The scope of a corporation’s operations refers to the size of its operations.
Answer:
Companies strive toward quality improvements for attaining economies of scale.
Answer:
Gross national product (GNP) is the value of all goods and services imported into a
country over a one-year period.
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Literacy tests offer a reliable basis on which one nation’s educational level can be
compared with another.
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The Council of the European Union is the executive body of the EU.
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Using a distributor increases an exporter’s risk.
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The international bond market consists of all bonds sold by issuing companies outside
their own countries.
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Mercantilism states that nations should only concern themselves with accumulating
financial wealth.
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A nuclear family comprises of one’s immediate family, along with grandparents, uncles,
aunts, and cousins.
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A solid grasp of local values, customs, and traditions can help reduce a company’s
exposure to political risk.
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The Foreign Corrupt Practices Act forbids U.S. companies from bribing government
officials or political candidates in other nations.
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Trade between most nations is presently characterized by a certain degree of
isolationism.
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Support activities assist companies in performing their primary activities.
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An ethnocentric staffing strategy can facilitate the transfer of special know-how to
branch operations.
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Subcultures do not exist in democratic countries with large populations.
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Products marketed in all countries essentially without any changes are known as
continental products.
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Export-processing zones are special areas in which companies engage in tariff-free
importing and exporting.
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A low-cost leadership strategy typically requires a company to have a large market
share.
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Advance payment made by an importer to an exporter normally takes the form of a
sight draft.
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Civil conflict, tax discrimination, weak legal systems, and terrorist actions are political
risks faced by MNEs operating in foreign countries.
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The open account method of export/import financing is used when the two parties are
unfamiliar with each other.
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Forward rates represent the expectations of currency traders and bankers regarding a
currency’s future spot rate.
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Critics of globalization argue that it eliminates jobs in developing nations.
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The Bretton Woods Agreement was an accord among nations to create a new
international monetary system based on the value of the U.S. dollar.
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Nations with the poorest infrastructures and lowest personal incomes are called
developing countries.
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An international division structure reduces the authority of country managers in an
organization’s subsidiaries.
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The General Agreement on Tariffs and Trade (GATT) was designed to promote free
trade by reducing both tariffs and nontariff barriers to international trade.
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Flexible labor markets allow workers to be redeployed rapidly to sectors of the
economy where they are highly valued.
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An ethnocentric policy toward staffing is typically reserved for top-level managers.
Answer:
The theories of comparative and absolute advantage assume that specialization in the
production of one particular good results in efficiency gains.
Answer:
The power of the General Agreement on Tariffs and Trade (GATT) to settle trade
disputes is what sets it apart from the World Trade Organization (WTO).
Answer:
Another question that Stephanie anticipates concerns the acceptability of certain topics
of discussion like: “Should we avoid discussing our families and spouses?” Which of
the following represents the most effective response to this question?
A) Absolutely, family is kept completely separate from business in China.
B) Yes, because it is considered very rude by businesspeople to discuss family.
C) No, Chinese businesspeople may invite business partners to family functions.
D) It’s fine to discuss family, but never agree to go to a business partner’s house.
Answer:
The ________ of a company is the mix of equity, debt, and internally generated funds
that it uses to finance its activities.
A) enterprise value
B) stock value
C) capital structure
D) corporate structure
Answer:
An offshore financial center is usually characterized by ________.
A) extensive regulations
B) economic and political instability
C) excellent telecommunications
D) high taxes
Answer:
A country’s ________ is a national accounting system that records all monetary
transactions to entities in other countries and all receipts coming into the nation.
A) balance of payments
B) chart of accounts
C) global financial system
D) international monetary system
Answer:
A company that is closing factories with unused capacity and laying-off workers is most
likely following a ________ strategy.
A) growth
B) retrenchment
C) stability
D) combined
Answer:
________ decision making occurs at a high organizational level in one location, such as
an organization’s headquarters.
A) Centralized
B) Facilitative
C) Participative
D) Consultative
Answer:
The principle that nominal interest rate is the sum of the real interest rate and the
expected rate of inflation over a specific period of time is called ________.
A) the law of one price
B) purchasing power parity
C) the comparative advantage theory
D) the Fisher effect
Answer:
Which of the following will add to the cost of an imported product by levying an
additional tax upon it?
A) tariffs
B) quotas
C) local content requirements
D) embargoes
Answer:
Individuals from the home country manage operations outside the home country in
________ staffing.
A) ethnocentric
B) polycentric
C) regiocentric
D) geocentric
Answer:
Which of the following is a method of export/import financing?
A) offset
B) buyback
C) switch trading
D) documentary collection
Answer:
A country that believes an imported product is being sold in its market for a price lower
than the cost of production for the product may impose a(n) ________ in retaliation.
A) countervailing duty
B) ad valorem tariff
C) antidumping duty
D) compound tariff
Answer:
The efficient market view holds that ________.
A) companies can search for new pieces of information to improve forecasting
B) forward exchange rates provide the least accurate forecasts of future exchange rates
C) companies must spend time and money collecting and examining information
believed to affect future exchange rates
D) prices of financial instruments reflect all publicly available information at any given
time
Answer:
Which of the following statements is true of geocentric staffing?
A) It reduces the high cost of relocating expatriate managers and their families.
B) It employs managers exclusively from the home country to look out for the
company’s interests.
C) It helps develop global managers who can adjust to any business environment.
D) It emphasizes on re-creating local operations in the image of home-country
operations.
Answer:
Mr. Yoshimura and his family were initially very excited to see Tennessee but soon
started missing their home, relatives and friends in Japan. They are facing ________.
