1) Risk is an important factor for companies engaged in international business. One
way a collaborative arrangement helps minimize risk when operating abroad is by
________.
A) reducing the possibility of technological appropriation
B) freeing up resources so a company can diversify into more countries
C) preventing the entry of new competitors
D) eliminating losses from exchange rate depreciation abroad
2) A current sourcing dilemma that some companies face is whether or not they should
________.
A) use outsourcing as a reward to underperforming employees
B) make critical components for which they have competencies
C) outsource innovative processes
D) measure supplier performance
3) Gibson Enterprises is an MNE that relies on just-in-time inventory management and
lean manufacturing systems to optimize quality and efficiency. For the last few years,
Gibson has used the same foreign sources for its raw materials. What is the most likely
risk faced by Gibson because of foreign sourcing?
A) quality of incoming inventory
B) uncertainty of arriving parts
C) few available suppliers
D) high inventory costs
4) Which of the following best supports the idea that MNEs should remain in countries
that allow child labor?
A) MNEs have a positive influence on government employment policies in most
foreign countries
B) Many MNEs have substantially improved the working conditions of their foreign
plants
C) MNEs are required to pay child workers more than local companies
D) Most MNEs employ local managers to handle cultural differences
5) In a strategy known as ________, many new companies locate themselves near
competitors and suppliers
A) offshoring
B) franchising
C) clustering or agglomeration
D) exporting
6) An import license is ________.
A) an agreement whereby one country gives another country permission to use a patent
that a company has registered there
B) a requirement that exporters take merchandise in lieu of money as payment for their
sales
C) a requirement that permission be secured from governmental authorities before
importation can be undertaken
D) a government prohibition of imports from a specific country
7) If Toranaga-san, who works for a Japanese trading company that operates in
Japanese yen, wanted to purchase Spanish castanets from a company in Barcelona and
needed Euros to complete the transaction, he would use the ________ to gain access to
spot Euros.
A) stock market
B) foreign-exchange market
C) New York Stock Exchange
D) international export market
8) The so-called “misery index” is the sum of a country’s ________.
A) foreign and national debt
B) inflation and unemployment rates
C) unemployment level and total debt
D) trade deficit and long-term inflation rate
9) Politics, law, culture, and economy are all examples of ________ factors that can
affect the ways in which companies produce and sell their products in foreign markets
A) social
B) physical
C) competitive
D) political
10) MedCo uses an IT system that labels a product with an electronic tag to provide
realtime information. Which of the following does MedCo most likely use?
A) EDI (electronic data interchange)
B) RFID (radio frequency ID)
C) PTX (private technology exchange)
D) ERP (enterprise resource planning)
11) Which of the following would have the LEAST influence on price setting in the
foreign-exchange market?
A) Morgan Stanley
B) Deutsche Bank
C) Western Union
D) JP Morgan
12) 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
13) Thomas is planning a vacation to Country X. On a tourism Web site, he reads that
the government of Country X limits the amount of money a tourist may convert into the
country’s currency. Country X most likely uses which of the following?
A) import deposit requirements
B) multiple exchange rates
C) import licensing
D) quantity controls