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Exam Paper for International Business in BBA (With
Answers)
PAPER # 1
**Instructions:**
- This exam consists of two sections: Multiple Choice Questions
(MCQs) and Short Answer Questions (SAQs)
...

- For SAQs, provide clear and concise answers
...
Which of the following is NOT a key driver of globalization?
a) Technological advancements
b) Government regulations
c) Market liberalization
d) Cultural convergence
**Answer: b) Government regulations**
2
...
Which trade theory suggests that a country should specialize in
producing goods where it has an absolute advantage?
a) Mercantilism
b) Comparative advantage
c) Absolute advantage
d) Protectionism
**Answer: c) Absolute advantage**
4
...
In the context of international business, what does FDI stand for?
a) Free Domestic Investment
b) Foreign Direct Investment
c) Fiscal Development Index
d) Fair Trade International
**Answer: b) Foreign Direct Investment**

3

**Section B: Short Answer Questions (SAQs)**
6
...
Provide an example of how cultural distance
can affect business operations
...
These
differences can impact international business operations
...

7
...
Provide examples for each
...
For instance, a technology company can tap into a
global talent pool for software development
...
An
example is a local manufacturer facing stiff competition from cheaper
overseas alternatives, potentially leading to job losses
...
Explain the difference between free trade and protectionism, and
provide examples of policies associated with each approach
...
An example is the North
American Free Trade Agreement (NAFTA), which eliminated trade
restrictions between the U
...
, Canada, and Mexico
...
For instance, imposing tariffs on steel
imports to protect domestic steel producers is a protectionist policy
...
Describe the stages of international market entry strategies that a
company might consider when expanding globally
...

- **Licensing:** Allowing a foreign company to use your intellectual
property in exchange for royalties
...

- **Wholly Owned Subsidiaries:** Establishing a presence in the
foreign market by owning 100% of the subsidiary
...


5

10
...
Provide examples of how political instability
can affect businesses
...
Stable political environments reduce the risk of
government interference and ensure the protection of property rights
...
In contrast, political instability,
such as frequent changes in government or civil unrest, can disrupt
business operations, lead to expropriation of assets, or create
uncertainty that discourages foreign investment
...

PAPER # 2
1
...

(10 marks)
Answer: The main drivers of globalization are:
- Technological advancements: Technology has enabled faster and
cheaper communication, transportation and production across the
world
...

- Market liberalization: Market liberalization refers to the removal of
barriers to trade and investment among countries
...


6

- Competitive pressures: Competitive pressures refer to the need for
firms to improve their efficiency, quality and innovation in order to
survive and grow in the global market
...

- Consumer preferences: Consumer preferences refer to the demand
for diverse and customized products and services from different
countries
...

2
...
(10 marks)
Answer: The main modes of entry into foreign markets are:
- Exporting: Exporting refers to selling goods or services produced in
the home country to customers in foreign countries
...

- Licensing: Licensing refers to granting a foreign firm the right to use
the home firm's technology, brand name or other intangible assets in
exchange for a fee or royalty
...

- Franchising: Franchising refers to granting a foreign firm the right to
operate a business under the home firm's name and standards in
exchange for a fee or royalty
...

- Joint venture: Joint venture refers to forming a partnership with a
foreign firm to share the ownership, control and profits of a new
business in a foreign country
...

- Wholly owned subsidiary: Wholly owned subsidiary refers to
establishing a new business or acquiring an existing business in a

7

foreign country that is fully owned and controlled by the home firm
...

3
...
(10 marks)
Answer: The main advantages and disadvantages of globalization for
businesses are:
Advantages:
- Access to larger and more diverse markets: Globalization enables
businesses to sell their products and services to more customers in
different countries, regions and segments
...

- Access to cheaper and better resources: Globalization enables
businesses to source their inputs from more suppliers who can offer
lower costs, higher quality or greater variety
...

- Access to more opportunities for innovation and learning:
Globalization enables businesses to access more ideas, knowledge
and skills from different sources that can enhance their innovation and
learning capabilities
...

Disadvantages:

8

- Exposure to more risks and uncertainties: Globalization exposes
businesses to more political, economic, social and environmental risks
and uncertainties that can affect their performance and survival
...

- Exposure to more competition and challenges: Globalization
exposes businesses to more competitors and challenges from both
local and global players who can offer better or cheaper products and
services
...

- Exposure to more ethical and social responsibilities: Globalization
exposes businesses to more ethical and social responsibilities that
can affect their reputation and legitimacy
...

Answer any four questions
1
...

International business is the exchange of goods, services, or other economic resources
between two or more countries
...







Foreign direct investment (FDI): This involves a company investing in a business
in another country
...

Franchising: This involves a company giving another company the right to
operate a business using its brand name and operating system
...
Discuss the different factors that influence the decision of a company to expand
internationally
...

Cost advantages: Companies may also be motivated to expand internationally in
order to take advantage of lower labor costs, lower taxes, or other cost
advantages
...

Competitive pressures: Companies may also be motivated to expand
internationally in response to competitive pressures
...


3
...

There are several different theories of international trade, including:


Comparative advantage theory: This theory states that countries will specialize in



the production and export of goods and services that they can produce more
efficiently than other countries
...




Heckscher-Ohlin theory: This theory builds on the comparative advantage theory
and argues that countries will specialize in the production and export of goods

and services that use their abundant factors of production
...
Discuss the different challenges that companies face when doing business
internationally
...




Language barriers: Companies need to be able to communicate effectively with
their customers and suppliers in the countries in which they are doing business
...




10

Legal and regulatory challenges: Companies need to comply with the laws and
regulations of the countries in which they are doing business
...
Explain the different international business strategies that companies can use
...

Import strategy: This involves buying goods and services produced in another
country and selling them in the home country
...

 Wholly owned subsidiary strategy: This involves setting up a new business in
another country that is completely owned by the parent company
...
Definition of international business and different types of international business
activities
International business is the exchange of goods, services, or other economic resources
between two or more countries
...
Factors that influence the decision of a company to expand internationally
There are many factors that influence a company's decision to expand internationally,
including:

11



Market opportunities



Cost advantages



Government incentives



Competitive pressures

3
...
Challenges that companies face when doing business internationally
Companies face a number of challenges when doing business internationally, including:


Cultural differences



Language barriers



Political and economic risk



Legal and regulatory challenges

5
...
Which of the following is NOT a barrier to international trade?
o

12

A
...
Quotas
o C
...
Cultural differences
2
...
Trade shows
o B
...
Export credit insurance
o D
...
Which of the following is a type of foreign direct investment (FDI)?
o

A
...
Acquisition
o C
...
All of the above
4
...
Increased market share
B
...
Access to new resources and technologies
o D
...
Which of the following is a challenge of internationalization for businesses?
o

o

A
...
Cultural differences
o C
...
All of the above
Section B: Short Answer (5 marks each)
6
...

o

7
...

8
...

9
...


13

10
...

Section C: Essay (10 marks)
11
...

Answers:
Section A
1
...
D
3
...
D
5
...
Absolute advantage is the ability to produce a good or service more efficiently
than another producer, using the same amount of resources
...

7
...
Types of foreign direct investment (FDI):
o Greenfield investment: Building new facilities in a foreign country
o Acquisition: Buying an existing company in a foreign country
Joint venture: Partnering with a local company in a foreign country
9
...
Challenges that businesses face when internationalizing:
o Increased competition
o

Cultural differences

o

Political and economic instability

o

Trade barriers

o

Managing a global supply chain

o

Managing a diverse workforce

Section C
11
...

Comparative advantage: This theory argues that countries should
specialize in producing the goods and services that they are most efficient
at producing, and then trade with other countries for the goods and
services that they are less efficient at producing
...

The implications of these theories for businesses are: * Mercantilism: Businesses
should focus on exporting products that are protected by tariffs or other trade barriers
...
* New trade theory:
Businesses should focus on developing products that are differentiated from the
products of their competitors, and on investing in research and development to stay
ahead of the competition
...
Each question carries equal marks
...
What is international business?
2
...

3
...
What are the different types of international trade barriers?
5
...
International business is the exchange of goods, services, and resources
between two or more countries
...
The three main types of international business are:
o

International trade: The import and export of goods and services
...


o

Foreign portfolio investment (FPI): The purchase of financial assets in a
foreign country, such as stocks and bonds
...
The key benefits of international business include:
o

Increased sales and profits

o

Access to new markets and resources

o

Reduced costs

o

Diversification of risk

o

Increased competitiveness The key challenges of international business
include:

16

o

Cultural differences

o

Language barriers

o

Political and economic instability

o

Trade barriers

o

Currency fluctuations

4
...


o

Non-tariff barriers: Other types of trade barriers, such as quotas,
subsidies, and licensing requirements
...
The difference between foreign direct investment (FDI) and foreign portfolio
investment (FPI) is that FDI involves the investment in a business in a foreign
country, while FPI involves the purchase of financial assets in a foreign country
...

