Which of the following is the main cultural motive behind government intervention in
trade?
A) promotion of strategic trade policies
B) protection of jobs
C) protection of national identity
D) protection of young industries from competition
Answer:
Which of the following forecasting techniques employs statistical models based on key
economic indicators to forecast exchange rates?
A) financial analysis
B) fundamental analysis
C) probability bounds analysis
D) technical analysis
Answer:
One of the main goals of the World Trade Organization is to ________.
A) encourage dumping among trading nations
B) restrict the free flow of trade
C) provide favorable terms of trade to a few selected countries
D) settle trade disputes among its members
Answer:
Which of the following is a disadvantage of local requirement laws to foreign
companies?
A) They do not foster local business activity and increase regional and national
unemployment.
B) They make it necessary for the government to resort to expropriation and
confiscation.
C) The companies are forced to bring in raw material and workers from their own
countries.
D) Companies required to hire local personnel might be forced to take on inadequately
trained workers.
Answer:
Expropriation is best defined as the ________.
A) transference of ownership of resources from private to public sector with no
compensation
B) transference of ownership from private to public sector with compensation to private
owners for their losses
C) conversion of state-owned property to privately owned property
D) conversion of state-owned property to privately owned property with no
compensation
Answer:
Which of the following talks about the relative ability of two countries’ currencies to
buy the same “basket” of goods in those two countries?
A) the Fisher effect
B) the law of one price
C) purchasing power parity
D) cross rates
Answer:
Which of the following occurs when a company sells its products to intermediaries who
then resell to buyers in a target market?
A) indirect exporting
B) counterpurchase
C) an acquisition
D) a joint venture
Answer:
The way in which a company divides its activities among separate units and coordinates
activities among those units is referred to as ________.
A) organizational structure
B) organizational network analysis
C) organizational diagnostics
D) organizational climate
Answer:
In his research, Alistair discovers a type of arrangement in which industrial equipment
is exported in return for products produced by that equipment. This arrangement is
known as ________.
A) barter
B) offset
C) switch trading
D) buyback
Answer:
Sam’s mentor is excited about the wheat prices in France and the U.S. because he sees
an opportunity to buy wheat in the U.S. and sell it in France, which is known as a(n)
________.
A) exchange rate profit
B) arbitrage opportunity
C) violation of purchasing power parity
D) violation of the law of one price
Answer:
According to the efficient market view, future exchange rates are most accurately
forecasted by ________.
A) forward exchange rates
B) cross rate
C) interbank interest rates
D) buy rate
Answer:
Which of the following is a barrier to buying products from international suppliers?
A) extremely low tariffs
B) additional transportation costs
C) lower flexibility to respond to market conditions
D) high political risk
Answer:
Nations following the theory of ________ believed that the world’s wealth was limited
and that a nation could increase its share of the pie only at the expense of its neighbors.
A) absolute advantage
B) comparative advantage
C) mercantilism
D) factor proportions
Answer:
A pricing policy in which one selling price is established for all international markets is
called ________.
A) dual pricing
B) value-based pricing
C) worldwide pricing
D) target pricing
Answer:
The process whereby countries in a geographic area cooperate with one another to
reduce or eliminate barriers to the international flow of products, people, or capital is
called ________.
A) regional economic integration
B) protectionism
C) mercantilism
D) economic nationalism
Answer:
Which of the following is an income-elastic product?
A) food
B) utilities
C) jewelry
D) beverages
Answer:
In a market economy, access to alternative purchase options is known as ________.
A) price-sensitivity
B) economic transition
C) laissez-faire
D) free choice
Answer:
Which of the following industries is typically protected for national security reasons?
A) agriculture
B) textile
C) automobile
D) housing
Answer:
Which of the following statements is true about country image and its effects on global
companies?
A) It embodies all important facets of a nation’s business environment.
B) If a country’s image is positive in one product class, it tends to be positive in all
other product classes as well.
C) An image, once formed, seldom changes over time.
D) Products made in emerging countries are evaluated more positively than products
made in developed countries.
Answer:
Transportation costs are one of the driving forces behind the globalization of the
________ industry.
A) health care
B) publishing
C) software
D) steel
Answer:
Economic integration whereby countries remove barriers to trade and the movement of
labor and capital among members, set a common trade policy against nonmembers, and
coordinate their economic policies is called a(n) ________.
A) customs union
B) common market
C) economic union
D) free trade area
Answer:
Which stage of the market-screening process is John involved in, while examining
government regulations and bureaucracy in a market?
A) assessment of the national business environment
B) selection of the market
C) identification of the basic appeal for markets
D) measurement of market potential
Answer:
If Trader’s Paradise purchases euros expecting the value to rise and generate a profit for
the company, it is engaging in currency ________.
A) swap
B) speculation
C) hedging
D) arbitrage
Answer:
________ is the value of all goods and services produced by the domestic economy
over a one-year period.
A) Gross domestic product (GDP)
B) Human development index (HDI)
C) Gross national product (GNP)
D) Purchasing power parity (PPP)
Answer:
Which of the following stages of the market or site screening process involves
competitor analysis?
A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site
Answer:
One lower-level position Erica must fill requires the employee to be familiar with the
new market and its customs, traditions, and language. Also, the new hire must be
comfortable with Hudson Food’s organizational culture and business traditions. Who
among the following will Erica most likely recruit for this position?
A) a local fresher with strong government contacts
B) an existing Hudson Foods employee from the United States
C) a native of the target market who has completed a one-year internship at Hudson
Foods
D) an individual from the U.S. who has experience in the frozen food industry
Answer:
In today’s world, the Andean Community is best described as an incomplete ________.
A) free-trade area
B) customs union
C) economic union
D) political union
Answer:
The ________ replaced the institution of GATT while retaining all of the former GATT
agreements.
A) World Trade Organization
B) Federation of International Trade Association
C) Commonwealth of Nations
D) International Monetary Fund
Answer:
Which of the following is the final step in the screening process for potential markets
and sites?
A) assessment of the national business environment
B) measurement of market or site potential
C) selection of the market or site
D) assessment of climate suitability
Answer:
An important advantage of the staffing policy recommended by Valerie is that it
________.
A) re-creates local operations in the image of home-country operations
B) eliminates the high cost of relocating expatriate managers and families
C) helps the company develop global managers who can adjust easily to any business
environment
D) sends managers from home to look out for the company’s interests
Answer:
France gave Excelsior’s Limited permission to export its product as long as the
company obtained a special license first. Excelsior has been waiting six months for the
license and is wondering if it will ever arrive. Excelsior’s Limited is experiencing a(n)
________.
A) administrative delay
B) local content requirement
C) embargo
D) currency control
Answer:
The purchase or sale of a currency with the expectation that its value will change and
generate a profit is called ________.
A) currency hedging
B) currency arbitrage
C) currency speculation
D) currency conversion
Answer:
Tax breaks on profits earned abroad and political pressures 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:
If Owen’s HomeCare Products decides to sell their products to intermediaries who then
resell them to buyers in target markets, the company would be engaging in ________.
A) indirect exporting
B) counterpurchase
C) an acquisition
D) a joint venture
Answer:
One option that intrigues Alistair is the process in which one company sells to another
its obligation to make a purchase in a given country. This arrangement is known as
________.
A) barter
B) offset
C) switch trading
D) buyback
Answer: