1) At Fidelity Enterprises, raw materials, parts, and components are acquired from
suppliers as they are needed in the manufacturing process so that Fidelity does not have
to store large inventories. Which of the following does Fidelity most likely use?
A) just-in-time (JIT)
B) total quality management (TQM)
C) six Sigma
D) acceptable quality level (AQL)
2) Companies can anticipate conducting countertrade with businesses in countries that
________.
A) experience widespread economic problems
B) command strong negotiation positions
C) have sufficient access to cash
D) weakly regulate international trade
3) ________ is the chance that political forces may change a country’s business
environment in ways that lead investors to lose some or all of the value of their
investment or be forced to accept a lower-than-projected rate of return.
A) Governmental risk
B) Operating risk
C) Transaction risk
D) Political risk
4) In a command economy, ________.
A) businesses and consumers are assumed to be the best judges of how resources
should be allocated
B) the government sets goals and determines the price and quantity of what is produced
C) different economic sectors coordinate the activities of the federal government
D) each enterprise sets its goals before making reports to the central government
5) You are the manager of an SME in the United States, and your firm wants to begin
exporting. Since you have never been involved with exporting, there are many
compelling reasons that encourage contacting the ________ to obtain expert counseling
on exporting.
A) U.S. Treasury Department
B) Small Business Administration
C) Federal Credit Insurance Association
D) U.S. Commerce Department
6) All of the following factors most likely led to Costa Rica’s attraction of high-tech
FDI EXCEPT the country’s ________.
A) demand for high-tech products
B) literacy rate
C) quality of life
D) political stability
7) Historically, the geographic division structure is associated with companies pursuing
________ strategies.
A) multidomestic
B) transnational
C) global
D) international
8) Which of the following was part of the stability and growth pact that was required for
countries to be part of the European Monetary Union?
A) The annual government budget must be no greater than 3% of GDP
B) The annual inflation rate must remain within 1.5% of the three best-performing EU
countries
C) The annual government budget deficit could be no greater than 60% of GDP
D) The annual inflation rate must remain within 5.5% of the four best-performing EU
countries
9) Some MNEs that have tried contemporary structures have run into problems, most
notably ________.
A) frequent managerial intervention in decision making
B) relentless centralization of decision making
C) employees too motivated by bonuses
D) resource competition
10) The EU organization that provides political leadership, drafts laws, and runs the
daily programs of the EU is the ________.
A) European Commission
B) Council of Ministers
C) European Parliament
D) European Central Bureaucracy
11) In a country that practices state capitalism, all of the following are most likely to be
handled by the state EXCEPT ________.
A) leveraging control of the financial system
B) developing national corporations
C) supporting the local activities of foreign competitors
D) systematically managing trade relations
12) Which of the following is a characteristic of most offshore financial centers?
A) strict domestic regulation
B) minimal banking activities
C) large foreign currency markets
D) nominal or non-existent tax rates
13) Which of the following has MOST influenced consumers to demand access to
foreign-made products?
A) Declining global affluence has caused consumers to seek out lower-priced products
from abroad
B) Consumers have become more efficient in using media and technologies to compare
prices worldwide
C) Fearing that their governments will enact restrictive policies on imports, consumers
are stocking up on foreign products before restrictions are put in place
D) Expectations of rising prices of foreign products have caused consumers to seek
foreign products before their prices become prohibitive
14) Vantex Fabrics is a U.S. firm that designs, manufactures, and sells high-quality
fabrics used for home decor. Executives at the firm believe that Vantex could
significantly increase its profitability by exporting fabrics to foreign markets. The vice
president of marketing is in favor of exporting to England, while the vice president of
finance asserts that the firm would benefit most from exporting to China. Which of the
following, if true, best supports the vice president of marketing’s suggestion?
A) Incremental internalization reduces the exporting risks facing Vantex
B) Rapid internationalization decreases the likelihood of failure for Vantex
C) Vantex plans to diversify its product offerings within the next ten years
D) Vantex employs 450 people and will likely develop worldwide operations within 12
months
15) A worrisome outcome of chronic inflation is that it tends to ________.
A) erode confidence in a country’s currency
B) give central banking officials excessive flexibility to manage monetary policy
C) increase the real income of people, thereby inflating their spending and borrowing
levels
D) lower consumer demand for foreign goods, which triggers lower prices and
eventually lower employment
16) The HRM requirements of a(n) ________ strategy are well matched with a
polycentric staffing policy.
A) transnational
B) international
C) multidomestic
D) global
17) Johnson & Johnson embodies its organizational culture in “The Credo,” which is
the firm’s ________.
A) code of conduct
B) vision statement
C) strategic plan
D) mission statement
18) In order to save costs and consolidate its manufacturing capacity, Samsonite has
________.
A) decreased investment in R&D
B) moved from a centralized configuration to a decentralized configuration
C) increased the amount of final goods and components it outsources
D) diversified its reseller base
19) Which of the following statements is important to companies in order for them to
gain contracts with foreign distributors?
A) Convince the distributors that the product and company are viable
B) Offer high margins so distributors will compete to get the account
C) Determine the distribution gap before signing a contract
D) Establish in-house distribution to demonstrate what is desired
20) Studies indicate that the main cause of nearly half of failed expatriate assignments
is the inability of the expatriate to ________.
A) meet performance expectations
B) initiate a fair compensation package
C) adapt to the host culture
D) learn the local language