Which of the following statements is most likely true about the postconventional level
of moral development?
A) Individuals learn what is moral but not why such behavior is moral.
B) Individuals behave morally because they fear negative repercussions.
C) Individuals learn how to conform to society’s values through observation.
D) Individuals behave morally because they believe such actions are right.
In a diversification strategy for international expansion, a company would move
________.
A) rapidly into many foreign countries, and then gradually increase its presence in those
countries
B) rapidly into a few foreign countries with many of its products and most of its
resources
C) into one foreign country and fully expand its product lines in that country before
moving to another country
D) quickly into a regional foreign market but build up its resources in only a few of the
countries in the region
In Country X, all dimensions of economic activity, including pricing and production
decisions, are determined by the central government. Which term best describes
Country X?
A) market economy
B) mixed economy
C) command economy
D) democratic economy
Which of the following is NOT a key stakeholder group that a company must work to
satisfy in order to survive in a global environment?
A) employees
B) competitors
C) shareholders
D) customers
Most counterfeit goods are made in markets in which ________ is the basis of the legal
system.
A) the rule of man
B) the rule of law
C) religious doctrine
D) corporate precedent
Which of the following is true about projected demographic changes up to the year
2050 that could affect future production and sales locations?
A) The share of the working population should rise in developed countries and fall in
developing countries.
B) The growth in per capita GDP should be higher in today’s developing economies
than in today’s developed economies.
C) The percentage of the world population living in today’s developed countries is
expected to increase.
D) The population should fall in sub-Saharan Africa.
Executives want to set export prices below those that the firm charges domestically.
What is the most likely problem the company will experience?
A) WTO antidumping regulations
B) consumer complaints
C) FDI restrictions
D) high tariffs
Which of the following countries has an individualistic orientation?
A) Venezuela
B) Japan
C) Egypt
D) Canada
Ferguson Manufacturing, an American MNE, has facilities in India and Mexico.
Ferguson fills management positions at the facility in India with Indians and
management positions in Mexico with Mexicans. Ferguson most likely follows a(n)
________ approach to staffing.
A) ethnocentric
B) geocentric
C) polycentric
D) intercentric
Tax-haven subsidiaries categorically referred to as International Offshore Financial
Centers have all of the following characteristics EXCEPT ________.
A) a low tax on foreign investment or sales income earned by resident corporations and
a low dividend withholding tax on dividends paid to the parent firm.
B) a stable currency to permit easy conversion of funds into and out of the local
currency. This requirement can be met by permitting and facilitating the use of
Eurocurrencies.
C) a stable government that encourages the establishment of foreign-owned financial
and service facilities within its borders.
D) All of these answer choices are characteristics of tax-haven subsidiaries.
The origin of investment proposals differs from the origin of divestment proposals in
that the divestment proposals are more likely to come from ________.
A) subsidiary management
B) outside the organization
C) higher up in the organization
D) line personnel as opposed to staff personnel
Risk is an important factor for companies engaged in international business. One way a
collaborative arrangement helps minimize risk when operating abroad is by ________.
A) reducing the possibility of technological appropriation
B) freeing up resources so a company can diversify into more countries
C) preventing the entry of new competitors
D) eliminating losses from exchange rate depreciation abroad
Firms that pursue a(n) ________ strategy create value by transferring core
competencies from the home market to foreign markets in which local rivals lack a
competitive alternative.
A) transnational
B) localization
C) global
D) international
Garnet Footwear suffered significant financial losses and had to close its foreign
operations. The dissolution process took six months and cost four percent of the firm’s
value. Where were Garnet’s foreign operations most likely located?
A) Ecuador
B) France
C) Japan
D) China
In a democracy, ________.
A) citizens have the right to participate in the decision-making process
B) the opportunity to truly participate in the political process is restricted to a select few
C) the court system is directly supervised by the political system
D) the rights of the individual are merged with the state
Some countries opt for a mixed economic system in the belief that although an
economic system should aspire to achieve the efficiencies created by free markets, it
must also support policies to ________.
A) destabilize poverty rates
B) achieve low unemployment
C) restrict economic growth
D) inequitably distribute wealth
If a foreign currency is quoted in American terms (the direct quote) and the forward rate
for a foreign currency is less than the spot rate, the foreign currency is selling at a
________.
A) forward premium
B) backward discount
C) backward premium
D) forward discount
Billions of investment dollars are needed to develop many new products. This trend
toward higher development costs is likely to have which of the following effects on
future modes of operations?
A) Collaborative arrangements are likely to decrease because a company making a
breakthrough will be leery of partners’ appropriation of knowledge.
B) Collaborative arrangements are likely to increase because of the huge investments
needed for development.
C) Exporting will become more important relative to other operating modes because of
the large scale production facilities necessary for economic efficiency.
D) Cross-licensing will gain in importance because companies will be forced to
specialize more in different technologies.
Morris Lighting is a U.S. firm that wants to start exporting its high-end lighting fixtures
to foreign markets. Morris Lighting should seek assistance from U.S. government
agencies for all of the following EXCEPT ________.
A) organizing trade events that help potential exporters make foreign contacts and
explore export opportunities
B) understanding how to comply with domestic and foreign trade regulations
C) acting as an export marketing department or international department for the
company
D) providing information about market demographics and product demand
Which of the following statements is NOT true about risk as it affects companies’
choice of locations for foreign operations?
A) Companies and their managers differ in their perception of what is risky.
B) One company’s risk may be another company’s opportunity.
C) There are means to reduce risk other than avoiding locations.
D) Companies choose the cheapest location regardless of risks.
Johnson & Johnson delegates to its subsidiaries a great deal of authority to respond to
local conditions. Many subsidiaries have their own manufacturing, marketing, research,
and human resource functions. This value chain configuration illustrates the ________
strategy.
A) transnational
B) global
C) localization
D) international
Managing and cultivating diverse teams is facilitated by first encouraging team
members to ________.
A) understand each other’s culture before dealing with the tasks at hand
B) jump into the task allowing the team members to react and adapt to each other
C) deal with fellow team members as they would in their own culture
D) establish strict rules on how the task will be performed
Gary is a manufacturing manager at Forman Enterprises. Gary works at the MNE’s
headquarters in the United States. Before Gary can implement any major changes or
decisions, he must communicate and coordinate his plans with Raj, a sales manager at
Forman’s facility in India. Which structure is most likely used by Forman Enterprises?
A) global
B) matrix
C) product division
D) geographic division
Which of the following would be an example of a customer orientation in international
marketing?
A) A cosmetics company bans animal testing of its products to gain goodwill.
B) A fruit company brands the bananas it sells in foreign and domestic markets.
C) A beer company makes non-alcoholic beer for a country that bans the sale of
alcohol.
D) A plastics manufacturer makes some components to the specifications of a foreign
company.
One way that developed countries specialize in order to gain acquired advantages is by
________.
A) allocating research efforts more heavily in specific sectors
B) emphasizing production in natural resource endowments
C) restricting imports to those in the service sector
D) subsidizing the transport of exports
Which of the following is a characteristic of the Eurocurrency market?
A) The Eurocurrency market is both short and medium term.
B) Private borrowers are the major players in the Eurocurrency market.
C) The Eurocurrency market is a retail, rather than wholesale, market.
D) The interest rates in the Eurocurrency market are about the same as in domestic
markets.
Endaka, the “high yen,” caused financial problems for ________.
A) Japanese foreign-exchange reserves
B) American foreign-exchange reserves
C) Japanese importers
D) Japanese exporters
Elite Manufacturing seeks a foreign location with a highly favorable business
environment and a comprehensive legal code. Which of the following countries would
be most suitable for Elite?
A) Japan
B) Canada
C) Singapore
D) United Kingdom
Political, legal, economic, monetary, and institutional forces comprise the ________ of
international business and influence managers’ actions.
A) environment
B) competition
C) culture
D) threat
If inflation in the United States is relatively higher than inflation in Japan, and the
Japanese government wants to keep the exchange rate fixed between the yen and the
dollar, it should most likely ________.
A) allow its currency to rise against the dollar
B) allow its currency to fall against the dollar
C) increase the supply of yen in the market
D) decrease the supply of yen in the market
Phillip is an international business manager with Corbin Manufacturing. Which of the
following serves as an external influence on the business decisions that Phillip makes?
A) production plant locations
B) host country monetary policy
C) supply chain linkages
D) product design standards
Larson Shoes is a British company. Which balance sheet format is most likely used by
Larson?
A) assets + liabilities = shareholders’ equity
B) liabilities + shareholders’ equity = assets
C) noncurrent assets + current assets – current liabilities – noncurrent liabilities =
shareholders’ equity
D) noncurrent assets – net current assets = liabilities + capital and reserves
We now have technology to allow people to communicate globally without traveling as
much. Leading researchers on urbanization and planning suggest that the most likely
consequence of this is ________.
A) a decrease in international airline travel
B) a decreased need for immigration restrictions
C) a smaller number of retirees living in urban areas
D) a greater number of self-motivated workers e-mailing and teleconferencing with
colleagues
