The extent to which the place of manufacturing influences product evaluations is
known as _____.
A. source effects
B. country of origin effects
C. noise effects
D. location effects
It has been observed that a product’s production costs decline by some quantity about
each time cumulative output _____.
A. increases by twenty five percent
B. quadruples
C. doubles
D. triples
A consumer surplus can be best described as:
A. what the consumer has “left-over” after a purchase.
B. how much extra a consumer has to pay for a product.
C. value for the money.
D. the premium charged for a quality product.
Switching costs:
A. drive early entrants out of the market.
B. make it easy for later entrants to win business.
C. make it difficult for later entrants to win business.
D. give later entrants a cost advantage over early entrants.
Which of the following staffing approaches will be most effective for a firm that is
pursuing a transnational strategy?
A. A polycentric staffing policy
B. An ethnocentric staffing policy
C. A geocentric staffing policy
D. An internal staffing policy
The term _____ has been coined to describe the ability of companies to use flexible
manufacturing technology to reconcile the goals of low cost and product
personalization.
A. assembly-line production
B. product standardization
C. mass customization
D. Six Sigma production
The _____ refers to the extent to which a culture programs its citizens to accept delayed
gratification of their material, social, and emotional needs.
A. long-term versus short-term orientation dimension
B. indulgence versus restraint dimension
C. uncertainty avoidance
D. power distance dimension
An economy in which the interaction of supply and demand determines the quantity in
which goods and services are produced is called a _____.
A. planned economy
B. command economy
C. closed economy
D. market economy
A key goal of the 1986 Uruguay Round was to:
A. extend GATT to cover trade in commodities.
B. extend GATT rules to cover trade in services.
C. increase agricultural subsidies.
D. loosen the GATT’s monitoring and enforcement mechanisms.
Which of the following is an advantage of countertrade?
A. Countertrade uses instruments such as time draft and sight draft.
B. It is an effective way of doing business with developing nations.
C. It provides exporters and opportunity to obtain direct revenue.
D. Countertrade prevents exchange of unusable or poor-quality goods.
_____ is the ability to understand why people of other countries behave the way they
do.
A. Others-orientation
B. Cultural myopia
C. Perceptual ability
D. Cultural toughness
A(n) _____ allows an entity to reduce the taxes paid to the home government by the
amount of taxes paid to the foreign government.
A. indirect tax
B. tax haven
C. tax credit
D. internal tax
The _____ is issued to the exporter by the common carrier transporting the
merchandise.
A. bill of lading
B. sight draft
C. letter of credit
D. time draft
_____ is primarily used for one-time-only deals in transactions with trading partners
who are not creditworthy or trustworthy.
A. Counterpurchase
B. Barter
C. Offset
D. Buyback
Which of the following is seen as a disadvantage of the euro?
A. Higher foreign exchange and hedging costs
B. National authorities losing control over monetary policy
C. It becomes difficult to compare prices across Europe
D. It undermines the development of a pan-European capital market
The ability to understand why people of other countries behave the way they do is
_____.
A. self-orientation
B. others-orientation
C. perceptual ability
D. cultural toughness
Which of the following is included in world merchandise trade?
A. Service industry
B. Agricultural labor
C. Foreign services
D. Mining products
Which of the following is one of the measures that HDI is based on?
A. Life expectancy at birth.
B. Political freedom.
C. Attainment of housing.
D. Whether the lowest incomes are sufficient to meet the basic needs of life.
_____ are unit cost reductions associated with a large scale of output.
A. Current account deficits
B. Economies of scale
C. Current account surpluses
D. Factor endowments
Since the 1960s, which of the following has been a notable trend in the demographics
of the multinational enterprise?
A. The decline of multinational companies in the manufacturing sector
B. The growth of government-owned multinational enterprises
C. The decline of non-U.S. multinationals
D. The growth of mini-multinationals
A multinational enterprise (MNE) is a firm that:
A. exports its products to multiple countries.
B. has production units in more than two countries.
C. does most of its business on the Internet.
D. lists its securities on a public exchange.
According to Lessard-Lorange model, ending rate is the spot exchange rate:
A. forecast for the end of the budget period.
B. when the budget is adopted.
C. when no formal exchange rate exists.
D. when the budget and performance are being compared.
_____ refers to the expertise, competencies, and skills of established retailers in a
nation, and their ability to sell and support the products of international businesses.
A. Channel exclusivity
B. Channel knowledge
C. Channel quality
D. Channel skill
In a _____, if demand for a product exceeds supply, prices will rise, signaling to
producers to produce more.
A. mixed economy
B. market economy
C. collectivist economy
D. command economy
According to _____, the social responsibility of business is to increase profits, so long
as the company stays within the rules of law.
A. the naive immoralist
B. the righteous moralist
C. cultural relativism
D. the Friedman doctrine
Which of the following statements is true about the growth of foreign direct investment
in the world economy over the last few decades?
A. FDI has experienced a slower growth than world output.
B. FDI has accelerated faster than world trade growth.
C. FDI has remained the same over the past few decades.
D. FDI has dropped dramatically. The past 35 years have seen a marked increase in
both the flow and stock of FDI in the world economy. Over the past 30 years, the flow
of FDI has accelerated faster than the growth in world trade and world output.
A country’s _____ keep track of both its payments to and its receipts from other
countries.
A. current accounts
B. offshore accounts
C. balance-of-payments accounts
D. currency accounts A country’s balance-of-payments accounts track both its payments
to and its receipts from other countries.
The purchasing power parity (PPP) theory argues that the exchange rate will:
A. increase if a country is experiencing inflation.
B. change even if relative prices remain unchanged.
C. increase if a country is experiencing deflation.
D. change if relative prices change.
Which of the following is an impediment that makes it difficult for firms to achieve the
optimal dispersion of their productive activities to locations around the globe?
A. Transportation costs
B. Government deregulations
C. Reduction of barriers to trade between countries
D. Reduction of barriers to foreign direct investment
The main tenet of mercantilism is that it is in a country’s best interests to:
A. maintain a trade deficit.
B. maintain a trade surplus.
C. Import goods made from products that it does not have in abundance.
D. import more than it exports.
A firm following a(n) _____ approach to staffing believes that the host-country
nationals should be recruited to manage subsidiaries, while parent-country nationals
occupy key positions at corporate headquarters.
A. geocentric
B. eurocentric
C. polycentric
D. ethnocentric
_____ can be used when a government restricts the convertibility of its currency to
preserve its foreign exchange reserves so they can be used to service international debt
commitments and purchase crucial imports.
A. A buyback
B. Countertrade
C. An offset
D. Switch trading
How can a firm protect its proprietary information in a joint venture arrangement?
A. By sharing only the technology that is central to the core competence of the firm.
B. Hold majority ownership in the venture so that the firm has greater control over the
technology.
C. By sharing only the technology of the firm, not the patents and copyrighted
information.
D. Hold minority ownership in the venture so that the firm does not have to give over
control of the technology.