A designated geographic region in which merchandise is allowed to pass with lower
customs duties and/or fewer custom procedures is called a(n) ________.
A) foreign trade zone
B) free trade area
C) single market
D) open border
Answer:
The income-elasticity coefficient for Zulu doll is 1.2, which means the demand for Zulu
doll will ________.
A) increase 1.2 percent for every 1.0 percent increase in income
B) decrease 1.0 percent for every 1.2 percent increase in income
C) decrease 1.2 percent for every 1.0 percent increase in income
D) remain stagnant since 1.2 is the equilibrium value
Answer:
Companies along a distribution channel that work together in delivering products to
customers are called ________.
A) subsidiaries
B) intermediaries
C) value chains
D) value networks
Answer:
Which of the following reasons encourages companies to make a product rather than
buy it?
A) Making a product gives managers greater control over the production process.
B) Making a product lowers the risk associated with the production process.
C) Making a product increases the company’s flexibility to respond to market
conditions.
D) Making a product gives companies a great deal of power in their relationships with
suppliers.
Answer:
While designating an exchange rate, the numerator indicates the ________.
A) base currency
B) transaction currency
C) quoted currency
D) cross currency
Answer:
The GDP per capita of a country is lower than that of France. If the GDP per capita of
the country is adjusted for PPP, the country’s revised GDP is higher than that of France.
Which of the following is most likely true about the country?
A) The cost of living in the country is higher than that of France.
B) The cost of living in the country is lower than that of France.
C) The cost of living in the country is approximately equal to that of France.
D) The cost of living in the country has increased over the past decade.
Answer:
The market consisting of all the world’s currencies that are banked outside their
countries of origin is called the ________.
A) foreign exchange market
B) interbank market
C) Eurocurrency market
D) offshore financial center
Answer:
The unbundling and repackaging of hard-to-trade financial assets into more liquid,
negotiable, and marketable financial instruments is called ________.
A) currency hedging
B) commercialization
C) currency arbitrage
D) securitization
Answer:
Which of the following features is TeleToys least likely to use in order to create a
perception of having unique products?
A) brand image
B) reputation for quality
C) product design
D) low cost
Answer:
In an attempt to raise money in Country B, Color-Me-Green was quoted an interest rate
of 14 percent by a local bank. This quoted rate is called the ________ rate.
A) cross
B) artificial
C) nominal
D) exchange
Answer:
Which of the following statements, if true, weakens her argument?
A) The employment rate of developed nations has been declining because of
international outsourcing.
B) With the exposure to new technology and cultural trends, the standard of living in
developing countries has improved.
C) People in high-wage countries often can’t afford hospital care without financial
assistance.
D) Labor market flexibility across the world has seen little improvement over the last
decade.
Answer:
The international bond market consists of all bonds sold by issuing companies,
governments, or other organizations ________.
A) within their own countries
B) outside their own countries
C) within developing nations
D) within developed nations
Answer:
The pattern of imports and exports that occurs in the absence of trade barriers is called
________.
A) vertical integration
B) autarky
C) protectionism
D) free trade
Answer:
Home nations discourage foreign direct investment outflows because it ________.
A) discourages cooperation between countries
B) replaces jobs in the home nation
C) fails to protect the ‘sunset” industries in the home nation
D) decreases long-term competitiveness of companies
Answer:
Their argument is vulnerable to criticism because ________.
A) most restaurants still display their menu cards in French
B) they fail to take other social and cultural factors into account
C) they do not distinguish between movies made by studios in England and movies
made in Hollywood
D) no other country screens French movies or star French actors
Answer:
Trade unions claim that by permitting international firms to continually move to nations
with ________, globalization reduces labor’s bargaining power and forces overall labor
standards lower.
A) better factory facilities
B) higher resource accessibility
C) lower labor standards
D) lower labor density
Answer:
Which of the following statements is true of embargoes?
A) An embargo may be placed on one or a few goods or may completely ban trade in all
goods.
B) An embargo is the least restrictive nontariff barrier available.
C) An embargo is usually employed for economic reasons.
D) Embargoes are used frequently today because they are easy to implement.
Answer:
The closing of TeleToys’ Australian men’s clothing line can best be described as a(n)
________ strategy.
A) organic growth
B) stability
C) retrenchment
D) global
Answer:
The practice of insuring against potential losses that result from adverse changes in
exchange rates is called currency ________.
A) hedging
B) arbitrage
C) speculation
D) conversion
Answer:
________ is the term used to refer to a production technique in which inventory is kept
to a minimum and inputs to the production process arrive exactly when they are needed.
A) Just-in-time manufacturing
B) Lean manufacturing
C) Continuous production
D) Flow production
Answer:
To minimize the economic inequality within developing nations, studies suggest that the
nations can boost incomes of their poorest citizens by ________.
A) rejecting globalization and sheltering themselves from exploitation
B) embracing globalization and integrating themselves into the global economy
C) fortifying trade barriers and discouraging exports
D) encouraging economic independence and restricting imports
Answer:
________ cannot indicate how individuals feel about a company or its product.
A) Surveys
B) Industry data
C) Consumer panels
D) Interviews
Answer:
A(n) ________ structure is best suited to companies that treat each national market as
unique due to the vast cultural, political, or economic differences between nations.
A) international division
B) international area
C) global matrix
D) global product
Answer:
Which of the following terms is used to refer to habits or ways of behaving in specific
circumstances that are passed down through generations?
A) customs
B) attitudes
C) prejudices
D) aesthetics
Answer:
Which of the following is a disadvantage of a company with an international area
structure?
A) Country managers have very little authority.
B) The subsidiaries fail to develop organizational cultures suited to their locations.
C) Individual responsibility and accountability is foggy.
D) Cross-fertilization of knowledge from one unit to another may be less than desirable.
Answer:
Which of the following is a drawback of Jerome’s staffing approach?
A) expense to relocate managers
B) potential for losing control of the host-country operations
C) potential for losing control of the home-country operations
D) inability to re-create local operations in the image of the home-country operations
Answer:
On a recent trip to Hong Kong, a group of tourists found several Prada bags being sold
on the pavement. They cost only a few dollars and were clearly fake; though they bore
the Prada trademark. This is an example of ________.
A) piracy
B) monopolization
C) ethnocentrism
D) nationalization
Answer:
Regulatory controls or bureaucratic rules designed to impair the rapid flow of imports
into a country are called ________.
A) local content requirements
B) administrative delays
C) voluntary export restraints
D) import quotas
Answer:
Jack has always handled product returns on a case-by-case basis, but he is often
unprepared to deal with too many cases of returns. Which of the following would most
likely help Jack increase his repeat business?
A) continuing with the current system, since it is already well-established
B) accepting returns but crediting customer accounts slowly to discourage future returns
C) planning for returns and giving prompt credits to customers
D) avoiding receiving returns when possible to discourage the loss of revenue
Answer:
Herb knows that much of the success his company enjoys is due to the patents and
copyrights that protect the company’s products. If Sports Stuff chooses an entry mode in
which it grants another firm the right to use its intangible property for a specified period
of time, it would be engaging in ________.
A) a turnkey project
B) franchising
C) licensing
D) a joint venture
Answer:
Country A implements a ban on trade in two products with Country B. This is an
example of a(n) ________.
A) embargo
B) tariff-quota
C) tariff
D) voluntary export restraint
Answer:
Which of the following accounts within the current account of the United States’
balance of payments includes financial gains earned on U.S. assets held abroad?
A) income receipts account
B) income payments account
C) merchandise account
D) services account
Answer:
The new trade theory is mainly at odds with the ________ theory.
A) international product life cycle
B) comparative advantage
C) national competitive advantage
D) factor proportions
Answer:
A major drawback of the staffing policy recommended by Valerie is ________.
A) the potential for losing control of the host-country operations
B) the necessity of depending on managers who don’t know the local culture
C) the potential for creating legal barriers to host-country operations
D) the high cost of training managers in the language of the host country
Answer:
A(n) ________ strategy deals with the primary and supports activities in an
organization that create value for customers.
A) business-level
B) department-level
C) corporate-level
D) international
Answer: