When the foreign exchange market determines the relative value of a currency, we say
that the country is adhering to a _____ regime.
A. currency board exchange
B. pegged exchange rate
C. fixed exchange rate
D. floating exchange rate
According to Ricardo’s theory of comparative advantage, countries should:
A. specialize in the production of those goods that it produces most efficiently.
B. specialize in the production of those goods that their competitors in the world market
currently have monopolies on.
C. produce all the products for which they have an absolute advantage.
D. produce only the products for which they have an absolute advantage.
_____ refers to the movement of raw material, component parts, and finished goods
throughout the global supply chain.
A. Distribution
B. Transportation
C. Sourcing
D. Logistics
In the _____ program organized by the U.S. Department of Commerce, department
representatives accompany groups of U.S. businesspeople abroad to meet with qualified
agents, distributors, and customers.
A. best prospects
B. SCORE
C. capital assistance
D. matchmaker
By its very nature, _____ limits a firm’s ability to utilize a coordinated strategy.
A. licensing
B. turnkey contracting
C. franchising
D. exporting
In ____, the contractor agrees to handle every detail of the project for a foreign client,
including the training of operating personnel.
A. exporting
B. licensing
C. franchising
D. turnkey projects
Trade unions around the world:
A. developed simultaneously and in coordination with each other.
B. are widely varied in their structure.
C. have virtually the same ideology.
D. employ the same union structure.
Which of the following is an ill antiglobalization protestors assign to globalization?
A. Job growth in industries under attack from foreign competitors
B. Upward pressure on the wage rates of unskilled workers
C. Environmental degradation
D. Cultural insularity of global media and MNEs
Concentration of production is appropriate when:
A. the product serves universal needs.
B. the product does not serve universal needs.
C. the product’s value-to-weight ratio is low.
D. volatility in important exchange rates is expected.
The threat of _____ limits the ability of a firm to use aggressive pricing to gain market
share in a country.
A. specific tariffs
B. import quotas
C. countervailing duties
D. antidumping action
What is the term that describes when two or more enterprises encounter each other in
different regional markets, national markets, or industries?
A. Multipoint competition
B. Monopoly
C. Location-specific competition
D. Oligopoly Multipoint competition arises when two or more enterprises encounter
each other in different regional markets, national markets, or industries.
_____ is an alternative means of structuring an international sale when conventional
means of payment are difficult, costly, or nonexistent.
A. Floating exchange system
B. Countertrade
C. Letter of credit trade
D. Fixed exchange system
Which of the following is a country in which banks emerged as the main providers of
capital to enterprises?
A. United States
B. Britain
C. Philippines
D. Switzerland
The main advantage of _____ is that it gives the firm a much greater ability to build the
kind of subsidiary company that it wants.
A. an acquisition
B. strategic alliances
C. greenfield investment
D. franchising
The basic strategy paradigm suggests that to maximize its profitability, a firm should do
which of the following?
A. Choose, according to strategy, any position on the efficiency frontier as all positions
are viable.
B. Pick a position on the efficiency frontier that is viable in the sense that there is a low
product demand anticipated.
C. Configure its external operations so that they support the position of diminishing
returns.
D. Make sure that the right organization structure is in place to execute the strategy.
Country X and Country Y reach an agreement to boost bilateral trade. They agree to
remove all barriers to the trade of goods and services. They, however, are free to
determine their own trade policies with regard to nonmembers. Which level of
economic integration is this an example of?
A. A customs union
B. An economic union
C. A common market
D. A Free trade area
According to Geert Hofstede’s study, which of the following cultural dimensions would
be characterized by a greater readiness to take risks and less emotional resistance to
change?
A. High power distance cultures
B. Low uncertainty avoidance
C. High collectivism
D. Low power distance cultures
Which branch of economic theory seeks to explain why firms often prefer FDI over
licensing as a strategy for entering foreign markets?
A. Internalization theory
B. Product life-cycle theory
C. Multipoint competition theory
D. Strategic behavior theory A branch of economic theory known as internalization
theory seeks to explain why firms often prefer foreign direct investment over licensing
as strategy for entering foreign markets.
Financial management in an international business includes three sets of related
decisions. Which of these involves making decisions about how to manage the firm’s
financial resources most efficiently?
A. Multilateral decisions
B. Financing decisions
C. Investment decisions
D. Money management decisions
An equity loan is made when:
A. a corporation pledge equities or other assets to borrow money.
B. corporations avail cash loans from individuals.
C. a corporation sells stock to investors.
D. corporations issue bonds to individual investors.
Which of the following is a reason that little progress has been made toward the
ambitious goals set at the 1992 Earth Summit in Rio de Janeiro?
A. China has shown a strong appetite to adopt tighter pollution controls.
B. Political cooperation in the U.S. Congress promotes domestic action.
C. There is a culture of denial in the United States.
D. Trade liberalization efforts have not been rolled back.
Which of the following is an advantage of establishing cross-functional product
development teams?
A. It reduces the need for collaboration within the development team.
B. It helps firms reduce the status differences between employees.
C. It facilitates integration between different functions in a firm.
D. It helps teams reduce the conflicts within product development teams.
The simple comparative advantage model assumed that trade:
A. changes efficiency with which a country utilizes resources.
B. changes a country’s stock of resources.
C. allows for dynamic changes in the marketplace.
D. does not change a country’s stock of resources.
Mendenhall and Oddou’s “others-orientation” dimension, in their study on what predicts
success in foreign jobs postings, refers to the:
A. expatriate’s self-esteem, self-confidence, and mental well-being.
B. expatriate’s ability to interact effectively with host-country nationals.
C. expatriate’s ability to understand why people of other countries behave the way they
do.
D. relationship between the country of the assignment and how well an expatriate
adjusts to a particular posting.
The principle of mercantilism views trade as a(n) _____ game.
A. advantage
B. positive-sum
C. zero-sum
D. negative-sum
Identify the correct statement about the PPP theory.
A. It predicts that exchange rates are determined by relative prices.
B. It yields accurate predictions of short-run movements in exchange rates.
C. It best predicts exchange rate changes for countries with low rates of inflation.
D. It includes transportation costs and trade tariffs.
In many countries entrepreneurs and other business leaders, eager to protect their
property rights and ensure the dispassionate enforcement of contracts, had pushed for
_____. This contributed to a wave of democratic revolutions during the late 1980s and
early 1990s.
A. state ownership of productive resources
B. regulated markets
C. democratic reforms
D. planned economies
Which of the following is a step in the shift toward a market-based economic system?
A. Increasing trade barriers
B. Increasing price controls
C. Nationalization
D. Creation of a legal system to safeguard property rights
The _____ obliges member states to make the bribery of foreign public officials a
criminal offense and excludes facilitating payments made to expedite routine
government action from the convention.
A. Convention on Combating Bribery of Foreign Public Officials
B. Foreign Corrupt Practices Act
C. Convention on International Business Transactions
D. Universal Declaration of Human Rights
An importer obtains a _____ from a local bank in a typical international transaction.
A. draft
B. bill of lading
C. letter of credit
D. bill of exchange