1) Import substitution is a program promoting local production of products that would
otherwise be imported.
2) Trading activity has increased in recent years due to the growing importance of
foreign exchange as an alternative asset and the expanded emphasis on hedge funds.
3) In most cases, trade protectionism makes it easier for a company to buy what it needs
and to sell products in global markets.
4) Parmalat engaged in financial statement fraud in part to divert funds to family-owned
businesses.
5) Under a strategic marketing orientation, a company considers potential
environmental, health, social, and work-related problems from the sale of its products
abroad.
6) The Japanese yen is an example of a soft currency.
7) In collectivist cultures based on kinship, security and social needs are met more
effectively in the workplace than at home.
8) Acquiring and allocating financial resources among the company’s activities and
projects is the responsibility of the financial marketing manager.
9) The lowering of tax rates around the world is one of the seven major forces behind
recent globalization
10) In societies where trust is high, there tends to be a lower cost of doing business.
11) According to the PLC theory, developing countries have their best production
advantage in which stage of the product life cycle?
A) growth
B) maturity
C) decline
D) introduction
12) Melissa, a foreign-exchange trader, wants to buy euros from Stephanie. Which of
the following is the price at which Melissa is willing to buy euros?
A) spread
B) offer
C) bid
D) cross rate
13) Elite Manufacturing seeks a foreign location with a highly favorable business
environment and a comprehensive legal code. Which of the following countries would
be most suitable for Elite?
A) Japan
B) Canada
C) Singapore
D) United Kingdom
14) All of the following are differences that need to be overcome for international
collaborative arrangements to be effective EXCEPT ________.
A) national disparities in governmental policies
B) company variances in strategic directions and objectives
C) governmental differences in export restrictions
D) company diversity in management styles and structures
15) Which of the following is a characteristic of most offshore financial centers?
A) political stability
B) services for residents
C) accounting scandals
D) a lack of legal expertise
16) The ________ is the common currency of the European Union.
A) franc
B) pound
C) euro
D) mark
17) In a country’s balance of payments, the ________ tracks all trade activity in
merchandise.
A) capital account
B) current account
C) payment account
D) deficit account
18) Shelly, a manager at a global firm, is studying the foreign currency intervention
practices of Indonesia. Shelly is most likely examining ________ factors.
A) institutional setting
B) fundamental analysis
C) confidence
D) circumstantial
19) Garnet Footwear suffered significant financial losses and had to close its foreign
operations. The dissolution process took six months and cost four percent of the firm’s
value. Where were Garnet’s foreign operations most likely located?
A) Ecuador
B) France
C) Japan
D) China
20) Executives at Apex decided to use a production orientation in the firm’s
international marketing efforts. Which of the following statements best supports this
decision?
A) Top management at Apex is committed to the concept of social responsibility
B) Apex is willing to alter its products to fit mass-market needs in foreign countries
offering growth potential
C) Apex will produce in each country where it sells
D) Apex will aim sales at foreign-market segments that resemble segments to which it
aims domestically
21) A(n) ________ is the price of a currency.
A) tariff
B) quota
C) exchange rate
D) subsidy
22) Which of the following is NOT causing greater complexity in the regulation of
trade?
A) growth in export tariffs
B) services available over the Internet
C) heightened concern about product safety
D) development of new products that must be classified
23) List and compare the three common methods of implementing a balanced
compensation plan.
24) Why do companies often treat foreign reinvestment decisions differently than new
foreign investment decisions?
25) What factors makes international pricing and distribution more complex than
domestic pricing and distribution?
26) Describe total quality management.
27) What is the role of the controller in an MNE? What are some of the challenges that
a controller faces in an international environment?
28) Why do you think corporate universities are becoming more popular among MNEs?
How do both MNEs and employees benefit from corporate universities?