The immediate cause of country risk is a legal or political factor.
Answer:
The ISO 9000 is a production technique in which inputs to the production process
arrive exactly when they are needed.
Answer:
Predictable exchange rates increase the need for currency hedging.
Answer:
When a company exports a product at a price higher than the price normally charged in
its domestic market, it is said to be dumping.
Answer:
Extranets give distributors and suppliers access to a company’s database to place orders
or restock inventories electronically.
Answer:
A common market requires that member nations create a common currency.
Answer:
Pluralism is the belief that only individuals and private groups should control a nation’s
political activities.
Answer:
Core competencies of organizations are the special skills of certain employees that give
a company an edge over other organizations.
Answer:
A company often undertakes in-house production when it can manufacture a product for
less than it must pay another business to produce it.
Answer:
Countertrade provides a way for firms to trade either by using a small amount of hard
currency or even none at all.
Answer:
Small businesses will be completely immune to events in the international business
environment.
Answer:
Interviews and focus groups are two main sources of secondary data that help managers
make informed decisions.
Answer:
Worker productivity tends to be lower in most developing nations than in developed
nations.
Answer:
An absolute advantage is the economic and strategic advantage gained by being the first
company to enter an industry.
Answer:
Pluralism is a political system in which political leaders rely on military and
bureaucratic power.
Answer:
Companies make products rather than buy them in order to reduce total costs.
Answer:
The physical path a product follows on its way to customers is called a promotional
channel.
Answer:
Consumers are benefitted when a government imposes import quotas on products.
Answer:
A product for which demand increases more relative to an increase in income has an
income-elasticity coefficient less than 1.
Answer:
Developing nations have the toughest product liability laws, while developed countries
have more relaxed laws.
Answer:
The primary advantage of franchising is that franchisees have a great degree of
organizational flexibility.
Answer:
The human development index (HDI) demonstrates that high national income alone
guarantees human progress.
Answer:
Factor proportions theory states that a country will produce and export those goods that
require resources abundantly available within the country.
Answer:
Companies typically recruit locally for nonmanagerial positions.
Answer:
A major drawback of geocentric staffing is that it is expensive.
Answer:
Low tariffs and high quota limits encourage market entry by means of investment.
Answer:
The process of aggregating the currencies that one bank owes another and then carrying
out the transaction is called clearing.
Answer:
Expatriate failure refers to an employee’s early return from an international assignment
because of inadequate job performance.
Answer:
A born global firm is a company that engages in international business from or near its
inception.
Answer:
A compound tariff on an imported product is calculated partly as a percentage of its
stated price and partly as a specific fee for each unit.
Answer:
Expropriation is the term used to describe a host-country government seizing the assets
of a foreign corporation and providing no compensation in return.
Answer:
The main purpose of self-managed teams is to help break down barriers between
departments.
Answer:
With the help of microfinance, low-income entrepreneurs can borrow money at
competitive rates without having to put anything up as collateral.
Answer:
Devaluation lowers the price of a country’s exports in the global market and increases
the price of its imports.
Answer:
Imports are goods and services purchased abroad and brought into a country.
Answer:
The ________ account within the United States’ current account includes financial
gains compensated to entities in other nations that is earned on assets they hold in the
United States.
A) income receipts
B) income payments
C) merchandise
D) services
Answer:
National competitive advantage theory states that a nation’s competitiveness in an
industry depends on ________.
A) the capacity of companies to create barriers to entry
B) the capacity of the industry to innovate and upgrade
C) the availability of government subsidies for industry development
D) the availability of cheap factors of production in the nation
Answer:
A company proposes that in exchange for a hard-currency sale, it will make a
hard-currency purchase of an unspecified product from the buyer nation in the future.
Which of the following is the company proposing?
A) a counterpurchase
B) an offset
C) a buyback
D) a barter
Answer:
Which of the following steps of the strategy development process for exports involves
establishing relationships with potential local distributors?
A) identification of a potential market
B) match market needs to the company’s abilities
C) initiation of meetings
D) commitment of resources
Answer:
Companies with centralized production facilities are often pursuing ________
strategies.
A) low-cost
B) differentiation
C) retrenchment
D) combination
Answer:
Which of the following countries has been facing difficulties in negotiations regarding
its application for European Union membership?
A) Bulgaria
B) Czech Republic
C) Romania
D) Turkey
Answer:
An additional tariff placed on an imported product that a nation believes is receiving an
unfair subsidy is called a(n) ________.
A) countervailing duty
B) ad valorem tariff
C) antidumping duty
D) compound tariff
Answer:
Any commercial transaction that crosses the borders of two or more nations is known as
________.
A) domestic marketing
B) market segmentation
C) international business
D) global manufacturing
Answer:
Currently the most sophisticated and advanced example of regional integration is
occurring in ________.
A) Asia
B) Europe
C) North America
D) Africa
Answer:
Globalization tends to foster two important values, tolerance and ________.
A) nationalization
B) diversity
C) authoritarianism
D) heterogeneity
Answer:
Exports and imports of computer software, electronic components, and apparel are
included in the ________ account of a country’s balance of payments.
A) services
B) capital
C) merchandise
D) savings
Answer:
Which of the following is an argument offered by the new trade theory?
A) It is in line with the factor proportions theory.
B) There are gains to be made from specialization and increasing economies of scale.
