By ignoring important cultural nuances, companies can inadvertently decrease the
potential for noise that can cloud the audience’s understanding of their promotional
message.
Answer:
The rapid pace of technological innovation today extends the life cycles of products.
Answer:
Customer service is an example of a support activity in the value chain of an
organization.
Answer:
The Single European Act predominantly aimed at establishing common transportation
policies among the European Union members.
Answer:
A value-added tax is a tax levied on each party that adds value to a product throughout
its production and distribution.
Answer:
A government with a currency board is legally bound to hold an amount of foreign
currency that is at least equal to the amount of domestic currency.
Answer:
Governments bar international companies from entering economic sectors like energy
exploration for security reasons.
Answer:
Companies selling differentiated products find centralized production most effective.
Answer:
The forces of supply and demand determine currency prices.
Answer:
In marketing, distribution is the process of sending promotional messages about
products to target markets.
Answer:
Product differentiation is more likely when nations share the same level of economic
development.
Answer:
Subcultures mimic the values, preferences, and beliefs of dominant cultures.
Answer:
All of Europe’s currencies combined are referred to as Eurocurrency.
Answer:
Trade deficit occurs when the value of a country’s imports is greater than the value of its
exports.
Answer:
Social status is determined by family heritage, income, and occupation.
Answer:
According to the efficient market view for forecasting exchange rates, forward
exchange rates are perfect predictors of future exchange rates.
Answer:
The North American Free Trade Agreement membership includes Canada, Mexico, and
the United States.
Answer:
Interest arbitrage is the profit-motivated purchase and sale of interest-paying securities
denominated in different currencies.
Answer:
In a free trade area, each country can maintain whatever policy it sees fit against
nonmember countries.
Answer:
Folk customs that spread by cultural diffusion to other regions develop into popular
customs.
Answer:
Objectives at the highest level in a company are always stated in the most specific
terms.
Answer:
Countries belonging to a free trade area must concede a certain amount of their national
autonomy to the supranational union of which they are a part.
Answer:
The European Free Trade Association focuses on trade in consumer goods.
Answer:
A confirmed letter of credit is guaranteed by both the exporter’s bank in the country of
export and the importer’s bank in the country of import.
Answer:
All foreign exchange transactions can be performed in the over-the-counter (OTC)
market.
Answer:
The main benefit of a global strategy is that it allows companies to monitor buyer
preferences closely in each local market.
Answer:
Major financial activities take place in booking centers.
Answer:
Mercantilist countries used to amass wealth by acquiring less-developed territories
around the world.
Answer:
The particular process to be used to create products is typically determined by a firm’s
business-level strategy.
Answer:
Volunteer work and unpaid household work are included in GNP.
Answer:
Expropriation involves the forced transfer of assets from a company to the government
without compensation.
Answer:
________ in the computer industry is the outsourcing of the actual assembly of
computers plus the job of shipping them to distributors and other intermediaries.
A) Agile manufacturing
B) Just in time manufacturing
C) Lean manufacturing
D) Stealth manufacturing
Answer:
Which of the following statements is true of a centrally planned economy?
A) Individual concerns are as important as the government’s concerns.
B) Consumers determine the prices of products and labor.
C) Factories are privately owned.
D) The government sets the production goals.
Answer:
Which of the following terms is defined as the process of identifying and attracting a
qualified pool of applicants for vacant positions?
A) orientation
B) outsourcing
C) recruitment
D) selection
Answer:
Which of the following is the most common form of social stratification in the world
today?
A) racial segregation
B) class system
C) gender-based division
D) language-based stratification
Answer:
Gro-Tru would be engaging in ________, if it decides that in exchange for a
hard-currency sale it would make a hard-currency purchase of an unspecified product
from the importing nation in the future.
A) barter
B) offset
C) switch trading
D) buyback
Answer:
According to the opponents of globalization, which of the following occurs as a result
of worker dislocation brought about by globalization?
A) increased labor costs for companies
B) lower workers’ wages in developed nations
C) surfeit of jobs in developed nations
D) increased investment in individual education
Answer:
Which of the following communication strategies adapts a product to the requirements
of the international market while retaining its original marketing communication?
A) product/communications extension
B) product extension/communications adaptation
C) product adaptation/communications extension
D) product/communications adaptation
Answer:
A ________ strategy is best suited for the promotion of industrial products because
potential buyers usually need to be informed about a product’s special features before
purchase.
A) push
B) pull
C) stability
D) differentiation
Answer:
Which of the following methods of export/import financing is Techno Toys’ bank using
if it acts as an intermediary without accepting financial risk?
A) documentary collection
B) buyback
C) letter of credit
D) advance payment
Answer:
Which of the following types of money adds to the volatility of emerging markets
because it can be quickly withdrawn from its investment?
A) hot money
B) patient money
C) key money
D) fiat money
Answer:
Foreign bonds issued in the U.S. are called ________.
A) bulldog bonds
B) yankee bonds
C) samurai bonds
D) dragon bonds
Answer:
The process by which a company extends its control over additional stages of
production is called ________.
A) a push strategy
B) a pull strategy
C) vertical integration
D) horizontal integration
Answer:
________ teams are self-managed teams that help reduce waste in the production
processes of many manufacturing companies.
A) Cross-functional
B) Quality-improvement
C) Interdependent
D) Virtual
Answer:
Which of the following steps of the market screening process involves an evaluation of
the government bureaucracy?
A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site
Answer:
Which of the following materialized the EU’s goals of removing trade barriers,
increasing harmonization, and enhancing the competitiveness of European companies?
A) the Maastricht Treaty
B) the European monetary union
C) the Single European Act
D) the Copenhagen Criteria
Answer:
Companies involved in more than one line of business must first formulate a ________
strategy.
A) business-level
B) department-level
C) corporate-level
D) global-level
Answer:
In some countries, people exchange electronic goods for Techno Toys instead of paying
money for them. This practice is known as ________.
A) offset
B) counterpurchase
C) switch trading
D) barter
Answer:
A(n) ________ is anything that represents a culture’s way of life, including gestures,
material objects, traditions, and concepts.
A) social structure
B) social status
C) cultural baggage
D) cultural trait
Answer:
The global business environment consists of four distinct elements: the forces of
globalization, national business environments, the international business environment,
and ________.
A) domestic investment opportunities
B) technological innovation
C) international firm management
D) multinational corporations
Answer:
Chuck is convinced that his golf equipment will sell itself. But he is preparing a special
presentation for Asian customers because he wants to make a good first impression. As
an expert in culture of the Pacific Rim countries, which of the following would be your
most likely advice to Chuck?
A) Be sure to have a tight legal contract ready, to avoid product piracy problems.
B) Aggressive salesmanship is unlikely to work in Pacific Rim countries.
C) Have plenty of English-language business cards to pass around because most Asians
know English and like the language.
D) Avoid the confusion introduced by third-party contacts.
Answer:
The products that Ureshi Toys manufactures are examples of ________.
A) global products
B) niche products
C) intangible products
D) customized products
Answer:
Which of the following statements is true of outsourcing?
A) It reduces economic risk by facilitating the purchase of large insurance policies.
B) It reduces production risk by eliminating delays in the timely receipt of needed parts.
C) It reduces political risk by enabling the company to avoid investing in plants and
equipment abroad.
D) It reduces currency risk by allowing the company to invest the home currency on
in-house production facilities.
Answer:
In 1951, Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands
signed the Treaty of Paris and created the ________.
A) European Union
B) European Economic Community
C) European Coal and Steel Community
D) European Community
Answer:
Guanxi, in the Chinese business context, means ________.
A) bribing government officials
B) manufacturing inexpensive products
C) personal relationships
D) preference for communism
Answer:
Which of the following is a result of the protection of domestic companies from
international competition?
A) Consumers need to pay lesser for products.
B) There are increased incentives to cut production costs and improve quality.
C) Companies become more reliant on protection.
D) Protection increases a company’s incentives to obtain the knowledge it needs to
become more competitive.
