1) the governments of the argentina and brazil in 1988 agreed to enter into a free trade
agreement, the goal of which was to eliminate all tariffs on bilateral trade between these
countries by 1998 .
2) proponents of nafta have argued that the free trade area should be viewed as an
opportunity to create an enlarged and more efficient productive base for the entire
region.
3) a grouping of various types of machinery, a common materials handler, and a
centralized cell controller is a flexible machine cell.
4) by holding a variety of stocks in a diversified portfolio, the losses incurred when
some stocks fail to live up to their promises are offset by the gains enjoyed when other
stocks exceed their promise.
5) thanks to the world intellectual property organization, enforcement of intellectual
property rights is strong across the globe.
6) a company that is successful at a localization strategy will realize experience curve
and location economies.
7) countries adopting a pragmatic stance pursue policies designed to maximize the
national benefits and minimize the national costs.
8) in the united states and great britain, the financial accounting system is oriented
toward providing individual investors with the information they need to make decisions
about purchasing or selling corporate stocks and bonds.
9) strategic trade policy suggests that a government should use subsidies to support
promising firms that are active in newly emerging industries.
10) the emerging role of the european commission in competition policy suggests the eu
is increasingly willing and able to intervene and impose conditions on companies
proposing mergers and acquisitions.
11) social responsibility refers to the idea that businesspeople should consider the social
consequences of economic actions when making business decisions, and that there
should be a presumption in favor of decisions that have both good economic and social
consequences.
12) harvard economist martin feldstein argues that short-term capital is still relatively
rare, primarily because although capital is free to move internationally, its owners and
managers still prefer to keep most of it at home.
13) a(n) _____ strategy makes most sense when demands for local responsiveness are
high, but cost pressures are moderate or low.
a.global standardization
b.international
c.localization
d.transnational
14) which of the following is a potential drawback of the worldwide area structure?
a.it encourages fragmentation of the organization into highly autonomous entities
b.it is inconsistent with a localization strategy
c.it discourages local responsiveness
d.it is not suitable for firms with a low degree of diversification and a domestic
structure based on functions
15) under the _____, the exchange rate at the balance sheet date is used to translate the
financial statements of a foreign subsidiary into the home currency of the multinational
firm.
a.temporal method
b.current rate method
c.operating cost accounting method
d.historic cost principle
16) for american multinationals, the biggest impediment to expatriate success is:
a.the inability of the spouse to adjust
b.the manager’s inability to adjust
c.the manager’s inability to cope with larger overseas responsibilities
d.the manager’s personal or emotional maturity
17) by acquiring retailers in different countries, large global retailers such as carrefour
and wal-mart have increased:
a.retail concentration
b.retail fragmentation
c.retail dispersion
d.retail crowding
18) bretton woods set a restriction of _____ percent for devaluations of currency, if a
currency became too weak to defend, without permission from the imf.
a.5
b.10
c.15
d.20
19) one drawback of relying on emcs is that:
a.they are not conversant with the ins and outs of the exporting process
b.they have no knowledge of different business mores
c.the company can fail to develop its own exporting capabilities
d.the company is unable to avoid common pitfalls
20) this is a less rigid form of social stratification in which social mobility is possible.
a.social system
b.caste system
c.cultural system
d.class system
21) centralization:
a.gives top management time to focus on critical issues by delegating more routine
issues to lower-level managers
b.can give top-level managers the means to bring about needed major organizational
changes by concentrating power and authority in one individual or a management team
c.permits greater flexibility because decisions do not have to be “referred up the
hierarchy”
d.unless they are exceptional in nature
e.can be used to establish relatively autonomous, self-contained subunits within an
organization
22) the benefits of doing business in a country are a function of all of the following
except:
a.the size of the market
b.its past growth
c.its present wealth
d.its future growth prospects
23) what is countertrade? why would a firm engage in countertrade?
24) discuss the shift in fdi from manufacturing to services. what is driving the trend?
25) discuss the reasons why expatriate managers fail to complete their foreign
assignment. do the reasons for expatriate failure differ by nationality?
26) what was adams smith’s contribution to the theory of why nations trade? what is the
theory of absolute advantage?
27) discuss the buy america act and its connection with local content requirements.
28) how can a borrower hedge against unpredictable movements in exchange rates?
29) explain the concept of location economies.
30) what is channel length? what is the most important determinant of channel length?
mention two factors that shorten channel length.