The United Nations Universal Declaration of Human Rights, related to employment,
upholds which of the following?
A. The requirement for the formation of trade unions.
B. A sliding pay scale based upon need.
C. Prohibition of trade unions.
D. Protection against unemployment.
Identify the correct statement about the rights theories.
A. Human beings have fundamental rights and privileges that transcend national
boundaries.
B. The moral worth of actions or practices is determined by their consequences.
C. People should be treated as ends never purely as means to the ends of others.
D. The only social responsibility of business is to increase profits, so long as the
company stays within the rules of law.
Which of the following is a drawback of the polycentric approach to staffing?
A. Firms are likely to suffer from cultural myopia.
B. Host-country nationals are vulnerable to cultural misunderstandings.
C. This approach increases the cost of value creation.
D. Host-country nationals have limited opportunities for advancement beyond senior
positions in their subsidiary.
In 2000, the United Nations adopted eight economic and human develop goals for the
world known as the:
A. Millennium Goals.
B. Century Goals.
C. Globalization Goals.
D. U.N. Humanic Goals.
Consumers in the most developed countries are:
A. typically most interested in products that have been developed with the lowest
common denominator in mind.
B. typically willing to sacrifice their preferred product attributes for lower prices.
C. often shun prefer globally standardized products.
D. often not willing to sacrifice their preferred attributes for lower prices.
In response to increased demand, what is a monopolist likely to do?
A. Restrict output to drive prices down.
B. Increase output to drive prices down.
C. Restrict output and let prices rise.
D. Increase output and let prices rise.
Extensive empirical studies have shown that:
A. there is only a short-run relationship between a country’s relative inflation rates and
changes in exchange rates; no long-run relationship exists.
B. there is a long-run relationship between a country’s relative inflation rates and
changes in exchange rates.
C. that there exists both short-run and long-run relationships between a country’s
relative inflation rates and changes in exchange rates.
D. a country’s relative inflation rates and changes in exchange rates are not related to
each other.
Compliance to IASB standards is:
A. mandatory for countries to engage in international trade.
B. enforced through the World Trade Organization.
C. voluntary.
D. enforced through the United Nations.
The World Trade Organization has estimated that the developed nations of the world
can raise global economic welfare by $128 billion by:
A. removing subsidies given to their agricultural producers.
B. increasing tariff barriers to trade in agriculture.
C. increasing outsourcing of manufacturing processes.
D. reducing defense expenditure.
The infant industry argument is criticized because it relies on an assumption that:
A. new manufacturing industries in developing nations can initially compete with
established industries in developed countries.
B. selling goods in a foreign market at below their “fair” market value is legally and
ethically justified.
C. the domestic industry in a developing nation lacks the capacity to meet demand.
D. firms are unable to make efficient long-term investments by borrowing money from
the domestic or international capital market.
Political scientist Samuel Huntington argues that modernization in non-Western
societies can result in a retreat toward the traditional. This is exemplified by the _____.
A. Islamic resurgence
B. popularization of modern gadgets
C. adoption of Western culture
D. higher levels of literacy and education
Firms commonly employ a(n) _____ as third party in international transactions.
A. reputable bank
B. stock exchange
C. export management company
D. customs broker
When two parties agree to exchange currency and execute the deal at some specific
time in the future, a _____ occurs.
A. currency swap
B. forward exchange
C. hedging
D. spot exchange
Part of the benefit that a parent company receives by receiving payment through
royalties can be lost if the subsidiary’s:
A. combined tax rate is higher than the parent’s.
B. local government views royalties as an expense.
C. local tax rates on profits are extremely high.
D. managers are controlled directly by the parent.
Gold par value refers to the:
A. ratio of the price of gold in a currency to price of gold in U.S. dollars.
B. amount of a currency needed to purchase one ounce of gold.
C. ratio of price of gold in a currency to price of gold in euros.
D. amount of gold required to equal the reference currency that a nation is using.
Stagnation can occur in planned economies because:
A. entrepreneurial individuals have few economic incentives for innovation.
B. private ownership of means of production leads to exploitation of workers.
C. prices of goods and services are fixed by market forces of demand and supply.
D. lack of barriers to trade results in increased competition for domestic producers.
_____ is viewed as the most restrictive countertrade arrangement.
A. Barter
B. Offset
C. Buyback
D. Switch trading
From a strategic perspective, the key issue in international labor relations is the degree
to which organized labor can:
A. improve the profitability of the company.
B. enhance the choices of an international business.
C. increase the integration and consolidation of global operations.
D. limit the choices of an international business.
Which of the following observations about subsidies is true?
A. Government subsidies must be paid for, typically by taxing individuals and
corporations.
B. Subsidies are used to reduce exports from a sector, often for political reasons.
C. Whether subsidies generate national benefits that exceed their national costs is
debatable.
D. Subsidies help foreign producers gain a competitive advantage over domestic
producers.
Harvard economist Martin Feldstein argues that the lack of patient money is due to:
A. the flood of information, due to the internet, that investors receive about current
events in other countries.
B. money owners and managers preferring to keep their money “home.”
C. the relative paucity of information that investors have about foreign investments.
D. money owners and managers preferring to place their money in foreign investments.
_____ is an alternative means of structuring an international sale when conventional
means of payment are difficult, costly, or nonexistent.
A. Barter
B. Offset
C. Countertrade
D. Buyback
The number of intermediaries between the producer and the consumer is known as the
_____.
A. channel quality
B. marketing mix
C. channel length
D. experience curve
_____ refers to the relationship between the country of assignment and how well an
expatriate adjusts to a particular posting.
A. Cultural toughness
B. Self-orientation
C. Perceptual ability
D. Others-orientation
Design and names by which merchants or manufacturers designate and differentiate
their products are known as _____.
A. trademarks
B. copyrights
C. patents
D. licenses
Which of the following is a hidden cost associated with basing production in a foreign
location?
A. Cost of labor within the location
B. High employee turnover
C. Transportation costs
D. Differences in the value of currency
What is ethnocentrism?
A. A belief in the superiority of one’s business or organization over another.
B. A belief in the superiority of another group or culture over one’s own group or
culture.
C. A belief in the superiority of one’s own ethnic group or culture.
D. A belief in the superiority of one’s self over another person.
Royalties and fees have certain tax advantages over _____, particularly when the
corporate tax rate is higher in the host country than in the parent’s home country.
A. transaction costs
B. deferrals
C. dividends
D. transfer fees
The need to integrate R&D and marketing to adequately commercialize new
technologies poses special problems in the international business because:
A. firms typically have all of their R&D centers in the home country.
B. commercialization means that the same version of a new product needs to be
produced for all countries.
C. firms typically do not have their R&D centers in the same country as their
production facilities.
D. commercialization may require different versions of a new product to be produced
for various countries.
A ____ is the instrument normally used in international commerce to effect payment.
A. bill of lading
B. letter of credit
C. draft
D. countertrade
In its extreme viewpoint, _____ suggests that if a culture supports slavery, it is all right
to use slave labor in the country.
A. the Friedman doctrine
B. noblesse oblige
C. righteous moralist
D. cultural relativism
Consider a transnational strategy. Why would a firm choose this strategic alternative?
What are the disadvantages of this strategy?
What is a currency board? Why do countries choose this type of system? What are the
disadvantages of this type of arrangement?
What is the TRIPS agreement? Why was it established?
How can the marketing and sales functions of a firm create value?
Consider the role of investor psychology and bandwagon effects on how well
purchasing power parity and the international Fisher effect explain short-term
movements in exchange rates.
Identify a major disadvantage of the product life-cycle theory.
Discuss the benefits and costs of FDI from the perspective of a host country and from
the perspective of the home country.
Why do so many firms take a reactive approach to exporting rather than a proactive
approach?
What is dumping? How do governments respond to charges of dumping?
Discuss the demographics of world trade since the 1960s.
Explain the difference between a concentrated retail system and a fragmented one.
Recent policies of the International Monetary Fund have drawn a lot of criticism.
Discuss these criticisms.
Compare and contrast currencies that are freely convertible, externally convertible, and
nonconvertible.
What is an oligopoly? Discuss the impact of interdependence in an oligopoly.
What are the advantages of global capital market in comparison with a purely domestic
capital market?
What are the drawbacks of the Eurocurrency market?