Argonia Republic is in trade surplus with Kamboly. Under the gold standard, which of
the following statements is true until a balance-of-trade equilibrium is achieved?
A.There will be a net flow of gold from Argonia Republic to Kamboly.
B.The money supply in Kamboly will be reduced due to the flow of gold to Argonia
Republic.
C.The prices of the traded goods in Kamboly will increase.
D.The demand for traded goods in Argonia Republic will increase.
E.Kamboly will start to buy more goods from Argonia Republic.
Answer:
Which of the following is a power of the WTO?
A.It can restrict the membership of nations in other supranational organizations such as
the United Nations.
B.It can grant loans to cash-strapped governments in poor nations.
C.It supersedes IMF and has complete authority over IMF’s actions.
D.It can issue a ruling instructing a member-state to change trade policies that violate
GATT regulations.
E.It can make decisions related to international trade without considering the collective
interests of member-states.
Answer:
The type of countertrade where a firm agrees to purchase a certain amount of materials
back from a country to which a sale is made is called:
A.barter.
B.counterpurchase.
C.compensation.
D.switch trading.
E.buyback.
Answer:
Many host countries are concerned that a foreign-owned manufacturing plant may
import many components from its home country, which has negative implications for
the host country’s:
A.free trade agreements.
B.inward FDI.
C.sovereignty.
D.balance-of-payments position.
E.gold reserves.
Answer:
Which of the following enables organizations to conduct international trade without
having to resort to barter?
A.Foreign exchange market
B.Caribbean Single Market and Economy
C.Auction market
D.Countertrade
E.Balance-of-trade equilibrium
Answer:
Pull strategies tend to be emphasized:
A.for complex new products.
B.for consumer goods.
C.for industrial goods.
D.when distribution channels are short.
E.when few print or electronic media are available.
Answer:
Which of the following is a part of the organization architecture that consists of the
metrics used to measure the performance of subunits and make judgments about how
well managers are running those subunits?
A.Reports
B.Controls
C.Rewards
D.Knowledge flows
E.Dominions
Answer:
People in the West tend to associate which of the following with a free market system,
strong property rights protection, and economic progress?
A.Anarchist state
B.Representative democracy
C.Planned economy
D.Communist state
E.Command economy
Answer:
The idea behind multipoint competition is to ensure that:
A.a rival does not dominate one market and use the profits from there to drive
competitive attacks elsewhere.
B.the competitors cooperate with each other to establish a cartel.
C.no other competitors can enter the market unless they resort to licensing or
franchising with the initial pioneers.
D.growing technologies or business methods in new markets are transferred to
established markets.
E.the firms in an industry prefer FDI over licensing or exporting.
Answer:
According to the results of a seminal study by R. L. Tung, what was the major reason
for expatriate failure among European expatriates?
A.Personal or emotional problems
B.Inability to cope with overseas responsibilities
C.Poor pay
D.Inability of spouse to adjust to a new environment
E.Lack of technical competence
Answer:
Once it undertakes FDI, a firm becomes a(n):
A.outsourcer.
B.retail chain.
C.offshore company.
D.multinational enterprise.
E.national corporation.
Answer:
Which of the following is true of inflation?
A.It occurs when the demand for a particular currency is more than the supply.
B.It occurs when securities are purchased in one market for immediate resale in another.
C.It occurs when two parties agree to exchange currency and execute a deal at a
specific date in the future.
D.It occurs when the quantity of money in circulation rises faster than the stock of
goods and services.
E.It occurs when output increases faster than the money supply.
Answer:
Which of the following is true regarding the pragmatic nationalist view of FDI?
A.One aspect of pragmatic nationalism is the tendency to aggressively court FDI
believed to be in the national interest by, for example, offering subsidies to foreign
MNEs in the form of tax breaks or grants.
B.The pragmatic nationalist view states that FDI always has a positive effect on the
balance of payments which arises from the outflow of a foreign subsidiary’s earnings
and from the import of inputs from abroad.
C.According to the pragmatic nationalist view, international production should be
distributed among countries based on the theory of comparative advantage.
D.According to the pragmatic nationalist view, FDI should not be allowed to enter into
a country because its costs always outweigh its benefits.
E.The pragmatic nationalist view of FDI accepts the Marxist theory, and suggests that
FDI by MNEs is an instrument of imperialism.
Answer:
Which of the following staffing policies relies extensively on the use of expatriate
managers?
A.Global
B.Polycentric
C.Transnational
D.Ethnocentric
E.Localized
Answer:
Which of the following observations about the International Monetary Fund (IMF) is
true?
A.The IMF can force countries to adopt the policies required to correct economic
mismanagement.
B.Internal political problems can affect a government’s commitment to taking corrective
action in return for an IMF loan.
C.In recent years, the IMF has begun to make its policies more tight and inflexible.
D.In response to the global financial crisis of 2008-2009, the IMF began to adopt a
“one-size-fits-all” approach to macroeconomic policy.
E.In recent years, the IMF has begun to urge countries to oppose fiscal stimulus and
monetary easing.
Answer:
Which of the following factors helps a firm shorten channel length?
A.The entry of large discount superstores
B.A firm’s insistence on dealing with wholesalers instead of manufacturers
C.Fragmentation of a retail system
D.A small sales force
E.Smaller sales orders generated from sales calls
Answer:
Which of the following was a change proposed by the Single European Act?
