1) countries cannot prohibit national firms from investing in certain countries for
political reasons.
2) the failure rate for international strategic alliances is very low.
3) the value of a currency is determined by the interaction between the demand and the
supply of that currency relative to the demand and supply of other currencies.
4) the foreign exchange market is open for only 12 hours in a day.
5) one of the reasons for the spread of democracy is the emergence of increasingly
prosperous middle and working classes who have pushed for democratic reforms.
6) the creation of skills that help to lower the costs of production, or to enhance
perceived value and support higher product pricing, is the monopoly of the corporate
center.
7) to leverage subsidiary skills, companies should establish incentive systems that
encourage local employees to acquire new skills.
8) according to the friedman doctrine:
a.ethics are nothing more than the reflection of culture
b.a multinational’s home-country standards of ethics are inappropriate to follow in
foreign countries
c.businesses should not undertake social expenditures beyond those mandated by the
law and required for the efficient running of a business
d.if a manager of a multinational sees that firms from other nations are not following
ethical norms in a host nation, that manager should not either
9) the most restrictive form of countertrade is:
a.switch trading
b.barter
c.buyback
d.counterpurchase
10) in order for price discrimination to be successful:
a.there must be a strong case for arbitrage
b.markets must be kept separate
c.demand must be very elastic
d.a large change in demand must be triggered by a small change in price
11) a french subsidiary owes a mexican subsidiary $6 million and the mexican
subsidiary simultaneously owes the french subsidiary $4 million. through a mutual
settlement a single payment of $2 million is made from the french subsidiary to the
mexican subsidiary, the remaining debt being canceled. this example best exemplifies:
a.bilateral netting.
b.a transfer loan.
c.multilateral netting.
d.a fronting loan.
12) individualism can best be described by which of the following statements?
a.it as a philosophy suggests that an individual should have freedom over his/her
economic and political pursuits
b.it is a political system in which government control over all factors of production is in
entirety
c.it is a political system that stresses the primacy of collective goals over individual
goals
d.it is a form of government in which one person or political party exercises absolute
control over all spheres of human life
13) design and names by which merchants or manufacturers designate and differentiate
their products are known as:
a.patents
b.copyrights
c.trademarks
d.licenses
14) mendenhall and oddou’s “others-orientation” dimension, in their study on what
predicts success in foreign jobs postings, refers to:
a.the expatriate’s self-esteem, self-confidence, and mental well-being
b.the expatriate’s ability to interact effectively with host-country nationals
c.the expatriate’s ability to understand why people of other countries behave the way
they do
d.the relationship between the country of the assignment and how well an expatriate
adjusts to a particular posting
15) which of the following statements pertaining to the changing demographics of
world gdp and trade from 1963 to 2006 is not true?
a.as emerging economies continue to grow, a relative decline in the share of world
output and world exports accounted for by the u.s. seems unlikely
b.forecasts predict a rapid rise in the share of world output accounted for by some
developing nations
c.a decline in the share enjoyed by rich industrialized countries such as great britain,
germany, japan, and the u.s. is likely
d.if current trends continue, the chinese economy could be larger than that of the u.s. on
a purchasing power parity basis
16) assume that the yen/dollar exchange rate quoted in london at 3:00 p.m. is 120 = $1,
and the new york yen/dollar exchange rate at the same time is 125 = $1. a dealer makes
a profit by buying a currency low and selling it high. the dealer has engaged in a(n):
a.currency swap
b.arbitrage
c.backwardation
d.straddle
17) when companies disperse different stages of the value chain to those locations
around the world where perceived value is maximized or where the costs of value
creation are minimized, companies create:
a.a differentiated organization
b.a location economy curve
c.economies of scale
d.a global web of value creation activities
18) the agencies of the u.s. department of commerce provide the potential exporter with
all of these services except:
a.matchmaker programs
b.trade events and exhibitions
c.best prospects lists
d.export subsidies
19) the european coal and steel community, formed in 1951, was a forerunner of:
a.efta
b.eu
c.mercosur
d.apec
20) the stock of fdi is:
a.the amount of fdi undertaken over a given period of time
b.the total accumulated value of foreign-owned assets at a given time
c.the flow of fdi out of a country
d.the flow of fdi into a country
21) compare and contrast a pure democracy and a representative democracy. which type
of democracy is more common today? why?
22) explain how the concept of production efficiency has changed with the rise of
flexible manufacturing technologies.
23) explain how switch trading works.
24) write a brief note on foreign exchange risks and the cost of capital.
25) what is the difference between profitability and profit growth?