a country has an absolute advantage in the production of a product when it is more
efficient than any other country in producing it.
the choice between centralization and decentralization is not absolute.
the risk associated with a portfolio increases as the investor increases the number of
stocks in her portfolio.
a bill of lading serves as a receipt, a contract, and a document of title.
bureaucratic rules designed to make it difficult for imports to enter a country are called
local content requirements.
A tax treaty between two countries is formed to fix the exchange rates between the two
countries.
total interest cost for a bond issued at a premium equals the total of the periodic interest
payments added to the premium.
the board of directors may authorize more bonds than are issued.
a firm following a polycentric approach to staffing believes that the host country lacks
qualified individuals to manage subsidiaries.
the principle of mercantilism views trade as a positive-sum game.
A deferral principle specifies that parent companies are not taxed on foreign source
income until they actually receive a dividend.
the infant industry argument is criticized because it relies on an assumption that:
a.new manufacturing industries in developing nations can initially compete with
established industries in developed countries
b.selling goods in a foreign market at below their “fair” market value is legally and
ethically justified
c.the domestic industry in a developing nation lacks the capacity to meet demand
d.firms are unable to make efficient long-term investments by borrowing money from
the domestic or international capital market
which of the following is a home-country policy aimed at limiting outward fdi flow?
a.taxing domestic companies foreign earnings at a higher rate than their domestic
earnings
b.implementation of government-backed insurance programs to cover major types of
foreign investment risk
c.eliminating double taxation of foreign income
d.persuading host countries to relax their restrictions on inbound fdi
eurobonds are ____.
a.denominated in the currency of the country in which they are issued
b.normally underwritten by an international syndicate of banks
c.denominated in a currency that is accepted by the european union
d.are sold outside the borrowers county with reference to the originating currency
Which of the following is the reason why the current foreign-exchange system is
sometimes thought of as a managed-float system?
A.The exchange rates of a currency are determined by market forces.
B.Governments intervene frequently in the foreign exchange market.
C.Major currencies are allowed to freely float against each other.
D.Countries use a reference currency to estimate the value of their currencies.
moving down the experience curve:
a.increases the cost of a firms raw material
b.allows a firm to reduce its cost of creating value
c.decreases a firms profitability
d.increases the r & d expenditure of a firm
the stock of fdi is:
a.the amount of fdi undertaken over a given period of time
b.the total accumulated value of foreign-owned assets at a given time
c.the flow of fdi out of a country
d.the amount of foreign direct investment made by domestic companies over a given
period of time
the stock of fdi refers to the total accumulated value of foreign-owned assets at a given
time.
the _____ occurs when a resource is shared by all, but owned by no one, is overused by
individuals, resulting in its degradation.
a.friedman effect
b.noblesse oblige
c.inequity aversion
d.tragedy of the commons
a(n) _____ seeks the best people for key jobs throughout the organization, regardless of
nationality.
a.polycentric staffing policy
b.ethnocentric staffing policy
c.geocentric staffing policy
d.uniform staffing policy
class-based conflict between workers and management in class-conscious societies can
lead to:
a.increased costs of doing business
b.decreased costs of doing business
c.companies going out of business
d.workers looking for new jobs in other businesses
which of the following statements concerning a voluntary export restraint is not true?
a.it benefits domestic producers by limiting import competition
b.in most cases, it benefits consumers
c.it raises the domestic price of an imported good
d.it is a variant of the import quota
shannon company issued $750,000, 8%, 10-year bonds on december 31, 2011, for
$720,000. interest is payable annually on december 3 shannon uses the straight-line
method to amortize bond premium or discount.
instructions
prepare the journal entries to record the following events.
(a)the issuance of the bonds.
(b)the payment of interest and the discount amortization on december 31, 2012.
(c)the redemption of the bonds at maturity, assuming interest for the last interest period
has been paid and recorded.
Which of the following is NOT a characteristic of a foreign debt crisis?
A.Widening current account deficit
B.Excessive expansion of domestic borrowing
C.Low relative price inflation rates
D.Asset price inflation
what is the concept that is concerned with the long-run effect of changes in exchange
rates on future prices, sales, and costs?
a.translation exposure
b.economic exposure
c.transaction exposure
d.risk exposure
vertical integration refers to _____.
a.outsourcing production to a low-cost based company
b.making all or part of a product in-house
c.using multiple suppliers to procure raw materials
d.procuring raw materials or products from a single supplier
all of the following statements regarding convertible bonds are true except
a.if the market price of common stock increases substantially, bondholders with
convertible bonds benefit
b.convertible bonds can be converted into common stock at the option of the issuing
company
c.bondholders with convertible bonds receive interest on the bonds until conversion
d.convertible bonds sell at a higher price and pay a low rate of interest than those
without the conversion option
_____ refers to giving a person in each subunit responsibility for coordinating with
another subunit on a regular basis.
a.global learning
b.liaison roles
c.knowledge network
d.matrix structures
an equity loan is made when ____.
a.a corporation pledge equities or other assets to borrow money
b.corporations avail cash loans from individuals
c.a corporation sells stock to investors
d.corporations issue bonds to individual investors
Which of the following is an advantage of using the gold standard?
A.The standard makes sure that goods are not priced out from markets due to inflation.
B.The standard does not require a commitment from nations to maintain its currencys
value.
C.The standard effectively prevents the devaluation of currencies across the world.
D.It contains a powerful mechanism for achieving balance-of-trade equilibrium by all
countries.
Most international businesses require all budgets and performance data within the firm
to be expressed in the “corporate currency,” which is normally _____.
A.a common currency such as the U.S. dollar
B.the home currency
C.a foreign currency
D.the currency of the country where products are sold
what are the four main differences between distribution systems across countries?
maria gomez is discussing the advantages of the effective-interest method of bond
amortization with her accounting staff. what do you think maria is saying?
describe the situation where an international division makes sense. how common is this
structure? what are the disadvantages of the structure?
Why does China represent both opportunities and threats for established international
businesses?
what are the three main factors that affect the decision of locating production?