1) transfer pricing is consistent with a policy of treating each subsidiary in the firm as a
profit center.
2) since 1973, exchange rates have been relatively stable thanks to the floating
exchange rate system currently in place.
3) under a jit system, products are briefly warehoused before entering the
manufacturing process.
4) auditing standards are rules for preparing financial statements and define what useful
accounting information is.
5) a deferral principle specifies that parent companies are not taxed on foreign source
income until they actually receive a dividend.
6) many firms are not proactive simply because of their ignorance of foreign market
opportunities.
7) a firm becomes a multinational enterprise when it undertakes foreign direct
investment.
8) new trade theory and the heckscher-ohlin theory are in complete agreement with
regard to world trade patterns.
9) a firm with an ethnocentric staffing policy will fill all key management positions
with parent-country nationals.
10) the majority of u.s. firms that export are large multinationals that employ 500 or
more people.
11) the trips regulations oblige wto members to grant and enforce patents lasting at least
20 years and copyrights lasting 50 years.
12) when two or more enterprises encounter each other in different regional markets,
national markets, or industries, regional competition occurs.
13) a company using _____ achieves control by comparing actual performance against
targets and intervening selectively to take corrective action.
a.personal control
b.output control
c.bureaucratic control
d.cultural control
14) these are the charges that most banks take for moving cash from one location to
another.
a.currency taxes
b.location fee
c.exchange charges
d.transfer fee
15) according to max weber:
a.principles embedded in hinduism encourage high levels of entrepreneurial activity
b.hindu values emphasize that individuals should be judged by their material
achievements
c.pursuit of material well-being makes the attainment of nirvana easier
d.devout hindus would be less likely to engage in entrepreneurial activity than devout
protestants
16) if a firm’s core competency is based on control over proprietary technological
know-how, it should avoid _____ and _____ arrangements if possible, to minimize the
risk of losing control over that technology.
a.licensing; joint-venture
b.wholly owned subsidiary; exporting
c.turnkey contracts; exporting
d.exporting; joint-venture
17) which of the following is not a feature of the eurobond market that makes it an
appealing alternative to most major domestic bond markets?
a.an absence of regulatory interference
b.ability to offer the bonds to residents of the country in whose currency they are
denominated
c.less stringent disclosure requirements than in most domestic bond markets
d.a favorable tax status
18) expatriate managers may experience more than the usual degree of pressure to
violate their personal ethics because of all of the following reasons except:
a.they are away from their ordinary social context and supporting culture
b.they are psychologically and geographically closer to the parent company
c.they may be based in a culture that does not place the same value on ethical norms
important in the manager’s home country
d.they may be surrounded by local employees who have less rigorous ethical standards
19) the manner in which decisions are made and work is performed within the
organization is known as the firm’s:
a.organizational culture
b.incentives
c.control systems
d.processes
20) which of the following statements about values and norms of a culture is not true?
a.the values and norms of a society do not emerge fully formed
b.they are the evolutionary product of a number of factors
c.they are influenced by religion
d.they do not influence social structure
21) an exchange rate of 1 = $1.30 indicates that:
a.$1 is worth 1.30 euros
b.one could sell 1.30 euros for $1
c.one euro buys $1.30
d.there are 1.30 euros for every dollar
22) at the doha round of the wto in late 2001,
a.the wto was established
b.gatt was extended to include services
c.world trade volume increased
d.an agenda was established to phase out subsidies to agricultural producers
23) a currency is said to be freely convertible when:
a.the country’s government allows both residents and nonresidents to purchase
unlimited amounts of a foreign currency with it
b.only nonresidents may convert it into a foreign currency without any limitations
c.neither residents nor nonresidents are allowed to convert it into a foreign currency
d.only residents may convert it internally into a foreign currency
24) what is a country’s legal system? why is it important to international businesses?
25) discuss the idea of compensation or buybacks as they relate to countertrade. provide
an example of a buyback arrangement.
26) what are the three dimensions of organizational structure?
27) what is a quota rent? provide an example of how an import quota affects price.
28) discuss the concept of the globalization of production.
29) what is strategy? how does strategy relate to a firm’s profitability?
30) describe the process involved in financing imports and exports using a letter of
credit. why has this system developed? what is the advantage of using this system?