1) The term protectionism, when applied to international trade, refers to governmental
restrictions and incentives to affect trade flows.
2) In a matrix structure, product, functional, or geographic groups compete for
resources.
3) Companies that have integrated their supply chains internationally tend to lobby their
home governments for increased protectionist measures.
4) Antidumping regulations of the WTO allow countries to establish restrictions against
any exports that fail to meet quality standards.
5) According to the accounting concept of mutual recognition, companies are required
to reconcile financial statements to local GAAP.
6) The typical tax-haven subsidiary owns the common stock of its related operating
foreign subsidiaries.
7) A joint venture is an example of a portfolio investment
8) Studies of repatriated employees regularly report that most knew what their company
position would be when they returned home but were uncertain about their likely new
workplace practices.
9) Which of the following is considered a primary activity in a company’s value chain?
A) shipping
B) product design
C) systems and solutions
D) materials and equipment
10) An example of a Japanese service export is a visit by a ________
A) Japanese citizen to Disneyland in the United States
B) Japanese citizen to the Japan Pavilion at Epcot Center in the United States
C) US citizen to the Japan Pavilion at Epcot Center in the United States
D) US citizen to Tokyo Disneyland in Japan
11) An example of an electronic brokerage system used to trade foreign exchange is
________.
A) Reuters
B) Interbank Traders Ltd.
C) Bank for International Settlements
D) the reporting dealers clearing house
12) Companies most likely use the foreign-exchange market to ________.
A) diversify their expenses from other sources
B) convert money for use in financial transactions
C) increase their presence on the black market
D) acquire currency from emerging markets
13) What is the primary reason for technology licensing to take place while a product is
still in the developmental stage?
A) to enable the licensor to receive some earnings in case the technology never
becomes operative
B) to ensure that a product launches in various countries at about the same time
C) to gain funds to complete the development
D) to reduce transaction costs
14) GAAP usage differences increase the problems associated with ________.
A) trading foreign stock
B) establishing e-commerce
C) identifying emerging markets
D) raising capital in different countries
15) The more closed a society is, the more important ________ group membership is.
A) acquired
B) age-based
C) education
D) ascribed
16) Today, most expatriate assignments are for ________.
A) less than one year
B) one to three years
C) three to five years
D) five to ten years
17) A governmental strategic trade (industrial) policy is one that ________.
A) lessens dependence on foreign military goods
B) seeks reciprocal free trade agreements between developed and developing countries
C) targets the resources needed to support industries that seem to fit best with the
country’s advantages
D) limits imports to encourage domestic production of what would otherwise be
imported
18) Which of the following is a characteristic of India that discourages MNE
investment?
A) slow market growth
B) restrictive labor laws
C) poor communication infrastructure
D) government controlled market
19) Vale, the large Brazilian mining company, is trying to decide if it wants to invest in
a Canadian nickel mine. Which of the following questions is LEAST relevant to Vale’s
capital budgeting decision?
A) How will differing rates of inflation in Canada and Brazil affect the parent and
subsidiary?
B) How will dividends be affected by the Canadian and Brazilian tax systems?
C) What is the difference in inflation rates between Brazil and Canada?
D) Does Brazil or Canada have the absolute advantage in exporting?
20) An example of an expatriate would be a Canadian manager working for a Canadian
firm in China.
21) The top location for trading foreign exchange is ________.
A) London
B) New York
C) Zurich
D) Tokyo
22) Federal, state, and local governments that recognize the benefits of international
trade, actively aid the efforts of potential and active exporters and ________.
A) ensure the quality of exported products
B) establish barriers to punish foreign rivals
C) collect a fee for each successful export sale
D) protect the interests of struggling importers
23) A multinational enterprise (MNE) is best defined as a firm ________
A) that is a member of the Fortune 500
B) with foreign business partners
C) involved in global franchising
D) with foreign direct investments
24) A go/no-go decision means ________.
A) an individual project decision is based on whether the project meets threshold
criteria
B) projects are ranked and approved from the top of the list down until available
resources are exhausted
C) management reviews existing information and decides whether additional
individualized feasibility studies are warranted
D) projects are approved or disapproved based on the potential ease of divestment
25) Most countries have agreed on how to assess values when their customs agents levy
tariffs. Which of the following best expresses this agreement?
A) They should use the value of similar goods arriving at about the same time
B) They should use the declared invoice price unless they doubt its authenticity
C) They should assess a value based on local costs to produce a similar product
D) They should assess a value based on the expected final consumer sales price
26) Hoffman Electronics is a U.S. company. Which balance sheet format is most likely
used by Hoffman?
A) assets + liabilities = reserves
B) assets = liabilities + shareholders’ equity
C) noncurrent assets + current assets – current liabilities – noncurrent liabilities =
shareholders’ equity
D) current assets – current liabilities = fixed assets – noncurrent liabilities = capital and
reserves