1) In a pure market economy, the government only performs functions that the private
sector cannot do.
2) Economic systems are examples of formal institutions.
3) The combination of resources and assets that enable a firm to gain a competitive
advantage are referred to as supplementary assets.
4) The Andean Community is more pro-free trade than Mercosur.
5) The resource-based view argues that foreign firms need to deploy overwhelming
resources and capabilities to offset their liability of foreignness.
6) The rarity of a firms resources and capabilities is studied under the VRIO framework.
7) A multinational enterprise is a firm that engages in foreign direct investment by
directly managing value-added activities in other countries.
8) The Bretton Woods system did not allow the United States to unilaterally change the
exchange rate of the dollar.
9) The UNASUR is a free trade agreement between the United States and five Central
American countries and the Dominican Republic.
10) According to the stage model, firms will enter culturally distant countries for their
first internationalization.
11) An FDI investment is not considered a zero-sum game.
12) Benchmarking is the process of converting a firm-specific activity into an
industry-specific activity.
13) BPO refers to the outsourcing of low-end manufacturing to third-party providers.
14) The theory of national competitive advantage of industries does not take domestic
demand conditions into account.
15) A floating exchange rate allows each country to make its own monetary policy.
16) Commoditization is the point at which an activity becomes proprietary or
firm-specific.
17) The country-of-origin effect refers to _____.
a. the inherent advantages domestic firms experience in their home countries
b. the inherent disadvantages foreign firms experience in home countries
c. the positive or negative perception of firms and products from a certain country
d. only the negative perception of firms and products from a certain country
18) OLI advantages refer to a firms quest for _____via FDI.
a. oligopolistic advantages, laissez-faire advantages, and intrafirm trade advantages
b. outsourcing advantages, licensing advantages, and importing advantages
c. organization advantages, leadership advantages, and innovation advantages
d. ownership advantages, location advantages, and internalization advantages
19) An informal understanding of expected delivery of benefits in the future for current
services is referred to as a(n) _____.
a. psychological contract
b. collective bargain
c. indorsement
d. social contract
20) _____ refers to the stock in a firm (usually expressed in shares), which represents
the owners rights.
a. Equity
b. Debt
c. Bond
d. Reserve
21) The Multifibre Arrangement (MFA) was in violation of the GATT.
22) A manager arguing against currency hedging would most likely argue that _____.
a. currency hedging eats into company profits
b. currency hedging leaves firms at the mercy of the spot market
c. currency hedging decreases stability of cash flows and earnings
d. currency hedging is mainly a practice of very large MNEs
23) The _____ theory viewed international trade as a zero-sum game.
a. comparative advantage
b. mercantilism
c. strategic trade
d. national competitive advantage of industries
24) Which of the following is a part of the triple bottom line?
a. Legal performance
b. International performance
c. Environmental performance
d. Psychological performance
25) A free trade area _____.
a. imposes common external policies on nonparticipants in order to combat trade
diversion
b. permits the free movement of goods and people among member nations
c. comprises a group of countries that remove trade barriers among themselves
d. coordinates and harmonizes economic policies in order to blend their economies into
a single economic entity
26) ____ is the flow of products, services, finances, and information that passes through
a set of entities from a source to the customer.
a. Logistic engineering
b. Market orientation
c. Supply chain
d. Product chain
27) Blue ocean strategy focuses on _____.
a. developing new markets
b. attacking core markets defended by rivals
c. attacking new markets explored by rivals
d. leading a price war
28) _____ refers to the coexistence of both cultural divergence and cultural
convergence.
a. Cultural concurrence
b. Covariance
c. Limited divergence
d. Crossvergence
29) Which of the following is a classical theory of international trade?
a. Comparative advantage theory
b. Product life cycle theory
c. Strategic trade theory
d. National competitive advantage of industries theory
30) Loan issued by the firm is called a(n) _____.
a. option
b. unit trust
c. dividend
d. bond
31) Which of the following statement concerning principal-agent versus
principal-principal conflicts is true?
a. Formal institutional protection is often lacking in principal-agent conflicts
b. Courts are more protective of minority shareholder rights in principal-principal
conflicts
c. Manifestations in principal-agent conflicts take the form of expropriation
d. Considering ownership pattern in principal-principal conflicts, often greater than 50
percent of equity is controlled by the largest shareholders
32) _____ is the organization underpinning regional economic integration in Southeast
Asia.
a. ASEAN
b. APEC
c. ANZCERTA
d. UNASUR
33) Which of the following is true of quantitative easing?
a. It depreciates the currency that is being printed
b. It appreciates the currency that is being printed
c. It increases the inflation rate in the country
d. It increases the exchange value of the currency
34) Which of the following is the economic trade agreement between Australia and
New Zealand?
a. CER
b. ASEAN
c. APEC
d. CAFTA
35) Which combination of resource similarity and market commonality results in the
most intense competition?
a. High resource similarity, low market commonality
b. Low resource similarity, high market commonality
c. Low resource similarity, low market commonality
d. High resource similarity, high market commonality
36) ____ is the informal benefits individuals and organizations derive from their
networks.
a. Social capital
b. Micro-macro link
c. Absorptive capacity
d. Global mandate
37) Which of the following characterizes the peg policy in foreign exchange rates?
a. It links a developed countrys currency to the gold standard
b. It stabilizes the import and export prices for developing countries
c. It is a type of floating exchange rate policy
d. It is primarily used by developed countries to control inflation
38) Private ownership differs from state ownership in that in private ownership _____.
a. maximizing profits is the primary objective of a firm
b. protecting jobs and minimizing social unrest is the primary objective of a firm
c. establishing a firm is determined by government officials and bureaucrats
d. failing firms deemed too big to fail may be supported by taxpayer money indefinitely
39) _____ allow participants to buy and sell currencies now for future delivery.
a. Currency Swaps
b. Direct transactions
c. Spot transactions
d. Forward transactions
40) Firms with ____ ownership have a separation of ownership and control.
a. state
b. concentrated
c. diffused
d. focused
41) _____ refers to a legal system based on religious teachings.
a. Common law
b. Theocratic law
c. Civil law
d. Right-wing totalitarian law
42) In the context of the customer-focused dimension of a global matrix, the _____
structure allows a provider to sell whatever combination of goods and services that
customers prefer, including rivals offerings.
a. open innovation
b. solutions-based
c. global account
d. social capital
43) The process of selecting, managing, and motivating non-native employees to work
abroad is called _____.
a. nepotism
b. onboarding
c. diasporization
d. expatriation
44) _____ is the strategy of treating the entire world as one market.
a. Total isolation
b. Semiglobalization
c. Standardization
d. Localization
45) Enhancing ____ often entails making a series of make-or-buy decisions.
a. aggregation
b. agility
c. alignment
d. adaptability
46) The _____ view focuses on the dynamic interactions between the laws, cultures and
ethics of a country and a firm, and considers firm behaviors as the outcome of such an
interaction.
a. internal strength-based
b. competency-based
c. institution-based
d. resource-based
47) Which of the following reasons for cross-border acquisition failure is associated
with pre-acquisition?
a. Failure to address multiple stakeholder groups concerns
b. Poor organizational fit
c. Nationalistic concerns against foreign takeovers (political and media levels)
d. Clashes of organizational cultures
48) Corporate governance in ____ enterprises has relatively weak external and weak
internal governance mechanisms.
a. exit-based
b. voice-based
c. unit-trust
d. state-owned
49) Which of the following was viewed the tertiary sector for organized economic
activities during the Industrial Revolution in the 18th and 19th centuries?
a. Agriculture
b. Residual service activities
c. Manufacturing
d. Retail
50) By trying to be self-sufficient and producing a wide range of goods, _____ policies
reduce the wealth of a nation in the long run.
a. absolute advantage
b. laissez faire
c. free trade
d. mercantilist
51) What are centers of excellence?
52) Low barriers to entry into an industry make collusion between firms difficult.
53) The price leader in a market possesses the capacity to punish.
54) Indirect export is one of the strategies used by entrepreneurial SMEs to
internationalize without leaving their home country.
55) Many firms phase out the international division structure after their initial stage of
overseas expansion.
56) CSR-related resources can include tangible technologies and processes as well as
intangible skills and attitudes.