Which of the following has resulted in a dramatic shortening of product life cycles?
A.Acceleration of the pace of technological change
B.Lack of domestic competition
C.Affluence of customers
D.An increase in the number of educated consumers
E.Removal of trade barriers
Answer:
Which of the following refers to accepted principles of right or wrong that govern the
conduct of a person, the members of a profession, or the actions of an organization.
A.strategy
B.goodwill
C.ethics
D.mission
E.vision
Answer:
Which of the following is a key feature of the foreign exchange market?
A.The foreign exchange market never sleeps.
B.The foreign exchange market is located in London.
C.The foreign exchange market is characterized by high transaction costs.
D.The foreign exchange market is shut for two hours every day.
E.The foreign exchange market is poorly interconnected giving rise to ample arbitrage
opportunities.
Answer:
The motive behind the high tariffs imposed by nations on imports of manufactured
goods, prior to World War II, was to:
A.deter any possible attempts to promote communism.
B.protect domestic industries from foreign competition.
C.prevent the occurrence of the Great Depression.
D.safeguard patents, copyrights, and trademarks.
E.promote the trade of services over the trade of manufactured goods.
Answer:
According to research, when do consumers usually use the country of origin as a cue
when evaluating a product?
A.When a firm tries to deemphasize its foreign origins
B.When consumers lack detailed knowledge of a product
C.When an advertising campaign stresses the positive performance attributes of a
product
D.When a limited number of messages compete with each other for consumers’
attention
E.When a firm resorts to personal selling instead of mass media advertising
Answer:
The best decisions, from a utilitarian perspective, are those that:
A.maximize a firm’s profit.
B.maximize stockholders’ wealth.
C.have greater social costs than benefits.
D.produce the greatest good for the greatest number of people.
E.result in the justified treatment of a minority.
Answer:
A totalitarian political system in which a party, group, or individual that represents the
interests of a particular ethnic group monopolizes political power is referred to as:
A.theocratic totalitarianism.
B.communist totalitarianism.
C.right-wing totalitarianism.
D.tribal totalitarianism.
E.democratic totalitarianism.
Answer:
The government of Greenland Republic protects its newly privatized firms from foreign
competition by imposing stringent barriers to international trade and foreign direct
investment. As a result of this, the newly privatized firms will:
A.continue acting like state monopolies.
B.operate at their maximum efficiency.
C.pay huge taxes.
D.import raw materials and many industrial goods at low tariffs.
E.have no control over production and pricing.
Answer:
The viability of an exporting strategy is often constrained by transportation costs,
particularly of products that can be produced in almost any location and have a:
A.high local content requirement.
B.low total landed cost.
C.low value-to-weight ratio.
D.low licensing tariff.
E.high marginal cost.
Answer:
Which of the following is a loophole in antidumping laws that is being exploited by
many countries to pursue protectionism?
A.The slackness of enforcement agencies
B.WTO’s noncommittal approach to antidumping laws
C.Bilateral VERs which subvert antidumping laws
D.The rather vague definition of what constitutes “dumping”
E.Lack of consensus among member nations
Answer:
Which of the following is a way in which the U.S. Department of Commerce helps
potential exporters?
A.It oversees volunteers with international trade experience and directs them to provide
one-on-one counseling to active and new-to-export businesses.
B.It assembles a “comparison shopping service” for 14 countries that are major markets
for U.S. exports.
C.It coordinates a nationwide group of international trade attorneys who provide free
initial consultations to small businesses on export-related matters.
D.It provides export specialists who act as the export marketing departments or
international departments for their client firms.
E.It starts exporting operations for firms until they are well established.
Answer:
Which of the following staffing approaches is compatible with an international
strategy?
A.Ethnocentric
B.Geocentric
C.Polycentric
D.Transnational
E.Ethical
Answer:
Which of the following is a drawback of the utilitarian approach to business ethics?
A.It omits the consideration of justice.
B.It fails to consider the benefits, costs, and risks of a course of action.
C.It advocates moral imperialism and ethnocentrism.
D.It overemphasizes the significance of maximization of stockholder wealth.
E.It recognizes that actions have multiple consequences.
Answer:
In terms of the approaches to exchange rate forecasting, which of the following draw(s)
on economic theory to construct sophisticated econometric models for predicting
exchange rate movements?
A.Technical analysis
B.Fractional integration models
C.Markov switching models
D.Fundamental analysis
E.Chart analysis
Answer:
TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would
build several ammonia plants in the foreign country and receive ammonia as partial
payment over a 20-year period. This is an example of:
A.switch trading.
B.a buyback.
C.a counterpurchase.
D.an offset.
E.barter.
Answer:
Considered to be the first theory of international trade, the principal assertion of
mercantilism is that:
A.countries differ in their ability to produce goods efficiently.
B.gold and silver are the mainstays of a country’s wealth and essential to vigorous
commerce.
C.countries should specialize in the production of goods for which they have an
absolute advantage.
D.differences in labor productivity between nations underlie the notion of comparative
advantage.
E.resources can move freely from the production of one good to another within a
nation.
Answer:
Businesses can make sure that they are hiring individuals with strong personal ethics
by:
A.employing only those people who have a very high intelligence quotient.
B.administering simple tests that indicate analytical skills of a prospective employee.
C.asking for letters of reference from the prospective employees.
D.hiring only those people who are relatives of current employees.
E.spying on prospective employees.
Answer:
Which of the following is true of the Single European Act?
A.It proposed to place frontier controls among European Community countries.
B.It sought to abolish the application of the principle of “mutual recognition” to product
standards.
C.It proposed to reduce costs indirectly by preventing national suppliers to compete.
D.It provided the impetus for the restructuring of substantial sections of European
industry.
E.It proposed to reduce costs directly by preventing lower-cost suppliers into national
economies.
Answer:
Star Volans Inc. is planning on expanding its business globally. In terms of the costs
involved in conducting business in a country, it will be most economical for the
company if it chooses a country:
A.with a closed totalitarian political system.
B.where the company will have to provide its own infrastructure and supporting
business.
C.where laws regarding product safety, safety in the workplace, and environmental
pollution are extremely stringent.
D.where politicians are held accountable by the electorate.
E.with no local laws to protect intellectual property.
Answer:
Which of the following drafts allows for a delay in payment?
A.Sight draft
B.Time draft
C.Bill of lading
D.Counterpurchase
E.Offset
Answer:
Which of the following is a definition of market segmentation?
A.It refers to identifying distinct groups of customers whose needs, wants, and
purchasing behavior differ from others.
B.It refers to developing existing market segments and increasing market share within
those segments.
C.It refers to identifying the need for new products in existing markets and developing
products for those markets.
D.It refers to identifying new markets that can buy existing products.
E.It refers to identifying the needs of a new market and developing new products for
that market.
Answer:
The total quality management philosophy was developed by a number of American
consultants. Which of the following individuals is one of them?
A.W. Edward Deming
B.Philip Kotler
C.Michael Porter
D.Henry Ford
E.Valerie Zeithaml
Answer:
Which of the following transactions is used to move out of one currency and into
another for a limited period without incurring foreign exchange risk?
A.Currency swap
B.Currency speculation
C.Carry trade
D.Spot exchange
E.Arbitrage
Answer:
Palladia specializes in the production of beef and produces beef more efficiently than
any other country. It buys wheat, which it produces less efficiently than beef, from
Rhodia, even though it produces wheat more efficiently than Rhodia. Which of the
following theories of international trade supports Palladia’s decision to buy wheat from
Rhodia?
A.The Samuelson critique
B.Mercantilism
C.Ricardo’s theory of comparative advantage
D.Adam Smith’s theory of absolute advantage
E.The Leontief paradox
Answer:
Which of the following is true about the three broad types of economic systems?
A.For a pure market economy to function efficiently product supply must be restricted.
B.In a command economy, state-owned enterprises have little incentive to control costs
and be efficient.
C.The sole role of government in a command economy is to encourage vigorous free
and fair competition between private producers.
D.Mixed economies were once uncommon throughout much of the world, although
they are becoming more popular now.
E.Production in command economies is determined by the interaction of supply and
demand and signaled to producers through the price system.
Answer:
When a time draft is drawn on and accepted by a bank, it is known as a:
A.trade acceptance.
B.banker’s check.
C.banker’s acceptance.
D.bill of lading.
E.letter of credit.
Answer:
Which of the following is true of Theodore Levitt’s arguments concerning the
globalization of world markets?
A.Modern transportation is facilitating a convergence of tastes and preferences among
consumers in advanced countries of the world.
B.Academics feel that Levitt understates his case concerning global markets and the fall
of multinational corporations.
C.Globalization, in the sense used by Levitt, is the rule in consumer goods markets and
industrial markets.
D.Levitt’s arguments hold true with respect to consumer goods markets but not for basic
industrial products.
E.As observed by Levitt, multinational corporations do not tailor their products to suit
different countries.
Answer:
Which of the following location externalities is favorable for foreign direct investment
in a country?
A.Presence of supporting industries
B.Market with many other foreign competitors
C.Lack of intellectual property rights laws
D.Presence of a communist political system
E.Appreciation of local currency
Answer:
For services such as banking or health care, “production” typically occurs when the:
A.customer specifies the service requirements.
B.service is paid for by the customer.
C.service is designed in-house.
D.service is delivered to the customer.
E.customer provides feedback.
Answer:
Due to the complexity and diversity of foreign markets, firms sometimes hesitate to
seek export opportunities. These firms can best overcome ignorance by:
A.shortening production runs.
B.creating revenue.
C.outsourcing decisions.
D.collecting information.
E.lowering unit costs.
Answer:
One of the principal risks associated with a strategic alliance is that:
A.it brings together the complementary skills of alliance partners.
B.it makes it difficult for the partner firms to enter into a foreign market.
C.a firm can give away more than it receives.
D.it does not allow firms to share fixed costs.
E.it almost always fails.
Answer:
Pressures for cost reduction are intense in firms:
A.that produce products that are well differentiated.
B.whose major competitors are based in high-cost locations.
C.with persistent low capacity.
D.in which consumers face low switching costs.
E.with no international competition.
Answer:
The recent trend to outsource information technology jobs to countries such as India
indicates that:
A.the availability of unskilled labor has increased in these countries.
B.these countries have benefited by moving toward communism.
C.a good education system is a determinant of national competitive advantage.
D.the availability of a pool of unskilled labor has been reduced in Western countries.
E.these countries are taking advantage of their latitudinal location.
Answer: