The rate at which one currency is interchanged for another is called the ________.
A) exchange rate
B) interbank interest rate
C) official cash rate
D) prime rate
Answer:
Which of the following is a contractual entry mode?
A) wholly owned subsidies
B) turnkey projects
C) joint ventures
D) strategic alliances
Answer:
A company selling in a country with a strong currency while sourcing from a country
with a weak currency ________.
A) practices unethical conduct
B) experiences a trade deficit
C) ends up bankrupt
D) improves its profits
Answer:
A country that has recently increased the portion of its national production and exports
derived from industrial operations is called a(n) ________.
A) newly industrialized country (NIC)
B) developing country
C) emerging market
D) developed country
Answer:
While designating an exchange rate, the ________ is always the denominator.
A) counter currency
B) base currency
C) cross currency
D) quoted currency
Answer:
When the law of one price is violated, a(n) ________ opportunity arises.
A) dumping
B) countertrade
C) arbitrage
D) devaluation
Answer:
Which of the following statements is true of foreign trade zone?
A) It is an area through which merchandise is allowed to pass with fewer procedures
but higher taxes.
B) These areas provide very limited employment opportunities.
C) Goods imported into these zones require import licenses and are subject to import
duties.
D) International companies can store goods in these zones without incurring taxes,
before shipping them to other countries.
Answer:
A company that hires the best-qualified individuals, regardless of nationality, to manage
foreign operations is utilizing a ________ approach.
A) horizontal integration
B) geocentric staffing
C) ethnocentric staffing
D) vertical integration
Answer:
According to Hofstede’s framework, organizations which have cultures that score high
on ________ tend to be more hierarchical, with power deriving from prestige, force,
and inheritance.
A) uncertainty avoidance
B) power distance
C) short-term orientation
D) femininity
Answer:
Purchasing power parity is better at predicting ________ exchange rates.
A) cross
B) spot
C) short-term
D) long-term
Answer:
Which of the following occurs when an idea to be communicated is translated into
images, words, and symbols?
A) compiling
B) encoding
C) parsing
D) processing
Answer:
Which of the following was created to regulate fixed exchange rates and enforce the
rules of the International monetary system?
A) International Monetary Fund
B) World Trade Organization
C) European Union
D) World Bank
Answer:
Bolivia, Colombia, Ecuador, and Peru belong to the ________.
A) Latin American Free Trade Association (LAFTA)
B) Central American Common Market
C) Andean Community
D) Latin American Integration Association (ALADI)
Answer:
Konesia has created a hybrid form of trade restriction-a lower tariff rate for a certain
quantity of imports and a higher rate for quantities that exceed the quota. This is an
example of a(n) ________.
A) compound tariff
B) export quota
C) ad valorem tariff
D) tariff-quota
Answer:
If Gem Jewels wants its employees to get “under the skin” of the local people, it should
provide ________.
A) language training
B) sensitivity training
C) cultural orientations
D) field experience
Answer:
If money were free from all controls when transferred internationally, the real rate of
interest would ________.
A) be the same in all countries
B) be the same as the inflation rate
C) create arbitrage opportunities across countries
D) create arbitrage opportunities in developed countries
Answer:
________ refers to the unwanted cultural influence in a nation that can cause great
distress and lead governments to block imports it believes to be harmful.
A) Cultural imperialism
B) Cultural protectionism
C) Dumping
D) Capitalism
Answer:
The most common tariffs used today are the ________ tariffs.
A) import
B) transit
C) inverted
D) export
Answer:
In the earliest days of international trade, ________ was the internationally accepted
currency for payment of goods and services.
A) British pound
B) U.S. dollar
C) silver
D) gold
Answer:
Export/import financing in which an exporter ships merchandise and later bills the
importer for its value is called ________.
A) advance payment
B) open account
C) a letter of credit
D) documentary collection
Answer:
Which of the following products has a low value-density ratio?
