1) Horizontal FDI refers to the amount of FDI moving out of a country in a year.
2) Antidumping duties are a type of tariff barrier.
3) GATT 1994 refers to the agreement governing the international trade of goods in the
WTO.
4) Dissemination risk refers to the cost that a firm has to endure even when its
investment turns out to be unsatisfactory.
5) A firms reputational resources are an example of its tangible resources and
capabilities.
6) The common law tradition is mostly spread in non-English speaking countries.
7) A build-operate-transfer (BOT) agreement is an equity mode of entry.
8) The non-equity mode of indirect exports has better control over distribution than
direct exports.
9) In private ownership, liquidation of a firm is forced by competition.
10) The crucial principle of GATT/WTO is nondiscrimination, ensuring that countries
do not discriminate among its trading partners.
11) Currency hedging is a popular way to minimize the foreign exchange risk inherent
in all nonspot transactions.
12) Which of the following is a primary cost of FDI to home countries?
a. Loss of sovereignty
b. Increase in local competition
c. Capital outflow and job loss
d. Increased exports of components and services to host countries
13) ____ centers on cooperating through joint ventures with MNEs and sell-offs to
MNEs.
a. Defender strategy
b. Extender strategy
c. Dodger strategy
d. Contender strategy
14) Which of the following is a defining characteristic of entrepreneurship?
a. Size of the firm
b. Market share of the firm
c. Ability to exploit opportunity
d. Nationality of the individual or firm
15) Social issue participation refers to a firms participation in social causes not directly
related to the management of its _____.
a. fair labor practice groups
b. primary stakeholders
c. secondary stakeholders
d. tertiary stakeholders
16) In an individualistic society, _____.
a. an individual’s identity is fundamentally tied to the identity of his or her group
b. ties between individuals are very strong
c. an individual’s identity is fundamentally his or her own
d. collective accomplishments are more important than individual accomplishments
17) Which of the following is considered as an intangible resource of a firm?
a. The ability to raise external capital
b. The access to raw materials of production
c. The possession of patents to an invention
d. The managerial skills of an employee
18) Which of the following alliances is a contractual alliance?
a. Strategic investment
b. Franchising
c. Cross-shareholding
d. Joint venture
19) Which of the following strategies is often known as international strategy?
a. Localization
b. Global standardization
c. Transnational
d. Home replication
20) Which of the following South American countries pulled out of the Andean
Community and joined Mercosur in 2006?
a. Uruguay
b. Peru
c. Colombia
d. Venezuela
21) The most widely used method in expatriate compensation is _____.
a. going rate approach
b. balance sheet approach
c. pay-per-impression
d. employee’s request approach
22) A(n) ____ is the transfer of the control of operations and management from one
firm to another with the former becoming a unit of the latter.
a. joint venture
b. merger
c. acquisition
d. contractual alliance
23) _____ is a countrys international transaction statement, which includes merchandise
trade, service trade, and capital movement.
a. Capital flight
b. Currency hedging
c. Purchasing power parity
d. Balance of payments
24) Activities that enrich controlling shareholders at the expense of minority
shareholders are referred to as _____.
a. amortization
b. accretion
c. backwardation
d. expropriation
25) Turning over an organizational activity to a domestic firm is called _____.
a. captive sourcing
b. onshoring
c. offshoring
d. nearshoring
26) Which of the following groups is primarily composed of emerging economies?
a. The Triad
b. BRIC
c. Group of Eight (G8)
d. NAFTA
27) A fundamental aspect of _____ is that it effectively conducts global business by
providing an individual the right to freedom of expression and organization.
a. communist totalitarianism
b. right-wing totalitarianism
c. democracy
d. theocracy
28) _____ is the set of firms that facilitate the movement of goods from producers to
consumers.
a. Stock keeping unit
b. Production channel
c. Distribution channel
d. CIF
29) Which of the following firms is most likely to have a sustained competitive
advantage based on the VRIO framework?
a. A firm with valuable but common resources and capabilities
b. A firm with valuable and rare but imitable resources and capabilities
c. A firm with valuable, rare, inimitable resources, and organizationally capabilities
d. A firm with non-value-adding resources and capabilities
30) The category of customers who are in favor of buying global brands that signal
prestige and cachet are called _____.
a. global agnostics
b. global dreamers
c. antiglobals
d. global citizens
31) Which of the following stakeholders has the most concern over short-term revenue
falling during mergers and acquisitions?
a. Investors
b. Top management
c. Middle management
d. Customers
32) Knowledge spillover refers to _____.
a. the risk associated with unauthorized diffusion of firm-specific know-how
b. a violation of the knowledge and IP rights secured by a copyright
c. knowledge diffused from one firm to others among closely located firms
d. the imperfect rules governing international transactions
33) Which of the following would be considered an example of formal institutions?
a. Laws
b. Norms
c. Cultures
d. Ethics
34) A _____ is a set of written policies and standards outlining the proper practices for a
firm.
a. code of point
b. code of defense
c. code of legitimacy
d. code of conduct
35) Which of the following is one of the five dimensions outlined in the Dimensions
Approach?
a. Language
b. Work ethics
c. Religion
d. Uncertainty avoidance
36) The TRIPS system was designed to _____.
a. create IP rights that adhered to the norms of individual countries
b. force firms to enforce IP rights through an informal system
c. make sure that firms follow theocratic laws
d. force firms to innovate while strictly adhering to IPR guidelines
37) Which of the following resulted in the abandoning of the Bretton Woods system in
the 1970s?
a. The inflation rates in the United States and other developed counties were low
b. The United States was not running a trade deficit
c. The dollar became inconvertible into gold
d. Most countries wanted to return to the gold standard system
38) Differentiate between the primary characteristics of horizontal and vertical FDI.
39) Importance of direct organizational monitoring and control is low in equity-based
alliances.
40) Identify the three advantages offered by the innovation strategy used in a growing
entrepreneurial firm.
41) The triple As underpinning supply chain management are agility, adaptability, and
aggregation.
42) The growth of an entrepreneurial firm can be viewed as an attempt to more fully use
currently underutilized resources and capabilities.
43) One key proposition of the stakeholder view of the firm is that a firm must pursue
only the economic bottom line such as profits and shareholder returns.
44) Licensing is a form of equity-based alliance.
45) A localization strategy is effective when differences among national and regional
markets are clear, and pressures for cost reductions are low.
46) Acquisition premium is the difference between the acquisition price and the market
value of the acquiring firm.
47) Information asymmetries exist between principals and agents.