1) the long-run benefits of doing business in a country are a function of factors such as
the size of the market, the present wealth of consumers in that market, and the likely
future wealth of customers.
2) once a firm has established a low cost position, it can act as a barrier to new
competition.
3) the gold standard called for a fixed exchange rate system against the u.s. dollar.
4) most expatriates believe that more weight should be given to an on-site manager’s
appraisal than to an off-site manager’s appraisal.
5) tariff rates on agricultural products are generally much lower than tariff rates on
manufactured products or services.
6) the main advantage of greenfield investment is that it gives the firm a much greater
ability to build the kind of subsidiary company that it wants.
7) the antiglobalization effort is created and supported only by a small group of
hard-core anarchists.
8) the judges of the court of justice are required to act as representatives of national
interests, rather than as independent officials.
9) mores have much greater significance than folkways.
10) an individual with a strong sense of personal ethics is less likely to behave in an
unethical manner in a business setting.
11) for american companies, the most comprehensive source of export information is
the local government trade department.
12) movement to a new state requires a substantial change in the form of a
multinational’s organization architecture so that it matches the desired new strategic
posture.
13) fdi does not benefit the host country’s balance of payments if the foreign subsidiary
creates demand for home-country exports of capital equipment, intermediate goods, or
complementary products.
14) an organizational culture can be strong but bad.
15) what is considered normal business practice in one country may be considered
unethical in other countries.
16) _____ occurs when an individual or business capitalizes on a price differential for a
firm’s product between two countries by buying the product in the country where the
price is low and reselling it in the country where prices are higher.
a.arbitrage
b.strategic pricing
c.price discrimination
d.market pricing
17) for firm’s seeking external financing for a project, the cost of capital is typically
lower in:
a.global capital markets.
b.domestic capital markets.
c.small markets.
d.relatively illiquid markets.
18) in a letter of credit transaction, the importer secures the letter of credit
a.before product shipment
b.after product shipment
c.from the exporter’s bank
d.after receiving the product
19) the premature return of an expatriate manager to his/her home country is known as:
a.repatriation
b.expatriate failure
c.inpatriate failure
d.foreign manager failure
20) if a government grants preferential trade terms to a country it wants to build strong
relations with, the government is employing a policy:
a.of retaliation
b.of human rights protection
c.to protect national security
d.to further foreign policy objectives
21) identify the theory that can be interpreted as justifying some limited government
intervention to support the development of certain export-oriented industries.
a.theory of national competitive advantage
b.heckscher-ohlin theory
c.theory of comparative advantage
d.theory of absolute advantage
22) a citizen of france who moves to germany to work at bmw is a(n):
a.host-country national
b.local
c.inpatriate
d.acquired citizen
23) all of the following are factors complicating the capital budgeting process for an
international business except:
a.a distinction must be made between cash flows to the project and cash flows to the
parent company.
b.cash flows to the project and to the parent company will be the same when a
host-country government blocks the repatriation of cash flows from a foreign
investment.
c.political and economic risks, including foreign exchange risk, can significantly
change the value of a foreign investment.
d.the connection between cash flows to the parent and the source of financing must be
recognized.
24) africa is not a popular destination for fdi because of all of the following reasons
except:
a.political unrest in the region
b.armed conflict in the region
c.liberalization of fdi regulations
d.frequent policy changes in the region
25) which strategy focuses on increasing profitability by customizing the firm’s goods
or services so they provide a good match to tastes and preferences in different national
markets?
a.global standardization strategy
b.transnational strategy
c.localization strategy
d.international strategy
26) which of the following statements is false?
a.the lesser the number of competitors, the higher the elasticity of demand
b.when competitors are limited, consumers’ bargaining power is weaker
c.a firm may charge a higher price for its product in a country where competition is
limited than in one where competition is intense
d.when there is high elasticity of demand and a firm raises its prices above those of its
competitors, consumers will switch to the competitors’ products
27) which of the following is not an advantage of a small-scale entry?
a.a small-scale entrant is more likely to be able to capture first-mover advantages
associated with demand preemption, scale economies, and switching costs
b.small-scale entry is a way to gather information about a foreign market before
deciding how best to enter
c.by giving the firm time to collect information, small-scale entry reduces the risks
associated with a subsequent large-scale entry
d.small-scale entry allows a firm to learn about a foreign market while limiting the
firm’s exposure to that market
28) what are political risks? why must a company evaluating foreign investment
opportunities consider the political risks that stem from the foreign location?
29) explain the notion of predatory behavior with regard to dumping.
30) what information sources are available to american companies seeking information
about export opportunities?
31) what is the single european act? what was the effect of the single european act on
the eu economy? did the single european act achieve its goals?
32) describe the notion of management development programs as a tool for increasing
the overall skill levels of managers. what is the goal of this type of program?
33) with the help of an example, discuss the notion of balance-of-trade equilibrium.
34) discuss the issue of how to evaluate performance of expatriate managers. what
problems arise for companies as they make such evaluations?
35) compare and contrast licensing agreements and franchising agreements.