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an ethnocentric approach is compatible with both global standardization and
transnational strategies.
there is no evidence that psychological factors play an important role in determining the
expectations of market traders as to likely future exchange rates.
paul samuelsons critique argues that trade is a positive-sum game in which all countries
that participate realize economic gains.
if the market rate of interest is greater than the contractual rate of interest, bonds will
sell at a discount.
It is easy for a business to get adequate insurance coverage for exchange rate changes
that might occur several years in the future.
which of the following arguments supports the paul samuelsons critique?
a.a rich country cannot produce net gains by engaging in free trade with a poor country
b.governmental intervention will reduce the likeliness of countries economic success
c.countries should attempt to specialize in the production of goods and services
d.trade is a positive-sum game in which all countries that participate realize economic
gains
the interest charged on a $200,000 note payable, at the rate of 6%, on a 60-day note
would be
a.$12,000
b.$6,000
c.$3,000
d.$2,000
the major cost saving associated with jit systems comes from _____.
a.early delivery of raw materials to production
b.decentralization of manufacturing
c.speeding up inventory turnover
d.reduced spending on crm activities
Which of the following combinations of exchange rates was ruled out by Lessard and
Lorange as illogical and unreasonable?
A.Translating budget using ending rate and translating actual performance using initial
rate
B.Translating both actual performance and budget using projected rate
C.Translating both actual performance and budget using initial rate
D.Translating budget using projected rate and translating actual performance using
ending rate
Lessard and Lorange ruled out four of the nine possible combinations they proposed as
illogical and unreasonable. It would make no sense to use the ending rate to translate
the budget and the initial rate to translate actual performance data.
firms engaging in a _____ with a local company can benefit from a local partners
knowledge of the host countrys competitive conditions, culture, language, political
systems, and business systems.
a.turnkey project
b.joint venture
c.greenfield investment
d.licensing arrangement
the _____ states that for any two countries, the spot exchange rate should change in an
equal amount but in the opposite direction to the difference in nominal interest rates
between the two countries.
a.purchasing power parity theory
b.efficient market theory
c.international fisher effect
d.law of one price
other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in:
a.politically unstable developing nations that operate with a mixed or command
economy
b.nations where there is a dramatic upsurge in either inflation rates or private-sector
debt
c.politically stable developed and developing nations that have free market systems
d.developing nations where speculative financial bubbles have led to excess borrowing
which of the following is an advantage that banks have when they deal with foreign
currencies?
a.interest payments to customers are low when dealing with foreign currencies
b.accounts need not be maintained when dealing with foreign currencies
c.risks that investors face are low when dealing with foreign currencies
d.governments give banks more freedom when dealing with foreign currencies
what is the long-term goal of international trade secretariats (itss)?
a.to increase the competition between national unions
b.to be able to bargain transnationally with multinational firms
c.to accommodate wide variation in union structure
d.to be able to regulate multinationals with regard to labor policies
bringing managers together in one location for extended periods and rotating them
through different jobs in several countries is a part of:
a.the ethnocentric approach
b.the global standardization strategy
c.cultural toughness programs
d.management development programs
most service firms have found that _____ with local partners work best for controlling
subsidiaries.
a.joint ventures
b.licensing agreements
c.greenfield investments
d.turnkey projects
the convention on combating bribery of foreign public officials in international business
transactions excludes:
a.bribes made to secure contracts that would otherwise not be secured
b.grease payments to gain exclusive preferential treatment
c.facilitating payments made to expedite routine government action
d.payments to government officials for special privileges
which of the following statements is true of reactive firms?
a.reactive firms consider a variety of markets for selling their products and services
b.they consider exporting only after their domestic market is saturated
c.they systematically scan foreign markets for profitable export opportunities
d.they create excess productive capacity and actively hunt for opportunities in foreign
markets
tariff rate quotas are common in agriculture, where their goal is to:
a.reduce the use of synthetic fertilizers
b.limit imports over quota
c.increase agricultural imports
d.increase foreign competition
which level of economic integration eliminates trade barriers between member
countries and adopts a common external trade policy?
a.political union
b.customs union
c.common market
d.economic union
to overcome cultural barriers, companies should:
a.develop products specifically for each market
b.focus on universal needs
c.focus only on international market segments
d.develop cross-cultural literacy
explain the concept of universal needs and in which type of industry it is most likely to
occur.
discuss the effect of country factors on the decision of where to locate production?
Compare currency crisis, banking crisis, and foreign debt crisis.
explain the five reasons why a firm should decentralize its decision-making.
the ________________ ratio provides an indication of a companys ability to meet
interest payments as they come due.
consider why a firm should enter a market via a wholly owned subsidiary. what are the
advantages and disadvantages of this type of strategy?
explain make-or-buy decisions with an example.
