If ABC Software simultaneously purchases and sells foreign exchange for two different
dates, the company is said to be involved in ________.
A) increasing its foreign exchange rate risk
B) conducting a currency swap
C) entering an arbitrage situation
D) buying and selling at the spot rate
Answer:
Which of the following is the oldest known form of countertrade?
A) counterpurchase
B) switch trading
C) offset
D) barter
Answer:
Which of the following statements is true of developing countries that have embraced
globalization?
A) The countries have experienced an increase in life expectancy.
B) As a result of extensive commercialism, there has been a decline in personal income.
C) Relying upon developed countries for technology has rendered their talent pool
stagnant.
D) Their rich cultural diversity hasn’t been affected by exposure to new cultures.
Answer:
________ appeals to companies because it lowers the amount of taxes the companies
must pay.
A) Debt
B) Equity
C) Stock value
D) Enterprise value
Answer:
________ teaches an expatriate a culture’s values, attitudes, manners, and customs.
A) Cultural assimilation
B) Cultural orientation
C) Language training
D) Cultural environmentalism
Answer:
Which of the following functions does a copyright perform?
A) It protects the trade secrets of an organization, including its business plans.
B) It prevents a company from monopolizing an invention.
C) It distinguishes the product and manufacturers from competitors through distinct
words and symbols.
D) It gives creators of original work the freedom to publish or dispose of them as they
choose.
Answer:
The exchange rate at the beginning of a year between the Indian Rupee (R) and the U.S.
dollar is R43.125/$. The annual inflation rates in India and in the United States are 19
percent and 3 percent respectively. What would be the new exchange rate at the end of
the year?
A) R49.8224/$
B) R37.327/$
C) R0.0267/$
D) $37.327/R
Answer:
The value of a product relative to its weight and volume is called its ________.
A) face value
B) value investing
C) real value
D) value density
Answer:
Nepotism often prevails in ________ cultures.
A) extended-family
B) individualistic
C) monotheistic
D) nuclear family
Answer:
________ refers to shares of ownership in a company’s assets that give shareholders a
claim on the company’s future cash flows.
A) Stock
B) A bond
C) Debt
D) A draft
Answer:
Which of the following entry modes would Sports Stuff be implementing if it hires a
company to design, construct, and test a production facility on its behalf?
A) joint venture
B) turnkey project
C) wholly owned subsidiary
D) franchising
Answer:
The government maintains control over the banking industry in a country. Which of the
following is most likely true if the country has a mixed economy?
A) Businesses in most economic sectors of the country are privately owned.
B) The government considers banking sector as important to national security.
C) The country has never experienced threats against its long-term stability.
D) The government views banking as more important than manufacturing.
Answer:
Partnerships between a government and a host company in the context of foreign direct
investment lead to ________.
A) increased exploitation of workers in the home country
B) domination of industries in the home country by large international firms
C) increased market access for the host company
D) increased control for the host country over its operations
Answer:
Which of the following is currently a member of the European Free Trade Association?
A) Slovakia
B) Ireland
C) Norway
D) Italy
Answer:
Which of the following is the first step in developing a successful export strategy?
A) identification of a potential market
B) match market needs to the company’s abilities
C) initiation of meetings
D) commitment of resources
Answer:
A ________ is a monetary regime that is based on an explicit commitment to exchange
domestic currency for a specified foreign currency at a fixed exchange rate.
A) currency option
B) currency board
C) currency speculation
D) currency arbitrage
Answer:
Issues regarding potential threat from substitute products in a market are addressed in
________.
A) security analysis
B) technical analysis
C) product fit analysis
D) competitor analysis
Answer:
________ is a legal system which is based on a detailed set of written rules and statutes
that constitute a legal code.
A) International law
B) Civil law
C) Tribal law
D) Common law
Answer:
If the family finds it difficult to adjust on returning to Japan after three years, they will
experience ________.
A) social loafing
B) reverse culture shock
C) expatriate failure
D) halo effect
Answer:
Adapting products and their marketing strategies in each of the national markets of a
company to suit local preferences is called a ________ strategy.
A) multinational
B) blue ocean
C) global
D) retrenchment
Answer:
Economic forecasts reveal that the U.S. dollar is expected to decline relative to the
Euro. Which of the following is the most advantageous method of obtaining funding for
Verandas under these conditions?
A) borrowing from U.S. banks
B) issuing equity in Germany
C) issuing equity in the U.S.
D) borrowing from Dutch banks
Answer:
Country M wants member nations to harmonize their tax, monetary, and fiscal policies
and wants to create a common currency. Country M is requesting for the creation of
a(n) ________ in the Moonland nations.
A) free trade area
B) economic union
C) customs union
D) common market
Answer:
Devaluation of a nation’s currency ________.
A) gives foreign companies in the country an edge over domestic companies
B) leads to a decline in the supply of goods and services
C) increases the price of a country’s imports
D) increases consumers’ buying power
Answer:
The major objective of the Association of Southeast Asian Nations (ASEAN) is to
________.
A) approach the European Union to resolve disputes between member countries
B) safeguard the region’s economic and political stability
C) introduce barriers to trade and investment
D) increase members’ tariff rates from an average of 7.5 percent to 15 percent
Answer:
A form of countertrade that usually typifies long-term relationships between the
companies involved is called ________.
A) barter
B) franchising
C) offset
D) buyback
Answer:
Citizens of one country who are living and working in another are called ________.
A) local employees
B) domicile residents
C) repatriates
D) expatriates
Answer:
A lower tariff rate for a certain quantity of imports and a higher rate for quantities that
exceed the quota is called a(n) ________.
A) export quota
B) tariff-quota
C) ad valorem tariff
D) voluntary export restraint
Answer:
The top management of the company contends that Hafstrom would benefit most from
manufacturing its own parts, rather than sourcing it from elsewhere, even if they are
made at another location overseas. Which of the following is being recommended in
this approach?
A) just-in-time manufacturing
B) location economies
C) vertical integration
D) outsourcing
Answer:
Which of the following statements is true of attitudes?
A) Over the years, they become more rigid than values.
B) They are learned from role models.
C) Because they’re formed within a cultural context, they mirror the attitudes of
surrounding countries.
D) They are developed only for the most important aspects of life.
Answer:
A(n) ________ channel creates a barrier that makes it difficult or impossible for
outsiders to penetrate.
A) exclusive
B) intensive
C) selective
D) two-level
Answer: