1) concentrating production at an optimal location is more attractive when a product
serves universal needs.
2) as an investor increases the number of stocks in her portfolio, the portfolio’s risk
increases.
3) there is now a trend toward greater decentralized control.
4) universal needs exist when the tastes and preferences of consumers in different
nations are similar if not identical.
5) the structure of market segments may differ significantly from country to country.
6) according to vernon, location-specific advantages can help explain the rationale for
and the direction of fdi.
7) the council of the european union is responsible for proposing eu legislation,
implementing it, and monitoring compliance with eu laws by member states.
8) u.s. firms interested in exporting can acquire a “best prospects” list of opportunities
from the u.s. department of commerce and its district offices all over the country.
9) when a currency depreciates, a low-cost location can be turned into a high-cost
location.
10) accounting is shaped by the environment in which it operates.
11) internalization theory is also known as the market imperfections approach.
12) american culture has changed and it is easier now for women to gain senior
management positions than men.
13) the product life-cycle theory and knickerbocker’s theory of horizontal fdi tend to be
very useful from a business perspective because the theories are more descriptive than
analytical.
14) when two parties agree to exchange currency and execute the deal immediately, the
transaction is a:
a.point-in-time exchange
b.temporal exchange
c.spot exchange
d.forward exchange
15) in a country where competition is limited,
a.prices will be low
b.there will be low elasticity of demand
c.prices will be high
d.consumers’ bargaining power rises
16) fdi has been rising for all of the following reasons except:
a.the globalization of the world economy
b.the general increase in trade barriers over the past 30 years
c.firms are trying to circumvent trade barriers
d.there is a shift toward democratic political institutions and free market economies
17) a range of barter-like agreements by which goods and services can be traded for
other goods and services is known as:
a.countertrade
b.protracted trade
c.intermediate sales
d.countersale
18) which of the following is less likely to add to the pressure for a firm to be locally
responsive?
a.national differences in consumer tastes and preferences
b.differences in infrastructure and traditional practices
c.switching costs for consumers
d.host-government demands
19) according to the _____ policy, subsidies can help a firm achieve a first-mover
advantage in an emerging industry.
a.strategic trade
b.antidumping
c.tariff quota
d.free trade
20) which of the following enables managers to walk away from a decision that is
profitable, but unethical?
a.noblesse oblige
b.moral courage
c.the difference principle
d.the friedman doctrine
21) by using a mix of techniques to transfer liquid funds from a foreign subsidiary to
the parent company, _____ allow(s) an international business to recover funds from its
foreign subsidiaries without piquing host-country sensitivities with large “dividend
drains.”
a.unbundling
b.tax treaties
c.the deferral principle
d.tax havens
22) historically, financial reports prepared by firms in germany:
a.tended to contain less information than those of british or u.s. firms
b.tended to contain all information required by individual investors
c.did not make any public disclosure of a firm’s financial position
d.overvalued assets and undervalued liabilities
23) which of the following are among the best examples of market makers?
a.individuals
b.regulatory agencies
c.governments
d.commercial banks
24) discuss michael porter’s interpretation of value creation and competitive advantage.
25) what is transaction exposure? how can transaction exposure be minimized?
26) discuss the different types of subsidies. how do subsidies help domestic producers?
27) define transfer price. enumerate the benefits of manipulating transfer prices.
28) explain ppp. use an example to show how ppp can help explain exchange rates.
29) what is a currency swap?
30) describe the three purposes of a bill of lading.
31) discuss strategic positioning. how does strategic positioning relate to the efficiency
frontier?
32) what is meant by minimum efficient scale? discuss the implications of minimum
efficient scale.
33) discuss the notion of social responsibility. what does it mean for corporations?