1) The ________ the level of the company at which managers make decisions, the more
that organization is ________.
A) higher; decentralized
B) lower; centralized
C) higher; centralized
D) higher; unstructured
2) According to the research described in your text, which of the following is among the
factors that would increase a firm’s probability of exporting?
A) low domestic productivity
B) high domestic labor costs
C) high level of operational efficiency
D) high R & D demands
3) Tied aid requires a recipient to ________.
A) donate a portion of the funds to the donor country’s infrastructure needs
B) use the capital in any way as long as donor country approval is granted
C) employ local workers in management positions
D) spend the funds in the donor country
4) Members of the Andean Community (CAN) have a common external tariff. CAN is
most likely a ________.
A) free trade agreement
B) customs union
C) domestic trade zone
D) free trade sovereignty
5) A ________ is a special outlook, skill, capability, or technology that runs through the
firm’s operations, weaving together all value activities into an integrated value chain.
A) core competency
B) value proposition
C) mission statement
D) learning curve
6) A(n) ________ operates on a contractual basis and provides exclusive representation
for an exporter’s goods and services in a foreign market.
A) export management company
B) import broker
C) invoice agent
D) countertrader
7) A(n) ________ is the right but not the obligation to buy or sell a foreign currency
within a certain time period or on a specific date at a specific exchange rate.
A) forward rate
B) bid
C) offer
D) option
8) Brooke buys shares of stock in a small bakery in a foreign country in return for an
ownership position and promised capital gains. This is an example of ________.
A) equity securities
B) debt financing
C) playing the stock market
D) investing in Euroequities
9) In a concentration strategy of foreign expansion, a company would go to ________.
A) many countries very rapidly, and then build up slowly in each
B) a foreign country with one product and not sell other products in that country until a
target market share is reached
C) a reporting system that measures performance on a regional rather than a
country-by-country basis
D) one or a few foreign countries and build a strong involvement there before going to
other countries
10) ________ involve the exchange of currency the second day after the date on which
the two foreign-exchange traders agree to the transaction.
A) Spot transactions
B) Outright forward transactions
C) FX swaps
D) Reverse transactions
11) Which of the following would most likely be reduced by vertical integration?
A) export tariffs
B) component prices
C) product returns
D) transaction costs
12) Which of the following statements about the euro is true?
A) It was adopted by all existing EU members when it was first initiated
B) It must be adopted by countries as a precondition to joining the EU
C) It cannot be used by countries that are not members of the EU
D) It was designed to eliminate currency as a barrier to trade in the EU
13) Host governments’ growing demands for increasing operational transparency will
most likely spur companies to make their value chains more ________.
A) locally responsive
B) globally integrated
C) concise
D) complex
14) Assume the per capita consumption of shoes is three pairs in Country A and two
pairs in Country B. The difference probably means that there is a ________ gap in
Country B.
A) product line
B) usage
C) distribution
D) competitive
15) El Salvador has a population density of about 620 people per square mile and
neighboring Honduras a population density of about 115 people per square mile.
According to the factor proportions theory of trade, one would expect El Salvador’s
exports to Honduras to ________.
A) have a lower labor-to-land ratio than its imports from Honduras
B) have a higher labor-to-land ratio than its imports from Honduras
C) embody more capital per square mile than its imports from Honduras
D) embody more capital per worker than its imports from Honduras
16) An MNE in which new knowledge and capabilities are developed in both domestic
and foreign locations, both independently and jointly, and then diffused throughout the
worldwide organization, is following a ________ strategy.
A) transnational
B) multidomestic
C) global
D) matrix
17) Which of the following refers to the means by which management applies the
systems that link a company’s value activities, whether those activities are performed in
one or in many countries?
A) configuration
B) logistics
C) coordination
D) core competency