Allied and Axis governments met in Bretton Woods in the final days of World War II.
The random walk hypothesis suggests that the best predictor of tomorrow’s currency
prices are today’s prices.
Translation exposure occurs when the subsidiary’s results are consolidated at the
corporate level.
Promotion is all forms of communication between a firm and its publics.
In a currency option hedge, the firm covers its downside risk but, because the contract
is an option, can also benefit from any upside.
Low-context cultures such as the United States have explicit communication patterns.
Accounting standard convergence is unlikely, given the complexities of the systems, all
of which would require harmonization.
Social desirability bias can be seen as a cultural problem when conducting market
research.
Effective bridging in a team situation is a substitute for integration.
The OECD and the U.S. Internal Revenue Service have issued guidelines on transfer
pricing because it has such critical tax implications.
According to the theory of comparative advantage, a nation can gain from trade if it is
not equally less efficient in producing two goods.
Bonuses are payments made to compensate expatriates for the extra costs they must
incur to live as well abroad as they did in the home country.
Country risk assessment is an evaluation that assesses a country’s political situation and
policies to determine how much risk exists of a change in that country’s government.
The cultural forces tend to be closely allied to the legal forces, which exert a strong and
pervasive influence on advertising.
There is one main organization that offers IP protection, the UN.
In the antitrust area, the United States is concerned with the impact of the business deal
on the consumer, whereas the EU focus is on the competitive structure of the
marketplace, so it pays attention to rivals.
Multilateral netting reduces foreign exchange transaction costs.
Value chain linkages must be examined not merely across activities within the company
but also in terms of managing relationships with external entities such as suppliers,
alliance partners, distributors, or customers within and across nations.
Because of the importance of the workforce to the effectiveness of organizational
operations, a company’s approach to international human resource management should
drive its competitive strategy.
Effective supply chain management can enhance a company’s ability to manage
regulatory, social, and other environmental pressures, both within a nation and globally.
Exporting is an expensive option for testing foreign markets and foreign competition.
Few international companies are organized by function at the top level.
Perks are symbols of rank in the corporate hierarchy and are used to compensate
executives while minimizing taxes.
The Internet may eventually allow any firm to have the opportunity to conduct surveys
anywhere in the world.
Global teams are a decreasing form for international work, since transportation cost
reductions have been implemented in many corporations.
The EU is a supranational body that has become, essentially, a regional government.
Only in communist countries do governments own the factors of production.
Porter suggests that adverse conditions can motivate innovation, which may lead to the
development of a competitive advantage.
According to the text, when a company offshores activities, it relocates those activities
to the facilities of another company that is located in a foreign location.
Managerial positions in overseas operations require more and different skills than do
purely domestic executive jobs.
When a company’s primary strategic orientation is multidomestic, an ethnocentric
orientation is particularly appropriate.
There are four main types of FX risk: transaction, translation, economic, and arbitrage
exposure.
In two-career families, when one spouse accepts a foreign assignment and the other
spouse goes along, that other spouse is referred to as a trailing spouse.
A company headquartered in another country is known as a foreign business.
The stakeholder model requires businesses to think about:
A. the stakeholders’ interest in profitability.
B. the network of tensions caused by competing demands.
C. strategy in light of sustainability.
D. the frequency of social issues faced by the stakeholders.
Culture plays a significant role in the discipline(s) of:
A. marketing, but not finance, because it is quantitative.
B. leadership, accounting, finance, marketing, human resources, and production.
C. marketing and human resources, but not production, finance, and accounting.
D. all foreign businesses, but not businesses of the home country.
Tax liability on foreign earnings is controlled by:
A. the tax treaties in place between the two relevant countries.
B. the tax rates in the local jurisdictions.
C. how the foreign operations of a company are organized.
D. negotiations between the company and the host country.
The IMF initially played a central role in:
A. establishing trade initiatives through GAAP measures.
B. supporting war-torn nations of Europe as they recovered from their devastation.
C. setting fixed exchange rates among nations’ currencies with an established par value
based on gold.
D. the monitoring of EU initiatives to restrain trade with South Africa.
Freight forwarders’ responsibilities may include all of the following except:
A. booking space on a ship.
B. preparing the export documents.
C. verifying that the seller has money in the bank.
D. arranging to have the merchandise delivered to the port.
E. D and C.
Cultural problems and technical difficulties cause problems:
A. when preparing for field trips.
B. in the collection of secondary data.
C. in the collection of primary data.
D. during the economic/financial screening.
E. none of the above.
Cooperation as a global team norm:
A. is scarce and unlikely to develop.
B. helps to overcome the disadvantage of geographic dispersion.
C. is overrated according to research.
D. contributes to high levels of out-group feelings.
E. C and D.
An arrangement in which one firm contracts with another firm to produce products to
its specifications but assumes responsibility for marketing is:
A. a license.
B. a franchise.
C. a management contract.
D. contract manufacturing.
E. a turnkey project.
Parent-company nationals might be concerned with:
A. the rate at which industrial skills are learned by host-country nationals.
B. how quickly they can learn the local language in their host country.
C. the exchange rate movement of their host country’s currency.
D. all of the above.
E. two of A, B, and C.
When nonexporting firms are asked why they do not export, they generally list the
following as problems:
A. locating foreign markets.
B. payment and finance procedures.
C. export procedures.
D. lack of foreign language expertise.
E. A, B, and C.
The interdependence that confronts global leaders results from:
A. needing to depend on others to implement change plans.
B. increased levels of linkage, both within and outside the company.
C. global logistics conditions.
D. outsourcing of manufacturing.
E. offshoring of personnel.
According to the text, data on imports may not completely measure market potential
because:
A. these data are not available for most countries and products.
B. foreign competitors will not report export data accurately.
C. transportation costs impact prices.
D. all of the above.
E. two of A, B, and C.
Why is a currency option sometimes preferred to a forward market hedge?
A. It is an optional contract, so the company could not exercise it and be able to benefit
from upside swings in the foreign currency value.
B. The rates are cheaper.
C. Currency options are available for longer periods.
D. The IRS favors currency options for tax credits when they are exercised.
The kinds of marine insurance policies include:
A. basic named perils.
B. broad named perils.
C. partial risk.
D. all risk.
E. A, B, and D.
Partnerships between or among competitors, customers, or suppliers that may take one
or more of various forms, both equity and nonequity, are known as:
A. licenses.
B. joint ventures.
C. wholly owned subsidiaries.
D. strategic alliances.
E. management contracts.
Which of the following are not identified in the text as being elements of the
competitive forces that an analyst uses to examine markets?
A. Competitors’ number, size, and financial strength
B. Competitors’ marketing strategies
C. Competitors’ product portfolios
D. Competitors’ coverage of the market
E. None of the above (All are identified as elements of the competitive forces used by
analysts.)
Export marketing plans should be specific about:
A. the markets to be developed.
B. the marketing strategy for servicing them.
C. the tactics required to make the strategy operational.
D. cash flow projections.
E. A, B, and C.
Bills of lading are of two types:
A. invalidated and validated
B. endorsed and unendorsed
C. to order and straight
D. confirmed and unconfirmed
E. documented and undocumented
The segment approach to investigating markets requires that markets should be which
of the following?
A. Large
B. Protected
C. Capturable
D. All of the above
E. A and C
Customs procedures in many countries often:
A. are transparent and fair.
B. discriminate against imports and favor exports.
C. are online and impersonal.
D. two of the above.
E. all of A, B, and C.
The segment approach to investigating markets requires that markets should be which
of the following?
A. Definable
B. Focused
C. Profitable
D. All of the above
E. Two of A, B, and C
In the U.S. court system, tort claims may result in:
A. exceedingly large awards.
B. lower liability insurance.
C. a reduction in strict liability.
D. reduced liability insurance costs for foreign companies.
E. none of the above.
Supporters of mercantilism:
A. viewed accumulation of precious metals as an activity essential to a nation’s welfare.
B. viewed industrial development as the primary source of a nation’s wealth.
C. promoted trade policies that generally benefited consumers and emerging
industrialists.
D. all of the above.
E. two of A, B, and C.
Latin and Asian countries’ scores on Hofstede’s power distance dimension are relatively
large and relatively low on:
A. the individualism dimension.
B. transparency.
C. masculinity.
D. femininity.
A multidomestic company is:
A. none of B, C, D, or E.
B. a business whose activities involve crossing national borders.
C. the domestic operations within a foreign country.
D. an organization with multicountry affiliates.
E. an organization that attempts to standardize operations worldwide.
The Council of European Union, the primary policy-setting institution of the EU, is
composed of:
A. the member-states’ prime ministers or presidents.
B. the member-states’ ministers who represent the specific area being discussed.
C. elected members from across Europe, elected by country.
D. appointed representatives from each member-state.
The United States is moving toward convergence with IASB standards:
A. and is the only major economy that does not follow them now.
B. and expects to be harmonized by 2015.
C. although the goal is long term, over 50 years.
D. A and B.
The presence of tattoos suggests social outcasts universally, based on:
A. their use in Japan by the Yakuza.
B. a primitive human desire to change and thus control the body.
C. a universal aesthetic.
D. nothing, because this statement is not accurate.
According to the text, the dimensions along which management can globalize
(standardize) their company’s international activities include:
A. markets.
B. competitive strategy.
C. political exposure.
D. all of the above.
E. two of A, B, and C.
When host-county nationals are employed:
A. training costs are a minimum.
B. they are familiar with local customs, culture, and language.
C. they are already familiar with the home country.
D. any conflict of interest is removed.
E. two of the above.
In high-context cultures, face-to-face relationships tend to be important and:
A. knowledge is situational.
B. decisions focus around personal relationships.
C. long term.
D. all of the above.
In an affective culture (Trompenaars), emotions are seen as:
A. responses to be freely displayed.
B. private and, therefore, not displayed.
C. a weakness and, therefore, hidden.
D. appropriate to share with family members only.
Usually, it is reasonable to assume that foreign law:
A. will be similar to U.S. law.
B. will differ from U.S. law and must be understood.
C. won’t matter because you and your trading partner will agree to arbitrate.
D. will be biased against the foreigner.
E. will vary but that U.S. law will take precedence.