Answer:
Which of the following statements is true of ethnocentric staffing?
A) Ethnocentric staffing appeals to companies that maintain lose control over
decision-making in branch offices abroad.
B) Companies that use ethnocentric staffing formulate policies designed to work in
every country in which they operate.
C) Ethnocentric staffing is generally used to fill positions at all levels of an
organization.
D) In ethnocentric staffing, individuals from the host country manage the operations
abroad.
Answer:
The belief that Freeland’s emerging industries need protection from international
competition during their development phase is an example of ________.
A) a local content requirement
B) a normal trade relation
C) the infant industry argument
D) the political motive of Freeland
Answer:
Which of the following should most likely be considered in making the decision to
outsource some of Echo’s manufacturing activities?
A) Do purchasing components present the lowest cost option for Echo?
B) Would Echo engineers be willing to relocate to a foreign nation?
C) Is Echo prepared to cover moving expenses for its managerial talent?
D) Can Echo find employees for a customer service center in the U.S.?
Answer:
Ownership restrictions and performance demands are used by ________.
A) host countries to promote FDI
B) host countries to restrict FDI
C) home countries to promote FDI
D) home countries to restrict FDI
Answer:
The three main goals of the World Trade Organization (WTO) are to help the free flow
of trade, help negotiate the further opening of markets, and ________.
A) measure the extent of globalization across the world
B) settle trade disputes between its members
C) accelerate technological innovation
D) fund small traders in developing nations
Answer:
A pricing policy in which a product has a different selling price in export markets than
it has in the home market is called ________.
A) dual pricing
B) cost-plus pricing
C) penetration pricing
D) premium pricing
Answer:
The world’s largest banks exchange currencies at spot and forward rates in the
________.
A) International Finance Corporation
B) Eurocurrency market
C) interbank market
D) World Bank
Answer:
Which of the following statements is true about the political risks in a global marketing
environment?
A) The political risk of low-income countries is lesser than high-income countries.
B) The more a country is developed, the greater is the political risk.
C) Political risk is a major deterrent for companies that want to invest abroad.
D) A country with high political risks attracts more investors.
Answer:
What is value density and what is its impact on an organization’s distribution policy?
Answer:
Explain the impact of added costs, trade barriers, and investor psychology on the ability
of purchasing power parity (PPP) to predict exchange rates accurately.
Answer:
Explain how political cooperation is a benefit of regional integration. How has the Gulf
Cooperation Council (GCC) evolved towards political cooperation?
Answer:
What types of information are found in a typical industry analysis? How can companies
use this information?
Answer:
Briefly describe any two of the three main components of the international capital
market.
Answer:
Discuss the role of business confidence and psychology in currency values.
Answer:
How does the theory of comparative advantage differ from the factor proportions
theory? Include a description of the factor proportions theory in your answer.
Answer:
Discuss the three essential pillars of the theory of mercantilism.
Answer:
Discuss the concept of lingua franca and how it affects communication in international
business.
Answer:
Discuss “political union” as a level of economic integration and “political cooperation”
as a benefit of economic integration.
Answer:
How does the international capital market reduce the cost of money for borrowers?
What are the two components for every quoted exchange rate?
Answer:
Explain how a pegged exchange-rate system works. Why would a country choose to
follow this system?
Answer:
Explain globalization of production and its benefits. Why should a company study
international firm management if its leadership commits to globalization of production?
Answer:
Discuss the challenges China faces as it continues its experiment on ‘socialism with
Chinese characteristics.”
Answer:
Explain the primary concerns of managers when establishing distribution policies.
Answer:
Discuss the limitations of the international product life cycle theory. How well does the
theory explain current trade patterns?
Answer:
Discuss the benefits and drawbacks of strategic trade policy. How are the drawbacks of
subsidies similar to the drawbacks of strategic trade policy?
Answer:
Explain how movement in a currency’s exchange rate affects the activities of both
domestic and international companies. Discuss how companies can export successfully
despite having a strong currency.
Answer: