An effective code of conduct reports results to external stakeholders.
An internal code of conduct is a set of guidelines, recommendations, and rules issued
by entities within society but outside the firm with the intent of affecting the behavior
of international business entities in order to enhance corporate responsibility.
In a country’s balance of payments, the current account and the capital account
represent equal values.
According to the Treaty of Maastricht, a euro applicant must have a total outstanding
government debt that does not exceed 60% of its GDP.
A company may use outsourcing as an implied threat to underperforming employees.
A company with limited resources is more likely to achieve national distribution within
a small country than within a large country.
Arbitrage is the purchase of foreign currency on one market for immediate resale on a
foreign market in order to profit from a price discrepancy.
The major objective of the European Central Bank is to control taxes as a means of
deficit spending.
Another source of financing, in which an investor takes an ownership position in return
for shares of stock in the company and the promises of capital gains, is called debt
financing.
Keiretsus is one of the two major configurations of sourcing.
The BRICs are the strongest developed economies in the world.
The various activities of HRM perform best when managers link them to the strategy of
the firm.
According to surveys, the most common concern regarding international trade is a
shortage of working capital to finance exporting activities.
Unlike the geocentric and polycentric mindsets, the ethnocentric mindset is not tied to a
particular home or host nation.
In response to the global financial crisis, the United States government took actions that
increased economic freedom.
An effective tariff is the sum of the ad valorem tariff plus the specific duty.
In collectivist cultures based on kinship, security and social needs are met more
effectively in the workplace than at home.
According to the accounting concept of mutual recognition, companies are required to
reconcile financial statements to local GAAP.
A firm that begins operating in a culturally similar foreign country will most likely face
few necessary cultural adjustments.
Tel-Comm Tek is a company that believes it has core competencies that its competitors
in foreign markets lack and that it faces relatively weak pressures for local
responsiveness and cost reductions. Tel-Comm Tek is likely to adopt an international
strategy.
There are more cost savings for international branding standardization than for
international product standardization.
Historically, companies searching their ranks for potential expatriates looked first for
individuals with the necessary language proficiency and then evaluated their technical
competence.
Change agents intentionally cause or accelerate social and cultural change.
The typical tax-haven subsidiary owns the common stock of its related operating
foreign subsidiaries.
Many firms gain a global competitive advantage by fostering cultural diversity.
The infant-industry argument for trade protection holds that an industry needs
government protection from imports until it becomes competitive enough in world
markets.
A market economy gives individuals the freedom to decide where to work doing what,
how to spend or save money, and whether to consume now or later.
A differentiation strategy works well in situations where there are many ways to
differentiate a product or service and many buyers perceive these differences as having
value.
The more a company needs to alter its products and ways of doing business to be
successful abroad, the more it should rely on a diversification strategy for entering
foreign markets.
In a matrix structure, product, functional, or geographic groups compete for resources.
An economic system is the set of structures and processes that guides the allocation of
resources and shapes the conduct of business activities within a country.
International business includes all commercial transactions between two or more
countries.
An argument for limiting foreign control of key industries is that decisions made abroad
can have adverse effects on the local economy.
One problem for companies that borrow locally in weak-currency countries is that
interest rates tend to be higher.
GE’s Ecomagination program has enabled the firm to develop a competitive advantage
over its competitors.
A company that exports products at a price lower than its domestic market price is using
a skimming policy abroad.
A joint venture is an example of a portfolio investment.
Research shows that urbanization leads to higher productivity. Which of the following
is the LEAST likely reason for this?
A) Urbanization establishes an inflow of immigrants who will work for less money.
B) In urban areas, firms can more easily find people with the exact skills they need.
C) Urbanization allows for economies in moving supplies and finished products.
D) In urban areas, knowledge flows more easily from one company to another and from
one industry to another.
Which of the following statements most likely undermines the infant-industry
argument?
A) Total unit costs decrease through economies of scale.
B) High tariffs to prevent foreign competition increase government revenues in the
protected country.
C) Domestic entrepreneurs need assistance to compete in industries with high entry
barriers.
D) Experience of operating over time triggers higher productivity and global
competitiveness.
According to research, expatriates posted to ________ encounter the greatest difficulty
in finding accommodations, locating health care, and setting up finances.
A) Australia
B) Saudi Arabia
C) Thailand
D) South Africa
Which of the following is Walmart’s competitive advantage in Mexico?
A) Walmart purchased all Mexican retail chains and eliminated competitors.
B) Walmart is able to transfer its “everyday low prices” concept to Mexico.
C) Walmart offers affordable, unique products for niche markets in Mexico.
D) Customers prefer to buy from American companies instead of Mexican companies.
Of the following possibilities, the European Union is best described as a ________.
A) customs union
B) domestic organization
C) global bargaining unit
D) common language agreement
Which of the following would have the LEAST influence on price setting in the
foreign-exchange market?
A) Morgan Stanley
B) Deutsche Bank
C) Western Union
D) JP Morgan
The 27 member EU negotiates trade agreements as one. The EU and Brazil have
negotiated a strategic trade alliance which is an example of a ________.
A) customs union
B) global free trade agreement
C) bilateral agreement
D) multilateral agreement
The ________ the level of the company at which managers make decisions, the more
that organization is ________.
A) higher; decentralized
B) lower; centralized
C) higher; centralized
D) higher; unstructured
Kyle, an international manager for Apex Industries, has been given the task of
analyzing the economies of three different emerging countries for the firm’s potential
expansion. Which of the following questions is LEAST relevant to Kyle’s assignment?
A) How much freedom will Apex have to run its foreign operations?
B) What are the current economic policies related to development?
C) What is the likelihood that Apex can fill manufacturing positions with locals?
D) What factors in the country drive or hinder economic change?
In conducting ________, a business sells goods directly to or through an independent
domestic intermediary in the exporter’s home country that exports the products to
foreign markets.
A) direct exporting
B) global marketing
C) strategic planning
D) indirect exporting
A multidomestic configuration is most important when ________.
A) demand in individual countries decreases significantly
B) exporting is the company’s main strategy
C) demand in individual countries becomes significant
D) low-priced, standardized products are available
Fidelity Manufacturing is considering expanding its operations into the Philippines. A
manager at Fidelity has the task of predicting political risk in the Philippines. Which of
the following approaches should the manager LEAST use to accomplish the task?
A) analyzing the market share of competitors in the country
B) analyzing the country’s past political patterns and trends
C) seeking and analyzing opinions of influential people in the country
D) examining social and economic conditions within the country
When using equity financing, firms run the risk of ________.
A) losing a controlling interest to shareholders
B) acquiring capital through the sale of shares
C) incurring an unmanageable amount of debt
D) falling victim to currency exchange rates
Assume a U.S. firm plans to expand into Mexico, Germany, or Japan. Its executives are
traveling to each country to meet with local businesspeople in the decision-making
process. Which of the following would be LEAST beneficial when the executives make
a presentation?
A) requesting a translator with technical vocabulary knowledge
B) simplifying vocabulary and terminology for the audience
C) conducting back translations for written work
D) avoiding repetition to prevent boredom
Since the late 1980s, the growing emergence of freer markets has been powered by the
realization that ________.
A) economic growth is directly related to economic freedom
B) economic growth has a limited effect on the standard of living
C) adoption of free market principles contributes to social injustices
D) centrally planned economies are best designed to deliver progress
________ is the linking or integrating of activities into a unified system.
A) Control
B) Coordination
C) Configuration
D) Compatibility
Roland Enterprises, an American company, has a manufacturing facility in France in
order to serve customers throughout Europe. Roland is most likely using a ________
manufacturing strategy.
A) centralized
B) regional
C) global
D) country-specific
The standard-setting organization tasked with the challenge of determining one set of
accounting standards that can be used worldwide is the ________.
A) Global Financial Accounting Standards Board
B) International Organization of Securities Commissions
C) International Financial Reporting Committee
D) International Accounting Standards Board
Historically, what is the top remittance-receiving country in Latin America?
A) Brazil
B) Mexico
C) Uruguay
D) Venezuela
Once a firm has determined what its manufacturing configuration will be, and has
coordinated its supply chain, it must create a(n) ________ system to ensure that the
firm’s strategies are carried out.
A) multidomestic
B) centralized
C) offshore
D) control
GAAP usage differences increase the problems associated with ________.
A) trading foreign stock
B) establishing e-commerce
C) identifying emerging markets
D) raising capital in different countries
The advantage to host countries of international management contracts is that they
________.
A) receive state-of-the-art facilities
B) get assistance without foreign control
C) can pay in local currency
D) save on making capital investments
According to the teleological approach, individuals base moral decisions on ________.
A) personal and social responsibilities
B) consequences of an action
C) cultural value systems
D) opinions of peers
Korman Industries is a foreign multinational that recently established operations in the
European Union. What is the most likely advantage for Korman as a result?
A) Governance processes are streamlined because local governments have been
eliminated.
B) Market size is larger because of the elimination of internal tariff barriers.
C) Differential external tariff barriers exist for product shipments.
D) The EU uses English as its official language.
Jordan Jewelry is a U.S. firm that designs, manufactures, and sells inexpensive jewelry
and accessories. Executives at the firm believe that Jordan Jewelry could significantly
increase its profitability by exporting products to foreign markets. Before engaging in
international trade, Jordan executives need to develop an export plan. Which of the
following questions is LEAST relevant to this activity?
A) Would Jordan’s resources be better utilized developing business in the United States?
B) How much will it cost to get Jordan’s products to the targeted markets?
C) What marketing campaign would be best for Jordan’s foreign markets?
D) Is exporting consistent with Jordan’s long-term goals?
Which of the following was primarily responsible for establishing the euro?
A) Lisbon Treaty
B) Treaty of Maastricht
C) European Finance Act
D) Single European Act
An exchange rate variance results from ________.
A) setting the budget at the actual exchange rate at that time and final performance at
the rate used when the budget was set
B) translating the budget and actual performance at the forecasted exchange rate
C) translating the budget at the projected exchange rate and final results at the actual
exchange rate
D) translating the budget using the current-rate method and actual results at the new
current-rate method
To determine whether the standard of living within a country is rising or falling,
economists would most likely use which of the following measures?
A) per capita GNI
B) GNI growth rate
C) purchasing power parity
D) degree of human development
Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the
most attention?
A) safe and hygienic working conditions
B) reasonable living wages
C) inhumane treatment
D) child labor
According to Transparency International, companies from which of the following
countries are more likely to pay bribes?
A) China
B) Japan
C) Singapore
D) Belgium