Final State Examination International Business

Bachelor’s Degree Programme

Questions for the year 2019

Students are given an examination using questions valid in the year of the students’
first attempt at completion of the FSE.

The examination consists of the following two compulsory examination areas:

1. Defence of the Bachelor’s Dissertation

2. Final State Examination:

1. International Trade
International Trade 1
International Trade 2
International Trade 3
International Finance

2. International Entrepreneurship
Payment Methods in International Business
International Business Techniques
International Marketing

International Management

The examination starts with the Bachelor’s Dissertation defence, after which
students continue answering the questions drawn from each of the two areas
(International Trade and International Entrepreneurship).

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International Trade

1. Explain the terminology of basic indicators used in international trade: trade

value index versus trade volume index (phys.), terms of trade. Explain the
concepts of territorial and commodity pattern of trade. What classifications
are the most commonly used to describe the commodity structure of foreign
trade? Describe the major milestones in the development of international
trade since the 2nd World War.

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2. Characterize the Classical Theory of International Trade, i.e. the Theory of
Absolute and Comparative Advantages. Explain the assumptions, principles
and the main conclusions of the theory and the difference between the
classical and Mercantilist perspective on trade.

3. Describe the neoclassical perspective on trade. Explain the assumptions,

principles and the main features of the Heckscher-Ohlin model. How well
does the model fit the reality? Explain the logic of the so-called “Stolper-
Samuelson Theorem”.
4. Explain the protectionist perspective on trade. How would you describe the
Mercantilism? Introduce the main critics and supporters of Mercantilism, and
their arguments - present and past ones. Briefly analyse the arguments of
the Dependency Theory and the Infant Industry Theory.

5. Theory outside the mainstream: Imitation Lag Hypothesis and the Product
Cycle Theory. Explain how they differ from the traditional neoclassical
approaches. Explain the potential problems considering the applicability of
these approaches in the contemporary world. Explain the Linder’s Theory of
Overlapping Demand.
6. Explain the concept of intra-industry trade (IIT). State the various types of
intra-industry trade. How this kind of trade (IIT) has been explained by the
traditional concepts of trade (Ricardo, Heckscher-Ohlin, Linder)? Explain the
logic of empirical indicators designed to measure and compare the
share/intensity of the intra-industry trade.
7. Explain the Krugman’s model. How does it differ from the neoclassical models
(e.g. Heckscher-Ohlin model)? What should be the impact of the European
integration based on the Krugman's model?

8. Explain the basic macroeconomic identities for an open economy and their
implications. Explain the logic of Keynesian multipliers for an open economy
and their impact on effective economic policy in a small open economy.

9. Balance of payments: definition, horizontal and vertical structure of the

balance of payments. Explain the logic and significance of major accounts/
balances. What does the zero balance of payments mean? Describe the
long-run development of the balance of payments in case of the Czech
Republic – assess the long-run development of the trade balance, current
account and financial account.

10. Exchange rate: Explain the difference between the nominal and real
exchange rate. What is the meaning of the term “effective exchange rates”?
Explain the differences between appreciation/depreciation and

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 revaluation/devaluation; direct versus indirect quotation. What is a tripartite
arbitration and cross exchange rates? Explain the concepts of bid, offer,
spread and mid-point.
11. Explain the basic theoretical approaches to the determination of the level of
exchange rates. Explain the relations between the real exchange rate and
ERDI. Explain the so-called Balassa-Samuelson effect.
12. Describe the kinds of exchange rate regimes. Explain the concepts of fixed
and floating exchange rate and the advantages/disadvantages of these
regimes. What types of fixed exchange rate do you know? Explain the
following terms- crawling peg, currency board, dollarization. What kind of
exchange rate regime has been used in the Czech Republic?

13. Explain the difference (or connection, if applicable) between the balance of
payments and international investment position. Describe the long-term
development of the international investment position of the Czech Republic.
Explain the macroeconomic impact of the FDI inflow. Focus particularly on
impact of FDI on the balance of trade, on the structure of the balance of
payments, on employment and on economic growth, give examples from the
Czech Republic.

14. Analyse the development of the financial account of the balance of payments
in the Czech Republic. Identify the main elements of the financial account,
and explain the trends in their development. Explain the relation between
the balance of the financial account and the balance of the current account
and foreign exchange reserves. Explain the microeconomic impacts of the
FDI inflows, i.e. the influence of foreign investors on the behaviour of
companies and regional labour markets.

15. Explain the economic and statistical definition of FDI. Describe how they
differ from the portfolio investments. Characterize the FDI development of
inflows/outflows in case of the Czech Republic in terms of industry structure
and in terms of segmentation based on source/destination countries. Explain
the logic of the support considering the FDI inflows and its contradictions.
Briefly describe the investment incentives offered in the Czech Republic.

16. Exchange rate and international trade. How the changes in exchange rate
affect international trade (Marshall-Lerner condition, J-curve, price
competitiveness)? Explain the relations between the real exchange rates and
competitiveness. Briefly describe the highlights in the development of the
Czech crown (CZK) exchange rate after the year 1993.

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17. Define the trade policy and discuss its mission. Explain the concept and
consequences of the free trade and protectionism. Characterize the areas of
trade influenced by the state/government. What is a strategic trade policy?
18. What are the non-tariff trade policy instruments? Explain the significance,
structure and the measures to control the trade. Give the examples of non-
tariff measures used in the Czech Republic and in the European Union.
19. Define custom duties. Identify types of customs. Define antidumping duty,
describe the antidumping proceedings and state its significance
20. How did the financial crisis of 2008-2009 affect the Czech economy?
Compare the timing of the crisis in the Czech Republic and in the U.S.,
explain the role of the banking sector and foreign trade during the crisis.
How was the Czech currency influenced by the crisis? How does the
subsequent crisis of EMU (Greece and the PIGS countries) differ from the
first phase of the financial crisis?

21. Define financial derivatives, describe different types and methods of their
use. What is a foreign exchange arbitrage, speculation and hedging?

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International Entrepreneurship

1. Characterize corporate culture and intercultural communication.

2. Explain the concept of leadership and decision-making in society in a
multicultural environment.

3. Define the role PESTEL and SWOT analysis in the process of strategic
marketing planning.
4. Describe the mode of entry that a multinational corporation uses when
expanding to foreign markets - direct and indirect export/import.
5. Describe the mode of entry that a multinational corporation uses when
expanding to foreign markets - international movement of know-how.
6. Describe the mode of entry that a multinational corporation uses when
expanding to foreign markets - foreign direct investments.
7. Explain Porter's Model of 5 competitive forces and the subsequent types of
strategies of a multinational corporation.

8. International marketing research - Explain the process and methods, identify

information resources for Czech exporters.
9. Characterize segmentation, targeting, and positioning in international
markets.

10. Describe the international product and brand policy.
 11. Explain the
international communications policy and communications mix.
12. Characterize international advertising. What are the basic types and
instruments?
13. Describe the marketing aspects of international pricing policy and
international pricing strategy.
14. Characterize the role of the terms of payment and the criteria for their
selection. Briefly describe banking instruments and compare them.
15. Characterize bills of exchange and cheques and possibilities of their
application in payment procedures in international trade.

16. Characterize letters of credit and documentary collections. What is their role
in international trade?

17. Describe cash payments and bank transfers. Describe bank guarantees and
the possibilities of their application.
18. Describe alternative forms of financing: factoring, forfaiting and leasing.

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19. What documents are mostly used in international payments? Specify the
types of documents, its significance and describe the process of document
circulation.
20. What is an international sales contract? What is its structure and content?
Describe requirements of a sales contract and the conditions of fulfilment.
Define General business conditions.
21. Define the delivery terms in a sales contract. Explain the concepts of
INCOTERMS 2010.
22. Describe the process of pricing in international trade, i.e. the methods of
determining prices in the sales contract and price calculation in international
trade.

23. Characterize the following risks in international business: market,

commercial, transport, territorial, foreign exchange risk, liability risk.
24. Describe the transport operations - modes of transport, their advantages and
disadvantages in the context of international trade, the significance of
forwarding, combined transport, container transport.
25. Describe insurance options in international trade - types, entities, and the
role of EGAP.

26. Describe the customs control procedure. Explain the concept of customs
value. How is the value calculated? Give examples of various customs
regimes. What is a customs debt? Explain TARIC customs tariff.
27. Describe the Pro-export Policy of the Czech Government, the reasons for
export supports, instruments, institutions and information resources
(websites, databases, printed materials).