A.Establish frontier controls among European Community countries
B.Increase the resources required for complying with trade bureaucracy
C.Place barriers to competition in the retail banking and insurance businesses
D.Apply the principle of “mutual recognition” to product standards
E.Reduce costs directly by not allowing lower-cost suppliers into national economies
Answer:
Which of the following applies to most totalitarian states?
A.Free and fair elections are not denied to the citizens.
B.There is free access to state information.
C.All the basic civil liberties are granted to the citizens.
D.The right to freedom of expression and organization is not curbed.
E.Media are heavily censored.
Answer:
Which of the following has no barriers to trade between member countries, includes a
common external trade policy, and allows factors of production to move freely between
members?
A.Command economy
B.Customs union
C.Common market
D.Efficient market
E.Free trade area
Answer:
Which of the following is true according to Theodore Levitt’s article in the Harvard
Business Review about the globalization of world markets?
A.Global corporations consider the world to consist of distinct and unique entities.
B.Global corporations operate at low relative costs.
C.Global corporations operate from a single country.
D.Global corporations adjust their products and practices to suit each country.
E.Global corporations are in danger of losing out to small businesses.
Answer:
Which of the following best exemplifies violation of mores?
A.Attending a business meeting in casual clothes
B.Committing a financial fraud
C.Failing to greet a person you know
D.Eating with the inappropriate cutlery in a social gathering
E.Keeping a good friend waiting at a coffee shop
Answer:
Which of the following is concerned with the effect of exchange rate changes on
individual transactions, most of which are short-term affairs that will be executed
within a few weeks or months?
A.Purchasing power parity
B.Transaction exposure
C.Economic exposure
D.Translation exposure
E.Currency speculation
Answer:
Which of the following is an example of transaction exposure?
A.Obligations for the purchase of goods at previously agreed prices
B.Borrowing of funds in domestic currency
C.Impact of currency exchange rate changes on the reported financial statements of a
company
D.Long-term effect of changes in exchange rates
E.The effect of changing exchange rates on future prices, sales, and costs
Answer:
Which of the following is the most widely spoken language in the world, and is
increasingly becoming the language of international business?
A.Chinese
B.French
C.English
D.Spanish
E.German
Answer:
Which of the following holds true for products with low value-to-weight ratios?
A.They are relatively expensive.
B.They do not weigh very much.
C.Their transportation costs account for a very small percentage of total costs.
D.It is advisable to manufacture them in multiple locations close to major markets.
E.Examples of these products are electronic components and pharmaceuticals.
Answer:
Small-scale entry into a foreign market makes it difficult to build market share because
it:
A.necessitates rapid entry into a foreign market.
B.is associated with a lack of commitment demonstrated by the foreign firm.
C.leads to escalating strategic commitments.
D.requires that extra time be spent in analyzing a foreign market.
E.leads to increased exposure to a foreign market.
Answer:
In a social context, the term values is used to describe the:
A.economic benefits that are inherent to a culture.
B.collective wealth of the society.
C.abstract ideas about what a group believes to be good, right, and desirable.
D.political ascendancy of a country.
E.social rules and guidelines about the appropriate behavior in public.
Answer:
In terms of the factors affecting product attributes, the impact of which of the following
is particularly important in foodstuffs and beverages?
A.Language
B.Nationality
C.Religion
D.Tradition
E.Gender
Answer:
Which of the following staffing policies limits a firm’s ability to reduce its use of
expatriates?
A.Geocentric
B.Polycentric
C.Transnational
D.Regiocentric
E.Neocentric
Answer:
Which of the following is a characteristic of high uncertainty avoidance cultures?
A.They do not place importance on job security, career patterns, retirement benefits,
and so on.
B.They allow a manager to tightly control subordinates’ initiatives.
C.They demonstrate less emotional resistance to change.
D.They are characterized by a greater readiness to take risks.
E.They oppose the use of rules and regulations to exercise control over individuals.
Answer:
The common law system enjoys a degree of flexibility not found in other systems
because:
A.it is usually found in democratic republics.
B.it originated from Great Britain and can be found in almost all of its former colonies.
C.it is interpreted by the law courts with regard to tradition, precedent, and custom.
D.it is based on a detailed set of laws organized into codes.
E.it has originated recentlyjust a decade ago.
Answer:
A principal concern of domestic unions about multinational firms is that a company can
counter its bargaining power with:
A.work schedules tied to global rather than domestic standards.
B.wage rates tied to global rather than domestic standards.
C.the power to import labor from abroad.
D.the power to move production to another country.
E.the retention of low-skilled tasks in home country.
Answer:
A firm concludes a counterpurchase agreement with a foreign country for which it
receives some counterpurchase credits for purchasing its goods. The firm does not want
any foreign goods, however, so it sells the credits to a third-party trading house at a
discount. The trading house finds a firm that can use the credits and sells them at a
profit. This is an example of:
A.barter.
B.switch trading.
C.an offset.
D.a buyback.
E.compensation.
Answer:
Which of the following premises is technical analysis, an approach to exchange rate
forecasting, based on?
A.Price and volume data cannot be used to determine past trends.
B.Econometric models drawn from economic theory are best suited to predict exchange
rate movements.
C.The foreign exchange market is efficient and forward exchange rates are the best
predictors of future spot exchange rates.
D.Previous market trends and waves can be used to predict future market trends and
waves.
E.Since forward exchange rates are the best predictors of future spot rates, it makes no
sense to invest in forecasting.
Answer:
Which of the following arises when two or more enterprises encounter each other in
different regional markets, national markets, or industries?
A.Monopoly
B.Monopsony
C.Cartel
D.Multipoint competition
E.Oligopsony
Answer: