1) the costs and risks associated with doing business in a foreign country are typically
high in an economically advanced and politically stable democratic nation.
2) it is possible that a multinational’s balance sheet may not balance when it uses the
temporal method to translate the accounts of a foreign subsidiary.
3) it is possible to have a totalitarian state that is hostile to collectivism and where some
degree of individualism is encouraged.
4) the ultimate controlling unit within the eu is the european council.
5) the foreign corrupt practices act originally allowed “facilitating payments” to secure
contracts that would not otherwise be secured.
6) the larger pool of investors in an international market implies that borrowers will be
able to pay more.
7) the product life cycle suggests that:
a.often the same firms that pioneer a product in their home markets undertake fdi to
produce a product for consumption in foreign markets
b.when a firm that is part of an oligopolistic industry expands into a foreign market,
other firms in the industry will be compelled to make similar investments
c.combining location-specific assets or resource endowments and the firm’s own unique
assets often requires fdi
d.impediments to the sale of know-how increase the profitability of fdi relative to
licensing
8) the international bank for reconstruction and development is also known as the:
a.imf
b.world bank
c.european central bank
d.international development agency
9) the international accounting standards board:
a.has no power to enforce its standards
b.was formed to replace the financial accounting standards board
c.has 120 members responsible for the formulation of new financial reporting standards
d.requires approval from 80 percent of its 120 members to issue a new standard
10) the system of values and norms that are shared among a group of people and that
when taken together constitute a design for living best defines:
a.society
b.value systems
c.principles
d.culture
11) according to john rawls:
a.each person should be permitted the maximum amount of basic liberty compatible
with a similar liberty for others
b.freedom of speech and assembly is the single most important component in a justice
system
c.equal basic liberty is only possible in a pure market economy
d.inequalities in a justice system are not to be tolerated under any circumstance
12) which of the following is an argument that supports global advertising?
a.standardized advertising lowers the costs of value creation by spreading the fixed
costs of developing the advertisements over many countries
b.because of concerns about the scarcity of creative talent, some feel that smaller efforts
will produce better results than one large effort to develop a campaign
c.even though there are cultural differences between nations, a single advertising theme
that is effective worldwide can be easily developed
d.standardized advertising may be implemented even in the face of advertising
regulations
13) article 1 of the united nations’ universal declaration of human rights states: “all
human beings are born free and equal in dignity and rights.” this best echoes:
a.cultural relativism
b.friedman doctrine
c.the righteous moralist approach
d.kantian ethics
14) which of the following statements is false?
a.product reliability may be a more important attribute in most advanced countries
b.consumers in highly developed countries tend to build a lot of extra performance
attributes into their products
c.consumers in the most developed countries are often not willing to sacrifice their
preferred attributes for lower prices
d.consumers in the most advanced countries often shun globally standardized products
that have been developed with the lowest common denominator in mind
15) when a speculative attack on the exchange value of a currency results in a sharp
depreciation in the value of a currency, a(n) _____ has occurred.
a.foreign debt crisis
b.banking crisis
c.currency crisis
d.exchange crisis
16) which of the following is not a reason to outsource production?
a.it can give the firm greater flexibility
b.it can make planning, coordination, and scheduling of adjacent processes easier
c.it can help drive down the firm’s cost structure
d.it may help the firm capture orders from international customers
17) fdi undertaken to serve the home market is known as:
a.greenfield investment
b.fdi substitution
c.offshore production
d.home market fdi
18) a political benefit of economic integration is that:
a.it enables participants to achieve gains from the free flow of trade
b.it enables participants to achieve gains from the free flow of investment
c.it allow countries to specialize in the production of goods and services that they can
produce most efficiently
d.linking neighboring economies creates incentives for cooperation between the
neighboring states and reduces the potential for violent conflict
19) _____ suggests that a government should use subsidies to support promising firms
that are active in newly emerging industries.
a.the infant industry argument
b.strategic trade policy
c.retaliation policy
d.the national security argument
20) a firm focusing on _____ will benefit by basing each value creation activity it
performs at that location where economic, political, and cultural conditions, including
relative factor costs, are most conducive to the performance of that activity.
a.organizational advantage
b.core competency
c.competitive gains
d.technical skill sets
21) in early 2006, six caricom members and the united states established the _____,
which was modeled on the eu’s single market.
a.central american common market
b.central america free trade agreement
c.caribbean single market and economy
d.north american free trade area
22) firms traditionally have tried to achieve coordination by adopting:
a.informal integrating mechanisms
b.formal integrating mechanisms
c.vertical differentiation
d.horizontal differentiation
23) which of the following is not associated with firms following the global
standardization strategy?
a.low pressures for local responsiveness
b.use cost advantage to support aggressive pricing in world markets
c.high pressures for cost reductions
d.customize product offering and marketing strategy to local conditions
24) when strategic assets such as brand loyalty, customer relationships, or distribution
systems are important, _____ investments are more appropriate.
a.merger and acquisition
b.greenfield
c.portfolio
d.new construction
25) according to data from the bank for international settlements,
a.by late 2008, the stocks of cross-border bank loans were significantly less as
compared to those in 1990
b.international equity issues were actually higher in 2007
c.outstanding international bonds in late 2008 were down from those in 1997
d.the international capital market was in recession from the 1980s to the early 2000s
26) describe accounting in international business. what is accounting information?
27) consider why a firm should enter a market via a wholly owned subsidiary. what are
the advantages and disadvantages of this type of strategy?
28) what are the features of the eurobond market that make it an appealing alternative to
most major domestic bond markets?
29) what is systematic risk?
30) what are the implications of the growth of the global capital markets for
international businesses that wish to borrow?
31) what is a currency board? why do countries choose this type of system? what are
the disadvantages of this type of arrangement?
32) what are the determinants of ethical behavior?
33) consider the use of personal controls in international firms. in which type of firm is
this control most common?
34) what is the convention on combating bribery of foreign public officials in
international business transactions?
35) discuss the advantages of using a joint venture to enter foreign markets.