The first phase of human resource planning is estimating the company’s future HR
needs.
Answer:
The bureaucracy is the part of government that implements the rules and laws passed by
elected representatives.
Answer:
Currency speculation is the purchase or sale of a currency with the expectation that its
value will remain constant.
Answer:
The Southern Common Market is also referred to as MERCOSUR.
Answer:
International trade is the purchase, sale, or exchange of goods and services across
national borders.
Answer:
Noise refers to anything that disrupts the audience’s ability to receive and interpret a
promotional message.
Answer:
The value of a currency expressed in dollars is called its par value.
Answer:
A product’s income-elasticity refers to the sensitivity of the price of a product relative to
changes in the income of consumer population.
Answer:
The stated aim of Asia Pacific Economic Cooperation (APEC) is to strengthen the
multilateral trading system.
Answer:
Today, the Southern Common Market acts as a political union.
Answer:
The psychological process of readapting to one’s home culture is seldom difficult for
expatriates who have successfully adapted to new cultures.
Answer:
A multinational strategy is most appropriate for companies that do not have foreign
direct investments but rather export their products to foreign markets.
Answer:
In ethnocentric staffing, operations outside the home country are managed by
individuals from the host country.
Answer:
The merchandise account includes exports and imports of tangible goods.
Answer:
Inflation in an economy can be controlled by lowering the interest rates.
Answer:
In regional economic integration, industries that require mostly unskilled labor tend to
shift production to low-wage nations within a trading bloc.
Answer:
The spread of privatization encourages the growth of the international equity market.
Answer:
The first step in analyzing a nation’s potential for international business activity is to
examine its business climate.
Answer:
In industries having a limited number of small firms, foreign direct investment
decisions frequently resemble a “follow the leader” scenario.
Answer:
The compensation of nonmanagerial workers is strongly influenced by increased
cross-border business investment.
Answer:
Trade in services tends to be relatively more important for the world’s richest countries.
Answer:
In order to capture the gains from currency translation, managers prefer exchange rates
that are volatile and unpredictable.
Answer:
The possibility that a company will create a future competitor by charging another
company for access to its knowledge is a market imperfection that can encourage
foreign direct investment.
Answer:
A back-to-back loan is one in which a subsidiary acquires a loan from the same bank
where its parent secured the first loan.
Answer:
Barter is an alternative for buyers who lack money needed to pay for imports.
Answer:
The most peaceful nations today are those that were once controlled and stabilized by
colonial powers.
Answer:
The first step in the identification of potential markets is an assessment of the basic
demand for a product.
Answer:
Cultures isolated by topographical barriers are characterized by slower cultural change.
Answer:
Purchasing power parity does not hold for single products, it is meaningful only when
applied to a basket of goods.
Answer:
Companies that belong to a nation’s internationally competitive industries exist in
isolation from supporting industries.
Answer:
A company can improve its profits by selling in a country with a strong currency and
sourcing from a country with a weak currency.
Answer:
A requirement that all WTO members extend the same favorable terms of trade to all
members that they extend to any single member is called ________.
A) normal trade relations
B) antidumping duties
C) local content requirements
D) countervailing duties
Answer:
A(n) ________ requires member nations to harmonize their tax, monetary, and fiscal
policies and create a common currency.
A) customs union
B) economic union
C) free trade area
D) common market
Answer:
Which of the following financial companies in the United States is involved in activities
of selling of goods abroad, and offers insurance on foreign accounts receivable?
A) National Cooperative Bank
B) Overseas Private Investment Corporation
C) Export-Import Bank
D) Inter-American Development Bank
Answer:
Which of the following is used by home-country governments to promote outbound
foreign direct investment?
A) political pressure
B) performance demands
C) ownership restrictions
D) sanctions
Answer:
Under the gold standard, if the U.S. dollar was fixed at $30/oz of gold and Japan was
fixed at ¥75/oz of gold, what would be the Yen/dollar exchange rate?
A) ¥2.50/$
B) $2.50/¥
C) ¥0.40/$
D) ¥2250/$
Answer:
Which of the following statements is true of the strategic factors that influence a
company’s international entry mode selection?
A) Low tariffs and high quota limits encourage market entry by means of investment.
B) Companies that produce goods with high shipping costs prefer exporting.
C) Companies set up production units in a host market if the total cost of production is
lower in the home market.
D) Markets that are likely to remain relatively small consider exporting as a viable
option.
Answer:
The purpose of the General Agreement on Tariffs and Trade (GATT) was to ________.
A) create an international currency
B) regulate exchange rates
C) create regional trade organizations
D) promote free trade
Answer:
If a kilogram of coal costs €1.5 in Germany and $1 in the United States, the law of one
price calculates the expected exchange rate between the euro and the dollar to be
________.
A) €0.67/$
B) €1.5/$
C) $1.67/€
D) $0.12/€
Answer:
As former competitors in many industries link up to challenge others on a worldwide
basis, ________ occurs.
A) segregation
B) denationalization
C) consolidation
D) technological stagnation
Answer:
Which of the following is among the most commonly counterfeited products?
A) aircraft parts
B) watches
C) surgical equipment
D) medicines
Answer:
Which of the following is a support activity that creates value for Beanstalk’s
customers?
A) production
B) marketing and sales
C) customer service
D) technology development
Answer:
Factor proportions theory differs from the theory of comparative advantage in that the
focus of factor proportions theory is on the ________.
A) usage of the most abundant factors of production, while the focus of the comparative
advantage theory is on the productivity of the production process
B) accumulation of financial wealth in the form of gold by encouraging imports and
discouraging exports, while the comparative advantage theory focuses on usage of the
most abundant factors of production
C) productivity of the production process, while the comparative advantage theory
focuses on maximization of production and consumption
D) minimization of trade surpluses, whereas the comparative advantage theory focuses
on the mercantilist idea that international trade is a zero-sum game
Answer:
Which of the following occurs when a company sells its products to buyers in a target
market without going through intermediary companies?
A) export through local distributors
B) export through agents
C) sale through export management companies
D) sale through export trading companies
Answer:
Which of the following actions can be adopted by developed nations to lessen the
negative effects of globalization?
A) restrict the import of goods from developing countries
B) slash agricultural subsidies that hurt the exports of developing nations
C) discontinue foreign-aid programs to developing countries
D) pressurize developing nations to fend for themselves in matters of health and
education
Answer:
Jeans Unlimited plans to set up new facilities that are designed specifically to reduce
impact on the environment. The management has emphasized on recycling and reusing
most of their resources. What concept is the company emphasizing on in this scenario?
A) sustainability
B) standardization
C) ethnocentricity
D) industrialization
Answer:
A product’s components are manufactured in a country that can produce them at a very
low cost while maintaining its quality. These components are then assembled in another
country where productivity in assembly is high. This process resembles the theory of
________.
A) comparative advantage
B) mercantilism
C) the international product life cycle
D) factor proportions
Answer:
Which of the following business-level strategies should a company follow in order to
charge a higher price for its products and enjoy greater customer loyalty?
A) differentiation strategy
B) stability strategy
C) mass customization strategy
D) retrenchment strategy
Answer:
Making investments in distribution in order to leapfrog channels of distribution that are
tightly controlled by competitors is an example of ________.
A) an internalization advantage
B) an ownership advantage
C) forward integration
D) backward integration
Answer:
Which of the following is a disadvantage of conducting business in totalitarian nations?
A) Laws regarding the resolution of contractual disputes are rigid and inflexible.
B) Companies have to contend with the interference of local political opposition.
C) A refusal to pay a bribe can result in the forfeiture of investments in the country.
D) The government has little power over the economic activities of the nation.
Answer:
Which of the following refers to the price charged for products sold between a
company’s divisions or subsidiaries?
A) dual pricing
B) transfer price
C) price skimming
D) arm’s length price
Answer:
The least amount of sovereignty that must be surrendered to a trading bloc occurs in a
________.
A) economic union
B) common market
C) free trade area
D) political union
Answer:
Which of the following statements is true of local content requirements?
A) It is a strategy mainly used by developed nations.
B) This strategy enforces companies to locate their manufacturing facilities in their
home countries.
C) Local content requirements hurt domestic producers through their effect on prices.
D) It forces companies from other countries to employ local resources in their
production processes.
Answer:
________ is a system in which a supervisor walks an employee through every step of
an assignment or task, monitoring the results at each stage.
A) Situational attribution
B) Situational management
C) Social mobility
D) Social stratification
Answer:
Which of the following is most likely to occur in the honeymoon stage of culture
shock?
A) new arrivals are fascinated by aspects of the new culture
B) individuals become annoyed by unpredictable quirks of the new culture
C) emotions hit rock bottom for visitors
D) visitors better understand and appreciate local customs and behavior
Answer:
Which of the following steps of the market screening process involves the
determination of a product’s income elasticity?
A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site
Answer:
When a country’s currency is weak, the price of its ________.
A) exports and imports on world markets declines
B) exports and imports on world markets increases
C) exports on world markets declines and the price of its imports increases
D) exports on world markets increases and the price of its imports declines
Answer:
For several emerging markets, Matt has collected data on the number of telephones,
TVs, and fax machines per capita, and population per retail outlet, which assesses the
________.
A) economic freedom
B) commercial infrastructure
C) market growth rate
D) market size
Answer:
In Country B, Color-Me-Green is faced with a tight labor market and a low
unemployment rate. This low unemployment rate will most likely result in ________.
A) lower interest rates
B) lower wages for workers
C) higher purchasing power
D) higher rate of inflation
Answer:
An exchange rate of ¥117.87/$ indicates ________.
A) that 117.87 yen buys one dollar
B) that 117.87 dollars buys one yen
C) a direct quote on the dollar
D) an indirect quote on the yen
Answer:
Which of the following allows a country to earn back some of the currency it pays out
for imports?
A) switch trading
B) counterpurchase
C) buyback
D) barter
Answer:
Which of the following statements is true of NAFTA?
A) It introduced a common currency for trade between the U.S., Mexico and Canada.
B) It overrode the local content requirements and rules of origin for products
manufactured in the member nations.
C) It eliminated all tariffs and nontariff trade barriers on goods originating from within
North America.
D) It called for stringent rules regarding government procurement practices and the
imposition of countervailing duties.
Answer:
Explain the theory of comparative advantage using an example, and describe its
assumptions and limitations.
Answer:
Describe the role of special government agencies in promoting exports and imports.
Answer:
Explain the risk-management method of “adaptation.” Why would it most likely be less
costly and time-consuming to pursue this method in a nation that practices civil law
rather than in a nation that practices common law?
Answer:
Briefly discuss the important political and legal forces that should be analyzed in the
market/site screening process.
Answer:
Why would an exporter use a sales representative or a distributor? Why would the
exporter be reluctant to offer an open account payment method?
Answer:
Discuss the importance of field trips in last stage of the market-screening process. How
do trade shows and trade missions help companies conducting primary international
research?
Answer:
Describe key characteristics of a born global firm, and explain why a born global firm
would be attuned to international firm management.
Answer:
Discuss how companies identify the basic appeal for products when screening a
potential market, and explain how international organizations provide the essential
information to researchers.
Answer:
Briefly describe the gold standard, its advantages, and why it collapsed.
Answer:
Does greater economic freedom guarantee a higher standard of living? Provide
examples of two specific countries to support your answer.
Answer:
Explain mercantilism. What were its major flaws?
Answer:
Summarize each benefit a company might obtain from the globalization of markets.
Answer:
Explain how both the international product life cycle theory and the new trade theory
ultimately result in lower priced goods. Include a definition of “first mover advantage”
in your answer.
Answer:
How is process planning affected by a company’s business-level strategy? How can
outsourcing lower risk for firms?
Answer:
Explain how tariffs protect domestic producers, and describe how a foreign trade zone
might offset the effects of tariffs.
Answer:
Briefly explain each of the three main methods companies use to manage political risk.
Answer: