Advocates of a floating exchange rate regime argue that removal of the obligation to
maintain exchange rate parity would restore monetary control to a government.
the risk that arises from volatile changes in exchange rates is known as foreign
exchange risk.
A firm does not have to become a multinational enterprise to engage in international
business.
the cost of capital is higher in a global market than in a purely domestic capital market.
a channel is considered to be long if the producer sells directly to the consumer.
where an expatriate community exists, firms often devote lesser effort to ensuring that
the new expatriate family is quickly integrated into that group.
a firm with an ethnocentric staffing policy will fill all key management positions with
parent-country nationals.
an increase in car ownership, the number of two-income households, and the number of
households with a refrigerator have all contributed to the more fragmented retail system
found in developed countries.
if the spot exchange rate is £1 = $1.50 when the market opens, and £1 = $1.48 at the
end of the day, the pound has appreciated, and the dollar has depreciated.
administrative trade policies are:
a.requirements that some specific fraction of a good be produced domestically
b.quotas on trade imposed by the exporting country
c.bureaucratic rules designed to make it difficult for imports to enter a country
d.designed to punish foreign firms that engage in dumping
keller company issued a five-year interest-bearing note payable for $100,000 on january
1, 2011. each january the company is required to pay $20,000 on the note. how will this
note be reported on the december 31, 2012, balance sheet?
a.long-term debt, $100,000
b.long-term debt, $80,000
c.long-term debt, $60,000; long-term debt due within one year, $20,000
d.long-term debt of $80,000; long-term debt due within one year, $20,000
the governments of both canada and the united states are keen on adding other latin
american countries to nafta.
mercosur originated as a(n) _____ between brazil and argentina in 1988.
a.common market
b.free trade pact
c.customs union
d.economic union
_____ control is achieved by comparing actual performance against targets and
intervening selectively to take corrective action.
a.personal
b.output
c.bureaucratic
d.cultural
economies of scale arise from all of the following sources, except:
a.increasing fixed costs by limiting them to small volumes
b.serving domestic and international markets from the same production facilities
c.serving global markets
d.bargaining with suppliers to bring down the cost of key inputs
which of the following is a feature of a democracy?
a.exercise of absolute control by one person or political party
b.governance by people or elected representatives
c.prohibition of entry to opposing political parties
d.complete restriction of individual political freedom
in a pure market economy:
a.all productive activities are owned by the state
b.production is determined by the interaction of supply and demand
c.collectivist goals are given priority over individual goals
d.the prices at which goods are sold is determined by the government
which of the following is a way in which governments increase the attractiveness of fdi
and licensing relative to exporting?
a.by implementing import quotas
b.by imposing fdi limits in industries
c.by increasing tax rates
d.by limiting free flow of capital
a political system that prioritizes the needs of the society over individual freedoms is
called ____.
a.totalitarianism
b.collectivism
c.capitalism
d.egalitarianism
which feature of a customs union differentiates it from a free trade area?
a.harmonization of members’ tax rates
b.a common currency
c.a common external trade policy toward nonmembers
d.ability of factors of production to move freely between members
current liabilities are due
a.but not receivable for more than one year
b.but not payable for more than one year
c.and receivable within one year
d.and payable within one year
when a company brings capital and/or technology to a host country, the host country
benefits from the:
a.political effect of fdi
b.resource-transfer effect of fdi
c.balance-of-payments effect of fdi
d.bandwagon effect of fdi
_____ denotes a whole range of barter-like agreements and its principle is to trade
goods and services for other goods and services when they cannot be traded for money.
a.countertrade
b.cross-selling
c.matchmaking
d.letter of credit
peterson company billed its customers a total of $735,000 for the month of november.
the total includes a 5% state sales tax.
instructions
(a)determine the proper amount of revenue to report for the month.
(b)prepare the general journal entry to record the revenue and related liabilities for the
month.
Which of the following will help a company hedge against currency fluctuations?
A.Finding a large supplier to supply all the raw materials
B.In-house manufacturing of raw materials
C.Basing business in a single country
D.Dispersing production to different geographic locations
assume that the current exchange rate is 1 = $1.50. if you exchange 1,000 euros for
dollars, you will receive ____.
a.$1,000
b.$750
c.$1,500
d.$667
the statement “bond prices vary inversely with changes in the market rate of interest”
means that if the
a.market rate of interest increases, the contractual interest rate will decrease
b.contractual interest rate increases, then bond prices will go down
c.market rate of interest decreases, then bond prices will go up
d.contractual interest rate increases, the market rate of interest will decrease
the valuable asset of firms, whose competitive advantage is based on management
know-how, is their ____.
a.top management staff
b.usp
c.advertisements
d.brand name
what is the difference between an ethnocentric and a polycentric staffing approach?
a.an ethnocentric staffing approach alleviates cultural myopia, while a polycentric
staffing approach can lead to cultural myopia
b.an ethnocentric staffing approach is more expensive compared to a polycentric
staffing approach
c.an ethnocentric staffing approach seeks host-country nationals for all key positions,
while a polycentric staffing approach seeks the best people for key jobs regardless of
nationality
d.an ethnocentric staffing approach is now used in most international businesses, while
the polycentric staffing approach is on the wane
why should a firm centralize its decision-making?
when a firm is considering fdi, what are the some of the negotiating points it must
weigh before making its decision?
where is the foreign exchange market located? what is the nature of the market? is the
market growing or shrinking on a global basis?
describe the benefits of global expansion for firms.
discuss corporate culture. how is corporate culture related to a firm’s performance?
What is gold standard? What was the major advantage of the system?
What are the shortcomings of IASB?
what is asean? what is its basic goal? how successful is asean?
what are the two types of competitive pressures that firms competing in the global
marketplace face? how do firms respond to these pressures?