efficient markets for financing the growth of companies as a means for bettering the lives of the poor in India. This suggests that by improving the efficiency of markets in terms of financing, it would create opportunities for companies to grow and expand, which in turn can lead to job creation and economic development. This can potentially benefit the poor by providing them with better employment opportunities and improving their overall living standards.

Explanation

Karnani (2007) advocates for more efficient markets for financing the growth of companies as a means for bettering the lives of the poor in India. This suggests that by improving the efficiency of markets in terms of financing, it would create opportunities for companies to grow and expand, which in turn can lead to job creation and economic development. This can potentially benefit the poor by providing them with better employment opportunities and improving their overall living standards.

88. Which of the following is NOT an argument made by Karnani (2007)?

More efficient markets (e.g. product and capital markets) will help the poor

It is wrong to reduce quality in order to reduce prices when selling to the poor

The aggregated Bottom of the Pyramid market is much smaller than claimed by Prahalad

The poor are resiliant and creative entrepreneurs

None of the above

Karnani (2007) does not argue that the poor are resilient and creative entrepreneurs.

Explanation

Karnani (2007) does not argue that the poor are resilient and creative entrepreneurs.

89. According to Karnani (2007), which of the following is NOT a key element of Prahalad's Bottom of the Pyramid proposition?

Authentic corporate social responsibility is a crucial underlying motivator of effective Bottom of the Pyramid initiatives

Multinationals can better the lives of the poor through innovation in developing and selling products targetted at the Bottom of the Pyramid

Multinationals can play the leading role in developing markets at the Bottom of the Pyramid

Multinational can make significant profits from selling to markets at the Bottom of the Pyramid

None of the above

The correct answer is "Authentic corporate social responsibility is a crucial underlying motivator of effective Bottom of the Pyramid initiatives." This statement is not a key element of Prahalad's Bottom of the Pyramid proposition because it does not directly address the role of multinationals in improving the lives of the poor through innovation and market development. While corporate social responsibility is important, it is not specifically mentioned as a key element in Prahalad's proposition.

Explanation

The correct answer is "Authentic corporate social responsibility is a crucial underlying motivator of effective Bottom of the Pyramid initiatives." This statement is not a key element of Prahalad's Bottom of the Pyramid proposition because it does not directly address the role of multinationals in improving the lives of the poor through innovation and market development. While corporate social responsibility is important, it is not specifically mentioned as a key element in Prahalad's proposition.

90. According to the Freeport Indonesia case, which of the following is closest to the approximate percentage of total Freeport Indonesia (PT-FI) employees who were indigenous Irian Jayans?

10%

25%

50%

75%

90%

Based on the Freeport Indonesia case, it can be inferred that the approximate percentage of total Freeport Indonesia employees who were indigenous Irian Jayans is 10%.

Explanation

Based on the Freeport Indonesia case, it can be inferred that the approximate percentage of total Freeport Indonesia employees who were indigenous Irian Jayans is 10%.

91. According to the Freeport Indonesia case, what was the particularly visible environmntal problem Freeport Indonesia faced that would be greatly exacerbated by expansion of the Grasberg mine?

Increased pollution from trucks and other motorized traffic

Waste ore after extraction

Overburden storage

Dirt and soot on the neighboring glacier

None of the above

The particularly visible environmental problem that Freeport Indonesia faced, which would be greatly exacerbated by expansion of the Grasberg mine, was waste ore after extraction. This means that after the extraction process, there was a significant amount of waste ore that needed to be managed and disposed of properly. If the mine were to expand, the amount of waste ore generated would also increase, posing a greater challenge for Freeport Indonesia to handle and mitigate the environmental impact.

Explanation

The particularly visible environmental problem that Freeport Indonesia faced, which would be greatly exacerbated by expansion of the Grasberg mine, was waste ore after extraction. This means that after the extraction process, there was a significant amount of waste ore that needed to be managed and disposed of properly. If the mine were to expand, the amount of waste ore generated would also increase, posing a greater challenge for Freeport Indonesia to handle and mitigate the environmental impact.

92. Which of the following is not one of the five main growth strategies for new multinationals listed in the assigned Economist article?

Focusing on becoming a global leader in a narrow product category.

Capitalizing on local enginneering capabilities to do global scale innovation.

Capitalize on political connections at home and abroad.

Combine access to home country natural resource with first class marketing and distribution.

The correct answer is "Capitalize on political connections at home and abroad." This is not one of the five main growth strategies for new multinationals listed in the assigned Economist article. The article focuses on strategies such as becoming a global leader in a narrow product category, leveraging local engineering capabilities for global scale innovation, combining access to home country natural resources with first-class marketing and distribution. However, it does not mention capitalizing on political connections as a growth strategy.

Explanation

The correct answer is "Capitalize on political connections at home and abroad." This is not one of the five main growth strategies for new multinationals listed in the assigned Economist article. The article focuses on strategies such as becoming a global leader in a narrow product category, leveraging local engineering capabilities for global scale innovation, combining access to home country natural resources with first-class marketing and distribution. However, it does not mention capitalizing on political connections as a growth strategy.

93. According to the Freeport Indonesia case, which of the following organizations canceled its $100 million insurance plan for Freeport?

OPIC

MIGA

World Bank

RTZ

None of the above

In the Freeport Indonesia case, OPIC canceled its $100 million insurance plan for Freeport.

Explanation

In the Freeport Indonesia case, OPIC canceled its $100 million insurance plan for Freeport.

94. Which of the following is NOT among the environmental conditions that Stiglitz (2001) emphasized as increasing the risks of the heavily bank-financed Asian Miracle economies?

Loss of human capital from the government due to higher salaries in the private sector.

Removal of restrictions on riskier bank lending, including into real estate.

Pressure from advanced economies and multilateral organizations to quickly liberalize capital markets.

All of the above.

None of the above.

Stiglitz (2001) emphasized that all of the mentioned environmental conditions increase the risks of the heavily bank-financed Asian Miracle economies. This means that none of the options listed are excluded as environmental conditions that contribute to the increased risks in these economies.

Explanation

Stiglitz (2001) emphasized that all of the mentioned environmental conditions increase the risks of the heavily bank-financed Asian Miracle economies. This means that none of the options listed are excluded as environmental conditions that contribute to the increased risks in these economies.

95. According to Fisman and Khanna (2004), which of the following types of firm owner is more focused on underdeveloped regions of India?

Indian business groups

Indian government

Foreign multinationals

Fisman and Khanna (2004) only directly examine the location choices of business groups in India

Fisman and Khanna (2004) directly examine the location choices of business groups in India, suggesting that Indian business groups are more focused on underdeveloped regions of India. Therefore, the answer "Indian government" is incorrect as it is not supported by the study. Foreign multinationals are also not mentioned in the study, so they cannot be considered the correct answer.

Explanation

Fisman and Khanna (2004) directly examine the location choices of business groups in India, suggesting that Indian business groups are more focused on underdeveloped regions of India. Therefore, the answer "Indian government" is incorrect as it is not supported by the study. Foreign multinationals are also not mentioned in the study, so they cannot be considered the correct answer.

96. Which of the following was NOT true of Taiwanese company Jinbao's investment in a calculator factory in Thailand in 1990?

Customers saw the final product as Japanese.

The key technological parts of the calculator were all produced in Taiwan.

The management of the factory in Thailand and sourcing of all the parts was done by Taiwanese.

All the labor putting the parts of the calculators together was Thai.

All of the above are true.

Jinbao's investment in a calculator factory in Thailand in 1990 had all of the above statements as true except for the fact that the key technological parts of the calculator were all produced in Taiwan.

Explanation

Jinbao's investment in a calculator factory in Thailand in 1990 had all of the above statements as true except for the fact that the key technological parts of the calculator were all produced in Taiwan.

97. Which economy does Stiglitz (2001) argue did not have industrial policy of its own, but may have benefitted from the industrial policy of its neighbor and key trading partner?

Korea

Singapore

Malaysia

Thailand

None of the above

Stiglitz (2001) argues that none of the mentioned economies (Korea, Singapore, Malaysia, and Thailand) had their own industrial policy, but they may have benefitted from the industrial policy of their neighbor and key trading partner.

Explanation

Stiglitz (2001) argues that none of the mentioned economies (Korea, Singapore, Malaysia, and Thailand) had their own industrial policy, but they may have benefitted from the industrial policy of their neighbor and key trading partner.

98. Fisman and Khanna (2004) write that: "Economic theory predicts that private enterprise should step in to provide these basic services where it is economically efficient to do so." Their point is that economists expect that private firms will step in to provide services often provided by government in other countries when which of the following is true?

It serves the interests of the country

The firms have more skilled workers than the government

It helps the firms to make more money

Government gives the firms monopoly power

Private firms are expected to step in and provide basic services when it helps them to make more money. This is because economic theory suggests that private enterprises are driven by profit motives and will only engage in activities that are economically efficient and profitable for them. If providing these services can generate more revenue for the firms, they are more likely to take on the responsibility rather than the government.

Explanation

Private firms are expected to step in and provide basic services when it helps them to make more money. This is because economic theory suggests that private enterprises are driven by profit motives and will only engage in activities that are economically efficient and profitable for them. If providing these services can generate more revenue for the firms, they are more likely to take on the responsibility rather than the government.

99. Fisman and Khanna (2004) build a score representing the development of each Indian state composed of all of the following components EXCEPT which of the following?

Industrial output

Power generation

Telecommunications

Transportation

Social services

Fisman and Khanna (2004) constructed a score to measure the development of each Indian state. This score was based on various components such as power generation, telecommunications, transportation, and social services. However, industrial output was not included as one of the components in their score.

Explanation

Fisman and Khanna (2004) constructed a score to measure the development of each Indian state. This score was based on various components such as power generation, telecommunications, transportation, and social services. However, industrial output was not included as one of the components in their score.

100. Which of the following conclusions does Krugman endorse in his "Myth" piece about the East Asian Miracle?

There is a major diffusion of world technology in progress, and Western nations are losing their traditional advantage

The world's econonic center of gravity will inevitably shift to Asia

Asian successes demonstrate the superiority of economies with fewer civil liberties and more government planning than people in the West have been willing to accept

All of the above

None of the above

In his "Myth" piece about the East Asian Miracle, Krugman does not endorse any of the conclusions mentioned. He does not argue for a major diffusion of world technology or the shift of the world's economic center of gravity to Asia. Additionally, he does not claim that Asian successes demonstrate the superiority of economies with fewer civil liberties and more government planning. Therefore, the correct answer is "None of the above."

Explanation

In his "Myth" piece about the East Asian Miracle, Krugman does not endorse any of the conclusions mentioned. He does not argue for a major diffusion of world technology or the shift of the world's economic center of gravity to Asia. Additionally, he does not claim that Asian successes demonstrate the superiority of economies with fewer civil liberties and more government planning. Therefore, the correct answer is "None of the above."

101. In his "Competitiveness" piece, Krugman argues that an increase in productivity in one country (e.g. China) will have which of the following effects on workers in other foreign countries that trade with it (e.g. Japan)?

Wages of workers in the other foreign countries are likely to fall

Wages of workers in the other foreign countries are likely to rise

Employment opportunities in the other foreign countries is likely to fall

Employment opportunities in the other foreign countries is likely to rise

None of the above

In his "Competitiveness" piece, Krugman argues that an increase in productivity in one country (e.g. China) will not have any of the listed effects on workers in other foreign countries that trade with it (e.g. Japan). Therefore, the correct answer is "None of the above".

Explanation

In his "Competitiveness" piece, Krugman argues that an increase in productivity in one country (e.g. China) will not have any of the listed effects on workers in other foreign countries that trade with it (e.g. Japan). Therefore, the correct answer is "None of the above".

102. In his "Competitiveness" piece, which of the following arguments does Krugman make about a country's trade balance and what it means for whether that country is successful?

A trade deficit is a sign of a national strength

A trade deficit is a sign of national strength, but only if sustained over an extended period (e.g. 5 or more years)

A trade surplus is a sign of national strength

A successful country is most likely to exhibit a trade balance

None of the above

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Explanation

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103. According to Henisz (2000), host country governments can create problems for multinational enterprises in which of the following ways?

Changes in tax policy

Changes in regulatory requirements

Direct seizing of assets by either government or individual government officials

All of the above

None of the above

Host country governments can create problems for multinational enterprises in several ways. First, they can make changes in tax policy, such as increasing tax rates or imposing new taxes, which can significantly impact the profitability of the multinational enterprise. Second, they can make changes in regulatory requirements, such as imposing stricter regulations or requiring additional permits, which can increase the cost of doing business and hinder the operations of the multinational enterprise. Lastly, host country governments or individual government officials can directly seize the assets of the multinational enterprise, either through nationalization or confiscation, which can lead to significant financial losses. Therefore, all of the above options can be ways in which host country governments create problems for multinational enterprises.

Explanation

Host country governments can create problems for multinational enterprises in several ways. First, they can make changes in tax policy, such as increasing tax rates or imposing new taxes, which can significantly impact the profitability of the multinational enterprise. Second, they can make changes in regulatory requirements, such as imposing stricter regulations or requiring additional permits, which can increase the cost of doing business and hinder the operations of the multinational enterprise. Lastly, host country governments or individual government officials can directly seize the assets of the multinational enterprise, either through nationalization or confiscation, which can lead to significant financial losses. Therefore, all of the above options can be ways in which host country governments create problems for multinational enterprises.

104. According to the Freeport Indonesia case, whichof the following is NOT among the areas in which PT Freeport Indonesia made investments aimed at making a positive social or environmental impact?

Education training

Business incubator

Public health and hospital care

Waste management

None of the above

PT Freeport Indonesia made investments in education training, business incubator, public health and hospital care, and waste management, all of which are areas aimed at making a positive social or environmental impact. Therefore, the correct answer is "None of the above."

Explanation

PT Freeport Indonesia made investments in education training, business incubator, public health and hospital care, and waste management, all of which are areas aimed at making a positive social or environmental impact. Therefore, the correct answer is "None of the above."

105. Which of the following does the author in Henisz (2000) NOT believe to be true when political hazards are greater in a particular host country?

Multinationals enterprises are less likely to enter that host country

Multinational enterprises that do enter are more likely to enter with MINORITY ownership

The positive relationship between higher contractual hazards and the multinational enterprises to choose MAJORITY ownership position will be further increased

All of the above

None of the above

The author in Henisz (2000) does not believe that all of the statements mentioned above are true when political hazards are greater in a particular host country.

Explanation

The author in Henisz (2000) does not believe that all of the statements mentioned above are true when political hazards are greater in a particular host country.

106. Which of the following is an implication for government policy of Porter's company-level recommendations in his article on "New global strategies"?

Trade policy should limit imports in industries that are of strategic importance

Allocation of scarce financial resources should be guided by government so as to concentrate on domestically oriented industries

Multinational firms should be required to increase their domestic sourcing of key inputs in order help local support industries reach world class quality

Foreign investment should be limited in industries that are of strategic importance

None of the above

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Explanation

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107. Which of the following is true about the data used in Henisz (2000)?

Most ventures in the data set were minority owned

It includes data on when each venture in each host country was first started

It includes both manufacturing and services ventures across 112 countries

All of the above

None of the above

The given answer "None of the above" is correct because the statement "Most ventures in the data set were minority owned" is not mentioned in the question. The statement "It includes data on when each venture in each host country was first started" is also not mentioned in the question. The statement "It includes both manufacturing and services ventures across 112 countries" is also not mentioned in the question. Therefore, none of the statements mentioned in the answer options are true about the data used in Henisz (2000).

Explanation

The given answer "None of the above" is correct because the statement "Most ventures in the data set were minority owned" is not mentioned in the question. The statement "It includes data on when each venture in each host country was first started" is also not mentioned in the question. The statement "It includes both manufacturing and services ventures across 112 countries" is also not mentioned in the question. Therefore, none of the statements mentioned in the answer options are true about the data used in Henisz (2000).

108. Which of the following was NOT among the core principles that Richard McCombs (of American Rice) said he came to hold about doing a successful joint venture in an emerging economy with weak institutions like Vietnam?

Choose a joint venture partner that is not focused on the target industry

Borrow substantially from the local banking system

Localize the external image of the joint venture as much as possible

Maintain full control over customers

None of the above

Richard McCombs did not mention "Maintain full control over customers" as one of the core principles for a successful joint venture in an emerging economy with weak institutions like Vietnam.

Explanation

Richard McCombs did not mention "Maintain full control over customers" as one of the core principles for a successful joint venture in an emerging economy with weak institutions like Vietnam.