A) culture shock
B) reverse culture shock
C) expatriate failure
D) cultural cringe
Answer:
The main challenge facing the Caribbean Community and Common Market
(CARICOM) is that ________.
A) the bloc has not yet signed an agreement calling for a single market
B) military conflicts continue to hamper efforts to move toward political union
C) most members trade more with nonmembers than they do with each other
D) the bloc has had no success in persuading Chile to become a member
Answer:
Herb has been exploring another type of entry mode that requires ongoing assistance on
the part of one firm, often in the form of start-up capital, management training, or
location advice. Herb is most likely considering ________.
A) a strategic alliance
B) franchising
C) licensing
D) a joint venture
Answer:
A business-level strategy in which a company exploits economies of scale is called a
________.
A) differentiation strategy
B) stability strategy
C) low-cost leadership strategy
D) retrenchment strategy
Answer:
________ refers to management of the physical flow of products from the point of
origin as raw materials to end users as finished products.
A) Operations research
B) Logistics
C) Warehousing
D) Environmental scanning
Answer:
A ________ is a political system in which government leaders are elected directly by
the wide participation of the people or by their representatives.
A) democracy
B) theocracy
C) plutocracy
D) autocracy
Answer:
Because Scooters Inc. caters to a very narrow niche of wealthy individuals, the CEO is
interested in implementing a worldwide pricing scheme. Which of the following is most
likely a reason for the establishment of such a scheme?
A) Their production costs differ from market to market.
B) The currency values fluctuate fairly predictably.
C) Their distribution channels are lengthy in each market.
D) Their customers have similar levels of purchasing power.
Answer:
Konesia is a country in which rising incomes are increasing the global demand for basic
products and services. Which of the following is the type of market featured in this
country?
A) traditional market
B) emerging market
C) feudal market
D) virtual market
Answer:
To cool off an inflationary economy, a government might ________.
A) lower interest rates
B) raise interest rates
C) lower foreign exchange rates
D) raise foreign exchange rates
Answer:
A(n) ________ is the most restrictive nontariff trade barrier and is typically applied to
accomplish political goals.
A) tariff-quota
B) subsidy
C) embargo
D) voluntary export restraint
Answer:
________ would most likely be recruited for nonmanagerial positions at foreign
subsidiaries that do not require specialized skills.
A) Recent graduates from colleges in the home country
B) Home-country specialists
C) Workers from the local host-country market
D) Current employees from the company headquarters
Answer:
Which of the following is true of American Depository Receipts (ADRs)?
A) Investors who buy ADRs have to pay a currency-conversion fee.
B) There is a minimum purchase requirement for ADRs.
C) Companies offer ADRs in the U.S. to appeal to mutual funds.
D) ADRs are listed and traded in London and Luxembourg.
Answer:
The requirement that a sufficient portion of a product’s content must originate within a
certain market to escape tariff charges is an example of a(n) ________.
A) ad valorem tariff
B) market imperfection
C) tariff-quota
D) subsidy
Answer:
The practice of exchanging rings at weddings, which was initially a pagan ritual, is now
followed by most people across the world. Which of the following does this illustrate?
A) cultural literacy
B) cultural encoding
C) cultural diffusion
D) cultural lag
Answer:
A geocentric staffing policy is generally reserved for ________.
A) top-level managers
B) mid-level managers
C) nonmanagerial employees
D) lower-level staff
Answer:
Blickinstock has identified a company that it can acquire or merge with. Which of the
following statements would represent the least likely reason for Blickinstock to go
ahead with the merger?
A) The merger would help increase Blickinstock’s global competitiveness.
B) The merger would allow the company to get a foothold in the nascent Latin
American market.
C) The merger would help to fill the gaps in Blickinstock’s product line.
D) The merger would bring in increased cash-flows that Blickinstock can use to acquire
other firms.
Answer:
Which staffing policy should Swingset consider if it wants its foreign operations to be
managed by the best-qualified individuals regardless of nationality?
A) nepotism
B) ethnocentric staffing
C) geocentric staffing
D) employee referrals
Answer:
Explain franchising with examples. Mention the advantages and disadvantages
associated with franchising. How is franchising different from licensing?
Answer:
Explain the market power theory of FDI, and discuss why the decision whether or not
to follow rivals into a new international market is important.
Answer:
Identify and explain the types of currency instruments used in the forward market.
Answer:
Explain the concept of cross rates. Include the description of a vehicle currency and the
role it plays in the foreign exchange market.
Answer:
Identify why a home country might support or discourage outgoing foreign direct
investment.
Answer:
Discuss why a host country might promote or restrict foreign direct investment.
Answer:
Why are many mixed economies converting to market-based systems? How does the
role of government change when a mixed economy transitions to a market economy?
Answer:
What are the two types of family groups? Why does the family play an important role in
affecting business activities across the world?
Answer:
Describe the Association of Southeast Asian Nations (ASEAN).
Answer:
Explain how the national competitive advantage theory supports and builds upon the
factor proportions theory.
Answer:
Differentiate between efficient and inefficient market views and discuss the
implications of the two schools of thought for companies.
Answer:
Explain the role of equity in a national capital market. What factors are responsible for
the growth of the international equity market?
Answer:
Describe the three categories of tariffs, and explain how the SmootHawley Act of 1930
influenced tariffs in the United States.
Answer:
Describe four corporate responsibility issues and explain how these issues can impact a
company’s international relations.
Answer:
Explain the factor proportions theory and discuss why it is at odds with the new trade
theory.
Answer:
Explain the differences between a mission statement and a business-level strategy.
Answer: