The most common method used for buying and selling goods internationally is
licensing.
Answer:
A voluntary export restraint refers to a quota that a nation imposes on its exports,
usually at the request of another nation.
Answer:
Products made in emerging countries tend to be evaluated more positively than those
from relatively more developed countries.
Answer:
International companies often must customize products to comply with local standards
if they are to do business in a particular country.
Answer:
The protection of infant industries by a nation’s government can cause more economic
harm than good.
Answer:
Material culture often displays uneven development across a nation’s industries.
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Not all factors of production are internationally mobile.
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The main cultural motive behind government intervention in trade includes protection
of domestic jobs.
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Corporate social responsibility is the practice of going beyond legal obligations to
actively balance commitments to investors, customers, other companies, and
communities.
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Civil law can be more adversarial than common law because civil law relies more on
the need to interpret laws according to tradition, precedent, and usage.
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In a backward integration joint venture, the parties choose to invest together in
downstream business activities.
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The term “globalization of production” refers to convergence in buyer preferences in
markets around the world.
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The London Interbank Bid Rate (LIBID) is the interest rate that London banks charge
other large banks for borrowing Eurocurrency.
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Tariffs are a source of government revenue mostly among developing nations.
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Booking centers are usually located on small territories with favorable tax and/or
secrecy laws.
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Consumer products such as toothpaste and soft drinks undergo extensive adaptation to
suit local preferences.
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A disadvantage of protection from import competition is the added cost of continuing to
produce a good domestically that could be supplied more efficiently by an international
supplier.
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Supporters and critics of globalization appear to agree that globalization prevents
dislocation in labor markets.
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Ombudsman and Data Protection Supervisor are the EU institutions that fulfill
secondary and support roles.
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A growth strategy is designed to increase the scale or scope of a corporation’s
operations.
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Like the European Union commissioners, EU justices are required to act in the interest
of their native countries.
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The protection of infant industries by a nation’s government can cause domestic
companies to become complacent toward innovation.
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Companies usually create a single marketing plan to be used in all markets in which
they sell their products.
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According to the eclectic theory that explains FDI, an internalization advantage is the
advantage of locating a particular economic activity in a specific location because of the
characteristics of that location.
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The process by which a company extends its control over additional stages of
production is called vertical integration.
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The greatest benefit of regional integration is trade diversion.
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Trademark protection typically lasts indefinitely, provided the word or symbol
continues to be distinctive.
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The role of the World Bank is to provide financing for national economic development
efforts.
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The practice of insuring against potential losses that result from adverse changes in
exchange rates is called currency arbitrage.
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Dual extension method extends the same home-market product and marketing
promotion into target markets.
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Inflation is a result of the supply and demand for a currency.
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Free-market economies tend to levy high taxes on business profits whereas socialist
economic systems normally levy lighter taxes.
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The value of trade passing through the borders of all countries exceeds the amount of
goods and services they produce.
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The potential to conduct written surveys is independent of the literacy rates among the
local population.
Answer:
________ are those that use outdated and obsolete technologies or employ low-wage
workers with few skills.
A) Business-agile enterprises
B) Sunset industries
C) Greenfield investments
D) Shell corporations
Answer:
Which of the following refers to convergence in buyer preferences in markets around
the world?
A) heterogenization of markets
B) globalization of markets
C) segmentation of markets
D) nationalization of markets
Answer:
Which of the following is the most common method of buying and selling goods
internationally?
A) exporting and importing
B) countertrade
C) a turnkey project
D) A merger or an acquisition
Answer:
Large international companies tend to make high-level labor decisions at the home
office because ________.
A) it creates a sense of unity and solidarity between the labour unions and management
members
B) managers in the home office are better equipped than managers in the host-country
office, to handle matters that affect workers personally
C) it places decisions that have a direct impact on host-country workers’ lives in the
hands of the home-country experts
D) it gives them greater control over their network of operations around the world
Answer:
Which of the following countries of the Central American Common Market has adopted
the U.S. dollar as its official currency?
A) El Salvador
B) Honduras
C) Nicaragua
D) Costa Rica
Answer:
The psychological process of readapting to one’s home culture after working in a
host-country culture is called ________.
A) social loafing
B) assimilation effect
C) reverse culture shock
D) expatriate failure
Answer:
ALADI refers to the ________.
A) Latin American Integration Association
B) Association of Southeast Asian Nations
C) Asia Pacific Economic Cooperation
D) Latin American Free Trade Association
Answer:
It is often difficult to conduct focus groups in ________ cultures where people have a
tendency to agree with others in the group.
A) collectivist
B) masculine
C) low uncertainty avoidance
D) long term oriented
Answer:
Which of the following reasons encourages companies to buy a product rather than
make it?
A) Buying a product gives managers greater control over the production process.
B) Buying a product decreases the company’s total costs significantly compared to
making the product in-house.
C) Buying a product ensures non-flexibility to local market conditions.
D) Buying a product enables a company to gain a great deal of power in their
relationships with suppliers.
Answer:
Which of the following terms is used to refer to widespread job turnover throughout an
economy?
A) redeployment
B) restructuring
C) onboarding
D) churning
Answer:
Himark Enterprises has foreign operations in Taiwan, India, and China. The firm pays
an annual insurance premium to the Overseas Private Investment Corporation. The firm
is most likely protecting itself from ________.
A) privatization
B) natural disasters
C) nationalization
D) financial instability
Answer:
The objectives at the ________ of an organization are typically more precise and
contain numerical targets of performance.
A) department-level
B) business-level
C) global-level
D) corporate-level
Answer:
The theory of absolute advantage measures a nation’s wealth by determining the
________.
A) amount of gold it has on reserve
B) quantity of minerals it has on reserve
C) total trade volume in the country
D) living standards of its people
Answer:
A tariff levied by the government of a country that is selling goods abroad is called a(n)
________.
A) export tariff
B) ad valorem tariff
C) compound tariff
D) specific tariff
Answer:
A(n) ________ allows the bank to modify the terms of the letter only after obtaining the
approval of both exporter and importer.
A) bill of exchange
B) bill of lading
C) confirmed letter of credit
D) irrevocable letter of credit
Answer:
Which of the following motives is least likely attributed to Freeland’s restriction on free
trade?
A) political motives
B) economic motives
C) social motives
D) cultural motives
Answer:
Purposely understaffing customs offices to cause time delays, requiring special licenses
that take a long time to obtain, and requiring air carriers to land at inconvenient airports
are all examples of ________.
A) local content requirements
B) import quotas
C) administrative delays
D) voluntary export restraints
Answer:
The CEO of Sports Stuff has decided that the company needs to retain complete control
over its operations in Europe. To achieve this objective, Herb would most likely
recommend that the firm establish a ________.
A) joint venture
B) cross licensing agreement
C) wholly owned subsidiary
D) strategic alliance
Answer:
Which of the following strategies works best for an organization that practices mass
production and mass-marketing?
A) differentiation strategy
B) focus strategy
C) low-cost leadership strategy
D) retrenchment strategy
Answer:
If ABC Software holds a currency option to purchase Swiss francs at SF 1.67/$ in 30
days, at the end of which the exchange rate is SF1.70/$, then ABC Software ________.
A) is required to follow through on a currency exchange
B) has succeeded in hedging against exchange rate risk
C) would exercise its currency option
D) would not exercise its currency option
Answer:
The Uruguay Round of Negotiations created the TRIPS Agreement to ________.
A) help standardize the intellectual property rules around the world
B) increase the exposure of national agricultural sectors to market forces
C) drastically reduce tariffs and nontariff barriers in agricultural trade
D) include international trade in services for the first time
Answer:
Which of the following is least likely to be caused by poor fiscal and monetary policies
of a nation’s central bank?
A) high rates of inflation
B) increasing budget deficits
C) depreciating currency
D) increasing levels of innovation
Answer:
If Wilson Industries selects a new area for its production units, the company will be
implementing ________.
A) capacity planning
B) process planning
C) facilities location planning
D) product structure modeling
Answer:
Which of the following represents the Fisher effect?
A) Cross Rate = Real Interest Rate + Nominal Interest Rate
B) Real Interest Rate = Nominal Interest Rate + Spot Rate
C) Nominal Interest Rate = Real Interest Rate + Inflation Rate
D) Real Interest Rate = Nominal Interest Rate + Unemployment Rate
Answer:
Which of the following would be most appropriate for its consumer product line?
A) horizontal integration
B) vertical integration
C) push strategy
D) pull strategy
Answer:
Which of the following forecasting techniques employs charts of past trends in currency
prices and other factors to forecast exchange rates?
A) financial analysis
B) fundamental analysis
C) value chain analysis
D) technical analysis
Answer:
The absence of government regulation in the Eurobond market ________.
A) substantially reduces the cost of issuing a bond
B) lowers the risk level of the bond
C) makes Eurobonds less popular than foreign bonds
D) exists because of the difficulty of regulating a multi-country market
Answer:
The U.S. legal system is largely based on ________.
A) common law
B) social law
C) civil law
D) theocratic law
Answer:
To insure against potential losses that result from adverse changes in exchange rates,
Trader’s Paradise should use currency ________.
A) swap
B) speculation
C) hedging
D) arbitrage
Answer:
Countries often use local content regulations to determine the proportion of the product
that must be made in the local market versus made outside of the local market in order
to ________.
A) maximize product safety
B) ensure a cultural fit
C) favor domestic companies
D) relieve production pressures on local companies
Answer:
Which of the following statements, if true, strengthens Donna’s argument?
A) People in low-wage nations have a high mortality rate and no access to healthcare
facilities.
B) Because of the increase in employment opportunities, workers from developing
countries flock to developed countries.
C) Low-wage nations tend to have poorly developed transport and communication
systems.
D) Many companies take advantage of lenient labor laws by setting up facilities in
low-income countries.
Answer:
The ________ called for large-scale reduction of the debt owed by poorer nations, the
exchange of old loans for new low-interest loans, and the making of debt instruments
that would be tradable on world financial markets.
A) Brady Plan
B) Louvre Accord
C) Bretton Woods Agreement
D) Smithsonian Agreement
Answer:
Foreign bonds issued and traded in Asia outside Japan and normally denominated in
dollars are called ________.
A) bulldog bonds
B) yankee bonds
C) samurai bonds
D) dragon bonds
Answer:
A tariff levied by the government of a country that a product is passing through on its
way to a final destination is called a ________ tariff.
A) transit
B) compound
C) export
D) specific
Answer: