Many firms, of all national origins, increasingly depend on _____ for their competitive
advantage.
A. globally dispersed production systems
B. specific tariffs
C. infant industries
D. subsidies
The need for coordination between subunits is highest in firms pursuing a(n) _____.
A. localization strategy
B. international strategy
C. global strategy
D. transnational strategy
A firm may be prevented from using _____ because of advertising regulations.
A. corporate advertising
B. culturally significant advertising
C. marketing strategies
D. standardized advertising
Which of the following is the reason why the current foreign-exchange system is
sometimes thought of as a managed-float system?
A. The exchange rates of a currency are determined by market forces.
B. Governments intervene frequently in the foreign exchange market.
C. Major currencies are allowed to freely float against each other.
D. Countries use a reference currency to estimate the value of their currencies.
The value of U.S dollar increased between 1980 and 1985:
A. despite running a growing trade deficit.
B. despite exporting substantially more that it imported.
C. because of a growing trade surplus.
D. because the country’s status as a world financial leader was becoming apparent.
Which of the following is an effective strategy for implementing organizational change?
A. Physically move the organization to a new state.
B. Keep the organizational structure.
C. Refreeze the organizational structure.
D. Slowly, through incremental changes, rearrange the organizational structure.
An Italian corporation issues a bond denominated in dollars. This is an example of a
_____.
A. foreign bond
B. Eurobond
C. micro bond
D. regulatory bond
A _____ allows for a delay in payment—normally 30, 60, 90, or 120 days.
A. bill of lading
B. sight draft
C. bill of exchange
D. time draft
There are five strategic levels for global purchasing that can be undertaken by a global
company. At which level do companies engage in international purchasing activities as
part of the firm’s overall supply chain management strategy?
A. Level I
B. Level II
C. Level III
D. Level IV
The connection between _____ and _____ has important implications for the choice of
countries in which to locate production facilities and do business.
A. culture; competitive advantage
B. moral principles; values
C. class system; society
D. values; norms
Paralleling the spread of democracy, since the 1980s there has been the transformation
from:
A. free-market economies to socialist economies.
B. mixed economies to collectivist economies.
C. open economies to closed economies.
D. command economies to market-based economies.
Which of the following is an advantage of using the gold standard?
A. The standard makes sure that goods are not priced out from markets due to inflation.
B. The standard does not require a commitment from nations to maintain its currency’s
value.
C. The standard effectively prevents the devaluation of currencies across the world.
D. The standard contains a powerful mechanism for achieving balance-of-trade
equilibrium by all countries.
Which of the following is true regarding culture?
A. Culture is not static.
B. Culture does not vary across and within nations.
C. Culture is a system of values and norms that are kept between each individual.
D. Culture involves the knowledge and beliefs of one individual.
Which of the following is the most common approach to expatriate pay?
A. Balance sheet approach
B. Net-to-net approach
C. Host-country approach
D. Cost-based approach
Until 1995, GATT rules applied only to:
A. services.
B. industrial goods.
C. textiles.
D. agricultural products.
Until 1995, GATT rules applied only to industrial goods (i.e., manufactured goods and
commodities). Until the Uruguay Round, GATT rules had applied only to trade in
manufactured goods and commodities. In the Uruguay Round, member countries
sought to extend GATT rules to cover trade in services.
What are the two main functions of the foreign exchange market?
A. Trading of equities of foreign companies and currency conversion
B. Reducing currency volatility and setting interest rates
C. Insuring companies against interest rate risk and enabling imports and exports
D. Currency conversion and providing some insurance against foreign exchange risk
The process of identifying distinct groups of consumers whose purchasing behavior
differs from others in important ways is known as _____.
A. demographic analysis
B. market segmentation
C. product mix
D. consumer behavior analysis
An international business, unlike a multinational enterprise:
A. needs to have manufacturing units in at least two foreign nations.
B. needs to manufacture products or provide services that target a global market.
C. need not customize its products to the requirements of national markets.
D. need not invest directly in operations in other countries.
The emphasis on local responsiveness in firms pursuing a localization strategy creates
strong pressures for:
A. centralizing all decisions regarding marketing, R&D, and human resource
management.
B. decentralizing operating decisions to foreign subsidiaries.
C. centralizing all operating decisions.
D. global learning.
The international trade secretariats (ITS) have had virtually no real success. Which of
the following is a cause of the ITS’s ineffectiveness?
A. National unions compete with each other to attract investment from international
businesses.
B. The structure and ideology of unions tend to be very similar from country to country.
C. Organized labor has had overwhelming success in its efforts to get national and
international bodies to regulate multinationals.
D. The codes of conduct developed by International Labor Organization and the
Organization for Economic Cooperation and Development prevented the ITSs from
exercising absolute power.
Which of the following is an advantage of franchising?
A. A firm takes profits out of one country to support competitive attacks in another.
B. A firm is relieved of many of the costs and risks of opening a foreign market on its
own.
C. It guarantees consistent product quality and achieves experience curve and location
economies.
D. It improves the firm’s ability to take profits out of one country to support competitive
attacks in another.
Which of the following is a drawback of government intervention?
A. It may invite retaliation and trigger a trade war.
B. The policies may be captured by foreign investors and turned to their advantage.
C. Despite being well-executed, the intervention is unlikely to work.
D. The usually establish new tariff levels on technology—to the detriment of all in the
industry.
If a domestic industry lacks the capacity to meet demand, an _____ can raise prices for
both the domestically produced and the imported good.
A. import tariff
B. import quota
C. import subsidy
D. ad valorem tariff
Which of the following is a characteristic of a foreign debt crisis?
A. Narrowing current account deficit
B. Excessive expansion of domestic borrowing
C. Low relative price inflation rates
D. Asset price deflation
Why is it said that not all the new jobs created by FDI represent net additions in
employment?
A. Because of the uncertainty of the overall economic environment
B. Because most of the job creation is indirect in nature
C. Because jobs created by an investment may be offset by the jobs lost in domestic
companies
D. Because the unemployment rate more or less remains constant over the short-term
Cynics argue that not all the “new jobs” created by FDI represent net additions in
employment. In the case of FDI by Japanese auto companies in the United States, some
argue that the jobs created by this investment have been more than offset by the jobs
lost in U.S.-owned auto companies, which have lost market share to their Japanese
competitors.
Although many countries have stringent intellectual property regulations on their books,
the enforcement of these regulations has often been lax. This has been the case even
among many of the 185 countries that are now members of the _____, all of which have
signed international treaties designed to protect intellectual property.
A. World Intellectual Property Organization
B. General Agreement on Tariffs and Trade
C. Business Software Alliance
D. Trade-Related Aspects of Intellectual Property Rights (TRIPS)
Through their choice of policies, home countries can both encourage and restrict FDI
by local firms. Policies designed to encourage outward FDI include which of the
following?
A. Tax rebates
B. Political pressure
C. Expropriation
D. Domestic risk insurance Through their choice of policies, home countries can both
encourage and restrict FDI by local firms. Policies designed to encourage outward FDI
include: foreign risk insurance, capital assistance, tax incentives, and political pressure.
A major aspect of a(n) _____ is a belief in global learning—the idea that valuable
knowledge does not reside just in a firm’s domestic operations.
A. global standardized strategy
B. localization strategy
C. transnational strategy
D. international strategy A major aspect of a transnational strategy is a belief in global
learning—the idea that valuable knowledge does not reside just in a firm’s domestic
operations; it may also be found in its foreign subsidiaries. Foreign factories that
upgrade their capabilities over time are creating valuable knowledge that might benefit
the whole corporation.
United States sells bonds that are denominated in dollars in Europe. This is an example
of a(n) _____ bond.
A. foreign
B. Euro
C. micro
D. regulatory
In a(n) _____, the limited pool of investors implies that borrowers must pay more to
persuade investors to lend them their money.
A. purely domestic market
B. mixed market
C. international market
D. purely Euro market
A firm pursuing a(n) _____ will have a strong incentive to decentralize
decision-making.
A. localization strategy
B. transnational strategy
C. global standardization strategy
D. international strategy
With a concentrated retail sector:
A. a relatively large sales force is required.
B. the orders generated from each sales call can be large.
C. there are long channels of distribution.
D. it is expensive for the firm to make contact with each individual retailer.
Which of the following is focused on making low-interest loans to cash-strapped
governments in poor nations that wish to undertake significant infrastructure
investments?
A. The WTO
B. The GATT
C. The World Bank
D. The IMF
