Cross-licensing agreements are increasingly common in the _____ industries.
A. transportation
B. high-technology
C. construction
D. consumer durables
Which of the following would a follower of the inefficient market school of thought
agree with?
A. Companies would be better off investing in foreign exchange forecasting services.
B. Forward exchange rates do the best possible job of forecasting future spot exchange
rates.
C. Companies can optimize their foreign exchange transactions by using forward
markets.
D. Forward rates reflect all available information about likely future changes in
exchange rates.
Under a(n) _____ agreement, a firm might license some valuable intangible property to
a foreign partner, but in addition to a royalty payment, the firm might also request that
the foreign partner license some of its valuable know-how to the firm.
A. integrated licensing
B. chartering
C. franchising
D. cross-licensing
_____ can be defined as the amount of time top management must devote to monitoring
and evaluating subunits’ performance.
A. Performance ambiguity
B. The formal matrix
C. The costs of control
D. Differentiation
According to Islam, those who hold property are regarded as _____.
A. trustees
B. owners
C. tenants
D. speculators
The technical process by which an independent person gathers evidence for determining
if financial accounts conform to required accounting standards is known as _____.
A. standardization
B. an audit
C. reporting
D. a benchmark
Strategic trade policy suggests that a government should use _____ to support
promising firms that are active in newly emerging industries.
A. tariff rate quotas
B. quota rents
C. subsidies
D. ad valorem tariffs
Critics of adjusting discount rates to reflect a location’s riskiness argue that it:
A. does not penalize either distant or early cash flows enough.
B. penalizes distant cash flows too heavily.
C. does not penalize early cash flows enough.
D. penalizes early cash flows too heavily.
In theory, the advantage of EMCs is that they are:
A. managed by governments that provide export subsidies.
B. not-for-profit organizations that provide free service.
C. subsidized by the Department of Commerce.
D. experienced specialists who can help the neophyte exporter.
To overcome cultural barriers, companies should:
A. develop products specifically for each market.
B. focus on universal needs.
C. focus only on international market segments.
D. develop cross-cultural literacy.
Firms pursuing a global standardization strategy must cope with a higher level of
_____, and this raises their costs of control.
A. vertical differentiation
B. cultural division
C. horizontal differentiation
D. performance ambiguity
The main attraction of a(n) _____ is that it can give a firm a way to finance an export
deal when there are no other means available.
A. countertrade
B. buyback
C. counterpurchase
D. offset
When the receiver of a message evaluates a message based on the status or image of the
sender, _____ are said to have occurred.
A. sender effects
B. noise effects
C. source effects
D. communication effects
Which of the following is a disadvantage of global capital market?
A. Foreign investments may be driven by speculative flows in the market.
B. A truly global market reduces the liquidity of investments.
C. The availability of capital is low in a global capital market.
D. The cost of capital is more in a global market than a domestic market.
Economies of scale have a number of sources, including the ability:
A. to average out the variable costs of production.
B. of large-volume producers to utilize specialized employees and equipment.
C. to adjust the scale of production based upon product saturation in the marketplace.
D. of to utilize non-specialized employees interchangeably.
Which of the following statements is true regarding an international business?
A. An international business needs to invest directly in operations in other countries.
B. An international business needs to have homogenous practices across countries.
C. An international business can be managed in the same way that a domestic business
is managed.
D. An international business must find ways to work within the limits imposed by
government intervention.
A multinational firm may need to delegate marketing functions to national subsidiaries
to:
A. fully implement the firm’s localization strategy.
B. employ economies of scale.
C. meet the requirements for a global standardization strategy.
D. be responsive to local differences in distribution channels.
The _____ approaches to ethics hold that the moral worth of actions or practices is
determined by their consequences.
A. nave immoralist
B. cultural relativist
C. righteous moralist
D. utilitarian
Which of the following is true regarding international businesses?
A. All MNEs are international businesses.
B. Only firms that export products are international businesses.
C. Only firms that invest abroad are international businesses.
D. All international businesses are MNEs.
_____ occurs when a third-party trading house buys the firm’s counterpurchase credits
and sells them to another firm that can better use them.
A. Countertrading
B. Offsetting
C. Switch trading
D. Bartering
According to the infant industry argument, many developing countries have a potential
_____ in manufacturing, but new manufacturing industries cannot initially compete
with established industries in developed countries.
A. absolute advantage
B. comparative advantage
C. opportunity cost
D. competitive advantage
The use of price as a competitive weapon to drive weaker competitors out of a national
market is known as _____.
A. Experience curve pricing
B. Predatory pricing
C. Competitive pricing
D. Multipoint pricing
Which of the following is a factor that transforms a low-cost location to a high-cost
location?
A. Appreciation of local currency
B. Use of fixed exchange rates
C. Use of pegged exchange rates
D. Implementation of free trade regime
The Netherlands exported tulip bulbs to almost every country in the world except
Japan. This was because in Japan, customs inspectors insisted on checking every tulip
bulb by cutting it vertically down the middle. This is an example of which of the
following trade barriers?
A. Export restraint
B. Administrative trade policies
C. Local content requirement
D. Ad valorem
If China continues to move toward greater free market reforms they:
A. may move from industrial superpower to third-world status.
B. will likely see a decrease in their GDP per capita.
C. may move from third-world to industrial superpower status.
D. will likely give global market share to Western and Japanese enterprises.
Which of the following statements about franchising is true?
A. It guarantees consistent product quality.
B. It tends to involve more short-term commitments than licensing.
C. It is a specialized form of licensing.
D. It is employed primarily by manufacturing firms.
In which way can the source country’s balance of payments benefit from an FDI made
in a foreign country?
A. From cash outflow during the initial investment to finance the FDI
B. If the purpose of the foreign investment is to serve the home market from a low-cost
production location
C. From the inward flow of foreign earnings
D. If FDI is a substitute for direct exports FDI can benefit the home (source) country’s
balance of payments from the inward flow of foreign earnings.
Strategic trade policy suggests that in industries where the existence of substantial scale
economies implies that the world will profitably support only a few firms, countries
may predominate in the export of certain products simply because they had firms that
were able to:
A. influence the assignment of tariffs.
B. receive government subsidies.
C. capture first-mover advantages.
D. capitalize on late-mover advantages.
There are three values central to the Confucian system of ethics that have very
important economic implications. Which of the following is one of these?
A. Filial piety
B. Rule-based law
C. Humaneness
D. Honesty in dealings with others
Which of the following is a reason why Turkey is not yet a member of the EU?
A. Only about 10 percent of Turkey’s international trade is with the EU.
B. There are concerns over human rights issues in the country.
C. The country has yet to form a customs union with the EU.
D. Turkey has a weak economy.