Section B: Long Answer Questions
1
...

2
...

3
...

4
...

5
...
The company is considering expanding into the
Chinese market
...
The main theories of international trade are:

17

o

Absolute advantage theory: This theory states that a country will export
goods and services that it can produce more efficiently than other
countries
...


o

Heckscher-Ohlin model: This model explains trade patterns based on the
differences in factor endowments (i
...
, land, labor, and capital) between
countries
...
Globalization has had a significant impact on international business
...
This has
led to increased competition and the emergence of global markets
...
The different strategies that companies can use to enter international markets
include:
o

Exporting: Selling goods and services to foreign customers without
establishing a physical presence in the foreign country
...


o

Licensing: Granting a foreign company the right to produce and sell your
products or services in exchange for a royalty fee
...


o

Joint venture: Partnering with a foreign company to establish a new
business in a foreign country
...


4
...
Case study: Company X should consider the following key factors when making
the decision to expand into the Chinese market:
o

18

The size and growth potential of the Chinese market

o

The level of competition in the Chinese market

o

The Chinese government's regulations on foreign investment

o

The cultural differences between the United States and China

o

The language barrier between English and Chinese

o

The political and economic stability of China

o

The currency fluctuations between the US dollar and the Chinese yuan
Company X should also consider its own resources and capabilities when
making

PAPER # 5
Section A: Multiple Choice Questions (10 marks)
1
...
Imports

o

B
...
Foreign direct investment

o

D
...
Which of the following is NOT a barrier to international trade?
o

A
...
Quotas

o

C
...
Subsidies

3
...


19

o

A
...
False

4
...

o

A
...
False

5
...

o

A
...
False

Section B: Short Answer Questions (20 marks)
1
...

2
...

3
...
Explain the role of international trade organizations such as the World Trade
Organization
...
Discuss the ethical implications of international business
...

Answers:
Section A:
1
...
Domestic trade
2
...
Exchange rates
3
...
True
4
...
True
5
...
True

20

Section B:
1
...


Importing: This involves buying goods and services from foreign markets
for sale in the domestic market
...

2
...
The main challenges that companies face when operating in international
markets include:
o

Cultural differences

o

Political and economic instability

o

Exchange rate fluctuations

o

Trade barriers

o

Competition from local companies

4
...
They do this by
negotiating trade agreements, providing dispute resolution mechanisms, and
promoting trade liberalization
...
The ethical implications of international business include issues such as:
o

21

Human rights

o

Environmental protection

o

Corruption

o

Social responsibility

Section C:
The impact of globalization on international business has been significant
...
This has led to
increased competition and created new opportunities for companies to expand their
markets
...

Globalization has led to the following impacts on international business:


Increased trade and investment: Globalization has made it easier for companies
to trade and invest across borders
...




Increased competition: The increase in international trade and investment has
led to increased competition in the global marketplace
...




New market opportunities: Globalization has created new market opportunities
for companies
...




Cultural challenges: Globalization has created cultural challenges for companies
...




Ethical challenges: Globalization has also created ethical challenges for
companies
...


Overall, the impact of globalization on international business has been positive
...
However, globalization has also created
challenges for companies, such as the need to adapt to different cultures and regulatory

22

KEYWORDS:
1
...
BBA Exam Paper
3
...
Exam Questions
5
...
Business Administration
7
...
International Business Course
9
...
Exam Preparation
11
...
International Business Theory
13
...
International Business Practices
15
...
Cross-Border Business
17
...
International Marketing
19
...
Multinational Corporations
21
...
Business Ethics in International Context
23
...
Business School

23

25
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International Business Exam
2
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International Business BBA
4
...
Study Materials
6
...
BBA Program
8
...
Answer Key
10
...
BBA Curriculum
12
...
BBA Study Resources
14
...
International Trade
16
...
Global Business Environment
18
...
International Finance
20
...
Global Supply Chain
22
...
BBA Degree
24
...
College Exam

24



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