Which of the following staffing policies seeks the best people for key jobs throughout
the organization, regardless of nationality?
A.Global
B.Ethnocentric
C.Geocentric
D.Polycentric
E.Transnational
Answer:
Which of the following is true of a localization strategy?
A.It allows a firm to capture the cost reductions of mass-producing a standardized
product.
B.It reduces duplication of functions.
C.It involves longer production runs.
D.It makes sense if the value added by customization supports higher pricing.
E.It substantially reduces local demand.
Answer:
Which of the following measures the total annual income received by residents of a
country and is regarded as a yardstick for the economic activity of a country?
A.Income elasticity of demand
B.Cash reserve ratio
C.Net cash flow ratio
D.Gross national income
E.Income equity ratio
Answer:
Under the U.S. macroeconomic policy package of 1965-1968, President Lyndon
Johnson backed an increase in U.S. government spending that was financed by:
A.the sale of gold reserves.
B.borrowing from the International Monetary Fund.
C.an increase in the money supply.
D.an increase in taxes.
E.selling bonds in the international capital market.
Answer:
Which of the following is a major consideration that underlay the establishment of the
European Community?
A.The pressing need to have a common currency that would make trade between
European and non-European countries easier
B.The need for a united Europe to deal with the United States and the politically alien
Soviet Union
C.The economic lessons from the Great Depression that hit the United States in the
1920s
D.The success of the European Free Trade Association formed by Western European
countries in 1960
E.The rise of communism in Europe in the 1960s
Answer:
Which of the following is a reason for London’s dominance in the foreign exchange
market?
A.Great Britain’s decision to retain the British pound instead of using the euro
B.The preeminence of Financial Times Stock Exchange (FTSE) index as an economic
health indicator
C.London’s location making it the link between the East Asian and New York markets
D.London being the preferred headquarters destination for major multinational
corporations
E.London’s trading centers opening soon after Tokyo’s and New York’s trading centers
closing for the night
Answer:
Muslim countries are likely to be receptive to international businesses as long as those
businesses:
A.behave in a manner that is consistent with Islamic ethics.
B.do not hold affiliations with supranational organizations like the WTO or IMF.
C.adopt western ideologies of doing business.
D.generate income in the form of interest on the loans.
E.do not undertake any charitable activities because Islam has very strict rules about the
way these activities should be conducted.
Answer:
Which of the following statements reflects the nature of the global economy of the
twenty-first century?
A.National economies are becoming less integrated into a single and interdependent
economic system.
B.The number of nations joining the ranks of the developed world has reduced.
C.Countries have extensively adopted liberal economic policies.
D.There are fewer instances of state-owned businesses privatized and markets being
opened to more competition.
E.The world is currently moving toward an economic system that is more unfavorable
for international business.
Answer:
Describe how violation of the apartheid laws by Western businesses helped improve
human rights in South Africa.
Answer:
A firm that does not want to bear the costs of establishing production facilities in a
foreign country should avoid:
A.exporting.
B.FDI.
C.licensing.
D.franchising.
E.outsourcing.
Answer:
Which of the following countries presents a favorable benefit-cost-risk trade-off
scenario for foreign expansion?
A.A country ridden by private-sector debt
B.A country with a free market system
C.A country experiencing a dramatic upsurge in inflation rates
D.A country that is heavily populated
E.A country that is less developed and politically unstable
Answer:
Once accepted by the drawee, a time draft becomes a(n):
A.asset for the drawee.
B.in-transit bill.
C.promise to pay by the accepting party.
D.bill of lading.
E.letter of credit.
Answer:
The risk of failure of an acquisition can be reduced by:
A.undervaluing the assets of an acquired firm.
B.ensuring that firms are acquired in the home country.
C.replacing high-level managers of an acquired firm.
D.a detailed auditing of operations, financial position, and management culture.
E.investing only in a firm that is managing to break even.
Answer:
Which of the following is the aim of the Central America Free Trade Agreement?
A.Lowering of trade barriers between the United States and the Central American
Common Market countries
B.Elimination of trade barriers between the CARICOM and Central American Common
Market countries
C.Reduction of trade barriers between Caribbean Single Market and Economy nations
and Central American Common Market countries
D.Introduction of a common currency for Costa Rica, El Salvador, Guatemala,
Honduras, and Nicaragua
E.Reductions in tariffs and quotas between Costa Rica, Dominican Republic, and
Nicaragua
Answer:
Which of the following modes of entry is suitable for service firms where the risk of
losing control over the management skills or technological know-how is not much of a
concern, and where the firms’ valuable asset is their brand name?
A.Exporting
B.Franchising
C.Licensing
D.Turnkey projects
E.Cross-licensing
Answer:
What type of risk can be defined as the likelihood that a trading partner will
opportunistically break a contract or expropriate property rights?
A.Political
B.Legal
C.Economic
D.Sociological
E.Cultural
Answer:
One way to reduce the risks associated with a global supply chain that operates on
just-in-time principles is to:
A.depend on one supplier for an important input.
B.outsource the production of inputs only to advanced countries.
C.hold an excess buffer stock of inventory.
D.source inputs from several suppliers located in different countries.
E.avoid using electronic data interchange.
Answer:
Which of the following statements is true about product safety and liability laws?
A.There are no criminal product liability lawsonly civil product liability laws exist.
B.Liability laws are typically most extensive in less developed nations.
C.A boom in product liability suits and awards in the United States resulted in a
dramatic decrease in the cost of liability insurance.
D.Product liability can be much greater if a product does not conform to required safety
standards.
E.If product safety laws are tougher in a firm’s home country than in a host country, the
ethical thing to do is to adhere to host-country standards.
Answer:
Mass customization reconciles the two goals of:
A.centralized production and long production runs.
B.product standardization and economies of scale.
C.high fixed costs and multiple production facilities.
D.low cost and product customization.
E.local responsiveness and decentralized production.
Answer:
Which of the following is true of the four attributes that make Porter’s diamond?
A.Absence of any single attribute does not impact effectiveness of the diamond.
B.The effect of one attribute is contingent on the state of others.
C.The diamond is not a mutually reinforcing system.
D.Chance events, such as major innovations, do not affect Porter’s diamond.
E.Only in the absence of one of the four attributes can government policies influence
Porter’s diamond.
Answer:
“Exporting jobs” to low-wage nations has contributed to:
A.higher living standards in those countries that “export” the jobs.
B.higher unemployment in wealthy advanced economies such as the United States.
C.an increase in the income levels in those nations that “export” the jobs.
D.lower standards of living in those countries to which the jobs are exported.
E.reduced specialization in the production of goods and services.
Answer:
According to the U.S. Department of Commerce, which of the following, occurs
whenever a U.S. citizen, organization, or affiliated group takes an interest of 10 percent
or more in a foreign business entity?
A.Multilateral investment
B.Foreign direct investment
C.Reciprocal foreign investment
D.International divestment
E.Asset divestment
Answer:
Of all the value creation activities in a firm, which of the following creates value by
discovering consumer needs and communicating them back to the R&D function of the
company, which can then design products that better match those needs?
A.Production
B.Marketing and sales
C.Human resources
D.Logistics
E.Information systems
Answer:
Which account in the balance of payments records transactions involving the export and
import of goods and services?
A.Current
B.Foreign
C.Internal
D.Tariff
E.Savings
Answer:
Which of the following is a consequence of using flexible machine cells?
A.It fails to adapt to the production of different products.
B.It generally results in stockpiles of partly finished products.
C.It improves capacity utilization and reduces wastes.
D.It increases setup time for complex equipment.
E.It adds to the cost structure of a firm.
Answer:
Why do firms pursuing global standardization or transnational strategies tend to prefer
establishing wholly owned subsidiaries?
A.It gives firms sound knowledge of the local markets, culture, and the political
environment.
B.It helps protect competitive advantages based on technology.
C.It allows firms to use the profits generated in one market to improve its competitive
position in another market.
D.It is the most politically accepted mode of entry into foreign markets.
E.It has the least costs and risks associated with developing a foreign market.
Answer:
The cement market in Erbia is dominated by four firms. These firms control 85 percent
of selling and buying of the domestic market. Which of the following terms explains the
market structure of the cement industry in Erbia?
A.Perfect competition
B.Monopoly
C.Oligopoly
D.Dual monopoly
E.Monopsony
Answer:
Which of the following is most likely to be a function of ethics officers in firms?
A.Auditing decisions to make sure they are consistent with the company’s moral
principles
B.Identifying the ethical principles followed by competing companies
C.Ensuring that the economic interests of stakeholders is given prime importance
D.Training managers to avoid moral imagination and veil of ignorance
E.Informing external stakeholders about the moral intent of a decision
Answer:
Which of the following is true of the influence of economic development on consumer
preferences?
A.The level of economic development does not impact consumer preferences as much
as cultural difference does.
B.Firms based in highly developed countries do not build extra performance attributes
into their products.
C.Consumers in less developed nations demand to have extra attributes built into
products.
D.Consumers in developed countries are often willing to sacrifice their preferred
attributes for lower prices.
E.Consumers in developed nations are willing to pay more for products that have
additional features customized to their tastes.
Answer:
Which of the following is a factor that contributes to greater retail concentration in
developed countries?
A.The number of households owning televisions
B.The number of families with two or more children
C.An increase in the value of the currency of the country
D.The number of households with refrigerators and freezers
E.A decrease in per capita income
Answer:
Which of the following is a common underlying macroeconomic cause of financial
crises?
A.Low relative price inflation rates
B.Narrowing current account deficit
C.Increases in stock and property prices
D.Decline in domestic borrowing
E.Increases in the value of domestic currency
Answer:
Which of the following asserts that countries should simultaneously encourage exports
and discourage imports?
A.Ethnocentrism
B.Capitalism
C.Collectivism
D.Mercantilism
E.Socialism
Answer:
Where has the movement toward regional economic integration been most successful?
A.Africa
B.South America
C.North America
D.Europe
E.Asia
Answer:
Which of the following is a drawback of a countertrade agreement?
A.It fails to give firms a way to finance an export deal.
B.It requires an in-house trading department to be maintained, which can be expensive
and time-consuming.
C.It is detrimental to the economy of the importing country.
D.Developing nations may have trouble raising the foreign exchange necessary to pay
for imports.
E.It is not an acceptable means of trading in most developing countries.
Answer:
Which of the following is a nonreligious ethical system principally followed in China,
Korea, and Japan?
A.Shinto
B.Buddhism
C.Judaism
D.Confucianism
E.Hinduism
Answer: