1) one of the sources of economies of scale is the ability to spread fixed costs over a
large volume.
2) a common market has no barriers to trade between member countries, includes a
common external trade policy, and allows factors of production to move freely between
members.
3) firms pursuing a localization strategy have a high need for coordination between
subunits.
4) evidence shows that adopting a pegged exchange rate regime increases inflationary
pressures in a country.
5) fdi is seen by executives as a means of circumventing future trade barriers.
6) for european firms, the top reason for expatriate failure was the inability of the
manager to cope with larger overseas responsibilities.
7) because international businesses are headquartered in different countries, a nation’s
legal system is usually of very little interest to international business managers.
8) under a current rate method, 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.
9) the asia-pacific economic cooperation was established to increase multinational
cooperation in view of the economic rise of the pacific nations and the growing
interdependence within the region.
10) during the 1980s and early 1990s, the world trading system erected by the gatt
gained momentum as protectionist demands generally decreased across the world.
11) deregulation in a number of key countries has facilitated the growth of the
international capital market.
12) the u.s. government has used the threat of punitive trade sanctions to try to get the
chinese government to enforce its intellectual property laws.
13) since banks are the major providers of capital in countries like germany, financial
accounting practices involve overvaluing assets and valuing liabilities conservatively.
14) the correct transfer price, according to the irs guidelines, is an arm’s-length price.
15) capital flight is most likely to occur when the value of the domestic currency is
depreciating rapidly because of hyperinflation, or when a country’s economic prospects
are shaky in other respects.