The exchange rate at which two parties agree to exchange currencies on a specified
future date is called a ________ rate.
A) forward
B) prime
C) spot
D) cross
A country’s ________ is a national accounting system that records all monetary
transactions to entities in other countries and all receipts coming into the nation.
A) balance of payments
B) chart of accounts
C) global financial system
D) international monetary system
Scenario: Happyland
Happyland is a country characterized by beautiful beaches, vast natural resources, and a
highly skilled labor force. Happyland is now encouraging foreign direct investment
flows. The country has been exporting textiles, computer hardware, and software
programs. The net result of the trade is that Happyland exports far more goods and
services and receives more income from abroad than it imports and pays abroad.
Transactions involving the export of Happyland’s textile and computer products are
included in its ________ account.
A) capital
B) merchandise
C) services
D) income payments
A ________ strategy is one in which a company designs its products to be perceived by
buyers as unique throughout its industry.
A) differentiation
B) stability
C) low-cost leadership
D) retrenchment
Scenario: Frankfurter Friday
Betty Cleveland is the vice president of Frankfurter Friday, a highly successful hot dog
joint in Oceania. Her company decides to expand to Asia and identifies China as the
ideal market. Before she leaves for China, she studies their culture extensively and
discovers that the number four is considered extremely unlucky, that not everybody is
fluent in China’s official language-Mandarin-and that punctuality is a highly valued trait
in the country.
Social status is determined by family heritage, income, and occupation.
The process by which a company extends its control over additional stages of
production is called ________.
A) a push strategy
B) a pull strategy
C) vertical integration
D) horizontal integration
Which of the following statements is true about international promotions?
A) Most companies standardize all aspects of their international promotions to cut
costs.
B) Firms that standardize advertising often control campaigns from the home office.
C) Companies that adapt their advertising to different markets project a consistent brand
image.
D) Companies discourage blending product and promotional strategies in a
communication process.
Konesia is a country in which rising incomes are increasing the global demand for basic
products and services. Which of the following is the type of market featured in this
country?
A) traditional market
B) emerging market
C) feudal market
D) virtual market
Ownership restrictions and performance demands 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
Today, countries seen by others as trying to maintain a trade surplus and expand their
national treasures at the expense of other nations are accused of practicing ________.
A) totalitarianism
B) anti-mercantilism
C) social stratification
D) economic nationalism
A(n) ________ requires member nations to harmonize their tax, monetary, and fiscal
policies and create a common currency.
A) customs union
B) economic union
C) free trade area
D) common market
The ________ is the currency that dominates the foreign exchange market.
A) Japanese yen
B) British pound
C) U.S. dollar
D) Australian dollar
Which of the following is a major drawback of ethnocentric staffing?
A) high costs of relocating managers
B) loss of control over host-country operations
C) loss of control over home-country operations
D) difficulty in the transfer of special know-how between branches
It the actual euro/dollar exchange rate on currency markets is €1.2/$, and a kilogram
of wheat still costs $1 in the U.S. and €1.5 in France, Sam also knows that the price
of a kilogram of wheat in France is ________.
A) $1.25
B) $.80
C) €.80
D) €1.2
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.
Research in which an interviewer asks current or potential buyers to answer written or
verbal questions to obtain facts, opinions, or attitudes is called a ________.
A) survey
B) covert observational research
C) consumer panel
D) brainstorming session
Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin
America. To that end, Blickinstock is trying to decide whether to purchase an existing
company in a remote region of Argentina or build its own subsidiary. Keith Moon,
Blickinstock’s vice president of global business development, will be making a
presentation to the board outlining the company’s options. The income payments
account includes income earned on home country assets held abroad.
Which of the following political ideologies states that every aspect of people’s lives
must be controlled for a nation’s political system to be effective?
A) totalitarianism
B) capitalism
C) anarchism
D) pluralism
Country risk is considered similar to ________.
A) political risk
B) commercial risk
C) currency risk
D) cross-cultural risk