What is the primary difficulty associated with dismantling developed countries’
agricultural subsidies?
A) Rural areas in the United States, the European Union, and Japan are
disproportionately represented in their governments.
B) Developing countries put pressure on developed countries to maintain the subsidies
so that they receive food products at a lower price.
C) The subsidies are used to counter the commodity agreements set up mainly by
developing countries.
D) The subsidies are at the consumer, rather than producer, level, and everyone benefits
from the lower prices.
An example of an electronic brokerage system used to trade foreign exchange is
________.
A) Reuters
B) Interbank Traders Ltd.
C) Bank for International Settlements
D) the reporting dealers clearing house
Sales expansion is probably the most important variable in determining international
location decisions. This statement is most likely based on the assumption that
________.
A) consumer demand exceeds supply
B) increased sales will lead to more profits
C) the company will have a first-mover advantage
D) raw materials are available in the country targeted for sales
A hyperarchy is ________.
A) a form of structure with precise superior and subordinate relationships
B) a form of structure that relies on extensive centralization
C) a large-scale, self-organizing community
D) analogous to a hierarchy
________ are expat lifers who work an ongoing series of international assignments and
often plan never to return to headquarters or even to their original home.
A) Home-country nationals
B) Transpatriates
C) Inpatriates
D) Flexpatriates
Which term refers to the network that links together the different aspects of the value
chain and coordinates materials, information, and funds from the initial raw-material
supplier to the ultimate customer?
A) logistics strategy information system
B) materials management device
C) customer service
D) supply chain
Cultural change imposed by an alien culture is called ________.
A) multicultural ethnocentrism
B) cultural imperialism
C) collectivism
D) high-context
Instead of comparing different proposals involving foreign operations, companies often
make decisions by looking at proposals one at a time. Which of the following is NOT a
possible reason for this behavior?
A) Companies need to respond quickly to opportunities.
B) Defensive decisions typically need to be made rapidly.
C) A lack of comparable data on different countries renders comparison impossible.
D) Conclusion of different proposals or studies does not usually happen simultaneously.
Labor and capital mobility are intertwined because ________.
A) illegal workers sometimes pay large sums to people who smuggle them into another
country
B) people cannot emigrate to another country unless they bring capital with them
C) companies receive tax benefits for hiring immigrants
D) immigrants bring an investment in human capital with them
A city or country that provides large amounts of funds in currencies other than its own
is a(n) ________.
A) offshore financial center
B) ADR facilitator
C) interbank market
D) currency regulator
The 1997 Kyoto Protocol is best described as an agreement that requires ________.
A) all members of the United Nations to reduce their greenhouse gas emissions by 5.2
percent
B) the United States and Japan to control greenhouse gas emissions by 8% below 1995
levels
C) the signatory countries to cut greenhouse gas emissions to 5.2 percent below 1990
levels
D) the signatory countries to reduce greenhouse gas emissions by 80% by 2050
How would you classify the accounting values of companies from the United States and
the United Kingdom in terms of their measurement and disclosure of financial
information?
A) secret and transparent
B) transparent and optimistic
C) secret and conservative
D) conservative and optimistic
What is a master franchise?
A) the original agreement between the franchisor and franchisee
B) the franchisee with the highest revenue in a region
C) a franchisee with rights to open outlets on its own or develop subfranchises
D) the set of standard terms regulating the relationship between franchisor and
franchisee
What is the LEAST likely reason that international companies are concerned about the
gray market?
A) undermining the long-term viability of the distributorship system
B) causing a firm’s operations in different countries to compete against each other
C) requiring companies to make frequent price adjustments to capture the market
D) preventing companies from charging what the market will bear in each country
Hard currencies are usually ________.
A) not fully convertible
B) undesirable assets
C) highly liquid
D) unstable
Why is management of international human resources more difficult than directing
human resources at the domestic level?
A) the challenge of adjusting for political, cultural, legal, and economic differences
between countries
B) the challenge posed by managers in other countries that aim to achieve global
objectives for the company no matter the costs imposed on national objectives
C) the greater similarity among foreign subsidiaries than among domestic subsidiaries
in terms of dependence on headquarters for resources
D) the complications posed by dealing with competing agendas from different labor
unions in different countries
In terms of international business, it is most accurate to say that ________.
A) there is a universal “best way” to conduct business
B) global competition affects large companies but not small ones
C) most firms depend either on foreign markets and supplies or compete against
companies that do
D) government regulation of international business has little effect on a company’s
profits
The widening set of interdependent relationships among people from different parts of
the world is known as ________.
A) globalization
B) offshoring
C) franchising
D) outsourcing
Since production has shifted to more efficient producers due to comparative advantage,
consumers in Country X have had access to more goods at lower prices. Which of the
following most likely exists?
A) trade specialization
B) trade diversion
C) trade creation
D) trade internalization
A manager who refuses to bribe customs officials in a foreign country, even though it is
morally acceptable in that country, is most likely to believe in which of the following
perspectives on ethics?
A) relativism
B) normativism
C) humanism
D) existentialism
Assume a government places restrictions on a specific product from a specific foreign
country. What would be the government’s most likely concern about the foreign
country’s response?
A) the foreign producers raising the prices of their exports
B) the foreign country restricting its own imports
C) the foreign country restricting its exports in that industry
D) the foreign producers seeking other markets
A differentiation strategy works well when ________.
A) a company designs a universal product for a broad market
B) buyers believe minor product differences are irrelevant to price
C) buyers are highly sensitive to price shifts and quality control
D) a company can continually develop products that have unique features
The United States should NOT be subject to IFRS for all of the following reasons
EXCEPT ________.
A) the United States should have the most stringent reporting standards
B) GAAP is less comprehensive than IFRS
C) retraining would be necessary for publicly traded firms
D) there is more than one set of IFRS
The UN Global Compact is best described as a(n) ________.
A) corruption mandate
B) environmental initiative
C) external code of conduct
D) international trade guideline
How has the Kyoto Protocol affected U.S. companies operating in Europe?
A) U.S. companies are changing the way they do business in order to comply with new
emissions standards in Europe.
B) The Kyoto Protocol has not affected U.S. companies with subsidiaries in Europe
because the U.S. has not signed the Kyoto Protocol.
C) Before U.S. companies can open any more European subsidiaries, the U.S.
government must sign the Kyoto Protocol.
D) Because the United States is not a party to the Kyoto Protocol, U.S. companies may
not operate in European countries that have signed the Kyoto Protocol.
Which of the following statements is most likely true?
A) Consumers in most countries believe that imported products are better than locally
made products.
B) Brand names have little impact on perceptions about a product’s country-of-origin.
C) Consumers in most countries favor locally made products over imported products.
D) A positive brand image helps overcome negative perceptions about a product’s
country-of-origin.
The long-term financing dimension of financial management ________.
A) deals with the selection, issuance, and management of long-term debt and equity
B) is unaffected by currency changes because everyone borrows in U.S. dollars
C) focuses on the analysis of investment opportunities
D) is independent of the capital structure of an MNE
A physician, who is a citizen of and licensed in Country A, meets the professional
licensing requirements of Country B. The physician will most likely ________.
A) have to pass a language proficiency exam before being allowed to work in Country
B
B) not be allowed to work in the not-for-profit sector in Country A or Country B for a
set period
C) have to get a work permit from Country B’s immigration authorities to work in
Country B
D) have to work in the not-for-profit sector in Country B for a period of time before
being permitted to work for a profit-seeking organization
Which of the following is a reason for global companies to NOT take religious beliefs
into account?
A) Religion has an impact on almost every business function.
B) A company could get in trouble with local religious authorities.
C) A manager’s religious training should be implemented in the company he/she
manages.
D) Religion may influence consumer behavior.
Which of the following is a statement that summarizes all economic transactions
between a country and the rest of the world during a given period of time?
A) trade deficit
B) Gini coefficient
C) balance of payments
D) purchasing power parity
Businesspeople seeking to understand more about another culture in order to
successfully conduct business within that culture would be best advised to do which of
the following?
A) observe the behavior of people who have gained respect within that cultural
environment
B) rely on stereotypes, which are based on averages, to gain an understanding of the
culture
C) avoid cultural research studies because they perpetuate unjustified stereotypes and
behaviors
D) memorize the cultural variations that are typically encountered in a specific cultural
environment
Gomez Enterprises, a firm based in Mexico City, exported 1,000 circuit boards to
Taylor Industries, a firm based in Chicago. Taylor received a document from Gomez
that requests immediate payment for the goods. Gomez has most likely sent a
________.
A) time draft
B) sight draft
C) spot draft
D) futures draft
________ refers to the activities that an organization carries out to put the right person
into the right job in the right place at the right time for the right salary.
A) Work force analysis
B) Staff development
C) Human resource management
D) Leadership planning
Outright forward transactions involve the exchange of currency on a future date beyond
two business days at a fixed exchange rate, known as the ________.
A) spot rate
B) forward rate
C) option rate
D) reverse transaction rate
