The marketing mix is comprised of product attributes, distribution strategy,
communication strategy, and pricing strategy.
The quality of investments declined significantly in the Asian countries during the
1990s.
According to Paul Samuelson’s critique, a poor country will rapidly improve its
productivity if a rich country enters into a free trade agreement with it.
Upon meeting a foreign business executive, a Japanese executive will hold his business
card in both hands and bow while presenting the card to the foreigner. This is an
example of ritual behavior.
FDI has been declining in the last few decades because protectionist pressures have
become less intense.
Just-in-time systems reduce product quality although it brings about huge cost savings.
If $1 bought more yen with a spot exchange than with a 30-day forward exchange it
indicates the dollar is expected to depreciate against the yen in the next 30 days. When
this occurs, we say the dollar is selling at a premium on the 30-day forward market.
An investor purchases the right to receive a specified fixed stream of income from the
corporation when he purchases a share of stock.
The implied loss of national sovereignty to the European Central Bank (ECB) underlies
the decision by Great Britain, Denmark, and Sweden to stay out of the euro zone for
now.
Universal needs exist when the tastes and preferences of consumers in different nations
are similar if not identical.
A firm’s performance appraisal systems are an important element of its control systems.
The World Bank has focused on policing the world trading system and making sure
nation-states adhere to the rules laid down in trade treaties.
Patents, copyrights, and trademarks establish ownership rights over intellectual
property.
Other things being equal, the greater the capital investment in an economy, the more
favorable its future growth prospects are likely to be.
The most typical joint venture is a 25/75 venture.
Some of the arguments made by the product life-cycle theory seem ethnocentric and
increasingly dated when viewed from an Asian or European perspective.
Adopting a pegged exchange rate regime increases the inflationary pressures in a
country.
The utilitarian approach to ethics is a straw men approach to business ethics that has
some inherent value, but is unsatisfactory in important ways.
Direct effects of FDI arise when jobs are created in local suppliers as a result of the FDI
and when jobs are created because of increased local spending by employees of the
MNE.
Patents discourage companies from committing themselves to extensive basic research.
Debt loans include cash loans from banks and funds raised from the sale of corporate
bonds to investors.
Using the ending rate to translate the budget is a valid practice according to the
Lessard-Lorange Model.
Depositors are not protected against bank failures in the Eurocurrency market.
Local content regulations provide protection for a domestic producer of parts by
limiting foreign competition.
Greenfield ventures are less risky than acquisitions in the sense that there is less
potential for unpleasant surprises.
Historically, substantial regulatory barriers separated national equity markets from each
other.
According to Mendenhall and Oddou, poorly adjusted expatriates tend to be
nonjudgmental and nonevaluative in interpreting the behavior of host-country nationals.
Make-or-buy decisions are decisions that concern the components to be used in a
production process.
The Great Depression had roots in the failure of the world economy to mount a
sustained economic recovery after the end of World War I in 1918.
The spread between the Eurocurrency deposit rate and the Eurocurrency lending rate is
more than the spread between the domestic deposit and lending rates.
If the spot exchange rate is £1 = $1.50 when the market opens, and £1 = $1.48 at the
end of the day, the pound has appreciated, and the dollar has depreciated.
World Bank offers low-interest loans to risky customers whose credit rating is often
poor.
Transaction exposure includes obligations for the purchase or sale of goods and services
at previously agreed prices and the borrowing or lending of funds in foreign currencies.
Governments do not always act in the national interest when they intervene in the
economy; politically important interest groups often influence them.
Licensing limits the firm’s ability to realize experience curve and location economies by
producing its product in a centralized location.
Educating customers is a part of pioneering costs.
Interest rates adjust automatically under a strict currency board system.
According to the new trade theory, firms that establish a first-mover advantage with
regard to the production of a particular new product may subsequently dominate global
trade in that product.
Since its establishment, the euro has had a stable trading history.
Which of the following statements is true about the United Nations Universal
Declaration of Human Rights?
A. It transcends national borders.
B. It states that human rights are culturally determined.
C. It states that an action is judged desirable if it leads to the best possible balance of
good consequences over bad consequences.
D. It states that the only social responsibility of business is to increase profits, so long
as the company stays within the rules of law.
Interdependent political, economic, and legal systems of a country make up its:
A. administrative agenda.
B. socioeconomic fabric.
C. cultural environment.
D. political economy.
The great promise of exporting is that:
A. large revenue opportunities are often found in foreign markets.
B. it provides more opportunities to smaller firms than larger firms.
C. international trade is protected against exchange risks.
D. it reduces the need for insuring businesses against political risks.
Importers usually issue a _____ to importers in international transactions.
A. sight draft
B. letter of credit
C. time draft
D. bill of lading
Business firms that lobby their governments to engage in protectionism have an
opportunity to build a(n) _____ by constructing a globally dispersed production system.
A. absolute advantage
B. competitive advantage
C. strategic trade advantage
D. comparative advantage
When a company brings capital and/or technology to a host country, the host country
benefits from the:
A. political effect of FDI.
B. resource-transfer effect of FDI.
C. balance-of-payments effect of FDI.
D. bandwagon effect of FDI. Foreign direct investment can make a positive
contribution to a host economy by supplying capital, technology, and management
resources that would otherwise not be available and thus boost that country’s economic
growth rate.
_____ predicts that the power of microprocessor technology doubles and its cost of
production falls in half every 18 months.
A. Keynes’s Law
B. Say’s Law
C. Moore’s Law
D. Sullivan Principles
Systematic risk refers to movements in a stock portfolio’s value that are:
A. attributable to macroeconomic forces affecting an economy.
B. specific to the firm or individuals who invest in a portfolio.
C. attributable to factors pertaining to an individual firm.
D. specific to the company that facilitates the investment portfolio.
As a document of title, a _____ can be used to obtain payment or a written promise of
payment before the merchandise is released to the importer.
A. bill of lading
B. letter of credit
C. bill of exchange
D. draft
_____ refers to giving a person in each subunit responsibility for coordinating with
another subunit on a regular basis.
A. Global learning
B. Liaison roles
C. Knowledge network
D. Matrix Structures
Which of the following statements is true of EMCs?
A. An EMC is a transportation company that engages in international business.
B. EMCs are export-import banks that manage foreign exchanges.
C. EMCs are export specialists that act on behalf of their client firms.
D. An EMC is an intermediary that facilitates talks between two nations.
The _____ instrument is designed to address the notion that a leader’s effectiveness is
contextual. It is embedded in the societal and organizational norms, values, and beliefs
of the people being led.
A. GLOBE
B. WVS
C. IND
D. CVS
In Firm A, each division is a self-contained, largely autonomous entity with full
responsibility for its own value creation activities. What type of structure does Firm A
employ?
A. Worldwide product division structure
B. Global matrix structure
C. Worldwide area structure
D. Knowledge network structure
Organizational structure includes several elements. Which of the following is one of
them?
A. The establishment of integrating mechanisms to coordinate the activities of subunits.
B. The horizontal decision-making that occurs daily, for example, on the plant floor to
improve operations.
C. The manner in which decisions are made and work is performed by individuals.
D. The informal division of the organization into cultural groups.
A firm that operates with matrix-type structures in which both product divisions and
geographic areas have significant influence would use which of the following
strategies?
A. International strategy
B. Transnational strategy
C. Global strategy
D. Localization strategy
Economic growth appears to be a function of a country’s capacity for growth and its
_____.
A. previous economic success
B. political environment
C. free market system
D. mixed economy
Multilateral netting is used primarily to:
A. reduce the number of transactions between subsidiaries.
B. avail tax credit from governments.
C. establish a tax treaty amongst multiple countries.
D. to reduce the fixed costs of establishing a subsidiary.
Which of the following is an example of a positive source effect?
A. A 3M Post-it note
B. A Dell laptop
C. An Audi R8
D. An Apple iPod
A _____ brings together those who want to invest money and those who want to borrow
money.
A. consumer market
B. value chain
C. supply chain
D. capital market
The finance minister of a country considers several large, state-owned iron
manufacturing units to be inefficient and a source of corruption. To generate resources
for public expenditure and promote economic growth, the government decides to
auction an entire iron manufacturing plant to sell it to a strategic investor. This process
exemplifies _____.
A. nationalization
B. industrialization
C. liberalization
D. privatization
Which of the following is an action taken by organized labor to respond to the increased
bargaining power of multinational corporations?
A. Trying to establish international labor organizations
B. Increasing competition between national unions
C. Lobbying the European Union for legislation to restrict multinationals
D. Trying to achieve international regulations on multinationals through such
organizations as the United Nations
Which of the following statements is true of debt loans?
A. Management has the discretion in paying the amount to investors.
B. Debt loans should be repaid at regular intervals.
C. Returns from debt loans are variable in nature.
D. Corporations need not pay back the debt loans if they incur losses.
Which of the following is a potential drawback of the worldwide area structure?
A. This structure discourages division of the organization into autonomous entities.
B. This structure makes it difficult to decentralize decisions regarding operations
authority.
C. This structure makes it difficult to realize location and experience curve economies.
D. This structure reduced local responsiveness.
Through its _____ program, the SBA oversees about 850 volunteers with international
trade experience to provide one-on-one counseling to active and new-to-export
businesses.
A. matchmaker
B. SCORE
C. ELAN
D. trade fair
Three sets of related decisions are involved in financial management in an international
business. Which of these involves making decisions about how to fund the chosen
activities?
A. Investment decisions
B. Financing decisions
C. Bilateral decisions
D. Money management decisions
Describe the state of economic integration in Africa. What factors have hindered the
process?
In a company using _____, employees tend to control their own behavior, which
reduces the need for direct supervision.
A. bureaucratic controls
B. cultural controls
C. personal controls
D. output controls
The _____ occurs when a resource is shared by all, but owned by no one, is overused
by individuals, resulting in its degradation.
A. Friedman effect
B. noblesse oblige
C. inequity aversion
D. tragedy of the commons
Tariff rates on agricultural products are generally:
A. much lower than tariff rates on manufactured products or services.
B. much lower than import fees on electronics.
C. much higher than tariff rates on manufactured products or services.
D. much higher than import fees on electronics.
A(n) _____ entails even closer economic integration and cooperation than a common
market.
A. customs union
B. free trade area
C. economic union
D. full political union
_____ is viewed as the most restrictive countertrade arrangement and is primarily used
for one-time-only deals in transactions with trading partners who are not creditworthy
or trustworthy.
A. Switch trading
B. Offset
C. Barter
D. Buyback
Which of the following statements about retail systems is true?
A. One factor contributing to greater retail concentration is an increase in car
ownership.
B. The number of households with refrigerators leads to lesser retail concentration in
developed countries.
C. There is a tendency for greater retail concentration in many developing countries.
D. Retail systems are very fragmented in developed countries.
Private action refers to:
A. public officials extorting income, resources, or the property itself from property
holders.
B. bribing government officials in foreign countries in an attempt to win lucrative
contracts.
C. theft, piracy, blackmail, and the like by private individuals or groups.
D. violations of intellectual property rights.
Why should a firm centralize its decision-making?
Describe importance of accounting information in business.
Explain the changes observed in the risk of investments when an investor increases the
number of stocks in her portfolio.
What is ASEAN? What is its basic goal? How successful is ASEAN?
What are first-mover advantages? Discuss these advantages.
Present the common arguments that favor fixed exchange rates.
Compare and contrast the export assistance provided to German and Japanese
companies with that given to American companies. Discuss the implications of the
differences between the countries.
Explain how equity loans and debt loans differ in terms of attractiveness to businesses.
Identify a key accounting problem that international businesses are confronted with but
that does not confront purely domestic businesses.
How do levels of economic development affect consumer behavior? What are the
implications for marketing strategy?
Differentiate between multipoint pricing and experience curve pricing strategies.
Consider the use of personal controls in international firms. In which type of firm is this
control most common?
Explain how the concept of production efficiency has changed with the rise of flexible
manufacturing technologies.
Discuss the characteristics of globalization.
Explain why the evaluation of a subsidiary should be kept separate from the evaluation
of its manager.
Discuss the reasons why expatriate managers fail to complete their foreign assignment.