Question

1. Which of the following is not true about firms that operate internationally? They realize lower cost economies from experience effects by serving an expanded global market from a geographically central location, reducing costs of value creation. They realize location economies by dispersing value creation activities to worldwide locations. The market for their domestic products is expanded into international markets. They earn greater return by leveraging valuable skills developed in foreign operations and transferring them to entities on the global operation network.

2. Stocks, bonds, and bank loans currently total $300 trillion (more than 3 times the world economy). The two main factors that appear to be driving this growth are information technology and government deregulation. True or False

3. A major task of a firm's leadership is to control various sub-units of the firm. Which type of control is the most widely used in firms? personal controls cultural controls bureaucratic controls output controls

4. Which of the following is not true about the relationship between money and price inflation? When a country's inflation increases, its currency depreciates against that of countries where inflation rates are lower. When money supply grows faster than output, dollars will be more plentiful than currencies of countries where monetary growth is closer to output. Inflation rate can be determined by money supply growth. Increasing money supply makes it easier for individuals to borrow from banks and more difficult for banks to borrow from government.

Answer 1

1. Which of the following is not true about firms that operate internationally?

- They realize lower cost economies from experience effects by serving an expnded global market from a geographically central location reducing cost of value creation.
This sentence is not true because as the market expands globally, it can utilize productiion units more effectively and increases its productivity at lower average unit cost. The expanded sphere of the firm also helps it achieve more bargaining power from suppliers and it can also take advantage of learning effect from new geographical locations which will increase the porductivity. This increase in productivity will give rise to economies of scale. Therefore, firms that operate internationally will realize a greater cost economies.