Which type of exchange rate arrangement is based on supply and demand?
A) soft peg
B) hard peg
C) crawling
D) floating
Research has shown that past exchange rates are an accurate predictor of future
exchange rates ________.
A) only in the long run
B) only in the very short run
C) only during times of economic crisis
D) only during times of economic calm
A global strategy tends to be more successful when ________.
A) buyers are looking for customized products at bargain prices
B) the industry’s product is a commodity
C) entry barriers are low for new firms
D) suppliers have little bargaining power
Gates Manufacturing is striving to improve its performance reliability, speed of
delivery, and product reliability. Gates is most likely focusing on a(n) ________
strategy.
A) flexibility
B) innovation
C) dependability
D) quality
The benefits of retaining a core competency within a company and purposefully
threading that core competency through the value chain are referred to as ________
advantages.
A) internalization
B) domestic
C) location
D) ownership
This spring break you are planning to leave the United States and visit London, where
you will stay in a hotel for 10 days. The London hotel will be performing a(n)
________.
A) indirect merchandise export
B) merchandise export
C) service export
D) service import
At Fidelity Enterprises, raw materials, parts, and components are acquired from
suppliers as they are needed in the manufacturing process so that Fidelity does not have
to store large inventories. Which of the following does Fidelity most likely use?
A) just-in-time (JIT)
B) total quality management (TQM)
C) six Sigma
D) acceptable quality level (AQL)
Most world trade takes place ________.
A) between developed countries and developing countries
B) among developed countries
C) among developing countries
D) between raw material exporters and manufacturing exporters
Countertrade is an alternative means of structuring an international sale when
________.
A) natural resources are highly desirable
B) an importer is able to obtain a bank loan
C) an importer does not belong to the World Bank
D) conventional forms of payment are difficult, costly, or nonexistent
________ is a general, sustained rise in prices measured against a standard level of
purchasing power.
A) Deflation
B) Inflation
C) Expansion
D) Reflation
Which of the following is a common shortcoming of studies examining culture in
different countries and regions?
A) Cultures are static, which leads researchers to draw false conclusions from old data.
B) It is impossible to compare countries because of differences in data.
C) Responses are reported in averages, which can lead to a belief in unrealistic
stereotypes.
D) People are reluctant to complain about their own cultures, so they present only
positive opinions to researchers.
Which of the following is a problem with the infant-industry argument for protection?
A) Most developed countries increasingly have a larger portion of retirees than youth.
B) Consumer groups become very active in protesting the higher prices that result
during infancy.
C) Other countries retaliate by limiting exports of technology needed by the infant
industry producers.
D) If the industry does not lower costs sufficiently to be competitive, it becomes a
formidable pressure group for continued protection.
When a company identifies a market segment on a global basis, such as a segment
based on income, it will likely ________.
A) encounter a similar percentage of the population in each country within that segment
B) find that a niche market in one country may be a mass market in another
C) find that the market in each country is so dispersed that distribution is difficult
D) be aiming at a mass market in each country
As a trading currency, the euro is ________.
A) more widely traded than the U.S. dollar in seven of the top ten currency markets in
the world
B) widely traded in London but not in any other major foreign-exchange markets in the
world
C) becoming more popular than the U.S. dollar because of its global acceptance
D) gaining ground against the U.S. dollar in Eastern European countries
Tom, a manager at an MNE, has been given the task of identifying a pool of companies
with which the firm might form collaborative arrangements. Which of the following
activities would be LEAST useful for Tom?
A) attending technical conferences
B) monitoring industry journals
C) attending trade fairs
D) constructing turnkey facilities
Which of the following is true of export trading companies in the United States?
A) They are like independent distributors that match buyers with buyers.
B) They are prohibited from working with a firm’s competitors due to antitrust laws.
C) They must be established independently of the company in order to avoid a conflict
of interest.
D) They have been a successful form of export intermediation in recent years.
Assume the following conditions: In the United States it takes 5 units of resources to
produce a ton of potatoes and 10 to produce a ton of coal. In Canada it takes 6 units of
resources to produce a ton of potatoes and 9 to produce a ton of coal. According to the
theory of absolute advantage, ________.
A) the United States should export potatoes to Canada and import coal from Canada
B) the United States should export coal to Canada and import potatoes from Canada
C) the United States should import both potatoes and coal from Canada, while
concentrating on production of more valuable goods
D) there would be no basis for trade
Visible exports and imports are ________.
A) merchandise imports and exports
B) the sum total of goods and services traded
C) international transactions paid for in money rather than barter
D) typically a country’s least common international economic transactions
Compared with a forward contract, a futures contract ________.
A) is more flexible
B) is normally available through commercial banks
C) does not guarantee a future exchange rate
D) is only traded on an exchange
The primary limitation with the product division structure is the ________.
A) cost of duplicated functions and international activities
B) poor response to local market demands for a product
C) inability to transfer core competencies within units
D) difficulty of selling product lines
A major force leading to the convergence of accounting standards is ________.
A) a shareholder orientation towards FDI
B) the global separation of capital markets
C) MNEs’ needs for foreign capital
D) pressures from the EU
________ are the two basic strategies for creating value and attaining a competitive
advantage in an industry.
A) Diversification and niche marketing
B) Industry leadership and market dominance
C) Customer satisfaction and product innovation
D) Cost leadership and differentiation
Which of the following BEST describes the special drawing right?
A) an international reserve asset created to supplement members’ existing reserve assets
B) the official currency for international trade established by the World Bank
C) a substitute for the fixed value of gold as determined by currency rates
D) a contribution made by countries to join the IMF
Global integration occurs as countries from all over the world decide to cooperate
through the ________.
A) EU
B) NAFTA agreement
C) WTO
D) CARICOM
A distinct advantage of an international strategy is ________.
A) transferring core competencies to foreign markets
B) reaping benefits of global learning
C) customizing product offerings to local conditions
D) leveraging local managers’ knowledge of their markets
The trade theory that says a country should export more than it imports is known as
________.
A) mercantilism
B) absolute advantage
C) comparative advantage
D) import substitution
A(n) ________ is a large, liquid financial asset that can be traded anywhere at any time.
A) international stock
B) global bond
C) global equity
D) Eurodollar
Baldani Manufacturing, an Italian firm, plans to expand into Asia. In order to take
advantage of regional trading groups, Baldani will most likely need to change its
________.
A) operating strategies
B) selection test methods
C) bilateral trade agreements
D) economic integration methods
A problem that can arise in using trade protectionism to develop international
competitiveness for a domestic industry is that ________.
A) it is difficult to identify industries that have a high probability of reaching
competitiveness
B) assistance should be given only if entry barriers to new firms are very low
C) the protecting countries lose too much revenue from import duties
D) a short product life cycle makes the industry quickly noncompetitive
In a practical sense, the term political system is meant to signify the ________.
A) organization of military power in a country
B) working government in a country
C) philosophical orientations in a country
D) cultural values in a country
Foreign source income that is derived from the active conduct of a trade or business and
therefore subject to U.S. taxation is known as ________.
A) passive income
B) active income
C) uncontrollable foreign corporation income
D) tax haven income