1) exporting is advantageous because it avoids the cost of establishing manufacturing
operations in the host country and because it may help a firm achieve experience curve
and location economies.
2) as compared to exporting and licensing, fdi may be more expensive and risky.
3) lean production is another term for flexible manufacturing technology.
4) since its establishment, the euro has had a stable trading history.
5) a pegged rate means that the value of a currency is fixed relative to a reference
currency, and then the exchange rate between that currency and other currencies is
determined by the reference currency exchange rate.
6) the general assertion that nations that invest more in education will have higher
growth rates has been proved false.
7) the letter of credit system has evolved to create a less risky environment for
international trade.
8) confucianism can be accurately characterized as a religion.
9) a lag strategy involves attempting to collect foreign currency receivables early when
a foreign currency is expected to depreciate and paying foreign currency payables
before they are due when a currency is expected to appreciate.
10) the utilitarian approaches to ethics hold that the moral worth of actions or practices
is determined by their consequences.
11) most modern democratic states practice representative democracy.
12) the need for coordination between units is greatest in transnational firms.
13) the _____ states that a country’s “nominal” interest rate is the sum of the required
“real” rate of interest and the expected rate of inflation over the period for which the
funds are to be lent.
a.ppp theory
b.efficient market theory
c.inefficient market theory
d.fisher effect
14) _____ is the impact of currency exchange rates changes on the reported financial
statements of a company.
a.economic exposure
b.financial exposure
c.translation exposure
d.transaction exposure
15) a company might consider decentralizing when:
a.a product’s value-to-weight ratio is high
b.the product serves universal needs
c.trade barriers are low
d.volatility in important exchange rates is expected
16) a _____ is an asset whose value is contingent upon a particular relationship
persisting.
a.specialized asset
b.common asset
c.complementary asset
d.supplementary asset
17) under a tariff rate quota, a higher tariff rate is applied to imports within the quota
than those over the quota.
18) the term _____ has been coined to describe the ability of companies to use flexible
manufacturing technology to reconcile the goals of low cost and product customization.
a.assembly-line-like customization
b.economies of customization
c.mass customization
d.standardized customization
19) which of the following is not an element that constitutes a firm’s marketing mix?
a.product attributes
b.communication strategy
c.reverse engineering
d.distribution strategy
20) the risks that arise from volatile changes in exchange rates are commonly referred
to as:
a.interest rate risks
b.basis risks
c.operational risks
d.foreign exchange risks
21) which of the following is not a reason for the pressure for greater protectionism that
occurred during the 1980s and early 1990s?
a.the growing u.s. trade surplus with japan strained the world trading system
b.japanese economic success strained the world trading system
c.the persistent trade deficit in the united states strained the world trading system
d.many countries found ways to get around gatt regulations
22) in a _____ economy, certain sectors of the economy are left to private ownership
and free market mechanisms while other sectors have significant state ownership and
government planning.
a.market
b.private
c.command
d.mixed
23) rawls’ philosophy that inequalities are justified if they benefit the position of the
least-advantaged person is known as the:
a.inequality principle
b.equity principle
c.difference principle
d.indifference principle