According to Michael Porter, advanced factors account for the sustained competitive
advantage a country enjoys in a product.
Answer:
The European monetary system is still in practice today.
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Today, due to improved technology, it is fairly easy to persuade an outside supplier to
make significant modifications to a component.
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Firms from emerging markets account for a greater share of global mergers and
acquisitions than developed markets.
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Reverse culture shock is much milder than the initial culture shock an expatriate faces.
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Availability and cost of labor in the local market is crucial to process planning.
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The Court of Justice is the court of appeals of the European Union.
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A multinational strategy entails having a separate strategy for each nation in which a
company markets its products.
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A negative aspect of a low-cost leadership strategy is low customer loyalty.
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The primary purpose of the Gulf Cooperation Council (GCC) at its formation was to
create a political union between Iraq and Iran.
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Products for which there are fewer substitutes can more easily absorb higher shipping
and production costs.
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Industries considered essential to national security often receive government-sponsored
protection.
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Under the dual adaptation method, a company adapts its product to local requirements
while retaining the product’s original marketing communication.
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A focus strategy works best with mass-marketed products aimed at price-sensitive
buyers.
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Totalitarian governments tend to favor private ownership of economic resources.
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Multinational corporations (MNCs) have direct investments abroad in multiple
countries.
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The process of reducing the size of an organization’s workforce is called decruitment.
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In the maturing product stage of the international product life cycle theory, production
facilities are introduced in countries with the highest demand.
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The major purpose of foreign trade zones is to implement barriers to trade and
commerce.
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Core competencies are developed by organizations over long periods of time.
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Centralizing the decisions that directly impact workers’ lives contribute to better
labor”management relations.
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Training local workers on how to work on an assembly line is an example of cultural
assimilation.
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Countertrade is not an option for smaller companies because of the cash outlays
involved.
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Building a subsidiary abroad from the ground up is called a greenfield investment.
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An embargo is the most restrictive nontariff trade barrier available.
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Incentives and rewards for individual business initiatives are an important aspect of
collectivist cultures.
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Products that are of use in both industrial and military applications are designated as
dual-use products.
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One of the key obstacles faced by countries in economic transition is the lack of
managerial expertise.
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The process of obtaining information that already exists within the company is called
secondary market research.
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An excess money supply creates a borrower’s market, forcing down interest rates and
the cost of borrowing.
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Tariffs tend to exact a cost on countries as a whole because they lessen citizens’ gains
from trade.
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Guerrilla linguistics is often used in the cultural assimilation stage.
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People in collectivistic cultures are given freedom to focus on personal goals.
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Political risk insurance is more likely to be purchased by MNEs that apply an active
approach to political risk management.
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Venture capital is a source of equity financing for successful multinational companies.
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Investors increase risk by holding international securities whose prices move
independently.
Answer:
Based on the above scenario, which of the following statements is true?
A) Foodland has an absolute advantage in producing food.
B) Foodland has an absolute advantage in producing drinks.
C) Drinkland has an absolute advantage in producing both food and drinks.
D) Drinkland has an absolute advantage in producing food.
Answer:
Which of the following terms applies to the sale of a particular brand of jeans
manufactured in the U.S. and sold in Canadian stores?
A) exporting
B) outsourcing
C) insourcing
D) importing
Answer:
A document ordering the importer to pay the exporter a specified sum of money at a
specified time is called a ________.
A) bill of lading
B) letter of credit
C) bill of exchange
D) management contract
Answer:
The annual income considered below the poverty line in one country is the annual
income of a middle-class family in another country. Which of the following difficulties
associated with conducting international market research does this scenario illustrate?
A) availability of data
B) protection of data
C) marketability of data
D) comparability of data
Answer:
Which of the following is true of inflation?
A) It occurs when money is injected into an economy that is experiencing greater
output.
B) It is the result of supply and demand for a currency.
C) It increases people’s purchasing power.
D) It is not particularly affected by the unemployment in a country.
Answer:
Which of the following refers to a written statement of why a company exists and what
it plans to accomplish?
A) memorandum of association
B) mission statement
C) vision statement
D) articles of association
Answer:
Sally, a social worker from the United States, has been stationed in Konesia for a year.
She notices several things about the Konesian society; the people who report to her, for
example, do so with an excessive amount of submissiveness, and her superior seems to
expect the same of her. Which of the following statements about Konesia would be
consistent with Hofstede’s framework?
A) Konesians work best in an informal environment.
B) Konesia has a large power distance culture.
C) Konesian society is primarily individualistic.
D) Konesians derive power from their entrepreneurial drive.
Answer:
Betty notices that organizations in China tend to be hierarchical with power derived
from prestige and force. Which of the following statements is consistent with her
observation?
A) Chinese society considers caste system and class system a myth.
B) Chinese men are subordinate to Chinese women.
C) China scores high on the power distance dimension.
D) China owes its success to its individualistic society.
Answer:
The purchase of physical assets or a significant amount of ownership of a company in
another country to gain a measure of management control is called ________.
A) portfolio investment
B) foreign direct investment
C) horizontal integration
D) vertical integration
Answer:
Which of the following is an example of a legal force that is used to assess the national
business environment?
A) resource quality
B) environmental regulations
C) workforce qualifications
D) liquidity issues
Answer:
________ is the simultaneous purchase and sale of foreign exchange for two different
dates.
A) Currency hedging
B) Currency speculation
C) Currency swap
D) Currency arbitrage
Answer:
A(n) ________ is a right to exchange a specific amount of a currency on a specific date
at a specific rate.
A) forward contract
B) currency option
C) currency hedging
D) interest arbitrage
Answer:
No proposed legislation becomes EU law unless the ________ votes it into law.
A) Council of the European Union
B) European Parliament
C) Court of Auditors
D) European Commission
Answer:
Which of the following is the most likely reason for Konesia’s government to impose an
import quota?
A) to maintain adequate supplies of a product in the home market
B) to maintain market shares and prices of domestic producers
C) to restrict the supply of a product to world markets
D) to maintain the exports of a product at target levels
Answer:
Which of the following terms refers to an economic system in which the government
owns and controls all types of economic activity?
A) socialism
B) sovereign nationalism
C) political bureaucracy
D) pluralism
Answer:
Which of the following is the correct order of the different methods of cultural training
from the least advanced to the most advanced?
A) environmental briefings; language training; cultural orientations
B) cultural orientations; field experience; language training
C) cultural assimilation; language training; field experience
D) sensitivity training; cultural orientations; field experience
Answer:
Which of the following is defined as a group of people who share a unique way of life
within a larger, dominant culture?
A) macroculture
B) subculture
C) cultural universal
D) monoculture
Answer:
The first step in the screening process for potential markets and sites is to ________.
A) select a favorable market or site
B) measure the market or site potential
C) identify the basic appeal of a market
D) assess the national business environment
Answer:
Which of the following is a contractual entry mode in which one company supplies
another with intangible property and other assistance over an extended period?
A) franchising
B) management contract
C) licensing
D) strategic alliance
Answer:
Global Trading just learned that the government of one country in which it does
business has taken over the entire electric utility industry. The government’s actions are
an example of ________.
A) confiscation
B) globalization
C) expropriation
D) nationalization
Answer:
IMF members formalized the existing system of floating exchange rates as the new
international monetary system by drafting the so-called ________.
A) Bretton Woods Agreement
B) Smithsonian Agreement
C) Plaza Accord
D) Jamaica Agreement
Answer:
A market that is said to operate at peak efficiency and where goods are readily and
easily available is said to be a(n) ________ market.
A) perfect
B) Eurocurrency
C) foreign exchange
D) greenfield investment
Answer:
Rates that the world’s largest banks charge one another for loans are called ________.
A) interbank interest rates
B) London Interbank Bid Rates
C) exchange rates
D) official bank rates
Answer:
The ________ theory states that a firm tries to establish a dominant presence in an
industry by undertaking foreign direct investment.
A) eclectic
B) market power
C) market imperfections
D) international product life cycle
Answer:
Which of the following is an advantage of wholly owned subsidiaries?
A) The parent company receives all profits generated by the subsidiary.
B) They are the least expensive investment entry modes.
C) They help in the sharing of the cost of an international investment project.
D) They are the least risky when compared to other investment entry modes.
Answer:
A retrenchment strategy is designed to ________.
A) encourage growth through joint ventures
B) reduce the scale or scope of a corporation’s operations
C) focus exclusively on internally generated growth
D) guard against organizational change
Answer:
Which of the following would be most appropriate for its products sold through grocery
stores?
A) horizontal integration
B) vertical integration
C) push strategy
D) pull strategy
Answer:
________ refers to the most commonly quoted interest rate that London banks charge
other large banks that borrow Eurocurrency.
A) London Interbank Offer Rate (LIBOR)
B) London Interbank Bid Rate (LIBID)
C) Spot rate
D) Cross rate
Answer:
Which of the following steps of the screening process for potential markets involves the
evaluation of fiscal and monetary policies of a nation?
A) identification of basic appeal of a market
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site
Answer:
The regional trade agreement between Canada, Mexico, and the United States to
eliminate tariffs and non-tariff barriers between themselves is known as the ________.
A) Central American Free Trade Agreement
B) Andean Community
C) Caribbean Community and Common Market
D) North American Free Trade Agreement
Answer:
Which of the following is used by home country governments to limit outbound foreign
direct investment?
A) ownership restrictions
B) differential tax rates
C) tax breaks
D) low-interest loans
Answer:
Which of the following statements is true of tariffs?
A) Tariffs increase an imported product’s appeal to buyers.
B) Transit tariffs are the most widely-levied tariffs.
C) Ad valorem tariffs are levied as a specific fee for each unit of an imported product.
D) Export tariffs are used by countries when they believe an export’s price is lower than
it should be.
Answer:
In a ________ government, the strongest political parties share power by dividing
government responsibilities among themselves.
A) coalition
B) bilateral
C) totalitarian
D) theocratic
Answer:
Democracies try to preserve peaceful coexistence among groups of people with diverse
cultural, ethnic, and racial backgrounds. These rights are known as ________ rights.
A) indirect
B) central
C) subcapital
D) minority
Answer:
How can a nation’s topography affect the existence of subcultures?
Answer:
What is privatization? What role does it play in economic transition?
Answer:
Write a short note on the World Trade Organization and its influence on the
environment.
Answer:
Compare and contrast the two main techniques for forecasting exchange rates.
Answer:
What is the foreign exchange market? Explain why investors use this market.
Answer:
Briefly describe the three generic business-level strategies, providing an example of
each.
Answer:
How do national and international business environments influence multinational
strategy formulation?
Answer:
Differentiate between folk and popular customs. Why are popular customs seen as a
threat by some cultures? Support your answer with an example.
Answer:
Are the Kluckhohn-Strodtbeck and Hofstede frameworks useful for understanding
subcultures? Why or why not?
Answer:
Explain the concept of culture. Why is it important to avoid ethnocentricity and gain
cultural literacy?
Answer:
What role does flexibility play in the make-or-buy decision?
Answer:
Using any two of the four theories that appear in your text, explain why companies
engage in foreign direct investment.
Answer:
Differentiate between culture shock and reverse culture shock. How can companies help
employees deal with such issues?
Answer:
Describe the main political motives behind government intervention in trade.
Answer:
What are the options available to companies seeking financial resources?
Answer:
Describe the structure of the European Union.
Answer:
What is an offshore financial center? Differentiate between an operational center and a
booking center, providing examples for each.
Answer:
What is primary market research? Describe any four primary market research methods.
Answer: