Subcultures contribute very little to national culture and can be safely ignored when
making marketing and production decisions.
Answer:
Trade barriers and specialized knowledge are examples of market imperfections.
Answer:
Advance payment is the least favorable method of payment collection for exporters.
Answer:
Total quality management reduces the responsibility on each individual in the
production process.
Answer:
In a coalition government, the strongest political parties share power by dividing
government responsibilities among themselves.
Answer:
Polycentric staffing places managerial responsibility in the hands of people intimately
familiar with the local business environment.
Answer:
The process of staffing a company and ensuring employees are as productive as
possible is called human resource management.
Answer:
In geocentric staffing, operations outside the home country are managed by the
best-qualified individuals, regardless of their nationality.
Answer:
Food and utilities are examples of income-inelastic products.
Answer:
Secular totalitarianism is a political system in which government leaders are elected
directly by the wide participation of the people or their representatives.
Answer:
One reason to buy a product instead of making it in-house is the greater flexibility to
respond to market conditions.
Answer:
Fundamental analyses used for forecasting exchange rates estimate the timing,
magnitude, and direction of future exchange rate changes.
Answer:
Centralized decision making is beneficial when fast-changing national business
environments put a premium on local responsiveness.
Answer:
When one World Trade Organization member files a complaint against another,
decisions are to be rendered in less than one year.
Answer:
The World Trade Organization can punish a country in which a company accused of
dumping is based.
Answer:
Increasing globalization is causing a growing number of international companies from
emerging markets to undertake FDI.
Answer:
An international area structure separates domestic from international business activities
by creating a separate international division with its own manager.
Answer:
The brand name or trademark of a company is normally the single most important item
desired by a franchisee.
Answer:
A culture’s values tend to become more flexible over time.
Answer:
Product liability laws hold only manufacturers responsible for damage, injury, or death
caused by defective products.
Answer:
A main goal of the global product structure is to bring together geographic and product
area managers in joint decision making.
Answer:
A multinational strategy is best suited to industries in which price competitiveness is a
key success factor.
Answer:
When trade diversion occurs, buyers will likely pay less for products.
Answer:
It is important for low-cost competitors to locate near their markets in order to keep
track of buyer preferences.
Answer:
A differentiation strategy is often implemented when a company wants to exploit
economies of scale to have the lowest cost structure.
Answer:
As the unpredictability of exchange rates increases, so does the cost of insuring against
the accompanying risk.
Answer:
The main difficulty CARICOM will continue to face is that most members trade more
with nonmembers than they do with each other.
Answer:
The increase in the level of trade between nations that results from regional economic
integration is called trade creation.
Answer:
Today’s international monetary system remains in large part a managed float system.
Answer:
An import tariff is levied by the government of a country that a product is passing
through on its way to its final destination.
Answer:
The theory of absolute advantage measures a nation’s wealth by the standard of living
of its people.
Answer:
Strategy is the set of planned actions that managers take to help a company meet its
objectives.
Answer:
Rationalized production is a system of production in which each of a product’s
components is produced in the same location so that the cost of producing that product
is lowest.
Answer:
The value customers obtain from a product is heavily influenced by the image of the
country in which the product is manufactured.
Answer:
Most of the world’s merchandise trade is composed of trade in agricultural products.
Answer:
Developed nations normally have the most active counterfeiting markets.
Answer:
Lobbying is the policy of hiring people to represent a company’s views on political
matters.
Answer:
The eclectic theory states that firms undertake foreign direct investment only when the
features of a particular location make the location appealing for investment.
Answer:
Industry data cannot indicate how individuals feel about a company or its products.
Answer:
Which of the following statements is true of Paribo, a democratic nation whose legal
system is based on civil law?
A) The law is based on religious teachings and is enforced by the country’s religious
leaders.
B) The law is flexible and its interpretations differ with situations.
C) The law is based on a detailed set of written rules that constitute a legal code.
D) The law is interpreted on the basis of tradition, precedent and usage.
Answer:
________ dominates the foreign exchange market.
A) London
B) New York
C) Tokyo
D) Beijing
Answer:
________ is a prominent operational center.
A) Dubai
B) London
C) Singapore
D) Mexico
Answer:
When selecting employees to help her establish their chain in China, she decides not to
transfer Craig, as he believes that the people of China are less competent and skilled
than the people of his country. What trait does Craig display?
A) individualism
B) imperialism
C) ethnocentricism
D) collectivism
Answer:
Wallace’s executive team reviews the stages of the international product life cycle to
understand better what to expect when the product is sold overseas. Since there is
virtually no export market for the product at present, the product is most likely in which
of the following stages of the international product life cycle?
A) maturing product stage
B) new product stage
C) product decline stage
D) standardized product stage
Answer:
According to Hofstede’s framework, cultures that score high on ________ value respect
for tradition, thrift, and perseverance, and have strong work ethics.
A) power distance
B) masculinity
C) uncertainty avoidance
D) long-term orientation
Answer:
Which of the following created a new international monetary system based on the value
of the U.S. dollar?
A) Plaza Accord
B) Bretton Woods Agreement
C) Louvre Accord
D) Jamaica Agreement
Answer:
The process of assessing a company’s ability to produce enough output to satisfy market
demand is called ________.
A) capacity planning
B) lean production
C) process management
D) product structure modeling
Answer:
GMI’s purchase of the Brazilian company is best classified as a(n) ________.
A) greenfield investment
B) portfolio investment
C) acquisition
D) demerger
Answer:
Which of the following statements is true regarding the assumptions of the absolute and
comparative advantage theories?
A) The theories assume that there are many number of countries engaged in the
production and consumption of just two goods.
B) The theories assume that there are additional costs for transporting traded goods
from one country to another.
C) The theories assume labor to be the only resource used in the production process.
D) The theories assume that specialization in the production of one particular good
results in gains in efficiency.
Answer:
Which of the following is true of quotas?
A) They are the most common type of trade barrier.
B) They help domestic producers maintain their market shares and prices.
C) Their licenses are granted by governments to other nation companies on a five-year
basis.
D) They lead to a decrease in the prices of intermediate goods.
Answer:
Companies involved in direct exporting typically rely on ________.
A) distributors
B) agents
C) export management companies
D) export trading companies
Answer:
Rockwall Enterprises is planning to expand the firm by establishing operations outside
of the U.S. In which of the following countries would Rockwall most likely be able to
establish operations most quickly?
A) Japan
B) Brazil
C) Germany
D) Australia
Answer:
Stephanie also expects participants to ask: “Are the Chinese as formal and
business-oriented as Americans are?” Which of the following would most likely be
Stephanie’s response?
A) The Chinese operate very much like Americans, for them business is more important
than pleasure.
B) The Chinese dislike guessing games; give them your sales pitch right away and let
the meeting develop.
C) Don’t overlook the importance of personal relationships; friendship comes before
business.
D) The Chinese are very flexible and will easily adapt to your culture’s way of doing
business.
Answer:
A(n) ________ channel does not create strong barriers to channel entry for other
producers, nor does it provide much control over reseller decisions such as what
competing brands to sell.
A) one-level
B) zero-level
C) exclusive
D) intensive
Answer:
In which of the following ways did the Uruguay Round of Negotiations modify the
original General Agreement on Tariffs and Trade (GATT) treaty?
A) It helped standardize intellectual property rules around the world.
B) It called on developing and least-developed economies to cut agricultural tariffs
significantly.
C) It relaxed the additional tariffs imposed on companies charged with dumping.
D) It increased barriers to trade in all developed, developing and least-developed
nations.
Answer:
To estimate an emerging market’s openness, Matt could analyze its ________.
A) market receptivity
B) differentiation strategy
C) commercial infrastructure
D) country risk
Answer:
________ markets are characterized by the rural population migrating to cities for
better pay and thus, overloading cities’ infrastructures.
A) Traditional
B) Emerging
C) Virtual
D) Developed
Answer:
________ is political risk that affects only a specific firm or firms within a specific
industry.
A) Inclusive political risk
B) Exclusive political risk
C) Micropolitical risk
D) Macropolitical risk
Answer:
The key element of political risk of greatest concern for global companies is ________.
A) the cost of transporting materials and goods
B) unforeseen political change
C) currency and liquidity problems
D) letting past political events blind future opportunities
Answer:
Bob is a journalist who intends to spend the next five months exploring Konesia. In
order to be able to fit in with the locals, he studies their culture in detail. He familiarizes
himself with their tastes and preferences, takes note of their taboos, and memorizes
many of their sayings and phrases. Which of the following terms best describes his
actions?
A) material culture
B) popular culture
C) cultural imperialism
D) cultural literacy
Answer:
Given the lack of available hard currency, Russian businesses often use goods and
services as payment for other products they buy from abroad. This practice is referred
to as ________.
A) letter of credit
B) fiat money
C) barter
D) guanxi
Answer:
The ________ was a 1985 agreement among the G5 nations to act together in forcing
down the value of the U.S. dollar.
A) Bretton Woods Agreement
B) Smithsonian Agreement
C) Plaza Accord
D) Louvre Accord
Answer:
Much production in the world today closely resembles what is predicted by the
________.
A) new trade theory
B) international product life cycle
C) theory of comparative advantage
D) theory of factor proportions
Answer:
Research in which people record information in personal diaries on their attitudes,
behaviors, or purchasing habits is called a ________.
A) survey
B) focus group
C) consumer panel
D) literature review
Answer:
According to the international product life cycle theory, in which of the following
stages is a good produced in the home country because of uncertain domestic demand
and to keep production close to the research department?
A) standardized product stage
B) maturing product stage
C) declining product stage
D) new product stage
Answer:
Which of the following is best classified as an economic union?
A) Southern Common Market (MERCOSUR)
B) European Union (EU)
C) North American Free Trade Agreement (NAFTA)
D) Andean Community
Answer:
GMI’s subsidiary for component B in Thailand is best described as a(n) ________.
A) greenfield investment
B) portfolio investment
C) acquisition
D) merger
Answer:
A company that is selling unprofitable business units is most likely following a
________ strategy.
A) growth
B) retrenchment
C) stability
D) combined
Answer:
The principle that a difference in nominal interest rates supported by two countries’
currencies will cause an equal but opposite change in their spot exchange rates is called
the ________.
A) Guidotti-Greenspan rule
B) international Fisher effect
C) comparative advantage theory
D) efficient market view principle
Answer:
Countries might impose a(n) ________ in response to the threat of an import quota or
total ban on a product by an importing nation.
A) embargo
B) ad valorem tariff
C) compound tariff
D) voluntary export restraint
Answer:
Which of the following is true of the value densities of products?
A) The cost of transporting goods with high value-density ratios is high relative to their
value.
B) Products with high value-density ratios are integrated into the manufacturing process
at points close to their original locations.
C) Most commodities, including cement, iron ore, and crude oil, have high
value-density ratios.
D) The lower a product’s value density, the more localized the distribution system.
Answer:
Compare and contrast the purposes of the World Bank and the International Monetary
Fund.
Answer:
Compare and contrast the methods of cultural training. Is any single method better than
all the others?
Answer:
Discuss the role entrepreneurs and small businesses play in the expansion of FDI. What
are some of the surprises that managers face as they invest in new markets abroad?
Answer:
Describe the five communication strategies that companies commonly use and cite
situations where the strategies are used.
Answer:
Discuss the benefits and drawbacks of regional integration.
Answer:
Discuss the challenges involved in forecasting exchange rates.
Answer:
How does the dual extension method work as a promotional strategy?
Answer:
Discuss the dangers of trade dependency.
Answer:
Explain the concept of balance of payments and describe its two major components.
Answer:
Briefly explain how companies compensate managers in international markets.
Answer:
Explain why the availability of data is a challenge when conducting international
research. How do interviews and focus groups help in the availability of data?
Answer:
Explain the concept of capital structure as it applies to a company with international
operations.
Answer:
Differentiate between primary and support activities that create value for a company’s
customers. How can managers determine whether an activity enhances customer value?
Answer:
What challenges do international labor unions face as they try to accomplish their
objectives?
Answer:
How are countries classified? Explain with examples.
Answer:
Describe the importance of a nation’s legal system, and identify the main differences
between the three main types of legal systems.
Answer:
Describe the different types of tariffs and provide an example of each.
Answer: