Which of the following is true of criminal liability laws?
A. Calls for the payment of monetary damages
B. They are more extensive in Western Europe than in any other region of the world
C. Results in fines or imprisonment
D. They are less impactful if the product does not conform to the required safety
standards
After World War II, the world’s major industrial nations arranged their currencies
against each other at a mutually agreed on exchange rate. This is an example of a _____
system.
A. fixed exchange rate
B. dirty float exchange
C. pegged exchange rate
D. floating exchange rate
Which of the following is a reason for the pressure for greater protectionism that
occurred during the 1980s and early 1990s?
A. The U.S. Congress erected an enormous wall of tariff barriers.
B. Japanese economic failure strained the world trading system.
C. The persistent trade surplus in the United States strained the world trading system.
D. Many countries found ways to get around GATT regulations.
A firm that is pursuing a(n) _____ strategy is simultaneously trying to achieve low costs
through location economies, economies of scale, and learning effects, and trying to
differentiate its product offering across geographic markets.
A. global customization
B. international
C. localization
D. transnational
Ethical dilemmas exist because many real-world decisions involve:
A. first-, second-, and third-order consequences that are hard to quantify.
B. people from different cultures.
C. employers and employees.
D. people from different multinational firms.
Which of these statements pertaining to cross-border FDI flows is true?
A. There was a growth of FDI between 2004 and 2007.
B. A slump in FDI from 1998 to 2000 was followed by a surge from 2001 to 2003.
C. Among developing nations, the largest recipient of FDI has been Russia.
D. The dramatic increase in FDI reflects the decreasing internationalization of business
corporations.
Which of the following observations concerning Knickerbocker’s theory is true?
A. It does not explain imitative FDI behavior by firms in oligopolistic industries.
B. Economists favor this theory as an explanation for FDI compared to the
internalization theory.
C. It addresses the issue of whether FDI is more efficient than exporting or licensing for
expanding abroad.
D. It does not explain why the first firm in an oligopoly decides to undertake FDI rather
than to export or license. Although Knickerbocker’s theory and its extensions can help
to explain imitative FDI behavior by firms in oligopolistic industries, it does not explain
why the first firm in an oligopoly decides to undertake FDI rather than to export or
license.
What is the term for a company’s formal statement of the ethical priorities it expects all
of its employees to follow?
A. Code of ethics
B. Stakeholders pledge
C. Moral courage
D. Difference principle
When an exporting firm finds that its local agent is also carrying competitors’ products,
the firm may switch to a _____ to handle local marketing, sales, and service.
A. wholly owned subsidiary
B. franchising arrangement
C. turnkey operation
D. licensing agreement
In 2008, the U.S. government took an 80 percent stake in AIG to stop that financial
institution from collapsing, the theory being that if AIG did collapse, it would have very
serious consequences for the entire financial system. What type of economy is this an
example of?
A. Command
B. Mixed
C. Capitalistic
D. Market In mixed economies, governments tend to take into state ownership troubled
firms whose continued operation is thought to be vital to national interests. For
example, in 2008 the U.S. government took an 80 percent stake in AIG to stop that
financial institution from collapsing, the theory being that if AIG did collapse, it would
have very serious consequences for the entire financial system.
Which of the following is a theory that can be used to justify limited government
intervention to support the development of certain export-oriented industries?
A. Comparative advantage theory
B. Ricardo’s theory
C. New trade theory
D. Heckscher-Ohlin theory
Economies that arise from performing a value creation activity in the optimal location
are known as _____.
A. international strategies
B. location economies
C. localization strategies
D. economies of scale
Maintaining _____ allows a firm to hedge against currency risks.
A. low TQM
B. low minimum efficient scale
C. high TQM
D. high minimum efficient scale
Developing nations currently account for _____ of FDI in the form of cross-border
mergers and acquisitions.
A. well over half
B. about one-third or less
C. about 50 percent
D. the largest share FDI flows into developed nations differ markedly from those into
developing nations. In the case of developing nations, only about one-third or less of
FDI is in the form of cross-border mergers and acquisitions. Even though developed
nations still account for the largest share of FDI inflows, FDI into developing nations
has increased.
Which of the following is a reason that command economies tend to stagnate?
A. Costs are tightly controlled and business are forced to be efficient rather than
dynamic and innovative.
B. The abolition of private ownership means there is no incentive for individuals to
look for better ways to serve consumer needs.
C. All economic resources are mobilized for the public good.
D. Individuals in command economy countries lack the skills to be innovative.
Which of the following provides exclusive legal rights to authors, composers,
playwrights, artists, and publishers to publish and disperse their work as they see fit?
A. Patent
B. Copyright
C. Trademark
D. License .
_____ traces its roots to Marxist political and economic theory.
A. The radical view
B. Pragmatic nationalism
C. The free market view
D. The noninterventionist principle The radical view traces its roots to Marxist political
and economic theory.
Just-in-time systems:
A. leave a firm without a buffer stock of inventory.
B. ensure that product is always available.
C. help a firm respond quickly to increases in demand.
D. allow for stockpiling of key components of production.
According to some analysts, deregulation and reduced controls on cross-border capital
flows are:
A. having a stabilizing effect on national economies.
B. making individual nations more vulnerable to speculative capital flows.
C. making investors nervous and causing them to pull their money out of foreign
nations.
D. allowing undeveloped nations to enter the global market.
A change in political regime in a country can result in laws that _____ to international
businesses.
A. are more favorable
B. are less favorable
C. provide less incentives
D. provide more incentives
Textile industry in a nation is characterized by vigorous domestic rivalry. Which of the
following observations of this nation’s international competency is most likely to be
true?
A. The nation will have access to such basic factors of textile industry as natural
resources.
B. The nation’s textile firms will have a competitive advantage in international trade.
C. The domestic customers of the textile firms will be less demanding.
D. The nation’s textile industry will lack the advanced factors that are necessary to be
internationally competent.
What type of control system uses a system of rules and procedures that directs the
actions of subunits?
A. Personal controls
B. Bureaucratic controls
C. Cultural controls
D. Output controls
RSA is a bicycle manufacturing company. Which of the following is a make-or-buy
decision that the company will have to make?
A. Should the company increase its responsiveness toward the retailers?
B. What are the products that the company should manufacture?
C. Should the company outsource production to a low-cost vendor?
D. What should be the pricing strategy of the company’s product?
A(n) _____ is valuable because it can be used as a nonbureaucratic conduit for
information flows within a multinational enterprise.
A. liaison network
B. matrix structure
C. organizational structure
D. knowledge network
Which of the following is directly elected by the populations of the member states and
is primarily a consultative rather than legislative body?
A. The European Parliament
B. The European Commission
C. The Council of the European Union
D. The Court of Justice
Which of the following, adopted by the member nations of the European Community in
1987, committed member countries to work toward the establishment of a single market
by December 31, 1992?
A. Treaty of Rome
B. Single European Act
C. Treaty of Lisbon
D. Maastricht Treaty
When the value of U.S. dollars goes down:
A. bonds that are denominated in dollar will produce more returns.
B. foreign depositors in the U.S will benefit.
C. foreign borrowers will garner benefits.
D. investors tend to favor bonds that are denominated in dollar.
Modern socialism has been popularized largely through the work of _____.
A. Adam Smith
B. Karl Marx
C. David Hume
D. Thomas Hobbes
A _____ system is based on a very detailed set of laws organized into codes.
A. traditional law
B. theocratic law
C. civil law
D. common law
Even if a _____ can be characterized as having a single homogeneous culture, often that
national culture is a mosaic of subcultures.
A. culture
B. society
C. country
D. norm
Moral hazard arises when people behave recklessly because:
A. of the restrictions that exist in a country’s monetary policy.
B. of the restrictions that IMF has imposed on them.
C. they know they will be saved if things go wrong.
D. they face financial difficulties arising out of external factors.
What are the two methods of entering foreign marketing using a wholly owned
subsidiary?
What type of firms is most likely to engage in countertrade? Why?
Explain the two basic factors reflected by the relatively low correlation between the
movements of stock markets in different countries.
Discuss why the repatriation process is so difficult for so many expatriates.
How can international companies reduce their economic exposure in a world of
constantly fluctuating exchange rates?
What happened to GATT during the 1980s and early 1990s?
Compare and contrast counterpurchase agreements and offset arrangements. Why might
an exporter prefer an offset to a counterpurchase deal?
What are the three actions taken by organized labor to respond to the increased
bargaining power of multinationals? How successful have these efforts been?
Discuss how a firm’s marketing strategies may have to address differences in
distribution channels in other countries.
Explain how Mercosur has changed over time.
