Volatile currency values make it easier for firms to predict future earnings accurately in
terms of the home-country currency.
Answer:
Direct exporters always sell directly to end users.
Answer:
Trade missions are advantageous to small businesses as they are the most inexpensive
method of getting introduced to important business contacts.
Answer:
The major drawback of polycentric staffing is the potential for losing control of the
host-country operation.
Answer:
Mercantilism views competition for the world’s wealth as a positive-sum game.
Answer:
Low levels of class consciousness encourage social mobility and lessen conflict.
Answer:
Just-in-time manufacturing drastically reduces the costs associated with large
inventories in the production process.
Answer:
Transportation costs are a driving force behind the globalization of the steel industry.
Answer:
Canada and the United States are early examples of political unions.
Answer:
The least amount of sovereignty that must be surrendered to a trading block occurs in a
political union.
Answer:
Typically, indirect exporting relies on local sales representatives or distributors.
Answer:
Hispanics comprise a subculture in the United States.
Answer:
National competitive advantage theory states that a nation’s competitiveness in an
industry depends on the capacity of the industry to innovate and upgrade.
Answer:
A push strategy is a promotional strategy designed to pressure channel members to
promote a product to final users.
Answer:
Islamic law is the most widely practiced theocratic legal system today.
Answer:
A country’s climate plays an important role in determining the basic demand for a
company’s product.
Answer:
All company and product brand names are made up of morphemes.
Answer:
An exchange rate requiring delivery of the traded currency within two business days is
called a cross rate.
Answer:
Cultures that score low on uncertainty avoidance tend to be less open to change and
new ideas.
Answer:
The World Trade Organization’s dispute settlement system has the ability to penalize
offending nations.
Answer:
Research shows that pollution-intensive U.S. companies tend to invest in nations with
lenient environmental standards.
Answer:
Liquidity refers to the ease with which bondholders and shareholders may convert their
investments to cash.
Answer:
Expropriation is said to have occurred when a foreign national company dispossesses a
home-country company through uncompetitive practices.
Answer:
A common example of a push strategy is the creation of consumer demand through
direct marketing techniques.
Answer:
If a foreign company is taken over by the host-country government and some form of
compensation is paid, confiscation is said to have occurred.
Answer:
A majority of the regulatory changes that governments around the world introduced in
recent years are unfavorable to FDI.
Answer:
Currency devaluation increases consumers’ buying power.
Answer:
International business is any commercial transaction that crosses the borders of two or
more nations.
Answer:
Service providers do not need distribution channels because they market intangible
goods.
Answer:
The factor proportions theory of international trade was developed by Wassily Leontief.
Answer:
Economic integration can unintentionally reward a less efficient producer within a
trading bloc.
Answer:
Franchising is primarily used in the manufacturing industries.
Answer:
The market in which currencies are bought and sold and their prices determined is
called the ________.
A) Eurocurrency market
B) international capital market
C) international bond market
D) foreign exchange market
Answer:
Which of the following refers to planning, implementing, and controlling the physical
flow of a product from its point of origin to its point of consumption?
A) customization
B) distribution
C) communication
D) promotion
Answer:
The theory of comparative advantage was proposed by ________.
A) David Ricardo
B) Adam Smith
C) Bertil Ohlin
D) Raymond Vernon
Answer:
An expanded money supply ________.
A) reduces the cost of borrowing
B) increases interest rates
C) makes it difficult for financial institutions to lend money
D) diminishes entrepreneurial initiatives in a country
Answer:
Which of the following communication strategies uses the same home-market product
and marketing promotion in target markets?
A) product/communications extension
B) product extension/communications adaptation
C) product adaptation/communications extension
D) product/communications adaptation
Answer:
The value of a currency expressed in terms of gold is called its ________.
A) book value
B) net asset value
C) par value
D) carrying value
Answer:
If a Japanese citizen invests in the Australian stock market, the transaction would show
up on the capital account in the balance of payments of ________.
A) Japan
B) Australia
C) both Japan and Australia
D) neither Japan nor Australia
Answer:
Cultural change occurs when people integrate into their culture the gestures, material
objects, traditions, or concepts of another culture through ________.
A) ethnocentricism
B) cultural diffusion
C) social stratification
D) xenocentrism
Answer:
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
Answer:
Which of the following statements is true of licensing?
A) Licensing restricts finances needed for international expansion.
B) Cross licensing grants a company the right to use a property but does not grant it
sole access to a market.
C) A major advantage of licensing is that it is the least risky method of international
expansion.
D) Licensing increases the likelihood that a licensor’s product will appear on the black
market.
Answer:
The main benefit of a multidomestic strategy is that it ________.
A) exploits scale economies in product development and marketing
B) is cost-saving due to product and marketing standardization
C) takes advantage of location economies
D) responds quickly and effectively to emerging buyer preferences
Answer:
Which of the following represents a country or territory whose financial sector features
very few regulations and few, if any, taxes?
A) offshore financial center
B) interbank market
C) international financial services district
D) Eurocurrency market
Answer:
A ________ is used for a product’s promotion when there are many levels of
intermediaries in its distribution channel.
A) push strategy
B) pull strategy
C) retrenchment strategy
D) stability strategy
Answer:
Country X advocates the greatest level of integration possible for the member nations of
the Moonland Union. Which of the following is Country X most likely to support?
A) political union
B) free trade area
C) customs union
D) economic union
Answer:
Which of the following is a major driver of foreign direct investment?
A) vertical integration
B) horizontal integration
C) globalization
D) cultural diversity
Answer:
Letters of credit are popular among traders because most of the risks are assumed by
________.
A) distributors
B) importers
C) exporters
D) banks
Answer:
Higher levels of trade between nations result in ________.
A) higher product prices
B) lesser specialization
C) greater purchasing power
D) trade diversion
Answer:
The ________ played a major role in the development of capitalism and free enterprise
in nineteenth-century Europe.
A) pillars of Islam
B) Shinto doctrine
C) Protestant work ethic
D) tenets of Judaism
Answer:
Which of the following statements is incorrect with regard to the importance of colonies
for mercantilist nations?
A) They served as sources of inexpensive raw materials.
B) They served as markets for higher-priced finished goods.
C) They served as a source of military protection.
D) They served as a source of profits for mercantilist powers.
Answer:
During which stage of the market or site screening process do managers normally want
to visit locations?
A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site
Answer:
Surveys conducted by a group of sociologists show that French children display more
familiarity with the superheroes of Hollywood movies than with the heroes of their
traditional folklore. The French Government can use this fact to prove the effect of
________ within their country.
A) cultural imperialism
B) social stratification
C) ethnocentricism
D) racism
Answer:
Which of the following factors is responsible for growth in the international equity
market?
A) advent of cybermarkets
B) spread of countertrade
C) centrally planned economies
D) government partnerships
Answer:
Beanstalk managers know that the drawback of such an adaptive strategy is that it
________.
A) does not allow companies to exploit scale economies in product development,
manufacturing, and marketing
B) can cause a company to overlook important differences in buyer preferences across
various markets
C) is applicable only to industries in which price-competitiveness is a key success
factor
D) does not allow a company to modify its products except for the most superficial
features
Answer:
Susan finally settles upon Valmira because it has a stable business environment. Which
of the following factors, if true, proves her decision to be a good one?
A) Valmira does not enforce any product liability laws.
B) Valmira’s legal system protects individual property rights satisfactorily.
C) The business laws of Valmira are flexible and can be interpreted according to the
comfort of government officials.
D) The government of Valmira does not allow the private sector to flourish.
Answer:
Which of the following statements is true of export financing?
A) Small businesses that have just started to export are financially stable and seldom
require financing from government agencies.
B) The Ex-Im Bank finances the export activities of companies all over the world.
C) Governments usually offer loans to exporters with above-market interest rates.
D) Governments may promote exports by offering loan guarantees.
Answer:
Research in which an interviewer asks current or potential buyers to answer written or
verbal questions to obtain facts, opinions, or attitudes is called a ________.
A) survey
B) covert observational research
C) consumer panel
D) brainstorming session
Answer:
Which element of national competitive advantage theory divides resources into two
groups: basic and advanced?
A) demand conditions
B) factor conditions
C) related and supporting industries
D) firm, strategy, structure, and rivalry
Answer:
Which of the following determines the process that a company will use to create its
product?
A) a firm’s multinational strategy
B) a firm’s global strategy
C) a firm’s corporate-level strategy
D) a firm’s business-level strategy
Answer:
The approach recommended by Jerome is called ________.
A) vertical integration
B) ethnocentric staffing
C) horizontal integration
D) geocentric staffing
Answer:
Russia is in transition from ________.
A) a capitalist economy to a mixed economy
B) a centrally planned economy to a free-market economy
C) a market economy to a centrally planned economy
D) a mixed economy to a centrally planned economy
Answer:
Which of the following statements is true of tariffs?
A) They are the major source of government revenue in developed nations.
B) They increase products’ appeal to buyers.
C) They lower the effective prices of imports.
D) They protect domestic producers.
Answer:
Which of the following statements is true of national production?
A) Marketers use GDP or GNP figures to determine whether a country’s population is
wealthy enough to purchase its products.
B) Per capita numbers provide a detailed picture of development of the entire country.
C) Gross product figures accurately indicate whether a nation’s economy is growing or
shrinking.
D) Volunteer work and unpaid household work are considered in GDP and GNP.
Answer:
Which of the following reflects the correct sequence of the marketing communication
process?
A) promotional message; encoding; decoding; feedback
B) encoding; promotional message; decoding; feedback
C) promotional message; decoding; feedback; encoding
D) encoding; decoding; promotional message; feedback
Answer:
When creating a market-potential indicator for an emerging market, ________ is
estimated by determining a nation’s volume of international trade as a percentage of
GDP.
A) market receptivity
B) market intensity
C) market consumption capacity
D) market size
Answer:
The ________ view states that a company should adopt local ethics wherever it
operates because all belief systems are determined within a cultural context.
A) Friedman
B) cultural relativist
C) righteous moralist
D) utilitarian
Answer:
Differentiate among the five levels of economic and political integration.
Answer:
Explain the theory of market imperfections and describe the two major market
imperfections.
Answer:
When should managers consider decentralized decision making? What type of work
teams might emerge in organizations that practice decentralized decision making?
Answer:
Describe any three organizational structures that are common for a vast majority of
international companies.
Answer:
Explain the effect of counterfeit goods and black markets on international product
strategies.
Answer:
Define subsidies. What are their disadvantages? In what ways do the protection of
infant industries produce similar drawbacks?
Answer:
Explain the process of facilities location planning. What issues must companies
consider while selecting the location for their production facilities?
Answer:
Describe the purposes of the international capital market. What factors account for its
rapid growth?
Answer:
Differentiate between a multinational and a global strategy. Identify the main benefits
and the main drawbacks of each.
Answer:
Describe the four key approaches to corporate strategy, providing an example of each.
Answer:
Explain the Single European Act and how it helped to integrate Europe. How did the
Single European Act help prompt the creation of NAFTA?
Answer:
What is the role of debt in national capital markets, and what form does company debt
normally take? Describe the different types of international bonds.
Answer:
Discuss the factor proportions theory and describe the evidence on this theory.
Answer:
Differentiate between worldwide and dual pricing. Which one of these is more difficult
to achieve and why?
Answer:
Describe the purpose of a foreign trade zone. How is it used to promote trade?
Answer:
When should managers consider decentralized decision making? What benefits might
emerge?
Answer: