A market is efficient if the prices of financial instruments quickly reflect new public
information made available to traders.
Answer:
Unwanted cultural influence in a nation can cause governments to block imports that it
believes are harmful.
Answer:
Availability of energy is an important aspect of the business environment necessary for
facilities location planning.
Answer:
To provide funding for countries’ efforts toward economic development, the Bretton
Woods Agreement created the International Bank for Reconstruction and Development.
Answer:
Technology development is an example of a primary activity in the value chain of an
organization.
Answer:
In any exchange rate, the quoted currency is always the numerator.
Answer:
International transactions between two currencies other than the U.S. dollar often use
the dollar as a vehicle currency.
Answer:
A pull strategy is most appropriate when buyers display a great deal of brand loyalty
toward one particular brand name.
Answer:
The Maastricht Treaty called for political union of the member nations.
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Political risk tends to be higher in developing countries compared to industrialized
countries.
Answer:
Investor confidence in the value of a currency plays an important role in determining its
exchange rate.
Answer:
While assessing the market potential of emerging markets, market consumption
capacity is generally obtained through estimates of energy consumption.
Answer:
Companies use polycentric staffing to re-create local operations in the image of
home-country operations.
Answer:
Brain drain is the departure of highly educated people from one profession, geographic
region, or nation to another.
Answer:
Citizens who are working and living in their home country are called expatriates.
Answer:
Among asset seizure approaches, expropriation is more common than confiscation and
nationalization.
Answer:
To speed up the process of getting government approval for local operations, companies
must hire home country nationals.
Answer:
An offshore financial center is a territory whose financial sector features very few
regulations and few, if any, taxes.
Answer:
A benefit of regional economic integration is that it always expands employment
opportunities in all nations.
Answer:
Subcultures exist only within a nation’s borders.
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Trade agreements allow competitors from other nations to enter the domestic market.
Answer:
Secondary data tends to be very expensive because it has already been analyzed and
summarized by another party.
Answer:
According to Adam Smith, international trade should be restricted by tariffs and quotas
in order to give a country an absolute advantage.
Answer:
A sight draft extends the period of time following delivery by which the importer must
pay for goods.
Answer:
Translating subsidiary earnings from a strong host currency into a weak home currency
increases stated earnings in the home currency.
Answer:
The soaring cost of developing subsequent stages of technology has led multinationals
to engage in cross-border alliances and acquisitions.
Answer:
A potential problem with a rationalized production model is that a work stoppage in one
country can bring the entire production process to a standstill.
Answer:
The ability of a nation to produce a good more efficiently than any other nation is called
its comparative advantage.
Answer:
The theories of comparative advantage and absolute advantage assume that countries
are driven only by the maximization of production and consumption.
Answer:
The rules of the international monetary system are enforced by the World Bank.
Answer:
Companies usually decide to reinvest when a market is experiencing rapid growth.
Answer:
A nation’s cultural boundaries do not always correspond with its political boundaries.
Answer:
Economist David Ricardo developed the theory of comparative advantage.
Answer:
Most large companies use exporting as a means of expanding total sales when the
domestic market has become saturated.
Answer:
The concept of purchasing power parity (PPP) must be applied to understand the true
value of a currency in its home country.
Answer:
Switch trading is the export of industrial equipment in return for products produced by
that equipment.
Answer:
Firms that standardize their advertising usually control campaigns from the home
office.
Answer:
Which of the following variables involved in market-potential analyses allows
managers to rank countries from the largest to the smallest, regardless of a particular
product?
A) market growth rate
B) market intensity
C) market size
D) market consumption capacity
Answer:
________ refers to the ease with which individuals can move up or down a culture’s
social ladder.
A) Social standing
B) Social mobility
C) Social inertia
D) Social loafing
Answer:
Which of the following trains managers to be considerate and understanding of other
people’s feelings and emotions?
A) cultural orientation
B) sensitivity training
C) language training
D) cultural narcissism
Answer:
Each ________ is composed of unique cultural, political, legal, and economic
characteristics that define business activity within that nation’s borders.
A) capital market
B) national business environment
C) international bond market
D) operational center
Answer:
Which of the following is a marketplace of underground transactions that typically
appear because a product is either illegal or tightly regulated?
A) black market
B) niche market
C) two-sided market
D) vertical market
Answer:
The bid-ask spread in the foreign exchange market is the ________.
A) price at which a bank will buy a currency
B) price of currency in the foreign exchange market
C) difference between the bid and ask quotes for a currency
D) the time lapsed between a bid quote and an ask quote
Answer:
Eurobonds are popular because ________.
A) they are less risky than traditional bonds
B) they are always denominated in euros
C) governments of nations in which they are sold do not regulate them
D) European companies are considered very stable
Answer:
If Happyland advertises its beaches and attracts tourists, the tourism-related income
would be recorded in its ________ account.
A) capital
B) services
C) income payments
D) merchandise
Answer:
Two major forces that underlie the expansion of globalization are falling barriers to
trade and investment, and ________.
A) elevation of nationalism
B) rise of closed economies
C) political stagnation
D) technological innovation
Answer:
According to mercantilism, the accumulation of national wealth depended on the
________.
A) increase in a nation’s trade surplus
B) increase in a nation’s trade deficit
C) expansion of a nation’s total value of trade
D) expansion of a nation’s total volume of trade
Answer:
Goods and services purchased abroad and brought into a country are called ________.
A) gross domestic products
B) exports
C) gross national products
D) imports
Answer:
Which of the following steps would Owen implement toward the end while developing
a successful export strategy?
A) initiation of meetings with intermediaries
B) identification of a potential market
C) commitment of resources
D) matching of market needs to company abilities
Answer:
When creating a market-potential indicator for an emerging market, market
consumption capacity is often estimated from the ________.
A) growth in gross domestic product
B) percentage of a market’s population in the middle class
C) gross domestic product at purchasing power parity
D) amount of energy the total population produces
Answer:
Which of the following measures the extent to which a government equitably provides
its people with a long and healthy life, an education, and a decent standard of living?
A) category development index
B) gross national product index
C) human development index
D) purchasing power index
Answer:
The international product life cycle theory was developed by ________.
A) Milton Friedman
B) Karl Marx
C) Michael Porter
D) Raymond Vernon
Answer:
Companies that typically design promotional campaigns and advertising strategies at
their headquarters are most likely to follow a ________ strategy.
A) retrenchment
B) global
C) blue ocean
D) multidomestic
Answer:
________ is increasing the pace of both cultural diffusion and cultural change.
A) Collectivism
B) Enculturation
C) Fundamentalism
D) Globalization
Answer:
The extension of a company’s activities into stages of production that absorb the
company’s outputs is known as ________.
A) forward integration
B) backward integration
C) an internalization advantage
D) an ownership advantage
Answer:
When a U.S. company buys shares of stock in a French company on France’s stock
market, the U.S. balance of payments records the transaction as an ________.
A) outflow of capital with a plus sign
B) outflow of capital with a minus sign
C) inflow of capital with a plus sign
D) inflow of capital with a minus sign
Answer:
Which of the following steps of the market screening process involves the analysis of
the quality of workforce, materials, and infrastructure?
A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site
Answer:
Excelsior’s Limited tried to sell its product in Canada, but was told that at least forty
percent of the product must be manufactured in Canada. This is an example of a(n)
________.
A) administrative delay
B) local content requirement
C) tariff
D) embargo
Answer:
Which of the following is an advantage of conducting business in totalitarian nations?
A) International companies are less likely to face local political opposition to their
activities.
B) Government deals are always straightforward and transparent.
C) Laws regarding the resolution of contractual disputes are clearly defined.
D) International companies run no risk of their public image being tarnished.
Answer:
Today’s international monetary system is considered to be a ________ system.
A) fixed exchange
B) free float
C) managed float
D) linked exchange rate
Answer:
Developing a market-potential indicator for an emerging market is useful for a company
planning on ________.
A) exporting
B) licensing
C) joint ventures
D) acquisitions
Answer:
Which of the following accounts of a country’s balance of payments records
transactions involving the export of services?
A) transactional account
B) capital account
C) savings account
D) current account
Answer:
Which of the following methods would be most appropriate for conducting primary
market research in Country A?
A) Internet research
B) verbal questioning
C) written surveys
D) consumer panels
Answer:
The ________ altered the U.S. trade policy from a stance of free trade to one of
protectionism in the 1930s.
A) Norris-LaGuardia Act
B) Smoot-Hawley Act
C) Wheeler-Lea Act
D) Taft-Hartley Act
Answer:
When Excelsior’s Limited tried to convert its earnings from one country, the
government stipulated that the company had to exchange its currency at a very
unfavorable rate. This is an example of a(n) ________.
A) administrative delay
B) currency control
C) subsidy
D) tariff
Answer:
Which of the following methods of cultural training involves the use of guerilla
linguistics?
A) cultural orientation
B) language training
C) cultural assimilation
D) cultural narcissism
Answer:
The ________ of a country is its gross national product divided by its population.
A) GNP per capita
B) GDP per capita
C) purchasing power parity
D) purchasing power
Answer:
If Silk Industries pressures channel members to carry a product and promote it to final
users, it is using ________.
A) pull strategy
B) push strategy
C) vertical integration
D) horizontal integration
Answer:
Which of the following processes will a computer assembling firm engage in if it
decides to manufacture its own monitors and printers?
A) outsourcing
B) vertical integration
C) niche marketing
D) lean production
Answer:
What two factors propel growth in foreign direct investment?
Answer:
Explain how technological innovation has benefitted entrepreneurs.
Answer:
Explain the concepts of trade creation and trade diversion. Who are the winners and
losers in each scenario?
Answer:
Why might companies decide to reinvest, scale back, or divest local operations?
Answer:
Describe brain drain and its impact on an economy. What is reverse brain drain?
Answer:
Describe the relationship between culture and the physical environment.
Answer:
Compare and contrast the world’s three main political ideologies: anarchism,
totalitarianism, and pluralism.
Answer:
Explain participative management and accountability in a decentralized organization,
and discuss the probable accountability issues in a global matrix structure. Include a
description of the global matrix structure in your answer.
Answer:
Discuss the major points of differences between centralization and decentralization, and
explain the differences between an international area structure and a global product
structure.
Answer:
Distinguish between attitudes and values. How do cultures differ in their attitudes
toward cultural change?
Answer:
Explain each of the four means of incorporating risk into business strategies when
companies employ an adaptation strategy.
Answer:
Compare and contrast two prevalent political systems: totalitarianism and democracy,
and explain how a country’s political system influences its legal system.
Answer:
Differentiate between the push and pull promotional strategies. Explain the factors that
determine whether the push or the pull strategy is appropriate in a given marketing
environment.
Answer:
One argument in the debate surrounding globalization is about the inequality between
nations. Discuss the major points of the inequality between nations argument and
describe how falling barriers to trade and investment might help reduce the inequality
between nations.
Answer:
Compare and contrast the slow progress of the Andean Community and the Economic
Community of West African States (ECOWAS). Why have these trade blocs not been
more successful?
Answer:
Describe the global business environment and each of its four elements.
Answer:
Briefly describe regional integration efforts in Central America and the Caribbean.
Answer: