The major cost saving associated with JIT systems comes from:
A. early delivery of raw materials to production.
B. decentralization of manufacturing.
C. speeding up inventory turnover.
D. reduced spending on CRM activities.
Which of the following occurs when traders start moving as a herd in the same direction
at the same time?
A. Fisher effect
B. Bandwagon effect
C. Arbitrage
D. Decoupling of markets
A theocratic law system is one in which the law is based on:
A. religious teachings.
B. tradition, precedent, and custom.
C. a detailed set of laws organized into codes.
D. cultural and social norms.
The International Accounting Standards Board:
A. can issue a new accounting standard if the majority of the board members agree.
B. was formed to replace the Financial Accounting Standards Board.
C. proposes standards but has no power to enforce the standards.
D. was formed to supervise the accounting practices that U.S. firms follow.
_____ imply that when a firm already has significant value built into its product
offering, increasing value by a relatively small amount requires significant additional
costs.
A. Efficiency matrixes
B. Diminishing returns
C. Cost plus curves
D. Strategy convex curves
Rawls’ philosophy that inequalities are justified if they benefit the position of the
least-advantaged person is known as the:
A. inequality principle.
B. equity principle.
C. difference principle.
D. ignorance veil principle.
What is horizontal differentiation?
A. The mechanisms that enable each subunit to operate independently
B. The formal division of the organization into subunits
C. The location of decision-making responsibilities within a structure
D. The mechanisms for coordinating subunits
Firms usually respond to pressures for cost reduction by trying to:
A. lower the costs of value creation.
B. be locally responsive.
C. undertaking product differentiation.
D. diversifying product lines.
Which of the following is a political reason for governments to intervene in markets?
A. To help citizens obtain jobs in foreign markets
B. To aid their country’s businesses in foreign markets
C. To subsidize multinational companies
D. To protect jobs and industries
_____ control is achieved by comparing actual performance against targets and
intervening selectively to take corrective action.
A. Personal
B. Output
C. Bureaucratic
D. Cultural
Which of the following best describes an industry composed of a limited number of
large firms?
A. An oligopoly
B. A monopoly
C. An oligarchy
D. A perfectly competitive market An oligopoly is an industry composed of a limited
number of large firms (e.g., an industry in which four firms control 80 percent of a
domestic market would be defined as an oligopoly).
Make-or-buy decisions are decisions about:
A. the components to be used in manufacturing process.
B. procuring raw materials for a production process.
C. procuring the capital equipment for production.
D. whether or not to outsource value creation activities. International businesses
frequently face make-or-buy decisions, decisions about whether they should perform a
certain value creation activity themselves or outsource it to another entity. Deciding
whether or not to outsource is one such decision.
A polycentric approach to staffing is one in which:
A. host-country nationals are recruited to manage subsidiaries while parent-company
nationals occupy key positions at corporate headquarters.
B. standard psychological tests are used to assess perceptual ability and cultural
toughness, when selecting a manager for foreign posting.
C. all key management positions are filled by parent company nationals.
D. the best people, regardless of nationality, are recruited to fill key positions
throughout the organization.
Which of the following is a disadvantage of licensing?
A. It does not help firms that lack capital to develop operations overseas.
B. It does not give a firm the tight control over strategy that is required for realizing
experience curve and location economies.
C. It cannot be used when a firm possesses some intangible property that might have
business applications.
D. The firm has to bear the development costs and risks associated with opening a
foreign market.
The world’s four major trading currencies, the Japanese yen, the U.S. dollar, the British
pound, and the European Union’s euro are all free to float against each other. What is
this an example of?
A. pegged exchange rate regime
B. floating exchange rate regime
C. managed-float system
D. fixed exchange rate regime
A firm that adopts a polycentric approach to staffing is likely to suffer from cultural
myopia.
A Eurocurrency is any currency:
A. banked outside of its country of origin.
B. that is traded in European countries.
C. that originates in European countries.
D. used to buy gold and related commodities.
Lessard and Lorange refer company-generated forecast of future spot rates as _____
rate.
A. forward exchange
B. internal forward
C. initial exchange
D. ending exchange
Investors who purchase a fixed-rate bond receive:
A. incremental payouts until the bonded money runs out.
B. cash payoffs only at maturity.
C. a full cash payoff on demand.
D. a fixed set of cash payoffs.
Foreign producers typically agree to voluntary export restrictions because:
A. their manufacturing capacity is limited.
B. they can divert their exports to other countries and charge more for their products.
C. they fear far more damaging punitive tariffs or import quotas might follow if they do
not.
D. they are required to by the World Trade Organization.
Which of the following is the most important foreign exchange trading center?
A. London
B. New York
C. Tokyo
D. Singapore
Which of the following observations is true of the Bretton Woods agreement?
A. All countries agreed to fix the value of their currency in terms of gold under the
agreement.
B. The system accepted Pound as the official reference currency against gold.
C. The agreement established a floating system of monetary exchange.
D. Two multinational institutions, World Economic Forum and WTO, were formed
under the agreement.
Systems that emphasize collectivism tend toward _____.
A. totalitarianism
B. capitalism
C. democracy
D. privatization
Porter argues that a nation’s firms gain competitive advantage if:
A. their domestic consumers lack technical awareness
B. they function in a labor intensive market
C. the country has abundant supply of unskilled workers
D. their domestic consumers are demanding
Which of the following acts allows Americans to sue foreign firms that use property in
Cuba confiscated from them after the 1959 revolution?
A. D’Amato Act
B. Smoot-Hawley Act
C. Helms-Burton Act
D. Antidumping Act
Which of the following statements is true about the murabaha contract?
A. Under the murabaha contract, when an Islamic bank lends money to a business it
takes a share in the profits that are derived from the investment.
B. Under the murabaha contract, money deposited in a savings account is treated as an
equity investment in whatever activity the bank uses the capital for.
C. The murabaha contract is widely used among the world’s Islamic banks because it is
the easiest to implement.
D. The murabaha contract is a more efficient system than the Western banking system
since it encourages both long-term savings and long-term investment.
The _____ theory argues that the pattern of international trade is determined by
differences in factor endowments.
A. comparative advantage
B. Leontief Paradox
C. Heckscher-Ohlin
D. absolute advantage
In 1997, two South Korean manufacturers of semiconductors, LG Semicon and
Hyundai Electronics, were accused of selling dynamic random access memory chips
(DRAMs) in the U.S. market at below their costs of production. It was alleged that the
firms were trying to unload their excess production in the United States. This is an
example of:
A. ad valorem tariff.
B. subsidy.
C. dumping.
D. import quota.
Licensing would be a good option for firms in which of the following industries?
A. High-technology industries in which protecting firm-specific expertise is of
paramount importance.
B. Global oligopolies, in which competitive interdependence requires that multinational
firms maintain tight control over foreign operations.
C. Industries in which intense cost pressures require that multinational firms maintain
tight control over foreign operations.
D. In fragmented, low-technology industries in which globally dispersed manufacturing
is not an option. Licensing tends to be more common, and more profitable, in
fragmented, low-technology industries in which globally dispersed manufacturing is not
an option.
The level of output at which most plant-level scale economies are exhausted is referred
to as the:
A. minimum efficient scale of output.
B. downstream supply chain.
C. flexible machine.
D. upstream supply chain. The level of output at which most plant-level scale
economies are exhausted is referred to as the minimum efficient scale of output.