The major trade groups in South America are CAN and Mercosur.
The Malcolm Baldrige National Quality Award is an example of a general standard that
is presented annually to companies that demonstrate quality strategies and
achievements.
Producers are affected by exchange rate changes because goods manufactured in a
country with a weak currency will be relatively cheap in world markets.
Comparative advantage theory holds that gains from trade are the result of capital
movements from countries with low interest rates to countries with higher interest rates.
A localization strategy makes the most sense for companies that see high pressures for
local responsiveness and low pressures for cost reductions.
Countries with a theocratic legal system encourage precise, detailed contracts whereas
countries with a common legal system encourage shorter and less specific contracts.
Governments sometimes prohibit foreign acquisitions because they fear market
dominance by foreign enterprises.
The International Fisher Effect implies that the country with the higher interest rate
should have lower inflation.
The creation of a code of conduct includes steps such as establishing a global policy,
communicating the code to employees, ensuring that the policies are followed, and
reporting results to external stakeholders.
In a production orientation, a company focuses on efficiency and product quality when
selling abroad.
A culture in which people prefer to handle tasks sequentially is a polychronic culture.
Economic indicators such as GNI, and its expression in terms of per capita, growth rate,
and PPP, are not sufficient to develop a clear picture of the overall quality of life in a
country.
In societies where trust is high, there tends to be a lower cost of doing business.
The law is often based on imprecisely defined moral concepts that cannot be separated
from legal concepts.
There is a positive correlation between economic freedom and economic growth.
U.S.-based MNEs do not like to use the balanced scorecard for evaluation performance
because it does not take into consideration international differences.
Toyota has been successful in Europe by exporting cars to Europe as well as designing
and manufacturing cars in Europe for the European market.
A positive brand image cannot overcome negative perceptions of the country where the
product is made.
A current account deficit suggests that a country is importing more than it is exporting
and building up foreign debt.
The introduction of the euro has eliminated currency as a barrier to trade in all
European countries.
Countries typically establish export restrictions to encourage the development of
substitute products.
In the aftermath of the recent global financial crisis, there has been a significant
reduction in the level of government involvement in economic affairs.
Published government data is most often inaccurate because of translation errors from
other countries’ languages.
When free mobility of factors of production is added to a common market, the result is
a customs union.
A divisional structure tends to be adopted by firms that are diversified by products or
markets.
The foreign freight forwarder is the largest export intermediary in terms of value and
weight of products managed.
Export prices of primary products fluctuate less than export prices of manufactured
products.
The notion of boundaries, within the context of neoclassical structures, refers to those
limitations that interfere with communication and collaboration between the firm and its
suppliers, distributors, allies, competitive rivals, and customers.
The Petrobras oil company scandal involved companies outside Brazil.
A major problem with MNEs using offshore financial centers is that they may give
unfair tax advantages to companies.
Export-led development refers to the off-shoring of production.
Which of the following is the BEST example of a product disruption driving industry
change?
A) redesign of Toyota’s Prius
B) introduction of Apple’s iPad
C) AT&T’s purchase of T-Mobile
D) merger of United and Continental
Which level of moral development involves an individual learning role-conformity
from peers, parents, and laws?
A) conventional
B) principled
C) autonomous
D) preconventional
As a leading exporter of luxury automobiles, Germany has built a strong reputation in
engineering. Germany’s trade most likely relies on a(n) ________.
A) outward immigration restriction
B) natural advantage
C) acquired advantage
D) neomercantilist policy
What is typically the most difficult aspect of an export plan for SMEs?
A) finding a freight forwarder
B) identifying core competencies
C) creating countertrade activities
D) targeting the right foreign market
The concept of leveraging in finance refers to ________.
A) the degree to which companies rely on foreign exchange to fund operations
B) how a company hedges its foreign currency obligations
C) the degree to which a firm funds the growth of a business by debt
D) how much cash the CFO has in the bank
All of the following are benefits of countertrade EXCEPT ________.
A) decreasing trade protectionism
B) increasing access to innovative technology
C) developing new trade relationships with foreign companies
D) preserving foreign-exchange reserves
What is the main information-related challenge in global supply chain management?
A) The Internet is growing too quickly in emerging markets.
B) Few countries are technologically advanced.
C) The industrial equipment and food/agriculture industries use e-commerce more than
industries such as defense and motor vehicles.
D) Many emerging market networks cannot be managed through the Internet because of
the lack of technology.
The interbank market in foreign exchange is where ________.
A) electronic brokerage systems are required
B) banks trade currency with each other
C) reporting dealers set exchange terms
D) remittance payments are made
Which of the following is most likely a true statement about using the Internet in supply
chain management?
A) The Internet is universally accessible.
B) The Internet slows internal processes in a company.
C) The Internet minimizes efficiency gains to a company’s suppliers.
D) The Internet prevents a deeper level of collaboration and communication.
Assume a U.S. company sells merchandise to a French customer for $200,000 when the
exchange rate is $1.5 per euro. At the end of the month, the euro is trading at 1.47, and
in the middle of the next month when payment is received, the exchange rate is 1.53. If
the U.S. company receives payment in dollars, what is the value of the sale at the end of
the month for the U.S. company?
A) $200,000
B) $294,000
C) $300,000
D) $306,000
The more closed a society is, the more important ________ group membership is.
A) acquired
B) age-based
C) education
D) ascribed
The 27-member EU negotiates trade agreements as one. The EU and Brazil have
negotiated a strategic trade alliance, which is an example of a ________.
A) customs union
B) global free trade agreement
C) bilateral agreement
D) multilateral agreement
________ people account for the largest percentage of global production.
A) English-speaking
B) Mandarin-speaking
C) French-speaking
D) Spanish-speaking
Large companies that have resources to go it alone may have advantages in product
development over small companies that do not because ________.
A) evidence suggests that collaborative arrangements slow the speed of innovation
B) large companies can dictate their terms of operations abroad
C) small companies are disadvantaged in legal settlements
D) large companies need not adapt to national differences
A driving factor for the growth in imports is the impact of ________.
A) government programs
B) labor specialization
C) consumer preferences
D) social trends
Which of the following are members of NAFTA?
A) the United States, Canada, and Mexico
B) North America and Latin America
C) the United Kingdom, the United States, and Canada
D) the United States, Canada, and Brazil
According to the Ethical Trading Initiative (ETI), ________.
A) child labor cannot be used unless there are no suitable alternatives
B) employment need not be freely chosen in order to be acceptable
C) no harsh or inhumane treatment of workers should be allowed
D) MNEs are not responsible for establishing codes of conduct
Which of the following best explains Nike’s quick response to criticism of unfair
employment practices in developing countries?
A) retaining employees
B) improving public relations
C) addressing product safety concerns
D) cutting costs in order to improve profits
Which of the following is NOT one of the three basic configurations that MNEs
consider when establishing a global manufacturing strategy?
A) regional manufacturing
B) centralized manufacturing
C) multidomestic manufacturing
D) multicultural manufacturing
Which of the following is promoted by a neoclassical structure?
A) innovation of ideas
B) information control
C) project competition
D) minimal relationships
A(n) ________ ideology is the system of ideas that expresses the goals, theories, and
aims of how society should work.
A) technological
B) economic
C) legal
D) political
Abel Enterprises has implemented a system based on coordination by mutual
adjustment. Which of the following would most likely be used by Abel Enterprises?
A) strict scheduling
B) social networking
C) synchronized training
D) centralized decision making
In most cases, which type of government protection assistance is most controversial?
A) business development services
B) foreign business contacts
C) trade expositions
D) tariffs
Imports can stimulate exports by ________.
A) redistributing the work force
B) curtailing domestic competition
C) generating more tax revenue
D) increasing foreign income
Most people’s basic value system is ________.
A) modified significantly between childhood and adulthood
B) altered during adulthood through imposition
C) affected primarily by teenage peer pressure
D) acquired mainly during early childhood
Factor mobility refers to the movement of which of the following combinations?
A) capital, technology and people
B) currency, profits and raw materials
C) labor, capital and management
D) trade, profits and materials
The vigor of IPR protection is highly related to a country’s stage of ________.
A) economic development
B) cultural heterogeneity
C) natural resource development
D) standardization of patent regulations
Which of the following is NOT one of the top four locations for trading foreign
exchange?
A) London
B) New York
C) Tokyo
D) Hong Kong
In addition to protection, tariffs serve to ________.
A) generate revenue
B) subsidize exports
C) subsidize imports
D) increase consumption
An example of a Japanese service export is a visit by a ________.
A) Japanese citizen to Disneyland in the United States
B) Japanese citizen to the Japan Pavilion at Epcot Center in the United States
C) U.S. citizen to the Japan Pavilion at Epcot Center in the United States
D) U.S. citizen to Tokyo Disneyland in Japan
Companies using a sales orientation find their greatest ability to sell the same product in
more than one country when ________.
A) promotional programs are identical in each country
B) consumer characteristics are similar
C) the product is a household item
D) the product has a low price relative to incomes
What is dumping? What are the possible effects of dumping on a country’s economy?
What is the relationship between a company’s international market and its production
location decisions? How do firms benefit from the use of scanning techniques when
making location decisions?
In a brief essay, explain the roles of the World Trade Organization and the United
Nations in international trade.
In a short essay, discuss why governments have been liberalizing cross-border
movements of goods, services, and resources.
In a short essay, list and discuss the nontariff barriers that relate to direct price
influences: subsidies, aid and loans, customs valuations, and other direct price
influences.
What are common reasons that governments enact export restrictions? What are the
possible negative consequences of such restrictions?
What are the various types of collaborative arrangement options available to
international businesses? How can firms most effectively manage international
collaborative arrangements?
In a short essay, discuss the theory of mercantilism, and discuss favorable and
unfavorable balances of trade as they apply to international business.
What are the three main types of exporters? What are the three main types of importers?
Briefly describe the characteristics of each.
What issues complicate international economic analysis?
Explain how franchising agreements differ from licensing agreements.
How have sustainability demands and the Kyoto Protocol affected international
business? Discuss the controversies surrounding each.
What is procedural political risk? How does a nation’s political and legal environment
influence procedural risk for MNEs?
What is the difference between relativism and normativism? How do these concepts
relate to ethical behavior in international business?
What is a born global? How has technology triggered the growth of born globals?
There are two ways companies can invest in a foreign country. They can either acquire
an interest in an existing operation or construct new facilities. In a short essay, describe
the advantages and disadvantages of each alternative.
Why is geography important to most regional trade agreements? Provide examples of
RTAs to illustrate your answer.
