1) to survive, a firm must strive to achieve a fit between its environment, its strategy,
and its organizational architecture.
2) a foreign service premium is offered as an inducement to accept foreign postings.
3) a shotgun approach to exporting will almost always result in that firm becoming
established in any one market.
4) fronting loans is the most common method by which firms transfer funds from
foreign subsidiaries to the parent company.
5) typically, large companies are not very proactive in seeking opportunities for
profitable exporting.
6) in a purely domestic capital market, the liquidity of the market is limited.
7) large strategic commitments limit strategic flexibility.
8) the basic principle behind incentive systems is to ensure that the incentive scheme
for an individual employee is linked to an output target that he or she has some control
over and can influence.
9) from a strategic perspective, the key issue in international labor relations is the
degree to which organized labor can limit the choices of an international business.
10) current cost accounting adjusts all items in a financial statement to factor out the
effects of inflation.
11) time drafts are negotiable instruments.
12) pragmatic nationalism traces its roots to marxist political and economic theory.
13) the establishment of the euro required participating countries to give up their
monetary policy.
14) recent evidence indicates that the solution to the problem of stagnant incomes
among the unskilled is to be found in increasing society’s investment in education to
reduce the supply of unskilled workers.
15) in the 1986 uruguay round, gatt members sought to write rules for promoting all of
the following except:
a.intellectual property protection
b.agricultural subsidies
c.gatt’s monitoring and enforcement mechanisms
d.gatt rules to cover trade in services
16) according to research, american companies experience an expatriate failure rate that
is:
a.similar to that of japanese firms
b.similar to that of european companies
c.higher than both european and japanese enterprises
d.lower than both european and japanese multinationals
17) the marketing and sales functions of a firm can help to create value through all of
the following ways, except:
a.creating goods and services
b.brand positioning
c.advertising
d.communicating consumer needs to r&d
18) identify the incorrect statement pertaining to a country’s political economy.
a.it is independent of the culture of a nation
b.it is a combination of interdependent political, economic, and legal systems
c.its various systems interact and influence each other
d.its interacting systems affect the level of economic well-being
19) when two or more enterprises encounter each other in different regional markets,
national markets, or industries, there is:
a.vertical integration
b.horizontal integration
c.multipoint competition
d.monopolistic competition
20) advantages that arise from using resource endowments or assets that are tied to a
particular location and that a firm finds valuable to combine with its own unique assets
are known as:
a.location-specific advantages
b.resource-specific advantages
c.competitive advantages
d.directional advantages
21) in capital budgeting decisions, the discount rate must be adjusted downward:
a.in countries where liquidity is limited.
b.when the cost of capital used to finance a project is high.
c.in countries where governments offer foreign firms low-interest loans.
d.in countries where the perceived political and economic risks are greater.
22) if a service firm wants to build a global presence quickly and at a relatively low cost
and risk, _____ makes sense.
a.a wholly owned subsidiary
b.exporting
c.a turnkey project
d.franchising
23) _____ refers to movements in a stock portfolio’s value that are attributable to
macroeconomic forces affecting all firms in an economy, rather than factors specific to
an individual firm.
a.financial risk
b.portfolio risk
c.systematic risk
d.unplanned risk
24) the value of a product to an average consumer is v; and the average price that the
firm can charge a consumer for that product is p. here, v – p can be termed as:
a.consumer surplus per unit
b.producer surplus per unit
c.profit growth
d.profit per unit sold
25) identify the theory that seeks to explain why firms often prefer foreign direct
investment over licensing as a strategy for entering foreign markets.
a.internalization theory
b.internationalization theory
c.perfect markets theory
d.small markets theory
26) all of the following theories show why it is beneficial for a country to engage in
international trade even for products it is able to produce for itself except:
a.mercantilism
b.heckscher-ohlin
c.comparative advantage
d.absolute advantage
27) by 2006 some 24 of the world’s 100 largest non-financial multinationals were:
a.chinese enterprises
b.british enterprises
c.u.s. enterprises
d.japanese enterprises
28) differentiate between a tax credit, a tax treaty, and a deferral principle. what is their
importance in international business?
29) explain the notion of the web emerging as an equalizer.
30) highlight the role of the european union (eu) in harmonization of accounting
standards in the eu.
31) explain how governments use administrative trade policies to boost exports and
restrict imports. provide an example of an administrative trade policy.
32) what is the relationship between business, providers of capital, and the development
of a country’s accounting system?
33) what are state-owned companies? why do they exist? why do they usually perform
poorly?
34) why do managers behave in a manner that is unethical?