1) mnes can hedge against currency fluctuations by dispersing production to different
locations around the globe.
2) it is more important to have a common culture in firms employing a localization
strategy than a transnational strategy.
3) the iasb has developed accounting standards for firms seeking stock listings in global
markets.
4) the total amount of capital invested in factories, stores, office buildings and the like
is referred to as the stock of fdi.
5) according to the theory of comparative advantage, it is in a country’s best interest to
maintain a trade surplus and to export more than it imports.
6) a firm’s stakeholders are individuals or groups that have an interest, claim, or stake in
the company, what it does, and how well it performs.
7) in 2007, about a quarter of the imf’s members had an exchange rate policy that
allowed their currency to float freely.
8) diminishing returns to specialization occurs when lesser units of resources are
required to produce each additional unit.
9) employees in a business often take their cue from business leaders, and if those
leaders do not behave in an ethical manner, they might not either.
10) the smoot-hawley act raised tariff barriers in the hope of protecting jobs and
diverting consumer demand away from foreign products.
11) issues of strategic flexibility and organizational control are greater for purely
domestic businesses than for international ones.
12) to export successfully, it often makes sense to focus initially on a handful of
markets.
13) unspoken language refers to nonverbal communication.
14) the enron debacle indicates that an organizational culture can legitimize behavior
that a society would judge as unethical.
15) an expatriate needs to have language fluency to show willingness to communicate.
16) a key accounting problem faced by international businesses but that does not
confront purely domestic businesses is:
a.the lack of consistency in the accounting standards of different countries
b.the consistent, inaccurate filing of profit-and-loss statements by all international
businesses
c.the total lack of the accounting functions in international firms
d.international firms not reporting their income to the government
17) firms entering markets where there are no incumbent competitors to be acquired
should choose:
a.greenfield investments
b.joint ventures
c.acquisitions
d.takeovers
18) according to some analysts, under a _____ regime, countries are limited in their
ability to use monetary policy to expand or contract their economies by the need to
maintain exchange rate parity.
a.managed float
b.dirty float
c.fixed exchange rate
d.floating exchange rate
19) the _____ function creates value by ensuring the company has the right mix of
people to perform activities effectively.
a.information systems
b.company infrastructure
c.human resources
d.logistics
20) a common hybrid of a quota and a tariff is known as a(n):
a.quota rent
b.voluntary export restraint
c.ad valorem tariff
d.tariff rate quota
21) the most important determinant of channel length is the degree to which a retail
system is:
a.concentrated
b.fragmented
c.decentralized
d.globalized
22) the total amount of capital invested in factories, stores, office buildings, and the like
is summarized by:
a.gross fixed capital formation
b.total investment capital
c.total tangible investment
d.gross depreciable investments
23) the costs of promoting and establishing a product offering when a firm enters a
foreign market prior to its rivals are known as:
a.switching costs
b.market development costs
c.pioneering costs
d.promotional development costs
24) a basic tenet of ricardo’s theory is that:
a.consumers in those countries with an absolute advantage in the production of all
goods might derive no benefits from international trade
b.consumers in all nations can consume more if there are no restrictions on trade
c.restrictions on trade help consumers in countries that lack an absolute advantage in
the production of a particular good
d.trade is a zero-sum game
25) the simple comparative advantage model assumes constant returns to specialization.
however, it is more realistic to assume diminishing returns to specialization because of
all of the following reasons except:
a.all resources are of the same quality
b.different goods use resources in different proportions
c.as a country tries to increase its output of a certain good, it is more likely to draw on
more marginal resources whose productivity is not as great as those initially employed
d.if a country specializes to the degree suggested by the simple ricardian model, the
gains from specialization are likely to be exhausted before specialization is complete
26) moving down the experience curve:
a.increases the cost of a firm’s raw material
b.allows a firm to reduce its cost of creating value
c.decreases a firm’s profitability
d.increases the r&d expenditure of a firm
27) totalitarianism:
a.is a form of government in which one person or political party exercises absolute
control over all spheres of human life
b.refers to a political system in which government is by the people, exercised either
directly or through elected representatives
c.is based on a belief that citizens should be directly involved in decision making
d.is based on the idea that the welfare of society is best served by letting people pursue
their own economic self-interests
28) which of the following is not characteristic of globalization?
a.national economies are turning into independent economic systems
b.material culture is starting to look similar the world over
c.perceived distance is shrinking due to advances in transportation and
telecommunications
d.barriers to cross-border trade and investment are declining
29) which of the following is an argument favoring decentralization?
a.it can facilitate coordination
b.it can help ensure that decisions are consistent with organizational objectives
c.it can give top-level managers the means to bring about needed major organizational
changes
d.it permits greater flexibility
30) international businesses use foreign exchange markets for all of the following
reasons except:
a.to receive payments from foreign investments that may be in foreign currencies
b.to pay a foreign company for its products or services in its country’s currency
c.to invest for short terms in money markets when they have spare cash
d.to cover themselves from all risks involved in currency speculation
31) which of the following is variously defined as selling goods in a foreign market at
below their costs of production or as selling goods in a foreign market at below their
“fair” market value?
a.export restraint
b.dumping
c.local content requirement
d.ad valorem
32) after the uruguay round of gatt extended global trading rules to cover trade in
services, the first two industries targeted for reform by the wto were:
a.textiles and technology
b.telecommunications and financial services
c.automotives and aerospace
d.agriculture and consulting services
33) the concentration of production is favored when all of the following factors are high
except
a.fixed costs
b.minimum efficient scale
c.value-to-weight ratio
d.trade barriers
34) according to the new trade theorists, because early entrants are able to gain _____,
the early entrants into an industry may get a lock on the world market that discourages
subsequent entry.
a.zero-sum advantages
b.highly skilled employees
c.process expertise
d.economies of scale
35) describe the four dimensions of culture as identified by geert hofstede.
36) what is deregulation?
37) discuss the different ways to protect intellectual property.
38) what is capital budgeting?
39) explain the differences between common law and civil law systems by the approach
of each to contract law.
40) what is multipoint competition? how do firms respond to multipoint competition?