Every importer should know how the U.S. Customs calculates import duties and know
the importance of the product classification.
Foreign direct investment may be an attempt by foreign companies to establish
competitive advantage over potential competitors in other markets, due to possession of
advantages not available to local firms. Such advantages possessed by foreign
companies over their local competitors include knowledge about local market
conditions and cost efficiencies from operating at a distance.
Market screening is a modified version of environmental scanning in which the firm
studies the stock market to eliminate the less desirable markets.
Swap contracts exchange foreign currency debt for another liability in the home
currency.
The first step in finding a foreign market for a product is to determine whether a market
exists for a firm’s products.
Because of the rapidity of changes in uncontrollable variables, many managers have
turned to contingency plans, which are multiple, plausible stories for probable futures.
Nonrenewable energy sources include coal, fossil fuels, and ocean thermal energy
conversion.
Some firms promote host-country employees to international status without transferring
them abroad.
CIBERs are international business research and education efforts located at U.S.
universities.
We are each born with a unique culture.
According to the text, the level of intracompany trade of multinationals in 1930, as a
percentage of world trade, may have exceeded the proportion at the end of the 20th
century.
Kidnap, ransom, and extortion are techniques often used by terrorists against which no
insurance is available.
The use of TCNs has become particularly prevalent in the developing countries.
Sustainable business practices have three characteristics: limits, interdependence, and
equity.
Mistakes in selecting foreign distributors and sales representatives are not an issue new
exporters face.
Global trademark protection follows the Office of Harmonization in the Internal Market
approach.
Most of the foreign direct investment in the United States has been spent establishing
new companies.
The Bretton Woods system led to minimal growth in international trade but helped to
reduce inflation levels.
Although the EU can influence the practices of businesses located in non-EU-member
countries, Microsoft has been able to maintain business in the EU much as it conducts
business in the United States.
The basic functions of domestic and international marketing are the same.
The WTO has negotiated a TRIPS agreement whereby property rights do not take
precedence over public health.
One way in which contract manufacturing is used is for a company to contract with a
local manufacturer to produce products for the company, according to the company’s
specifications.
The product global corporate form eliminates the duplication of product and area
specialists.
The temporal method of translation translates fixed assets at the rates in effect the day
the assets were acquired.
The magnitude of international trade and how it has grown are reflected in the fact that
one-fourth of everything grown or made in the world is now exported.
A disadvantage of hiring local managers is that they are often unfamiliar with the home
country of the IC and with its policies and practices.
When possible, it is better for companies to initially outsource complex activities in
order to achieve better cost benefits.
In environmental scanning the firm scans the world for environmental forces that might
affect it.
Bridging involves seeing the other person’s point of view.
Physical forces inhibit efforts at international product standardization.
During the second screening, analysts are highly concerned with inflation trends,
exchange rates, and interest rates.
The United Kingdom Bribery Act includes penalties for corporate failure to prevent
bribery, but only if the act of bribery occurred in the United Kingdom.
Portfolio investment is the purchase of sufficient stock in a firm to obtain significant
management control.
Producing a factory ready to operate is similar to producing a turnkey project.
According to the text, the tendency toward an international integration of goods,
technology, information, labor, and capital, or the process of making this integration
happen, is called:
A. internationalization.
B. international business.
C. economic globalization.
D. multinationalization.
E. global integration.
Culture is a group of shared worldviews, social rules, and interpersonal dynamics that
is:
A. chosen consciously by each group to set themselves apart from other groups.
B. learned, interrelated, and shared.
C. used as a way to separate economic classes.
D. a collection of noble pursuits including opera, art, ballet, and classical music.
__________ permits a firm to set up an export program with a minimum of cash outlay
and little special expertise.
A. A joint venture
B. Direct exporting
C. Franchising
D. Indirect exporting
E. Licensing
The capability of one nation to produce more of a good with the same amount of input
than another country is:
A. a comparative advantage
B. an absolute advantage
C. a mercantilist advantage
D. none of the above
E. two of A, B, and C
Culture includes everything but:
A. religion.
B. religion and politics.
C. higher education and universal values.
D. none of the above.
Historically, more aspects of ______________ have been standardized and coordinated
worldwide by companies than has been the case for other value chain activities such as
__________.
A. research and development; manufacturing
B. marketing; manufacturing
C. manufacturing; marketing
D. marketing; research and development
E. none of the above
The successful domestic leader:
A. can easily adapt to the global arena because the leadership challenges there are the
same as those in the domestic arena.
B. faces daunting new skills in transferring to the global leadership arena, skills having
to do with understanding a fast-moving environment and cultural differences.
C. can be retrained to lead globally through an international global leadership program.
D. will need to learn foreign languages and nonverbal communication patterns to be a
global leader.
E. C and D.
Kidnapping:
A. two of B, C, and D.
B. is a weapon used by some terrorists to extract ransom.
C. can result in counterproductive results if ransom is paid for hostages.
D. can be insured against by obtaining kidnapping, ransom, and extraction (KRE)
insurance.
E. all of B, C, and D.
A pioneering firm stands the best chance for long-term success in market-share
leadership and profitability when:
A. there are few cultural barriers to entry.
B. the firm has sufficient size, resources, and competencies.
C. there is high potential for imitation.
D. all of the above.
E. two of A, B, and C.
Arguments for trade restrictions include:
A. national defense, infant industry, and job protection.
B. punishment of offending nations.
C. fair competition and retaliation.
D. all of the above.
E. two 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.
According to the text, approximately ______ percent of the companies surveyed
required cross-cultural training for their expats or their families.
