For the conservative international firm, there is no reason to move money other than the
repatriation of profits.
If a firm decides to set up its own export operation rather than do indirect exporting, the
firm must obtain overseas distribution.
Transnational corporations account for approximately 25 percent of total global output
and nearly 50 percent of world trade.
The unspoken language cannot tell the international manager something that the spoken
language does not.
According to the text, outsourcing is hiring others to do noncore activities.
Greater profits may be obtained by either increasing total revenue or decreasing the cost
of goods sold.
One of the reasons that Internet advertising is not appealing in an international setting is
that most Internet users are poor and difficult to reach.
That free trade is the best strategy for advancing the world’s economic development is
one of the few propositions on which almost all economists agree.
Under U.S. law, price fixing is illegal per se, while in other countries, damage or harm
has to be done; this is the case in the EU.
According to the text, the international environment is all of the uncontrollable forces
originating outside the home country that surround and influence the firm.
Knowing the number of imports to a specific country provides a firm with a complete
measure of market potential.
There are many outstanding international career opportunities for people with desirable
interpersonal and language skills that are not in mainstream business but may require
basic business expertise.
The use of third-country nationals has become particularly prevalent in the LDCs
because they provide substantial cost savings over the use of home-country nationals.
Sales companies will import in their own name from the parent and will invoice in the
currency of the parent company.
Although some business areas are affected by culture, accounting and finance are
objective and thus universal.
Regulations allowing the repatriation of earnings are considered an entry barrier.
Cognitive institutions are important to the international manager because these
institutions help the manager understand the schema operating in their international
environments and are easily missed or misunderstood by the non-native, so schemas
can easily lead to misunderstandings.
The overall goal of cash flow management is to reduce risk and position the firm so that
it can benefit from opportunities.
Tariff barriers may be used to protect domestic industry from foreign, lower-cost
producers.
The balance of payments is a record of a country’s transactions with its major trading
partners.
Accounting standard convergence is unlikely, given the complexities of the systems, all
of which would require harmonization.
Generally, as marketers go down the economic and social strata in each country, they
tend to find greater similarities among countries on social and cultural values.
The World Intellectual Property Organization is a UN agency that administers 24
intellectual property treaties.
When a country needs new job creation, it follows that government officials will insist
on the use of labor-intensive processes.
A multidomestic company is an organization that attempts to standardize and integrate
operations worldwide in all functional areas.
Production methods between capital-and labor-intensive methods are classified as
intermediate technology.
To create a sustainable competitive advantage, an international company should try to
develop competencies that are valuable, rare, difficult to imitate, and readily
substitutable.
The only export support available in the United States at the federal level is through
trade. gov.
Pooling alliances are driven by the logic of contributing dissimilar resources, while
trading alliances are driven by similarity and integration.
A business whose activities are carried out across national borders is known as an
international business.
Trompenaars’ dimension of universalism vs. particularism measures whether rules or
rewards regulate behaviors.
The international standardization of the sales promotion function is not difficult,
because experience has shown that what is successful in the United States generally
proves effective overseas.
Formal institutions operate through laws and regulations. They require members to
make a written commitment.
Terrorists avoid kidnapping because the repercussions can be harmful to their
movement.
Examples of informal, normative institutions would include local town/city
governments and the U.S. government.
NAFTA maintains restrictions on the movement of labor, a limitation that suggests it is:
A. a free trade area.
B. a common market.
C. not in compliance with WTO regulations.
D. B and C.
In the United States and EU, attitudes toward competition:
A. are quite similar.
B. are based on differing assumptions, with the United States following a per se concept
and the EU concerned about the existence of harm.
C. differ because the EU is anticompetitive; its Commission on Competition ensures
competition isn’t too severe.
D. differ on the role of market dominance, with the United States supporting it and the
EU wanting to avoid it.
E. are both focused on prevention of price fixing.
The Department of Commerce organizes events called “Show and Sells” that are helpful
in both locating foreign representatives and making sales. Which of the following is not
an event offered by the Department of Commerce?
A. U.S. pavilions
B. Reverse trade missions
C. Product literature center
D. Education seminars
E. None of the above
Assessment instruments can be used to:
A. determine job performance for global assignments.
B. measure cross-cultural adaptability and global leadership competencies.
C. train managers in global leadership.
D. train managers to assess global arena performance.
E. A and D.
The importance of personal selling compared with advertising depends to a great extent
on:
A. the type of product sold.
B. media availability.
C. availability of funds.
D. all of the above.
E. two of A, B, and C.
If people consider the context and relationships when they make decisions about the
application of rules, they are likely to be:
A. universalist.
B. particularist.
C. achievement-oriented.
D. individualist.
The Eonomist‘s Big Mac index (May 2010) suggests that against the dollar, the Chinese
yuan is:
A. trading fairly, since the Big Mac prices are similar.
B. quite undervalued, since the Chinese Big Mac is almost 50 percent less expensive
than the U.S. dollar Big Mac.
C. is overvalued, since the Big Mac sells for almost 50 percent less in Chinese currency
than in U.S. dollars.
D. trading at a historical premium.
Regional trade agreements such as NAFTA can be seen to impact the WTO:
A. negatively, because they undercut the nondiscrimination principle of the WTO.
B. positively, because they extend most-favored-nation status to more nations.
C. negatively, because they compete with the WTO for membership, since nations can
belong to only one trade group.
D. negatively, because the United States and the EU do not have a regional trade
agreement between them.
Latin and Asian countries’ scores on Hofstede’s power distance dimension are relatively
large and relatively low on:
A. the individualism dimension.
B. transparency.
C. masculinity.
D. femininity.
The foundation of a global mindset is:
A. knowledge of and experience in other cultures.
B. knowledge of foreign languages and cultures.
C. intellectual intelligence and global emotional intelligence.
D. global skills.
E. A, B, and D.
The FCPA has:
A. hurt American business because managers cannot use bribes anymore.
B. challenged the creativity of American managers and consultants to develop ways to
work around the FCPA.
C. brought the discussion of bribery into the open, which has, overall, been positive.
D. resulted in American foreign business going to Japanese and German businesses.
E. eliminated bribery in international business.
“Comparing the total cost of ocean freight versus air freight, air freight may be
cheaper.” What components are considered when making the previous statement?
A. Insurance rates
B. Packing
C. Replacement cost of damaged goods
D. Inventory cost
E. All of the above
Bretton Woods led to an exchange rate agreement known as the Bretton Woods System
or:
A. the floating-rate system.
B. the India Accord system.
C. the gold exchange standard.
D. the French rate system.
A joint venture may be:
A. a corporate entity formed between an international firm and local owners.
B. a corporate entity formed between two or more international firms.
C. a corporate undertaking between two or more firms of a limited-duration project.
D. two of the above.
E. all of A, B, and C.
Contract termination payments are:
A. made to induce the employee to quit.
B. made to induce the employee to work out the contract term.
C. frequently made for work in hardship areas.
D. two of the above.
E. none of A, B, and C.
IMF quotas are determined by the relative size of a nation in the global economy and:
A. determine the weight of the nation’s voting in the IMF.
B. determine how much a nation can borrow from the IMF.
C. are the nation’s “dues” to the IMF.
D. all of the above.
Foreign exchange risks—transaction, translation, or economic—are caused most
directly by:
A. unanticipated political actions by foreign governments.
B. anticipated movements in interest rates in foreign economies.
C. trade-related distribution risks such as weather, the price of fuel, and transport
strikes.
D. unanticipated movements in exchange rates.
Subsidies are problematic because they:
A. are administered as a form of political patronage.
B. aid export businesses or protect domestic businesses from imports.
C. encourage nationalization.
D. violate UN agreements.
E. two of the above.
Entry barriers, profit remittance barriers, and policy stability are all part of the:
A. first screening.
B. second screening.
C. third screening.
D. fourth screening.
E. fifth screening.
Hawalas make currency exchange and:
A. avoid the international currency exchange markets.
B. offer their clients nearly untraceable transactions.
C. transfer funds through the established banking system.
D. A and B.
Regarding foreign direct investment and trade:
A. historically, foreign trade has followed foreign direct investment.
B. foreign trade is typically more costly and more risky than making a direct investment
into foreign markets.
C. typically, a firm would hire sales representatives to live in overseas markets as a first
step in developing international trade.
D. fewer government barriers to trade, increased competition from globalizing firms,
and new production and communications technology are causing many international
firms to disperse the activities of their production systems to locations close to available
resources.
E. all of the above.
More than one-half of the exports from developing countries go to __________
countries, and this proportion has been _____________ over the past 35 years.
A. developed; increasing
B. developing; increasing
C. developed; decreasing
D. developing; decreasing
E. none of the above
The most serious recent challenge to the EU has been:
A. the recent financial crisis.
B. the arrest of the IMF’s Strauss-Kahn.
C. immigration-provoked social unrest.
D. weather changes that have resulted in rising sea levels and warmer temperatures.
Locating activities in another nation is:
A. outsourcing.
B. offshoring.
C. foreign direct investment.
D. all of the above.
E. two of A, B, and C.
An assessment conducted on the chain of interlinked activities of an organization or set
of interconnected organizations and intended to determine where and to what extent
value is added to the final product or service is known as:
A. economic value added.
B. internal analysis.
C. value chain analysis.
D. SWOT analysis.
E. none of the above.
The use of third-country nationals as IC executives in LDCs is a growing practice
because:
A. they tend to prefer working in LDCs.
B. there is frequently a shortage of skilled host-country nationals.
C. all of A, B, and D.
D. they often already have host-country work permits and knowledge of the host
country’s language and culture.
E. two of A, B, and D.
The key issue related to translation exposure is:
A. the local interest rates.
B. what method to use for the translation, current rate or temporal.
C. strategic planning.
D. A and C.
Reasons for international firms to enter into foreign markets are linked to which of the
following desires?
A. Increased sales and reduced costs
B. Protecting sales and profits from being eroded by competitors
C. Creation of new markets.
D. All of the above.
E. Two of A, B, and C.
The following country is not a member of ASEAN:
A. Indonesia.
B. Vietnam.
C. Cambodia.
D. China.
The forces over which management does have some command are called:
A. internal.
B. controllable.
C. foreign.
D. external
E. two of the above.
Porter in his diamond model distinguishes two types of factor conditions:
A. positive and negative factors.
B. contributing and disaggregating factors.
C. advanced and basic factors.
D. foreign and domestic factors.
According to the text, which of the following dimensions provide(s) the basis for
organizational subdivisions at the secondary, tertiary, and still lower levels?
A. Two of B, C, and D
B. Process
C. Customer class
D. Nature of competition
E. All of B, C, and D
International business really began:
A. with the East India Company, chartered in 1600.
B. when Singer Sewing Machine put up a factory in Scotland in 1868.
C. before the time of Christ.
D. when Colt Fire Arms set up a plant in England.
E. when the Ottoman Empire was established.
New types of dumping include:
A. cultural, social, financial services, and tax dumping.
B. truck, financial services, and black-market dumping.
C. gray-market, subsidiary, and transfer-pricing dumping.
D. two of the above.
E. all of A, B, and C.
Referring to Hall’s high-and low-context framework, in a high-context culture,
A. communication is explicit.
B. the context carries much of the communication.
C. communication is direct and focused on the topic.
D. the context is irrelevant.