C) The companies first to market forgo the opportunities to create barriers to entry.
D) Market forces alone play a role in assisting the home companies in a country.
Answer:
Which of the following treaties was signed by the members of the European Coal and
Steel Community in 1957 for creating the European Economic Community?
A) the Treaty of Rome
B) the Maastricht Treaty
C) the Treaty of Paris
D) the Treaty of Versailles
Answer:
The condition that results when the value of a nation’s exports is greater than the value
of its imports is called ________.
A) a trade deficit
B) a trade surplus
C) mercantilism
D) dumping
Answer:
An Asian jewelry company maintains production facilities in South Korea, Vietnam,
and Malaysia. Which of the following is the company exemplifying?
A) lean production
B) decentralized production
C) vertical integration
D) continuous production
Answer:
Which of the following is true of a “follow the leader” scenario in the context of foreign
direct investment?
A) Companies that practice “follow the leader” supply each other with inputs.
B) Companies that practice “follow the leader” pressurize each other to follow
environmentally safe methods.
C) It is a frequent practice in industries with a limited number of large firms.
D) It is common in industries in which producers source component parts from
suppliers.
Answer:
If Old World adopts different selling prices in export markets than it has in the British
market, it would be following a ________ pricing strategy.
A) dual
B) transfer
C) target
D) worldwide
Answer:
Which of the following training approaches involve employees visiting another culture,
walking the streets of its cities and villages, and becoming absorbed by the culture for a
short time?
A) language training
B) field experience
C) sensitivity training
D) cultural orientation
Answer:
Which of the following do governments impose upon people to help pay for the
consequences of using a particular product?
A) income taxes
B) consumption taxes
C) property taxes
D) value-added taxes
Answer:
Ben knows that a pricing policy in which one selling price is established for all
international markets is called ________.
A) worldwide pricing
B) value-based pricing
C) dual pricing
D) arm’s length pricing
Answer:
A ________ strategy is one in which a company designs its products to be perceived by
buyers as unique throughout its industry.
A) differentiation
B) stability
C) low-cost leadership
D) retrenchment
Answer:
The sale of goods and services to a country by a company that promises to buy a
specific product from that country in the future is called a(n) ________.
A) counterpurchase
B) offset
C) joint venture
D) barter
Answer:
________ is the belief that only individuals and private groups should control a nation’s
political activities.
A) Pluralism
B) Anarchism
C) Theocracy
D) Totalitarianism
Answer:
When a product has a higher selling price in the target market than it does in the home
market or the country where production takes place, it is called ________.
A) price skimming
B) price escalation
C) price dispersion
D) price fixing
Answer:
The NAFTA is best considered a(n) ________.
A) free trade area
B) customs union
C) economic union
D) political union
Answer:
According to the theory of ________, trade is beneficial even if one country is less
efficient in the production of two goods, as long as it is less inefficient in the production
of one of the goods.
A) absolute advantage
B) mercantilism
C) comparative advantage
D) factor proportions
Answer:
An economic condition in which a trade deficit causes a permanent negative shift in a
country’s balance of payments is called ________.
A) revaluation
B) statistical discrepancy
C) the Fisher effect
D) fundamental disequilibrium
Answer:
A team in which employees from a single department take on responsibilities of their
former supervisors is called a ________ team.
A) cross-functional
B) self-managed
C) global
D) virtual
Answer:
Folk customs that spread by cultural diffusion to other regions develop into ________.
A) trash culture
B) traditions
C) popular customs
D) superstitions
Answer:
Which of the following is a strategic factor that influences a company’s international
entry mode selection?
A) market consumption capacity
B) market receptivity
C) market size
D) market intensity
Answer:
What is meant by dumping? Describe the various roles of the World Trade
Organization, including when a country is accused of dumping.
Answer:
Explain the three types of property seizure. Why might property seizure be a risk for a
business operating in a totalitarian nation?
Answer:
How might a company benefit from the globalization of production?
Answer:
Describe the differences between human resource management in a domestic setting
and an international setting, and explain the three phases of human resources planning.
Answer:
Describe any three management issues involved in foreign direct investment decisions.
Answer:
Explain why governments impose restrictions on free trade.
Answer:
Explain the advantages and disadvantages of a geocentric staffing policy, and discuss
the effects of culture shock when assigning an employee to work in another country.
Answer:
Using examples, explain the circular process of marketing communication.
Answer:
Briefly describe the strategy formulation process of international organizations.
Answer:
What is country image? Explain how it affects the screening process using examples.
Answer:
Explain the function of spot rates and the spot market.
Answer:
Briefly discuss the effects of globalization on international marketing activities and
explain how a dual adaption method works as a promotional strategy.
Answer:
Explain how exchange rates adjust to inflation.
Answer:
What is economic transition? Describe the obstacles that countries face during
economic transition.
Answer:
Describe each instrument that governments use to promote trade.
Answer:
Discuss the advantages of licensing, low-cost production, and low-cost shipping for
international companies.
Answer:
Describe the Foreign Corrupt Practices Act, and explain how it relates to corporate
social responsibility.
Answer:
Describe the three main types of economic systems.
Answer:
Explain why job protection is a political motive for governments to restrict free trade.
Why might a government interested in job protection insist on local content
requirements for international firms doing business in that country?
Answer: