1) transnational investment occurs when a firm based in one country enters another
country’s capital market to raise capital from the sale of stocks or bonds.
2) when a gain by one country results in a loss by another, there is a positive-sum game.
3) in an individualist society, the welfare of society is best served by letting people
pursue their own economic self-interest.
4) the success of many multinational corporations is based not just upon the goods or
services that they sell in foreign nations, but also upon the core competencies that
underlie the development, production, and marketing of those goods or services.
5) to facilitate international business, property rights are defined in a consistent way
across countries.
6) which of the following countries has had the maximum relative decline in its share of
world output since 1963?
a.canada
b.united states
c.japan
d.germany
7) which of the following is a distinct advantage of exporting?
a.it avoids the often substantial costs of establishing manufacturing operations in the
host country
b.benefits from a local partner’s knowledge of the host country’s competitive conditions
c.avoids the threat of tariff barriers by the host-country government
d.appropriate if lower cost locations for manufacturing the product can be found abroad
8) which of the following is true of reactive firms?
a.they may not even consider exporting until their domestic market is saturated
b.they create excess productive capacity and actively hunt for opportunities in foreign
markets
c.almost all large firms fall under this category
d.they systematically scan foreign markets for profitable export opportunities
9) an equity loan:
a.does not give its holder a claim to a firm’s profit stream
b.is made when a corporation sells stock to investors
c.includes cash loans from banks and funds raised from the sale of corporate bonds to
investors
d.requires the corporation to repay a predetermined portion of the loan amount at
regular intervals regardless of how much profit it is making
10) firms usually respond to pressures for cost reduction by trying to:
a.lower the costs of value creation
b.be locally responsive
c.undertaking product differentiation
d.diversifying product lines
11) which of the following statements about fragmented retail systems is true?
a.countries with fragmented retail systems tend to have short channels of distribution
b.the more fragmented the retail system, the less expensive it is for a firm to make
contact with each individual retailer
c.fragmented retail systems tend to promote the growth of wholesalers to serve retailers
d.when the retail sector is very fragmented, it makes sense for the firm to deal directly
with retailers
12) in terms of seeking export opportunities, studies have shown that:
a.almost all small firms tend to be proactive about seeking profitable export
opportunities
b.most large firms tend to be reactive about seeking export opportunities
c.most small firms systematically scan foreign markets to see where the opportunities
lie
d.many medium-sized and small firms are very reactive
13) identify the incorrect statement pertaining to the world wide web.
a.it makes it much easier for buyers and sellers to find each other
b.viewed globally, it is emerging as an equalizer
c.it rolls back all of the constraints of location, scale, and time zones
d.it allows businesses to expand their global presence at a lower cost than ever before
14) this is a direct restriction on the quantity of some good that may be imported into a
country.
a.specific tariff
b.import quota
c.subsidy
d.ad valorem tariff
15) in december 1991, ec members signed this treaty that committed them to adopting a
common currency by january 1, 1999 .
a.the treaty of rome
b.the delores commission
c.the maastricht treaty
d.the single european act
16) _____ is consistent with the notion that an individual’s right to do something may
be restricted because it runs counter to “the good of society” or “the common good”.
a.entrepreneurship
b.collectivism
c.free enterprise
d.capitalism
17) which of the following statements about socialism is false?
a.modern socialists’ intellectual roots can be traced to karl marx
b.elements of socialist thought can be traced to plato
c.socialist ideology is split into two campscommunists and individualists
d.socialism advocates for state ownership of the means of production
18) _____ can be defined as the rate of return that the firm makes on its invested
capital, which is calculated by dividing the net profits of the firm by total invested
capital.
a.profitability
b.performance
c.cash flow
d.efficiency
19) identify the incorrect statement concerning globalization.
a.it has been blamed for unemployment in developed nations, environmental
degradation and the americanization of popular culture
b.it has created new threats for businesses accustomed to dominating their domestic
markets
c.it is transforming industries and is highly welcomed by those who believed their jobs
were protected from foreign competition
d.according to most economists it is a very beneficial process where gains outweigh the
losses by a wide margin
20) to guard against abuse of employment practices in other nations, multinationals
should do all of the following except:
a.establish minimal acceptable standards that safeguard the basic rights and dignity of
employees
b.adhere to working conditions of the host country if they are clearly inferior to those in
a multinational’s home nation
c.audit foreign subsidiaries and subcontractors on a regular basis to make sure
established standards are met
d.take action to correct unacceptable behavior
21) these refer to abstract ideas about what a group believes to be good, right, and
desirable.
a.values
b.norms
c.thoughts
d.ideas
22) for firms that are selling a product that serves universal needs, and that do not face
significant competition, a(n) _____ strategy makes sense.
a.localization
b.transnational
c.international
d.global standardization
23) these are requirements that some specific fraction of a good be produced
domestically.
a.import quotas
b.voluntary export restraints
c.local content requirements
d.antidumping duties
24) if a firm is facing long distribution channels, the firm should choose a _____
strategy.
a.competitive advertising
b.price discrimination
c.predatory pricing
d.pull
25) the extent to which the place of manufacturing influences product evaluations is
known as:
a.source effects
b.country of origin effects
c.noise effects
d.location effects
26) where is the foreign exchange market located? what is the nature of the market? is
the market growing or shrinking on a global basis?
27) explain the difference between fundamental analysis and technical analysis.
28) compare and contrast the advantages of foreign direct investment over exporting
and licensing.
29) what is the connection between religion and ethical systems?
30) describe an exclusive distribution channel. consider the implications of channel
exclusivity for outside firms.
31) debate the ratification of the north american free trade agreement. do you support
the agreement? why or why not? in your opinion, should nafta be expanded?
32) identify the reasons why accounting in developed countries tends to be far more
sophisticated than it is in less developed countries.
33) what is predatory pricing? describe how a firm might use predatory pricing.
34) what is the philosophy of amartya sen?
35) discuss the implications of the new trade theory.