A) semiconductors
B) emerald
C) crude oil
D) premium perfumes
Answer:
A strategy designed to reduce the scale or scope of a corporation’s business is called a
________ strategy.
A) growth
B) differentiation
C) retrenchment
D) stability
Answer:
If Old World wants to grant the right to sell its furniture to only a limited number of
resellers, it should consider a(n) ________ channel.
A) intensive
B) exclusive
C) two-level
D) selective
Answer:
Which of the following is true about economic development of a nation?
A) The purchasing power parity is a poor indicator of a people’s total well-being.
B) GDP is a larger figure and includes a nation’s income generated from exports,
imports, and international operations.
C) Illegal activities such as gambling and black market transactions are considered in
GDP and GNP.
D) Using gross product figures to compare production across countries accounts for
different cost of living in each country.
Answer:
The company’s financial advisors recommend that ABC Software conduct most of its
business in a vehicle currency. Which of the following is true of vehicle currencies?
A) A vehicle currency is a contract that requires the exchange of an agreed-upon
amount of a currency on an agreed-upon date at a specific exchange rate.
B) The U.S. dollar, Australian dollar, Japanese yen, and British pound are all examples
of vehicle currencies.
C) The U.S. dollar became a vehicle currency after World War II when all of the world’s
major currencies were tied indirectly to the dollar because it was the most stable
currency.
D) The Chinese yuan is expected to become a vehicle currency in the near future as
China’s position in world trade continues to grow.
Answer:
________ in the foreign exchange market specialize in currency futures and options
transactions.
A) Securities exchanges
B) Eurocurrency markets
C) Interbank markets
D) Over-the-counter markets
Answer:
Which of the following statements is true of Kirawi, a democratic nation whose legal
system is based on common law?
A) The law is based on religious teachings and is enforced by the country’s religious
leaders.
B) The law is inflexible and is applied the same way in all situations.
C) The law is based on a detailed set of written rules that constitute a legal code.
D) The law is interpreted on the basis of tradition, precedent and usage.
Answer:
Which of the following statements is true of rationalized production?
A) It depends on a large number of distribution channels which leads to inefficiency.
B) It depends on a large number of distribution channels which increases the cost of
production.
C) It can bring the entire production process to a standstill, if work is stopped in one
country.
D) It is an unethical method of production as it uses questionable labor practices to
reduce costs.
Answer:
The calculation of each currency’s par value under the gold standard was based on the
concept of ________.
A) earnings per share
B) interbank interest rates
C) purchasing power parity
D) inflation rates
Answer:
________ requires each individual to be focused on the quality of his or her own
output.
A) Total quality management
B) Quality-of-life index
C) Integrated business planning
D) Organizational restructuring
Answer:
Which of the following is established by a company that builds an entirely new facility?
A) a divestiture
B) a shadow economy
C) a greenfield investment
D) a shell corporation
Answer:
Robert believes that social and economic equality can be obtained only by establishing
an economic system in which the government owns and controls all types of economic
activity. However, he does not think of himself as a communist, but as a socialist.
Which of the following statements about Robert is true?
A) Robert does not believe that a violent revolution is needed to seize control over
resources.
B) Robert does not think that political dissidents should go unpunished.
C) Robert believes that the pricing of goods should be left to the discretion of laborers.
D) Robert believes that the means of production should be owned by the people who
use them.
Answer:
________ refers to the foreign direct investment in factories, equipment, and land that
cannot be pulled out of the market quickly.
A) Hot money
B) Patient money
C) Fiat money
D) Key money
Answer:
Which of the following refers to the use of computer networks to purchase, sell, or
exchange products; service customers; and collaborate with partners?
A) e-commerce
B) telecommuting
C) data virtualization
D) virtual hosting
Answer:
Which of the following will most likely help Techno Toys sell its toys directly to buyers
in the target market?
A) agents
B) sales representatives
C) export management companies
D) export trading companies
Answer: