1) the ppp theory is a strong predictor of short-run movements in exchange rates
covering time spans of five years or less.
2) the eximbank is a part of the wto’s efforts to facilitate trade between nations.
3) a firm’s strategy can be defined as the actions that managers take to attain the goals
of the firm.
4) licensing involves the establishment of a new operation in a foreign country.
5) if a firm is trying to enter a market where there are already well-established
companies, and where global competitors are also interested in establishing a presence,
the firm should choose a greenfield investment.
6) the wto has been very successful in efforts to initiate talks aimed at establishing a
universal set of rules designed to promote the liberalization of fdi.
7) all of the following are examples of pioneering costs except the costs of:
a.business failure
b.educating consumers
c.promoting and establishing a product offering
d.learning from the mistakes of early entrants
8) which of the following is mainly concerned with the selection of employees for
particular jobs?
a.retention policy
b.staffing policy
c.incentive policy
d.appraisal policy
9) according to statement 52, “foreign currency translation,” issued by the financial
accounting standards board:
a.the functional currency of a self-sustaining foreign subsidiary is to be the currency of
its parent company
b.the balance sheet of a self-sustaining foreign subsidiary is translated into the local
currency using the exchange rate in effect at the end of the firm’s financial year
c.the income statement of a self-sustaining foreign subsidiary is translated using the
average exchange rate for the firm’s financial year
d.the functional currency of an integral subsidiary is to be the local currency
10) agricultural subsidies have been criticized for all of the following reasons except:
a.they allow inefficient farmers stay in business
b.they discourage countries to overproduce heavily subsidized agricultural products
c.they encourage countries to produce products that could be grown more cheaply
elsewhere and imported
d.they reduce international trade in agricultural products
11) according to the 1986 uruguay round, the _____ was to be created to implement the
gatt agreement.
a.world trade organization
b.international monetary fund
c.united nations
d.world bank
12) which of the following does not affect a firm’s international communication?
a.cultural barriers
b.source effects
c.channel exclusivity
d.noise levels
13) which of the following statements is true regarding the european union (eu) and its
influence on accounting standards?
a.adoption of the directives issued by the eu is voluntary and member states are not
obligated to incorporate them into their own national laws
b.the eu may have a better chance of achieving harmonization than the iasb
c.the eu requires that the financial accounts issued by publicly listed companies in the
eu are to be in accordance with european standards
d.the objective of the requirements of the eu is to ensure the financial positions of
companies from different member states are represented according to their national
laws
14) _____ occurs when high-cost domestic producers are replaced by low-cost
producers within the free trade area.
a.a free trade zone
b.trade diversion
c.trade creation
d.trade interpretation
15) which of the following is true of the asia-pacific economic cooperation (apec)?
a.it was founded in 2001
b.it currently has 57 member states
c.united states and japan are not members of this body
d.collectively, the member states account for much of the growth in the world economy
16) the bill of lading serves all of the following purposes except:
a.it is a receipt
b.it is a bank note
c.it is a contract
d.it is a document of title
17) early entrants to a market that are able to create switching costs that tie the
customer to the product are capitalizing on:
a.economies of scale
b.pioneering costs
c.first-mover advantages
d.late-mover advantages
18) under a strict currency board system, interest rates:
a.adjust automatically
b.are constant
c.decline consistently
d.rarely move
19) in theory, the advantage of emcs is that they:
a.provide export subsides to the exporting firms
b.are not-for-profit organizations, hence provide free service
c.are subsidized by the department of commerce
d.are experienced specialists who can help the neophyte exporter
20) which of the following observations about the foreign corrupt practices act is true?
a.the act outlawed the paying of bribes to foreign government officials to gain business
b.there is enough evidence that it put u.s. firms at a competitive disadvantage
c.the act originally allowed for “facilitating payments”
d.the nike case was the impetus for the 1977 passage of this act
21) which of the following is typically not a main step in the control process by which a
corporate headquarters controls subunits within the organization?
a.head office and subunit management jointly determine subunit goals for the coming
year
b.head office monitors subunit performance against the agreed goals only at the end of
the year
c.if a subunit fails to achieve its goals, the head office intervenes in the subunit to learn
why the shortfall occurred
d.if a subunit fails to achieve its goals, the head office can take appropriate corrective
action if required
22) the _____ occurs when a resource is shared by all, but owned by no one, is
overused by individuals, resulting in its degradation.
a.tragedy of the commons
b.noblesse oblige
c.ethical dilemma
d.friedman system
23) which of the following, in a business setting, is taken to mean benevolent behavior
that is the responsibility of successful enterprises?
a.sullivan’s principles
b.ethical dilemma
c.tragedy of the commons
d.noblesse oblige
24) a _____ grants the inventor of a new product or process exclusive rights for a
defined period of time to the manufacture, use, or sale of that invention.
a.copyright
b.trademark
c.contract
d.patent
25) the andean pact is an example of a(n):
a.economic union
b.customs union
c.common market
d.political union
26) antidumping duties are often called:
a.special circumstance duties
b.positive duties
c.retroactive duties
d.countervailing duties
27) compare and contrast push strategies and pull strategies.
28) consider the kantian approach to ethics. who is responsible for the philosophy?
29) explain the idea of a turnkey project. why should a firm use this arrangement to
expand internationally? in what industries are turnkey arrangements most common?
30) why should a firm be cautious about entering a licensing agreement?
31) explain the relationship between first-mover disadvantages and pioneering costs.
32) discuss the failure of ppp theory to predict exchange rates accurately. what is the
purchasing power puzzle?
33) how can firms reduce the bias in performance appraisals of expatriate managers?
34) what are tax havens? what is their importance in international business?