1) myanmar has one of the worst human rights records in the world.
2) in general, economic studies suggest that countries that adopt a more open stance
toward international trade enjoy higher growth rates than those who keep their
economies closed to trade.
3) under a fixed exchange rate regime, countries were limited in their ability to use
monetary policy to expand or contract their economies.
4) production denotes both service and manufacturing activities.
5) a wholly owned subsidiary limits a firm’s control over operations in different
countries.
6) the spread between the eurocurrency deposit rate and the eurocurrency lending rate is
higher than the spread between the domestic deposit and lending rates.
7) a citizen of japan who moves to the united states to work at microsoft would be
classified as an inpatriate.
8) multilateral netting compounds the transaction costs that arise when many
transactions occur between a firm and its subsidiaries.
9) a firm following a polycentric approach to staffing believes that the host country
lacks qualified individuals to fill senior management positions.
10) ethical strategies are the accepted principles of right or wrong governing the
conduct of businesspeople.
11) if a country has an externally convertible currency, neither residents nor
nonresidents are allowed to convert it into a foreign currency.
12) many firms adopt a geocentric policy toward staffing because it is a relatively
inexpensive staffing policy.
13) people who violate folkways are considered to be evil or bad.
14) efficient supply chain management reduces the amount of inventory in the system
and decreases the inventory turnover.
15) when conventional means of payment are difficult, costly, or nonexistent, a firm is
more likely to use:
a.a letter of credit
b.a time draft
c.countertrade
d.a sight draft
16) in late 1997, a deal brokered by the _____ removed many of the restrictions on
cross-border trade in financial services and facilitated further growth in the size of the
global capital market.
a.european union
b.world trade organization
c.international monetary fund
d.world bank
17) in 2006, about a quarter of the imf members had a(n) _____ exchange rate policy.
a.fixed peg
b.currency board
c.free float
d.adjustable peg
18) the _____ shows all of the different positions a firm can adopt with regard to adding
value to the product and low cost assuming the firm’s internal operations are configured
efficiently to support a particular position.
a.strategic choice curve
b.strategy convex
c.efficiency frontier
d.experience curve
19) a _____ system is based on a very detailed set of laws organized into codes.
a.democratic law
b.theocratic law
c.civil law
d.common law
20) in the united states, the only firms allowed to import cheese are certain trading
companies, each of which is allocated the right to import a maximum number of pounds
of cheese each year. identify the trade restriction being imposed by the united states.
a.import quota
b.subsidy
c.ad valorem tariff
d.specific tariff
21) most service firms have found that _____ with local partners work best for
controlling subsidiaries.
a.joint ventures
b.licensing agreements
c.greenfield investments
d.turnkey projects
22) which of the following statements is true regarding cash flows that a firm must
estimate to decide if it should go ahead with a project?
a.in most cases, the cash flows will be positive at first, because the firm is yet to invest
heavily in production facilities.
b.after some initial period the cash flows becomes negative as investment costs increase
and revenues stabilize.
c.once the cash flows have been estimated, they must be discounted to determine their
net present value using an appropriate discount rate.
d.if the net present value of the discounted cash flows is less than zero, the firm should
go ahead with the project.
23) since the collapse of communism at the end of the 1980s, the erstwhile communist
nations have transformed their economies by encouraging all of the following except:
a.privatizing state-owned enterprises
b.regulating markets
c.increasing competition
d.welcoming investment by foreign businesses
24) all of the following are true of tariffs except:
a.they reduce the revenue for the government
b.they can be levied as a proportion of the value of the imported good
c.they can be levied as a fixed charge for each unit of a good imported
d.they impose significant costs on domestic consumers
25) the largest source country for fdi has been china.
26) capital budgeting:
a.in practice is a very simple and perfect process.
b.techniques are not useful for quantifying the benefits, costs, and risks of an
investment.
c.for a foreign project uses the same theoretical framework that domestic capital
budgeting uses.
d.techniques, for evaluating potential foreign projects, do not require the firm to
recognize the specific risks arising from its foreign location.
27) food and detergents giant unilever had foreign subsidiaries that had evolved into
quasi-autonomous operations, each with its own strong national identity. they objected
strenuously to corporate headquarters’ attempts to limit their autonomy. thus, unilever
found it very difficult to shift from a strategic posture that emphasized localization to a
transnational posture because of:
a.difficulty in achieving the coordination required to pursue experience curve and
location economies
b.the difficulty in achieving coordination required to transfer core competencies
c.the federation that resulted from a polycentric approach
d.expensive implementation and increased costs of value creation
28) social democracy:
a.as an ideology may prove to be more enduring than communism
b.has perhaps had its greatest influence in a number of democratic asian countries
c.has had no influence in any democratic western nation
d.had greatest influence in eastern european nations like poland, czechoslovakia, and
hungary
29) the individualism vs. collectivism dimension of hofstede’s study explored:
a.the extent to which different cultures socialized their members into accepting
ambiguous situations and tolerating uncertainty
b.the relationship between gender and work roles
c.how a society deals with the fact that people are unequal in physical and intellectual
capabilities
d.the relationship between the individual and his/her fellows
30) when the foreign exchange market determines the relative value of a currency, we
say that the currency is adhering to a(n):
a.volatile exchange rate
b.pegged exchange rate
c.floating exchange rate
d.fixed exchange rate
31) which among the following should be done in order to reduce bias in the
performance appraisal process for expatriates?
a.more weight should be given to an off-site manager’s appraisal than to an on-site
manager’s appraisal
b.the on-site manager should be of a different nationality as the expatriate manager
c.when the policy is for foreign on-site managers to write performance evaluations,
home-office managers should be consulted before an on-site manager completes a
formal termination evaluation
d.a former expatriates who served in the same location as a current expatriate should
not be allowed to participate in the appraisal
32) pegged exchange rates are popular among many of the world’s:
a.highly developed nations
b.richest nations
c.smaller nations
d.large economies
33) according to the text, various studies have confirmed that despite casual
observations different national stock markets appear to be:
a.positively correlated
b.negatively correlated
c.strongly correlated
d.only moderately correlated
34) the bretton woods agreement differed from the gold standard in that it:
a.incorporated both discipline and flexibility
b.was a floating rate system
c.was based on the british pound
d.was a rigid system of fixed exchange rates
35) explain the heckscher-ohlin theory. what is the relationship between
heckscher-ohlin’s work and the theory of comparative advantage?
36) describe localization strategy. what type of firm is likely to follow a localization
strategy?
37) how has technological change affected global markets? what key innovations have
changed the nature of how “we do business?”
38) describe the situations when licensing is not a good option for a firm.
39) describe the situation where an international division makes sense. how common is
this structure? what are the disadvantages of the structure?
40) what are the factors a firm considers when seeking external financing for a project?
41) what are the four attributes identified by porter as being important in determining
why a nation achieves success in a particular industry?
42) describe the benefits of global expansion for firms.