Developed countries have been the major participants behind cross-border mergers and
acquisitions.
Answer:
Cultural elements can influence what kinds of products are sold and how they are sold
in a country.
Answer:
The marketing communication process involves encoding and decoding of the
promotional message.
Answer:
Focus group interviews tend to work best when moderators are natives of the countries
where the interviews are held.
Answer:
The process of collecting and analyzing original data and applying the results to current
research needs is called primary market research.
Answer:
It is the nature of arbitrage to even out excessive fluctuation by destroying its own
profitability.
Answer:
One goal of currency restriction is to preserve hard currencies to pay for imports and to
finance trade deficits.
Answer:
Resistance to worldwide trade agreements has resulted in some nations placing greater
emphasis on regional pacts.
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Outsourcing refers to the practice of buying from another company a good or a service
that is part of a company’s value-added activities.
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Restrictions on the convertibility of one currency into others is called administrative
delays.
Answer:
Critics of globalization believe the overall gains that accrue to national economies are
worth the lost livelihoods of some workers.
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The pattern of imports and exports that would result in lesser trade barriers is called free
trade.
Answer:
The most common economic reason for nations attempts to influence international trade
is preserving national security.
Answer:
In a totalitarian system, rulers tightly control people’s lives and do not tolerate opposing
viewpoints.
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A push strategy is the most efficient promotional strategy when distribution channels
are lengthy.
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The first step in the screening of potential markets is an assessment of the national
business environment.
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Ownership restrictions is a method used by host countries to restrict incoming foreign
direct investment.
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The purpose of a combination strategy is to mix growth, retrenchment, and stability
strategies across a corporation’s business units.
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The product adaptation/communications extension method adapts both the product and
its marketing communication to suit the target market.
Answer:
A current account deficit occurs when a country exports more goods and receives more
income from abroad than it imports and pays abroad.
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The process of assessing a company’s ability to produce enough output to satisfy market
demand is called process planning.
Answer:
Objectives of individual business units in an organization exclusively contain numerical
targets of performance.
Answer:
Receiving financing from government agencies is often crucial to the success of small
businesses just beginning to export.
Answer:
According to the market imperfections theory, competition is a common market
imperfection.
Answer:
The IMF asset whose value is based on a “weighted basket” of four currencies is called
a special drawing right.
Answer:
International companies often must customize products to comply with local standards
if they are to do business in a particular country.
Answer:
All parties ranging from suppliers and employers to consumers who are affected by a
company’s activities are called its stockholders.
Answer:
The closing of factories with unused capacity is an example of a stability strategy.
Answer:
Decentralization can help foster participative management practices.
Answer:
Nations that invest in worker training programs are usually rewarded with an increase
in productivity and a rise in income.
Answer:
International firms tend to support reasonable labor and environmental laws to expand
future local markets for their businesses.
Answer:
The cultural component that deals with elements of imagery and symbolism is known
as material culture.
Answer:
Transit tariffs have been almost entirely eliminated worldwide through international
trade agreements.
Answer:
A(n) ________ is guaranteed by both the exporter’s bank in the country of export and
the importer’s bank in the country of import.
A) confirmed letter of credit
B) transferrable letter of credit
C) revocable letter of credit
D) irrevocable letter of credit
Answer:
________ refers to the number of intermediaries between producer and buyer.
A) Critical path
B) Channel length
C) Frequency
D) Value density
Answer:
A common purpose of many companies’ facilities in foreign trade zones is ________.
A) final product assembly
B) acquisition of raw materials
C) product design
D) product manufacturing
Answer:
Once in China, Betty witnesses the ease with which Chinese employees incorporate
change and new ideas into their workunlike the people of Oceania who prefer strong
systems of rules and guidelines. Which of the following statements within Hofstede’s
framework is consistent with her observation?
A) China scores low on the uncertainty avoidance dimension.
B) China scores high on the feminity dimension.
C) Chinese organizations are the least entrepreneurial.
D) Chinese organizations have high levels of employee turnover.
Answer:
A legal tradition based on religious teachings is called ________ law.
A) democratic
B) common
C) civil
D) theocratic
Answer:
The ________ limited the fluctuations of European Union members’ currencies within a
specified trading range.
A) exchange rate mechanism
B) special drawing right
C) currency board
D) free float system
Answer:
Which of the following is true of the euro?
A) It increases exchange-rate risk for business deals between member nations.
B) It increases transaction costs.
C) It makes prices between markets more transparent.
D) It is not accepted among merchants in France, Germany, and Italy.
Answer:
Using tariffs to generate government revenue is most common among ________.
A) developed countries
B) developing countries
C) western nations
D) First World nations
Answer:
The profit-motivated purchase and sale of interest-paying securities denominated in
different currencies is called ________.
A) currency conversion
B) currency hedging
C) interest arbitrage
D) interbank interest rates
Answer:
The measures of a nation’s well-being other than the financial wealth accumulated
through exports are irrelevant according to ________.
A) mercantilism
B) absolute advantage theory
C) factor proportions theory
D) new trade theory
Answer:
If Old World wants to have its furniture sold through as many distribution outlets as
possible, it should consider a(n) ________ channel.
A) exclusive
B) intensive
C) one-level
D) zero-level
Answer:
________ teams can help break down barriers between departments and reorganize
operations around processes in an organization.
A) Cross-functional
B) Self-managed
C) Global
D) Virtual
Answer:
________ is crucial in production facilities where nonnative managers supervise local
employees.
A) Ethnocentricism
B) Language proficiency
C) Cultural isolation
D) Individualism
Answer:
Which of the following is implied by a product with a low value density?
A) the distribution system is more localized
B) the product is more valuable
C) the cost of shipping the product is negligible
D) the product is processed in areas away from their original locations
Answer:
The Council of the European Union is the ________ body of the European Union.
A) legislative
B) executive
C) judicial
D) monitoring
Answer:
Which of the following refers to the process by which cultural traits spread from one
culture to another?
A) cultural heterogeneity
B) cultural imperialism
C) cultural diffusion
D) cultural literacy
Answer:
According to Hofstede’s framework, cultures scoring high on the dimension of
________ generally have more relaxed lifestyles in which people are more concerned
about caring for others as opposed to material gain.
A) feminity
B) ethnocentricity
C) imperialism
D) individualism
Answer:
In countries with high illiteracy rates, a(n) ________ should not be used to collect
information.
A) personal interview
B) written survey
C) focus group
D) field research
Answer:
Which of the following will most likely force international companies to cancel
proposed investments?
A) low rates of inflation
B) increasing budget deficits
C) rising productivity levels
D) an appreciating currency
Answer:
If all countries in the bloc are asked to give up the greatest amount of sovereignty, they
would most likely be joining a(n) ________.
A) economic union
B) free trade area
C) customs union
D) political union
Answer:
The term ________ refers to entities cooperating across national boundaries.
A) internationalization
B) supranationalism
C) denationalization
D) multiculturalism
Answer:
Which of the following is an example of a greenfield investment?
A) an agricultural business acquisition in South-east Asia’s former agricultural region
B) the construction of an entirely new steel manufacturing subsidiary overseas
C) a merger between a U.S. and a non-U.S. company
D) the purchase of an existing business that is still in its infancy
Answer:
Local content regulations are primarily intended to ________.
A) address cultural differences between local employees and expatriates
B) encourage MNEs to increase production activities in a country
C) address contract negotiation difficulties
D) assess local tax rates on MNEs
Answer:
Which of the following statements is true regarding location economies?
A) The demand and supply factors heavily influence the productivity of a location.
B) They apply only to service providers.
C) Each production activity generates more value in a particular location than
elsewhere.
D) They are restricted to business activities that involve product manufacturing.
Answer:
An individual from a country with a low degree of political risk would most likely be
from ________.
A) Venezuela
B) Canada
C) Zimbabwe
D) Iraq
Answer:
According to Hofstede’s framework, a culture with large power distance tends to be
characterized by ________.
A) inequality between superiors and subordinates
B) the absence of any form of hierarchy
C) power derived from hard work and entrepreneurial drive
D) a preference for individualism over collectivism
Answer:
A growth strategy is designed to ________.
A) guard against organizational change
B) increase the scale or scope of a corporation’s operations
C) support the stability strategies of an organization
D) support the retrenchment strategies of an organization
Answer:
The European Free Trade Association was formed in 1960 to focus on trade in
________.
A) consumer goods
B) agricultural goods
C) industrial goods
D) services
Answer:
Which of the following statements is true of the environmental forces that affect
strategy formulation?
A) Socialist economic systems normally levy light taxes on business profits.
B) Countries that excessively spend on R&D tend to have lower levels of prosperity.
C) Approval of the host government is almost always necessary for making direct
investments.
D) Free-market economies tend to levy high taxes on business profits.
Answer:
A(n) ________ channel provides buyers with location convenience because of the large
number of outlets through which a product is sold.
A) intensive
B) exclusive
C) one-level
D) zero-level
Answer:
Which of the following do products designated as dual use require before exports can
take place?
A) currency controls
B) countervailing duties
C) special government approval
D) local content requirements
Answer:
Renzi belongs to a country in which religion governs all aspects of his life, whether
personal or public. He has to abide by a strict, rigid, code that dictates everything from
the clothes he wears to the food he eats. Breaking away from these traditions is not an
option since religion plays an important role in the functioning of the nation. What
political system prevails in his country?
A) communist totalitarianism
B) left-wing totalitarianism
C) right-wing totalitarianism
D) theocratic totalitarianism
Answer:
A company that makes its marketing program elements uniform, targeting an entire
region with similar products, is demonstrating ________.
A) customization
B) segmentation
C) standardization
D) differentiation
Answer:
Which of the following is an assumption made by the comparative advantage theory?
A) maximization of production and consumption
B) government interference and control in trade activities
C) creation of trade deficits
D) creation of trade surpluses
Answer:
Which of the following constitutes the most basic level of training to prepare managers
for international assignments?
A) environmental briefings
B) language training
C) cultural assimilation
D) field experience
Answer:
Identify the strategic factors that influence a company’s international entry mode
selection. Explain any three of them.
Answer:
How does the eclectic theory explain the concept of FDI? How can a host country offer
incentives to attract FDI?
Answer:
Why do managers prefer that movements in exchange rates be predictable? How does
the Big Mac index help determine whether a currency is overvalued or undervalued,
and what are its drawbacks?
Answer:
Discuss the disadvantages of an ethnocentric staffing policy. How do bonuses, tax
incentives, and employee expectations contribute to high personnel costs?
Answer:
Explain the Hofstede framework briefly.
Answer:
Explain the concept of devaluation, and explain the effect devaluation has on the price
of a country’s imports. Discuss how international companies can adjust to a weak
currency.
Answer:
Discuss the volume of international trade, and explain the role government and chance
play in the growth of international trade.
Answer:
What is currency speculation? Why do some governments protect their markets from
currency speculation?
Answer:
What are the advantages of pursuing a wholly owned subsidiary as an entry strategy?
Answer:
What is countertrade? Explain the concept of buyback as a type of countertrade, and
discuss buyback as a joint venture configuration.
Answer:
Explain the benefits and drawbacks of a value-added tax.
Answer:
Discuss how a national business environment can influence a firm’s decision to
standardize or differentiate its product. How do cultural differences impact product
strategies?
Answer:
Describe the issues involved in the decision of how a company acquires raw materials
and fixed assets.
Answer:
Discuss free trade areas as a level of regional economic integration. How can regional
integration enable employment opportunities?
Answer:
Differentiate between GDP and GNP. Briefly discuss the drawbacks of using GDP and
GNP as indicators of economic development.
Answer:
Discuss the importance of cultural factors when assessing a national business
environment, and explain why cultural differences between markets create difficulties
when conducting international research.
Answer:
Why do governments impose currency restrictions and how can companies get around
such restrictions?
Answer:
Differentiate between currency speculation and currency arbitrage.
Answer:
Describe the process of how the documentary collection procedure works using an
example.
Answer:
What are voluntary export restraints and how are they used?
Answer: