Totalitarianism is a political ideology that typically involves constant indoctrination of
the population by agents of the government to eliminate dissent.
The collapse of communism in the late 1980s and early 1990s led to a more widespread
adoption of the principles of capitalism.
One advantage of centralized corporate practices is a reduced risk that lower-level
employees make costly, wrong decisions.
Gap analysis refers to an estimation of sales potential caused by the disparity in
incomes between developed and developing countries.
International marketing is unlike domestic marketing because the basic principles are
completely different.
One of the reasons that neighboring countries tend to ally is similar consumer tastes.
Relativism is the theory that ethical truths depend on the values of the groups holding
them; thus, MNEs should adhere to or adopt the cultures of the countries in which they
are located.
A company classified as a small and medium-sized enterprise (SME) has fewer than
500 employees.
National origin is an acquired group membership.
Upon selection of an executive for an expatriate posting, the most common
predeparture training involves a range of instructive profiles of major aspects of the
host country.
Although the European Union is a common market, member countries have different
economic growth rates.
The ownership of foreign bonds is an example of a portfolio investment.
The shifting of resources from inefficient to efficient companies as trade barriers fall
produces static effects.
Most trade groups contain countries in the same area of the world, even though
neighboring countries usually lack a common history and interests.
When forecasting exchange rates, forecasters must predict the magnitude, timing, and
direction of change in exchange rates.
A major challenge faced by Western Union in transferring money between the United
States and Mexico is that Mexican citizens trust the banks but do not trust Western
Union due to its reliance on global banks.
The fact that a company is the market leader in one country is no guarantee that it will
be the leader in another country.
The international regulatory situation for trade is becoming more, rather than less,
complex.
The long-term financing dimension of financial management deals with the selection,
issuance, and management of long-term debt and equity.
When using a lead strategy, a company will delay collection of foreign-currency
receivables if that currency is expected to strengthen.
Globalization of business has been stimulated by institutional developments that aid
foreign trade and investment.
Many products’ location of production will shift internationally as the products go
through their life cycle.
When using a budget for foreign operations, it is important for the parent company to
select an exchange rate to set the budget and use that same rate to evaluate
performance.
Although capital intensity is growing in most industries, labor compensation remains a
significant cost for most companies.
The IMF uses the quota system to determine how much a country may borrow from the
Fund.
An MNE would most likely benefit from converting local currency into its
home-country currency when exchange rates are most favorable so it can maximize its
return.
Dispersed value chains make sense when costs vary across countries.
The OECD has set transfer pricing guidelines to enhance the manipulation of prices and
therefore taxes for MNEs and the countries where they operate.
The U.S. dollar is important as a vehicle for foreign-exchange transactions between two
countries other than the United States.
The countries most likely to be successful at using trade retaliation are large trading
countries.
Assume that U.S. companies are importing the same product from Mexico and Taiwan.
The United States enters into an FTA with Mexico but not with Taiwan. Consequently,
the United States begins to import more goods from Mexico (due to lower tariffs) than
from Taiwan, even though the Mexican products are not any better or cheaper. This is
most likely an example of ________.
A) trade specialization
B) trade internalization
C) trade creation
D) trade diversion
The term “________ culture” describes a country in which the norm is a
money-and-things orientation and a belief that it’s better to “live to work” than to “work
to live.”
A) high masculinity
B) physiological
C) non-fatalistic
D) high-femininity
Anita, an employee at ABX Partners, a hedge fund firm, has purchased euros because
she believes that the euro will strengthen against other currencies. Which term best
describes Anita’s activities?
A) arbitrage
B) speculation
C) spot transaction
D) outright forward
Which of the following calls for economic activity that meets present needs without
hindering the future needs of society?
A) privatization
B) state capitalism
C) economic freedom
D) sustainable development
Which of the following types of political risks often are caused by ethnic conflict or
civil disorder and include those random political developments that adversely affect the
operations of all companies in a country?
A) systemic political risk
B) procedural political risk
C) catastrophic political risk
D) distributive political risk
Host governments’ growing demands for increasing operational transparency will most
likely spur companies to make their value chains more ________.
A) locally responsive
B) globally integrated
C) concise
D) complex
Which of the following BEST describes the purpose of using of an opportunity-risk
matrix for comparing countries?
A) narrow alternatives so decision makers can make a detailed analysis of the strongest
candidates
B) eliminate countries that have specific unacceptable conditions
C) determine whether to use a concentration versus diversification strategy for
international expansion
D) estimate where competitors are most likely to globalize
Which of the following is most likely a true statement about the relationship between
the United Nations and NGOs?
A) The UN must license an NGO for it to be involved in any international relief efforts.
B) A UN committee discusses issues of importance to NGOs but does not regulate their
activities.
C) The UN determines which NGOs can work on international humanitarian issues and
relief efforts.
D) NGOs typically operate in only one country, whereas UN agencies can operate
anywhere in the world.
Concord Foods, an international firm based in the United States, is in the process of
transitioning from a classical organizational structure to a neoclassical structure. Which
of the following tools would most likely enable Concord to make this change?
A) annual performance appraisals
B) cross-functional task forces
C) flexible benefits plans
D) merit awards
Which one of the following is a primary assumption of the free trade theories of
specialization?
A) Domestic resources are unable to move from the production of one good to another.
B) Countries have objectives other than economic efficiency.
C) Specialization triggers unemployment.
D) Resources are immobile internationally.
Which of the following would most likely be used in a totalitarian system to promote
unconditional support for the official ideology?
A) privately owned media outlets
B) a parliamentary system
C) state control of the education system
D) a representative legislative body
Evaluating the importance of potential clients or partners by the way they dress is an
example of using ________.
A) pragmatism
B) silent language
C) polychronism
D) fatalism
When a company wishes to introduce change in a foreign country, its likelihood of
success can most likely be improved by ________.
A) introducing many changes simultaneously
B) gaining the support of local opinion leaders
C) agreeing to make some home-country changes in return
D) employing expatriate managers to supervise local workers
Under the ________ form of totalitarianism, the regime confines itself to political
control of the state. It does not regulate the economic and social structure of society.
A) fascist
B) communist
C) theocratic
D) authoritarian
Safe work environments motivate ________; challenges motivate ________.
A) individualists; collectivists
B) collectivists; individualists
C) non-fatalists; fatalists
D) materialists; non-materialists
Pender Pharmaceuticals is considering expanding overseas and is focusing primarily on
the BRICs. Which of the following countries is one that Pender is considering?
A) Indonesia
B) Chile
C) Russia
D) Bangladesh
A company’s value chain is best described as the ________.
A) variable sequence of converting product ideas into value for shareholders
B) mixture of activities taken to define product value standards and price points
C) discrete series of steps taken to move a product from conception to end-users
D) blueprint that must be followed to leverage the core capabilities of a global firm
________ is a form of locking the value of a country’s currency onto another currency.
A) Managed floating
B) Monetarization
C) Dollarization
D) Floating
The balance between centralization and decentralization of authority in a company is
known as ________.
A) systemic differentiation
B) horizontal differentiation
C) schematic differentiation
D) vertical differentiation
Which of the following would most likely trigger internal tensions as a firm’s modes of
foreign operations change?
A) losing or gaining responsibilities
B) reluctance to learn about a culture
C) traveling for business purposes
D) geographic diversity
During a time of reflation, the government is most likely to ________.
A) lower taxes
B) print money
C) reduce interest rates
D) support infrastructure
________ is the price between two companies that most accurately reflects the market
price.
A) Economy price
B) Promotional price
C) Arm’s length price
D) Average cost
The distinguishing feature of political ideologies along the political spectrum is
________, with some emphasizing its primacy and others opposing it.
A) capitalism
B) socialism
C) freedom
D) liberalism
MNEs typically use reporting systems for foreign operations that are similar to the ones
they use domestically ________.
A) primarily in the early stages of operating abroad
B) because common systems allow comparative evaluations
C) until the subsidiary demonstrates mastery of the form
D) only in those countries with extremely similar systems of information technology
________ political risks arise from political actions, such as public corruption or a
partisan judicial system, that interfere with transactions between sellers and buyers and
that can significantly raise the costs of getting things done.
A) Systemic
B) Procedural
C) Catastrophic
D) Distributive
Which of the following is most likely a characteristic of a “partly free” country, such as
Guatemala, Pakistan, or Tanzania?
A) strict religious constraints
B) fair election procedures
C) respect for civil liberties
D) weak rule of law
All of the following are examples of international labor mobility EXCEPT ________.
A) a manager assigned by an MNE to work short-term abroad
B) a refugee who takes up employment in another country
C) a college student on a study abroad program
D) an illegal immigrant working in another country
The ________ is the currency most widely used as a reserve asset.
A) euro
B) Japanese yen
C) U.S. dollar
D) British pound
Which of the following recently threatened the future of the EU’s common currency?
A) refusal of the UK to use the euro
B) failed mergers and acquisitions
C) debt crisis in Greece
D) human rights issues
An Australian company makes athletic wear for women, men, and children. After
several years of successfully exporting its products to the U.K. and the U.S., the
company began exporting to Japan. This is an example of ________.
A) a born-global company
B) a location advantage
C) third-party exporting
D) incremental internationalization
All of the following are international business translation problems EXCEPT which of
the following?
A) All written work requires back translation in order to be understood in a second
language.
B) Because languages and the common meaning of words are constantly evolving, the
intended meaning of a word may be different from what the listener or reader
understands.
C) Some words in one language simply don’t have a direct translation into another
language.
D) Words mean different things in different contexts, thus the wrong context may be
translated.