The theory of absolute advantage destroys the mercantilist idea that international trade
is a ________.
A) positive-sum game
B) zero-sum game
C) negative-sum game
D) win-win game
A team of top managers from both headquarters and international subsidiaries who meet
to develop solutions to company-wide problems is referred to as a ________ team.
A) virtual
B) global team
C) cross-functional team
D) self-managed team
Using tariffs to generate government revenue is most common among ________.
A) developed countries
B) developing countries
C) western nations
D) First World nations
The government maintains control over the banking industry in a country. Which of the
following is most likely true if the country has a mixed economy?
A) Businesses in most economic sectors of the country are privately owned.
B) The government considers banking sector as important to national security.
C) The country has never experienced threats against its long-term stability.
D) The government views banking as more important than manufacturing.
Laws designed to prevent companies from fixing prices, sharing markets, and gaining
unfair monopoly advantages are called ________.
A) antitrust laws
B) theocratic laws
C) anarchist laws
D) bilateral laws
Government trade promotion agencies ________.
A) enable imports at discounts
B) set up foreign trade zones across the country
C) advertise in other countries to promote the nation’s exports
D) place voluntary export restraints on companies that fail to export adequately
________ is the process of identifying and selecting an organization’s objectives and
deciding how the organization will achieve those objectives.
A) Stratification
B) Planning
C) Economic transition
D) Value chain analysis
Supporters affirm that globalization ________.
A) brings an end to practices like outsourcing
B) causes worker dislocation that gradually lowers wages
C) increases wealth and efficiency in all countries
D) curbs market flexibility in developed nations
An economic condition in which a trade deficit causes a permanent negative shift in a
country’s balance of payments is called ________.
A) revaluation
B) statistical discrepancy
C) the Fisher effect
D) fundamental disequilibrium
Which of the following would be the least expensive method in terms of both time and
money, for conducting a market research in Country C?
A) structured interviews
B) surveys
C) data from the Internet
D) focus groups
Which of the following theories states that firms undertake foreign direct investment,
when the features of a particular location combine with ownership and internalization
advantages, to make the location appealing for investment?
A) market power theory
B) international product life cycle theory
C) market imperfections theory
D) eclectic theory
A lower tariff rate for a certain quantity of imports and a higher rate for quantities that
exceed the quota is called a(n) ________.
A) export quota
B) tariff-quota
C) ad valorem tariff
D) voluntary export restraint
To help speed up the process of getting approvals for local operations, a firm would
most likely benefit from hiring ________.
A) home-country managers from the company’s headquarters
B) managerial talent from the host country
C) recent college graduates trained in the home country
D) third-country expatriates with extensive experience in the field
A ________ strategy is one in which a company emphasizes on serving the needs of a
narrowly defined market segment by being the low-cost leader, differentiating its
product, or both.
A) global
B) focus
C) stability
D) retrenchment
A pricing policy in which one selling price is established for all international markets is
called ________.
A) dual pricing
B) value-based pricing
C) worldwide pricing
D) target pricing
Higher levels of trade between nations result in ________.
A) higher product prices
B) lesser specialization
C) greater purchasing power
D) trade diversion
Which of the following circumstances would best require a push strategy to be
implemented for product promotion?
A) channel members wield a great deal of power relative to that of producers
B) distribution channels are lengthy
C) buyers display a great deal of brand loyalty to particular product
D) products in question are industrial goods
Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin
America. To that end, Blickinstock is trying to decide whether to purchase an existing
company in a remote region of Argentina or build its own subsidiary. Keith Moon,
Blickinstock’s vice president of global business development, will be making a
presentation to the board outlining the company’s options.
Which of the following methods is being used when a host country provides lower tax
rates and low-interest loans to firms from abroad for encouraging inflows of foreign
direct investment?
A) financial incentives
B) sanctions
C) local content requirements
D) embargoes