1) A company can best benefit from a first-mover advantage by moving into a small
country, before entering a much larger country.
2) The balance of trade is a record of a country’s international transactions that take
place among companies, governments, or individuals.
3) Production location is not an important choice when doing business in the European
Union.
4) Equity financing is the degree to which a firm funds the growth of a business by
debt.
5) The degree of caution companies display in valuing assets and recognizing income is
known as conservatism.
6) Countries with large land areas are generally less dependent on trade than countries
with small land areas.
7) Committing resources to one country usually means forgoing or delaying projects in
others.
8) U.S.-based MNEs do not like to use the balanced scorecard for evaluation
performance because it does not take into consideration international differences.
9) The factor proportions theory holds that countries should improve their
competitiveness by importing capital and skilled employees from abroad.
10) Technology such as e-mail, VoIP, teleconferencing, and social networks help MNEs
respond to increasing globality.
11) The quest to maximize individual purchasing power compels local responsiveness.
12) The MNE that aims to control the transfer of its unique core competencies overseas
usually prefers an ethnocentric staffing policy.
13) When choosing international operating locations, companies should outsource the
preparation of grids or matrices to experts rather than preparing them with their own
personnel.
14) One reason that companies use the foreign-exchange market is to diversify their
expenses from other sources.
15) Managers at Morrison Manufacturing are considering expanding the firm’s
production overseas and want to ensure that the firm is located in a country with a high
degree of economic freedom. Presently, which of the following locations would most
likely offer Morrison the highest economic freedom?
A) Bolivia
B) Hong Kong
C) Venezuela
D) North Korea
16) Assume that U.S. companies are importing the same product from Mexico and
Taiwan. The United States enters into an FTA with Mexico but not with Taiwan.
Consequently, the United States begins to import more goods from Mexico (due to
lower tariffs) than from Taiwan, even though the Mexican products are not any better or
cheaper. This is most likely an example of ________.
A) trade specialization
B) trade internalization
C) trade creation
D) trade diversion
17) When a company wishes to introduce change in a foreign country, its likelihood of
success can most likely be improved by ________.
A) introducing many changes simultaneously
B) gaining the support of local opinion leaders
C) agreeing to make some home-country changes in return
D) employing expatriate managers to supervise local workers
18) Jordan, a manager at an MNE, is responsible for supervising the transportation and
storage of materials and final goods. Jordan is most likely a manager involved with
________.
A) quality control
B) offshoring
C) logistics
D) inventory management
19) Most world trade takes place ________.
A) between developed countries and developing countries
B) among developed countries
C) among developing countries
D) between raw material exporters and manufacturing exporters
20) The term “cultural distance” refers to the ________.
A) physical space between people during communication
B) time it takes people to adjust to the language, traditions, and norms of a foreign
culture
C) degree to which countries differ on cultural dimensions
D) preferred relationship between superiors and subordinates in a given culture
21) Preston Electronics is an MNE with facilities located in Taiwan, Singapore, and
Germany. Preston gives its local operations the authority to adapt value activities to
prevailing local economic, political, legal, and cultural conditions. Preston is most
likely using a(n) ________ strategy.
A) global
B) multidomestic
C) international
D) continental
22) Shelly, a sales manager at Best Computers, has recently moved from Dallas to
Hong Kong for an expatriate assignment. Shelly is feeling disoriented, irritable, and
stressed about her new job and living arrangements in Hong Kong, which means that
she is most likely experiencing ________.
A) uncertainty dislocation
B) melancholy
C) culture shock
D) cultural transition
23) Which of the following best describes a company that follows a social marketing
orientation?
A) It considers political and safety dimensions of its products
B) It is a not-for-profit entity based in a developed country
C) It is a government-owned entity from an emerging economy
D) It generates sales to niche markets using social networking sites
24) A pull rather than a push strategy is most likely preferable when ________.
A) self-service is not predominant
B) the price of a product is high relative to incomes
C) there are few governmental restrictions on advertising
D) there are a large number of languages and a low literacy rate
25) Compare and contrast the rule of law and the rule of man.
26) What is the difference between import substitution policies and export-led
development policies? What are the potential effects of each?
27) In a short essay, discuss why governments have been liberalizing cross-border
movements of goods, services, and resources
28) Why do companies engage in international harvesting or divestment?
29) What is globalization? What modes of international business are used by firms that
want to globalize? Briefly describe each method
30) Describe the different types of regional economic integration and give an example
of each type.