Which of the following is NOT true about Islam?
A) Islam prohibits gambling.
B) Islam condemns charging interest for money loaned.
C) Islam discourages free trade.
D) Islam prohibits drinking alcoholic drinks .
Through ________, a subsidiary can defer payment for goods and services received
from its parent firm.
A) trade credits
B) royalty payments
C) fronting loans
D) dividend remittances
Ciao Manufacturing Location (Scenario)
An Italian car company, Ciao, has made plans to expand its operations by building a
manufacturing facility in a foreign market. Ciao has been very successful selling its
small, economical, and stylish cars in Italy and Spain, and firm managers believe that
Ciao cars will be equally profitable in other markets. Ciao managers are trying to
determine whether Canada or Russia would be the best location for a new automobile
manufacturing facility.
Which of the following most likely supports the decision by Ciao managers to build a
plant in Russia?
A) The Russian government is transparent and totally corruption-free.
B) Ciao would be able to take advantage of the North American Free Trade Agreement.
C) Intellectual property lawsuits are common in Russia.
D) Land and construction costs are relatively inexpensive in Russia.
Which of the following is a typical outcome of free trade?
A) Unrestricted international trade generally increases the overall prosperity of poor
countries.
B) Free trade sustains inflation in developing economies.
C) Domestically produced products tend to be cheaper than imported products.
D) Lower-cost imports cause living standards to deteriorate.
Which of the following is an example of nontariff trade barrier?
A) Gayle Inc. is a U.S.-based retailer that imports cosmetic products manufactured in
Thailand. These products pass through U.S. customs and are subject to a 5 percent
import duty.
B) The U.S. imports chocolates manufactured in Belgium that cost $65 a box with
taxes.
C) The U.S. Department of Commerce announced that white sugar imports will be
limited to 7,500 million tons.
D) Spices imported from India to the U.S. for sale in the domestic market are subject to
a 10 percent import duty.
Which of the following is an example of a supranational institution?
A) the World Intellectual Property Organization
B) the UNICEF
C) the Red Cross
D) the World Trade Organization
A firm that uses the Internet to provide detailed product information and the means for
foreigners to buy offerings is using ________.
A) modular architecture
B) direct marketing
C) lengthy distribution channels
D) internal marketing
________ refers to a distinctive tradition or institution strongly associated with a
particular society.
A) Cultural metaphor
B) Totem
C) Moiety
D) Cultural pluralism
International Price Setting (Scenario)
The Comfy Couch Corporation (CCC) is a leading American manufacturer of sofas,
sectionals, and lounge chairs. Managers from the U.S.-based firm recently met a
London retailer who expressed an interest in selling CCC lounge chairs in his stores.
The retailer sells a number of different furniture brands in his stores, so CCC managers
need to price their furniture appropriately if the firm is to be competitive in the
European market.
If CCC managers employ rigid cost-plus pricing they would most likely be
disadvantaged because ________.
A) rigid cost-plus pricing often fails to account for local market conditions
B) through rigid cost-plus pricing, added costs of doing business abroad cannot be
adjusted
C) rigid cost-plus pricing overly focuses on the prevailing conditions in the local
markets
D) rigid cost-plus pricing is primarily driven by buyer demand in the local markets
________ refers to ideas or works created by individuals or firms and includes a variety
of proprietary, intangible assets: discoveries and inventions; artistic, musical, and
literary works; and words, phrases, symbols, and designs.
A) Global sourcing
B) Corporate governance
C) Constant capital
D) Intellectual property
A culturally diverse team would ________.
A) use diverse languages for business communications across various teams across the
globe
B) follow country-specific ethical standards across the globe
C) use local employees, for accountability, for all major company decisions
D) create a global view inside the firm while remaining in touch with local realities
________ refers to the values, beliefs, customs, arts, and other products of human
thought and work that characterize the people of a given society.
A) Ethnicity
B) Heritage
C) Culture
D) Race
Which of the following refers to an advantage of firms that enter new markets through
FDI?
A) low employee attrition
B) minimal competition from other players in the market
C) direct selling of products to consumers through the Internet
D) control over pricing strategy
Which of the following is a disadvantage of licensing for technological firms?
A) It is not appropriate for entering markets that pose substantial country risk.
B) It requires high capital investment and the presence of the technological firm in the
foreign market.
C) It restricts flexibility in the foreign market due to the technological firm’s ownership
of key assets in the target market.
D) It increases the risk of creating a future competitor.
Australian Business Partner (Scenario)
The Coffee Cup Corporation (CCC) is a large U.S.-based coffee retailer with stores
across America. After months of research, CCC executives have decided to open their
first international store in Sydney, Australia. CCC managers have been assigned the
task of selecting an appropriate Australian business partner for the coffee company.
CCC managers flew to Sydney to interview potential business partners, and they have
narrowed the list to three.
Which of the following statements most likely supports CCC managers selecting
Business Partner Y instead of Business Partner Z?
A) Business Partner Y has a good reputation in the marketplace.
B) Business Partner Y is fairly young and hence requires experience in the food and
beverage industry.
C) Business Partner Y has distinct goals and objectives compared to CCC.
D) Business Partner Y has the most experience in the automobile industry but now
wants to venture into the food and beverage industry.
Richard Johnson, an American citizen, is a senior manager in a telecom company based
in Texas. He is currently posted in and works from the company’s subsidiary in Uganda,
Africa. Richard is a ________.
A) host-country national
B) parent-country national
C) third-country national
D) repatriate
Which of the following is a characteristic of an equity joint venture?
A) simple management structure
B) facilitates knowledge transfer between partners
C) easy to terminate
D) lesser exposure to political risk
World Conference (Scenario)
At a world conference to be conducted in Tokyo, representatives from nearly every
country in the world will gather to discuss issues related to international trade.
Representative A is from a totalitarian state. Representative B is from a socialist nation.
Representative C hails from a democratic society.
Which of the following countries would Representative A most likely be from?
A) Denmark
B) Zimbabwe
C) Sweden
D) Australia