1) licensing is a good option for firms in high-tech industries where protecting
firm-specific expertise is of paramount importance.
2) if the free market reforms in china continue for two more decades, china may move
from third world status to industrial superpower status even more rapidly than japan
did.
3) over the past 20 years, the u.s. monopoly on new-product development has
strengthened significantly.
4) studies have shown that wage rates for unskilled workers in many advanced
economies have fallen in recent years.
5) in recent decades, the risk of outright expropriations has increased.
6) countertrading is a common solution for nonconvertibility of currency.
7) firms based in less-developed nations tend to build a lot of extra performance
attributes into their products.
8) identify the incorrect statement regarding the direction of fdi.
a.historically, most fdi has been directed at the developing nations of the world
b.during the 1980s and 1990s, the united states was often the favorite target for fdi
inflows
c.the developed nations of the eu have received significant fdi inflows
d.recent inflows into developing nations have been targeted at the emerging economies
of south, east, and southeast asia
9) great trading houses in japan are called:
a.kaizen
b.sogo shosha
c.miti
d.gaunxi
10) a tax treaty:
a.allows an entity to reduce the taxes paid to the home government by the amount of
taxes paid to the foreign government.
b.directs both the host-country government and the parent company’s home government
to tax the income of a foreign subsidiary.
c.is an agreement between two countries specifying what items of income will be taxed
by the authorities of the country where the income is earned.
d.specifies that parent companies are not taxed on foreign source income until they
actually receive a dividend.
11) to overcome cultural barriers, companies should:
a.develop products specifically for each market
b.focus on universal needs
c.focus only on market segments that transcend national boundaries
d.develop cross-cultural literacy
12) a firm that is pursuing a(n) _____ strategy is simultaneously trying to achieve low
costs through location economies, economies of scale, and learning effects, and trying
to differentiate its product offering across geographic markets.
a.global customization
b.international
c.localization
d.transnational
13) _____ exist when the tastes and preferences of consumers in different nations are
similar if not identical.
a.universal needs
b.homogenous needs
c.basic needs
d.bundled needs
14) when a firm has a strategic goal of pursuing a low cost strategy on a worldwide
scale, the firm should follow a(n) _____ strategy.
a.global standardization
b.localization
c.international
d.customization
15) as an investor increases the number of stocks in her portfolio, the portfolio’s risk:
a.increases initially
b.does not change
c.declines rapidly in the beginning
d.increases exponentially beyond a point
16) in a _____ exchange rate system, the value of a set of currencies is fixed against
each other at some mutually agreed on exchange rate.
a.pegged
b.dirty
c.fixed
d.direct
17) what is the biggest advantage of using a letter of credit system?
a.the exporter is guaranteed pre-export financing
b.it allows the importer time to resell the merchandise before requiring payment
c.the trust is established, for the importer and exporter, because of a reputable bank
d.it guarantees the importer extra funds for other purposes
once the exporter has seen a letter of credit, he knows that he is guaranteed payment
and will ship the merchandise.
18) which of the following is not true of a strong corporate culture?
a.almost all managers share a relatively consistent set of values and norms that have a
clear impact on the way work is performed
b.a strong culture leads to a high performance
c.outsiders see firms with a strong culture as having a certain way of doing things
d.a strong culture can be a bad culture
19) critics of globalization maintain that the apparent decline in real wage rates of
unskilled workers
a.owes far more to a technology-induced shift within advanced economies toward jobs
that require significant education and skills
b.is due to the migration of low-wage manufacturing jobs offshore and a corresponding
reduction in demand for unskilled workers
c.has been impacted most by technological change
d.can be checked by increasing society’s investment in education to reduce the supply
of unskilled workers
20) _____ involves removing legal restrictions to the free play of markets, the
establishment of private enterprises, and the manner in which private enterprises
operate.
a.a product law
b.trade certification
c.deregulation
d.a liability law
21) this theory, advanced by the 19th-century english economist david ricardo, forms
the intellectual basis of the modern argument for unrestricted free trade.
a.heckscher-ohlin
b.mercantilism
c.comparative advantage
d.absolute advantage
22) which of the following is not a main institution in the political structure of the eu?
a.the european parliament
b.the european central bank
c.the european commission
d.the council of the european union
23) a fronting loan:
a.helps a multinational to make a direct intrafirm loan, where the parent company lends
cash directly to the foreign subsidiary, and the subsidiary repays it later.
b.can circumvent host-country restrictions on the remittance of funds from a foreign
subsidiary to the parent company.
c.is suitable for lending funds to subsidiaries based in countries which are politically
stable.
d.offers insignificant tax advantages.
24) consider why firms selling products with low value-to-weight ratios choose fdi over
exporting.
25) how are the long-run benefits of doing business in a country measured?
26) what factors allowed the international capital market to bloom in the 1980s, 1990s
and 2000s?
27) why should a firm consider vertical integration as opposed to simply outsourcing
the component parts that go into its final product? what are the advantages of making a
product in-house?
28) what are the two main issues that managers must be aware of when considering
market segmentation in foreign countries?
29) with the help of an example explain how a tourist participates in the foreign
exchange market.
30) discuss the effect of the emphasis on individual performance that exists in many
western societies.