A. 21 percent
B. 27 percent
C. nearly half
D. 77 percent
E. 90 percent
Nuisance tariffs:
A. annoy the importers with red tape and administrative paperwork.
B. are a historical anomaly.
C. are found in developed nations more than in developing nations.
D. have no point other than to indicate that tariff regulations change quickly.
E. two of the above.
At the end of World War II, the UN called for the conference that set up the World Bank
and the IMF. This conference was:
A. convened in San Francisco.
B. held at Yalta.
C. held at Grasleben, Germany.
D. held at Bretton Woods, New Hampshire.
Foreign business denotes:
A. a business whose activities involve crossing national borders.
B. the domestic operations within a foreign country.
C. an organization with multicountry affiliates.
D. an organization that attempts to standardize operations worldwide.
E. all of the above.
The U.S. antitrust law contains both civil and criminal penalties:
A. neither of which can be applied outside the United States.
B. and the criminal penalties apply to foreign companies even if the conspiracy took
place outside the United States.
C. but their application to foreign companies is limited to actions that have taken place
within the United States.
D. and they can be administered by foreign courts.
E. and they are enforced through the United Nations
In a small power distance culture:
A. people will want direction, so top-down leadership styles are appropriate.
B. seniority, rank, and title are important.
C. first names are likely to be used in the office because the ideal is equality.
D. A and C.
ADRs are a way for non-U.S. firms to:
A. participate in U.S. debt markets.
B. lock in dollar exchange rates.
C. leverage in a foreign currency.
D. participate in local U.S. equity markets without incurring the need for a broker or
foreign exchange.
Whether to position a product as foreign or local is a basic cultural decision for the
marketer, and it seems to depend on:
A. the distribution channel being used.
B. the product type.
C. the target market.
D. all of the above.
E. two of A, B, and C.
Dissimilar cultural patterns generally necessitate changes in food and other:
A. industrial products.
B. consumer goods.
C. luxury products.
D. basic consumer staples.
E. all of the above.
Ex-Works is a short way to say:
A. cash in advance.
B. an open account.
C. consignment.
D. letters of credit.
E. shipment transferred to seller at factory.
The three largest markets for American exports of goods in 2010 were:
A. Japan, the UK, and China.
B. Japan, Mexico, and the UK.
C. Canada, Mexico, and China.
D. Canada, Japan, and the UK.
E. Japan, Mexico, and China.
Evidence suggests that:
A. the Internet can be an effective tool in personal selling, when used to build trust.
B. the Internet is more effective in personal selling than is face-to-face communication.
C. the Internet is an inappropriate choice for personal selling when trust building is
important.
D. all of the above.
E. two of A, B, and C.
The common characteristic of multinationals that are organized by function at the upper
level is a narrow:
A. and highly integrated product mix.
B. and highly integrated customer list.
C. variation of prices in the product mix.
D. research and development effort.
E. none of the above
Opponents of globalization argue that globalization has produced:
A. more and better jobs.
B. deleterious effects on labor and labor standards.
C. uneven results across nations and people.
D. all of the above.
E. two of A, B, and C.
Standards are a way to establish nontariff barriers, and examples are:
A. all of B, C, and D.
B. Japan’s refusal to import light mayonnaise.
C. Canada’s categorization of orange juice with added calcium as a drug and subject to
special requirements.
D. the prohibition of imported drugs at the consumer level in the United States.
E. two of B, C, and D.
(p. 111)-Unlike quotas, voluntary export restraints (VERs) are imposed by the:
A. importing country’s government.
B. exporting country’s government.
C. either the importing or exporting country’s government; what matters is that they are
voluntary.
D. the importing company.
E. none of the above.
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
International strategy:
A. needs to be consistent among the various functions, products, and regional units of
the company.
B. needs to be consistent with the demands of the international competitive
environment.
C. is concerned with the way firms make fundamental choices about developing and
deploying scarce resources internationally.
D. has a goal of achieving and maintaining competitive advantage.
E. all of the above.
Which of the following is the most risky for an exporter?
A. Open account
B. Irrevocable letter of credit
C. Bank collection time draft
D. Cash in advance
E. Revocable letter of credit
The International Energy Agency 2010 report observes that an energy revolution
underway may well lead to:
A. a 27 percent drop in oil usage.
B. North America becoming the center of alternative energy research.
C. Africa and the Middle East increasingly relying on fossil fuels.
D. Europe relying increasingly on nuclear.
A survey of CEOs of the 162 largest firms on Fortune’s list of the 500 largest American
corporations found that the CEOs strongly believed that:
A. an international orientation should be an important part of college business
education.
B. international business skills and knowledge were important for promotion to senior
executive positions but not for appointment to entry-level positions.
C. the importance of international business skills and knowledge for promotion to
senior executive positions was higher for companies anticipating an increased level of
importance of international activities in the next five years.
D. all of the above.
E. two of A, B, and C.
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.
Some of the variables that determine which decision is made where include:
A. product and equipment.
B. competence of subsidiary.
C. state-of-the-art communication networks.
D. two of the above.
E. all of A, B, and C.