An advantage of collaborative agreements is the ability to spread faster geographically.
A currency sells at a forward premium when the forward rate is greater than the spot
rate.
A quota is a quantitative limit on the amount of a product that can be traded.
U.S. companies generally put earlier and more emphasis on countries in which they
perceive it is easier to operate.
The strategy of a firm using an international strategy is likely to entail producing and
marketing mostly standardized products worldwide, with some customization where
and when necessary.
Demand for a country’s independently floating currency is a function of the demand for
that country’s goods, services, and financial assets.
Comparability of economic information among countries is hampered by countries’ use
of different definitions for similar terms.
Executives from the home office typically demand richer compensation packages and
impose higher relocation costs than third-country nationals do.
A company that develops different capabilities and contributions from different
countries and shares them in integrated worldwide operations is using a transnational
strategy.
Expatriate failure, broadly defined, indicates there is a breakdown in a company’s
selection policies to staff its foreign operations.
Under mercantilism, colonial powers sought to run trade surpluses with their colonies
by preventing the colonies from manufacturing.
The most important rationales for NAFTA are geographic proximity and trading
importance.
A market economy is one in which resources are primarily owned and controlled by
individuals and companies.
The SDR is equal in value to the U.S. dollar.
The Third Wave of Democratization was partially triggered by improved
communication systems.
According to experts, stakeholder participation in decision making is effective only in
countries with an educated population.
Subpart F income is passive and usually derived from operations in a tax-haven
country.
Foreign acquisitions are more advantageous than start-ups when the industry has little
excess capacity than when it has a lot of excess capacity.
Globalization refers to all economic transactions among countries.
Fundamentally, the task of HRM is putting the right person into the right job in the right
place at the right time for the right salary.
Headquarters management often feels that people within an established operation are
the best judge of the operation’s investment needs.
Support activities define the infrastructure of the firm and serve as the basis for the
daily implementation of primary activities in the value chain.
Inflation affects interest rates, exchange rates, the cost of living, general economic
confidence, and the stability of the current political system.
Although a company may have a good track record with collaborative arrangements,
this is of little help when negotiating new collaborative arrangements with different
companies.
OPEC is an example of a producer’s cartel that is successful because of its ability to
institute tariffs on oil exports.
Companies around the world typically find it easy to locate a number of executives able
and willing to run foreign operations.
Export intensity, the percentage of total revenues coming from exports, is not always
correlated with company size.
Where future orientation is high, people are more willing to delay gratification by
investing.
The finite nature of natural resources should work as a disadvantage for the export
prices of developing countries.
The most common way of identifying market segments is through demographics.
Managers use a value chain analysis to determine how the company will design, make,
move, and sell products; how it will find efficiencies in doing so; and how it will
coordinate the decisions in one part of the business with those made in other parts.
All of the following countries have a totalitarian political system EXCEPT ________.
A) China
B) Russia
C) South Korea
D) Saudi Arabia
Barkely Enterprises, a U.S. manufacturer, received assistance from the Overseas Private
Investment Corporation when it expanded operations into Saudi Arabia. Which of the
following types of support did Barkely most likely receive from OPIC?
A) financial capital
B) cultural training
C) legal guidance
D) political risk insurance
Which of the following primarily triggered Toyota’s investment in the European Union?
A) Europeans demanded affordable, high quality cars from Japan.
B) A common currency gave Europeans more buying power.
C) The EU lowered trade barriers on foreign auto imports.
D) Japan and the EU formed a free trade agreement.
Ellen, a U.S. citizen, worked for a U.S. firm in Germany for four years and was
transferred back to the firm’s home office in Chicago two months ago. Ellen feels
significant dissatisfaction with her job and life in Chicago, which is most likely a result
of ________.
A) reverse culture shock
B) polycentrism
C) culture shock
D) ethnocentrism
Cost-of-living allowances given to an expatriate during his or her foreign assignment
________.
A) usually involve a compensation reduction because of lower costs abroad
B) are due to the difficulty of duplicating a particular way of living abroad
C) are usually eliminated over time
D) increase the longer the individual is overseas
Which of the following is an example of interest arbitrage?
A) investing in debt instruments in different currencies or different countries
B) selling U.S. dollars for Swiss francs, then selling Swiss francs for British pounds,
then selling British pounds for U.S. dollars
C) investigating different commercial banks to find the best exchange rate
D) an American investing in a London-based company
A(n) ________ manager champions the ways of foreign markets as comparable, if not
more enlightened, than the practices of his or her parent company and home nation.
A) ethnocentric
B) geocentric
C) monocentric
D) polycentric
As described in the opening case, SpinCent’s CEO analyzed foreign markets, assessed
industries, prepped his company, traveled overseas, and hired trustworthy distributors.
SpinCent manages the export process including making and marketing its products for
foreign buyers. The nature of these activities shows that the leadership of SpinCent is
committing the company to ________.
A) countertrade
B) direct exporting
C) indirect exporting
D) third party logistics
A free trade agreement is likely to increase efficiency because of ________.
A) decreased competition
B) increased competition
C) decreased trade diversion
D) decreased trade creation
Suzanne, an investor, tends to invest in corporations that are headquartered in countries
that value financial transparency. A firm based in which of the following countries
would most likely appeal to Suzanne?
A) Japan
B) Germany
C) Switzerland
D) United Kingdom
What problem most likely arises when a company wishes to sell techniques/technology
that it has either not yet fully developed or used commercially?
A) A buyer is reluctant to buy what it has not seen, and a seller risks divulging secretive
information.
B) Most governments want to see contract details, which companies feel are
proprietary.
C) It is difficult to develop a rapport between negotiating parties in this type of
situation.
D) Parties can seldom agree on the desired level of quality control.
Which of the hypothetical new products, if successful, would most likely diffuse its
production and sales according to the product life cycle theory?
A) a Ferrari sports car selling for $200,000 to a niche, upper-end market
B) a Sony television that receives global transmissions without a satellite dish or cable
connection, introduced at a high price but targeted eventually for sale to a mass market
C) a new Diet Coca-Cola soft drink flavored with cranberries
D) a Kyocera plastic chip carrier, which is expected to be quickly obsolete because of
innovations
A ________ law system is based on tradition, judge-made precedent, and usage and
assigns a preeminent position to existing case law as a guide to dispute resolution.
A) theocratic
B) common
C) customary
D) civil
In terms of political risk, it is most accurate to state that high risk ________.
A) affects all geographic regions of a country equally
B) affects all foreign companies in the same manner
C) if avoided, may lead to higher competitive risk
D) triggers government turnovers
________ is an idea perfected by Japanese manufacturers to ensure quality in products.
A) Lean manufacturing
B) Total quality management
C) Zero defects
D) Kaizen
Protectionism will most likely affect which aspect of a company’s operations?
A) selecting employees
B) investing short-term capital
C) acquiring foreign supplies
D) relocating personnel overseas
Why is the United States both an exporter and importer of such products as vehicles and
passenger aircraft?
A) Buyers procure similar products for replacement parts.
B) Transportation costs and cultural differences limit exporters.
C) Companies differentiate products to appeal to different consumers.
D) Bilateral trading agreements require this interchange for a number of products.
Chrysler granted South East Motor (a company in China) rights to produce its Grand
Voyager minivan for sale in China in exchange for a fee. This is an example of a
________.
A) licensing agreement
B) bargaining school arrangement
C) technology appropriation
D) turnkey operation
Which of the following members of the European Union has NOT adopted the euro?
A) Denmark
B) Estonia
C) Germany
D) Greece
Subpart F income is ________.
A) usually earned by a branch rather than a corporation
B) not taxed to the parent unless a dividend is remitted
C) not eligible for the tax credit
D) passive and usually derived from operations in a tax-haven country
The fact that an English word such as blue jeans has entered the Spanish language,
while a Spanish word such as macho has come into American English illustrates that
________.
A) cultural diffusion is a two-way process
B) cultural trends come from emerging nations
C) existing national borders are shifting
D) material cultures are becoming universal
Creolization refers to ________.
A) government efforts to maintain a distinct cultural identity through legislation and
language
B) the process of mixing elements of an outside culture with those of a national culture
C) the use of stereotypes to describe a culture
D) changes as cultures evolve over time
The principle by which the tax authorities allow firms to reduce their tax liability by the
amount of income taxes paid to foreign governments is known as ________.
A) transfer pricing
B) a tax credit
C) lag strategies in tax planning
D) passive income reductions
Which of the following is NOT a reason a company would deal in foreign exchange?
A) to pay or receive dividends in a foreign currency
B) to speculate on possible future movements in a currency
C) to buy and sell merchandise denominated in a foreign currency
D) to import merchandise denominated in its currency rather than the currency of the
exporter
Meeting the needs of the present without compromising the ability of future generations
to meet their own needs is known as ________.
A) competitive advantage
B) the Kyoto Protocol
C) sustainability
D) externality
Amazon relies on the Internet to join together suppliers with companies and companies
with customers. Amazon is most likely using ________.
A) value-added networks
B) e-commerce
C) electronic data interchange
D) private technology exchange
Some MNEs that have tried contemporary structures have run into problems, most
notably ________.
A) frequent managerial intervention in decision making
B) relentless centralization of decision making
C) employees too motivated by bonuses
D) resource competition
Terrell, a manager with Qualsys Technologies, has been on an expatriate assignment in
Russia for the last three years. Terrell’s foreign assignment has ended, and he is working
with HR to return to the United States and begin a new job at the firm’s headquarters in
Philadelphia. In which activity is Terrell most likely involved?
A) expatriation
B) repatriation
C) demotion
D) promotion
Which of the following is NOT a disadvantage of the international strategy?
A) Headquarters can misread foreign-market opportunities and threats.
B) The transfer of core competencies to foreign markets is complicated by the necessity
to adapt to local needs.
C) Local subsidiaries are not given the opportunity to adapt value activities and share
what they have learned with headquarters.
D) The company can be blindsided by an unexpectedly innovative rival in a foreign
market.
Turnkey projects generally differ from other forms of international business in that
________.
A) they tend to be smaller
B) customers are more likely private companies
C) they are more often located in remote areas
D) they depend almost entirely on acquisitions rather than greenfield operations
All of the following are possible advantages of globally standardized advertising
programs EXCEPT ________.
A) cost savings
B) improvement of local-level quality
C) avoidance of legal impediments
D) faster entry into different markets
All of the following are ways to control currency convertibility EXCEPT ________.
A) import licenses
B) multiple exchange rates
C) import deposits
D) purchasing power parity