1) a global standardization strategy is appropriate when a firm is facing low pressures
for cost reduction but high pressure for local responsiveness.
2) cash needs are assumed to be normally distributed in each country and independent
of each other.
3) an expatriate manager is a citizen of one country who is working abroad in one of the
firm’s subsidiaries.
4) firms may avoid strategic alliances because their complexity usually delays entry
into a foreign market.
5) most benefits that are tax deductible for the firm in the home country are deductible
out of the country.
6) a firm pursuing a localization strategy will have a strong incentive to centralize
decision- making.
7) subunit goals are determined solely by the head office.
8) the ability to understand why people of other countries behave the way they do is
perceptual ability.
9) the principle tool that most managers now use to increase the reliability of their
product offering is tqm.
10) human rights activists see wto rules as outlawing the ability of nations to stop
imports from countries where child labor is used or working conditions are hazardous.
11) economies that arise from performing a value creation activity in the optimal
location are known as location economies.
12) the letter of credit is issued by the bank at the request of an exporter.
13) the use of price as a competitive weapon to drive weaker competitors out of a
national market is known as predatory pricing.
14) other things being equal, the greater the capital investment in an economy, the more
favorable its future growth prospects are likely to be.
15) when the income a country’s residents earn from exports is equal to the money its
residents pay to other countries for imports, the country is said to:
a.be in current account equilibrium
b.be in capital account equilibrium
c.be in balance-of-trade equilibrium
d.have a managed float
16) which of the following is not a trend toward deregulation that facilitated the growth
of the international capital market?
a.the u.s., in 1970s and early 80s, allowing foreign banks to enter the u.s. capital market
and domestic banks to expand their operations overseas
b.great britain’s removal of barriers, in october 1986, that had existed between banks
and stockbrokers and allowed foreign financial service companies to enter the british
stock market
c.restrictions on the entry of foreign securities houses in japan, and japanese banks not
being allowed to open international banking facilities
d.in germany, foreign banks being allowed to lend and manage foreign euro issues,
subject to reciprocity agreements
17) john dunning, a champion of the eclectic paradigm, argues that:
a.the firms that pioneer a product in their home markets undertake fdi to produce a
product for consumption in a foreign market
b.when a firm that is part of an oligopolistic industry expands into a foreign market,
other firms in the industry will be compelled to make similar investments
c.combining location-specific assets or resource endowments and the firm’s own unique
assets often requires fdi
d.impediments to the sale of know-how increase the profitability of fdi relative to
licensing
18) under the gold standard, the u.s. dollar could be converted into _____ grains of fine
gold.
a.10.1
b.17.3
c.23.33
d.480
given a common gold standard, the value of any currency in units of any other currency
was easy to determine.
19) when the receiver of a message evaluates a message based on the status or image of
the sender, _____ are said to have occurred.
a.sender effects
b.noise effects
c.source effects
d.communication effects
20) which of the following was designed to allow gm to operate ethically in south africa
as long as the company did not obey the apartheid laws in its own south african
operations?
a.the righteous moral system
b.sullivan principles
c.noblesse oblige
d.cultural relativism
21) the emphasis on local responsiveness in firms pursuing a local responsiveness
strategy creates strong pressures for:
a.decentralizing all decisions to foreign subsidiaries
b.decentralizing operating decisions to foreign subsidiaries
c.centralizing all operating decisions
d.centralizing all decisions
22) identify the incorrect statement pertaining to innovation and entrepreneurship.
a.they are the engines of growth
b.they require state ownership of all means of production
c.they require a market economy
d.they require strong property rights
23) the foreign exchange market serves two main functions. these are:
a.collect duties on imported products and convert the currency of one country into the
currency of another
b.insure companies against foreign exchange risk and set interest rates charged to
foreign investors
c.collect duties on imported products and set interest rates charged to foreign investors
d.convert the currency of one country into the currency of another and provide some
insurance against foreign exchange risk
24) before nafta was passed
a.mexico agreed to establish a higher minimum wage
b.the u.s. agreed to limit the number of jobs that could be exported to mexico
c.mexico committed to tougher enforcement of environmental protection regulations
d.canada committed to establish new limits of fdi
25) although the characteristics of the global economy have changed dramatically over
the past 30 years, as late as the 1960s all of the following demographic characteristics
were true, except:
a.the u.s. dominated the world economy
b.small, u.s. entrepreneurial firms dominated the international business scene
c.the u.s. dominated the world foreign direct investment picture
d.roughly half the world was governed by centrally planned economies of the
communist world
26) identify the advantage of establishing wholly owned subsidiaries.
a.it is the least expensive method of serving a foreign market from a capital investment
standpoint
b.political considerations make it the most feasible entry mode
c.it may be required if a firm is trying to realize location and experience curve
economies
d.it is particularly useful where fdi is limited by host-government regulations
27) since 1980, the world’s containership fleet has more than _____, reflecting in part
the growing volume of international trade.
a.doubled
b.tripled
c.quadrupled
d.quintupled
28) antitrust laws in the united states are designed to:
a.encourage business practices designed to monopolize a market
b.discourage private ownership
c.restrict privatization
d.outlaw monopolies
29) what is the most important factor in determining the elasticity of demand for a
product in a given country?
a.personal selling
b.logistics
c.operating revenue
d.income level
30) before a firm is allowed access to the european marketplace, the european union
requires that the quality of the firm’s manufacturing processes and products be certified
under a quality standard known as:
a.total quality management
b.reengineering
c.quality management system
d.iso 9000
31) the need for coordination between subunits is lowest in firms pursuing a(n):
a.localization strategy
b.international strategy
c.global strategy
d.transnational strategy
32) in analyzing a foreign investment opportunity, how can the additional risk that
stems from its location be handled?
33) discuss the three main reasons for the spread of democracy.
34) what are foreign bonds?
35) discuss the international monetary system. what are the major trading currencies?
36) why are tariff rates on agricultural products generally higher than tariff rates on
manufactured products or services?
37) what are rights theories? what is the connection between rights theories and the
united nations?