NAFTA is a good example of ________.
A) trade divestment
B) trade diversion
C) the theory of trade disruption
D) the theory of trade implementation
The view that globalization is inevitable is most likely based on the belief that
________.
A) international organizations will replace nation-states
B) protesters against globalization will be persuaded to change their views
C) people want more global homogeneity of cultures
D) technical advances in transportation and communications are highly persistent
________ is one of the primary business objectives for pursuing ethical behavior.
A) Replacing home-country technology with host-country technology
B) Minimizing federal investigations into corporate finances
C) Avoiding being perceived as a socially irresponsible firm
D) Imposing home-country behavior on the host country
Which of the following is most likely a true statement about the global economy since
the 1980s?
A) Socialist governments are intervening more in global exchanges.
B) Wealthy countries are exercising total control over emerging markets.
C) Developing countries are losing growing shares of their foreign-exchange reserves.
D) Emerging economies are adopting the principles and practices of free markets.
Which of the following is the LEAST likely characteristic of neoclassical structures?
A) few barriers between people
B) extensive collaborative efforts
C) higher capacity for change and learning
D) centralized decision making
Which of the following is NOT an area in which expatriates experience repatriation
frustration?
A) change in personal finances and compensation
B) readjustment to home-country corporate structure
C) change in technical competence
D) readjustment to life at home
Assume that U.S. MNE A earns $100,000 of foreign source income, that the tax rate in
the foreign country is 40 percent, and that the tax rate in the United States is 35 percent.
How much total (both domestic and foreign) tax would the company pay on that foreign
source income, assuming that the tax credit principle applies?
A) $40,000
B) $35,000
C) $75,000
D) $5,000
Tommy Hilfiger has encountered some European resistance to the sale of its products
because ________.
A) many European consumers associate France and Italy, rather than the United States,
with upscale fashions
B) its customary prices, especially for the German market, have been out of reach for its
target market
C) it has refused to adjust products to fit the tastes and needs of local consumers
D) it has depended on self-service in its company-owned stores
The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9100.
Pounds are selling at a ________.
A) discounted premium
B) backward discount
C) forward discount
D) forward premium
All the following are reasons for the lower international mobility of people than capital
EXCEPT ________.
A) the differences in economic return between countries are lower for people than for
capital.
B) it is more expensive to move people than capital.
C) people may have to learn another language and adapt to a different culture.
D) international capital transfers have less cumbersome legal restrictions than
international movements of people.
Between now and 2050, countries undergoing a simultaneous population reduction and
an increased percentage of retirees in the population most likely will need more
________.
A) imports
B) immigrants
C) domestic products
D) favorable balances of trade
Which of the following is the MOST accurate statement about culture?
A) Cultural variables can easily be isolated from other factors such as economic and
political conditions.
B) Although most cultural variables are universal, the forms these variables take differ
from culture to culture.
C) Most cultural variables are superficial and can easily be influenced by environmental
factors.
D) Within a culture, everyone responds to particular cultural variables the same way.
All of the following are areas in which commercial activities take place outside the
territory of any nation EXCEPT ________.
A) noncoastal areas of the oceans
B) the Panama and Suez Canals
C) outer space
D) Antarctica
Which of the following is permitted by the Foreign Corrupt Practices Act?
A) a bribe paid by foreign firms operating in U.S. territories
B) a bribe paid by a U.S. firm operating in a foreign country that permits bribes to be
paid
C) a payment to a foreign government official to influence a customs official
D) a payment to a customs official to clear legitimate merchandise
________ refer(s) to the creative ideas, innovative expertise, or intangible insights that
give an individual, company, or country a competitive advantage.
A) Proprietary goods
B) Exclusive ownership
C) Restrictive goods
D) Intellectual property
Countries sometimes fear that foreign producers are pricing their exports artificially
low. This fear is most likely based on the assumption that ________.
A) foreign companies will lack the earnings to repay their foreign debt
B) insufficient earnings will be available to improve product technology
C) foreign producers will charge exorbitant prices after putting competitors out of
business
D) developing countries will be unable to maintain critical industries needed in times of
war
Certain attitudes can link groups, such as managers, from different nations more closely
than managers within a given nation. As a result, international businesspeople should
most likely ________.
A) assume that there are few significant cultural differences among nations
B) examine relevant groups when comparing nations
C) adopt universal operating methods
D) avoid cultural imperialism
Members of the Andean Community (CAN) have a common external tariff. CAN is
most likely a ________.
A) free trade agreement
B) customs union
C) domestic trade zone
D) free trade sovereignty
ADRs that are created at the request of a foreign firm wanting its shares traded in the
United States are ________.
A) facilitated
B) unfacilitated
C) sponsored
D) unsponsored
Depositary receipts traded outside the United States are called ________ depositary
receipts.
A) Euro
B) Global
C) American
D) None of the above
A company can hedge their foreign-currency risk by using ________ financial contracts
such as forward contracts and options.
A) cash flow
B) multidomestic
C) lead
D) derivative
Top executives at Jordan, a U.S. consulting firm, are debating whether or not to expand
into a country with a great deal of violence by staffing mostly with U.S. personnel. A
vice president argues that Jordan should forgo sending its employees there because of
the high risk for them of kidnappings in the region. Which of the following statements
best supports the vice president’s position?
A) There is a high correlation between violence and life-threatening natural disasters.
B) Violence is a harbinger of additional risks that affect operations negatively.
C) Local personnel are immune from violence and are capable of filling positions.
D) The ability to evacuate people when necessary is much slower than it was in the
past.
Managers should be more precise in their directions to subordinates when ________.
A) the company has a philosophy of geocentrism
B) the society believes age equals wisdom
C) uncertainty avoidance is high
D) power distance is low
The international bond market is a major source of debt financing for which of the
following?
A) world governments
B) regional organizations
C) small firms
D) small businesses
If a company’s foreign sales per customer is small compared to those in its domestic
market, it should most likely ________.
A) introduce a larger family of products
B) narrow the product line offered to the market
C) reconfigure the product life cycle marketing strategy
D) shift additional salespeople to the domestic market
Which of the following is true concerning the International Accounting Standards
Board?
A) The IASB is an EU institution designed to harmonize accounting standards among
EU member countries.
B) The EU has voted to not adopt IFRS issued by the IASB so that it will not hurt its
own convergence efforts.
C) The IASB and the FASB of the United States are working closely to harmonize
accounting standards.
D) FASB has been ordered by the SEC to not work with the IASB in setting accounting
standards.
Assume a government is considering import restrictions on sugar because sugar imports
are hurting the domestic industry. Which of the following groups is LEAST likely to
speak out on the subject?
A) politicians in areas that grow sugar
B) employees of sugar companies
C) sugar company owners
D) sugar consumers
All of the following would most likely improve the successful repatriation of
expatriates EXCEPT ________.
A) encouraging repatriated workers to take sabbaticals upon return
B) developing mentoring programs to smooth transitions
C) integrating foreign assignments into career plans
D) providing repatriated workers with desirable jobs
In a concentration strategy of international expansion, a company would go to
________.
A) many countries very rapidly, and then build up slowly in each
B) a foreign country with one product and not sell other products in that country until a
target market share is reached
C) a reporting system that measures performance on a regional rather than a
country-by-country basis
D) one or a few foreign countries and build a strong involvement there before going to
other countries
Which of the following is NOT one of the issues surrounding high levels of bribery and
corruption?
A) high poverty rates
B) regional conflict
C) political unrest
D) high per capita income