1) political risk assessment is more art than science.
2) during the period 1990 – 2000, the volume of total exports was more than twice the
world gdp.
3) a key disadvantage of the worldwide area structure is that it limits local
responsiveness.
4) in a worldwide product divisional structure, each division is a self-contained, largely
autonomous entity with full responsibility for its own value creation activities.
5) according to the law of one price, at the most basic level, exchange rates are
determined by supply and demand.
6) to create value, managers should have a process for identifying when valuable new
skills have been created at a subsidiary, and then act as a facilitator to transfer the new
skills within the firm.
7) when conventional means of payment are difficult, a firm might turn to countertrade
as a means of structuring an international sale.
8) costs that an early entrant has to bear that a later entrant can avoid are known as
first-mover costs.
9) it was claimed that the strength of the gold standard was that it contained a powerful
mechanism for achieving balance-of-trade equilibrium.
10) the institutional arrangement that governs exchange rates is known as the:
a.financial control system
b.international monetary system
c.international monetary fund
d.international financial regime
11) a firm that uses a specialized third-party trading house in a countertrade
arrangement is involved in:
a.a barter
b.a counterpurchase
c.an offset
d.switch trading
12) which of the following decisions is typically centralized at a firm’s headquarters?
a.production decisions
b.human resource management
c.marketing decisions
d.overall firm strategy
13) mercosur originated as a(n) _____ between brazil and argentina in 1988.
a.open market
b.free trade pact
c.customs union
d.free trade zone
14) identify the incorrect statement about environmental regulations.
a.environmental regulations are often lacking in developing nations
b.environmental regulations are similar across developed and developing nations
c.developed nations have substantial regulations governing the emission of pollutants,
the dumping of toxic chemicals, etc
d.inferior environmental regulations in host nations, as compared to home nation, can
lead to ethical issues
15) according to harvard economist martin feldstein _____ supports long-term
cross-border capital flows.
a.hot money
b.patient money
c.short-term capital
d.investment capital
16) a(n) _____ tends to be adopted by firms that are reasonably diversified and,
accordingly, originally had domestic structures based on product divisions.
a.worldwide area structure
b.international division structure
c.worldwide product division structure
d.global matrix structure
17) which among the following is seen as the final link in an integrated, circular process
that connects good selection and cross-cultural training of expatriate managers with
completion of their term abroad and reintegration into their national organization?
a.residency
b.visitation
c.repatriation
d.homecoming
18) developed nations tend to have far more sophisticated accounting practices than less
developed countries because:
a.they have large organizations whose accounting problems are more straightforward
than those of small organizations
b.the workforce in these countries is highly educated and skilled and can perform
complex accounting functions
c.their accounting practices have been inherited from their former colonial rulers
d.their financial systems are highly controlled by their respective governments and
other international regulatory bodies
19) the percentage increase in net profits over time measures:
a.capital return
b.profitability
c.net profits
d.profit growth
20) safety standards to which a product must adhere are set by:
a.safety certifications
b.the government standards department
c.product safety laws
d.product liability laws
21) when a company measures the performance of its national operating subsidiaries
according to profitability, the company is using:
a.control systems
b.lean processes
c.incentives
d.organizational culture
22) if the critics of globalization are correct, all of the following things must be shown
except:
a.the share of national income received by labor, as opposed to the share received by the
owners of capital should have declined in advanced nations
b.even though labor’s share of the economic pie may have declined, living standards
need not deteriorate if the size of the total pie has increased sufficiently to offset the
decline in labor’s share
c.the decline in labor’s share of national income must be due to moving production to
low-wage countries, as opposed to improving production technology and productivity
d.economic growth in developed nations has offset the fall in unskilled workers’ share
of national income, raising their living standards
23) the person or business initiating a draft is known as the:
a.beneficiary
b.drawee
c.maker
d.trustor
24) which of the following is an assumption of the heckscher-ohlin theory?
a.countries have varying endowments of the various factors of production
b.gold and silver were the mainstays of national wealth and essential to vigorous
commerce
c.it is in a country’s best interests to maintain a trade surplus
d.trade is a zero-sum game
25) being too dependent on one location is particularly risky because of:
a.floating exchange rates
b.fixed exchange rates
c.lack of movement in currencies
d.static exchange rates
26) which of the following statement about the external sources of capital is not true?
a.a country’s accounting system tends to reflect the relative importance of individual
investors, banks, and government as providers of capital
b.the three main external sources of capital for businesses are individual investors,
banks, and government
c.in most advanced countries, only one of the main sources of external capital is
important
d.the importance of each source of capital varies from country to country
27) research has long maintained that a major factor of success for new products is the
closeness of the relationship between:
a.finance and marketing
b.marketing and r&d
c.finance and materials management
d.finance and r&d
28) how does a fixed exchange rate system work?
29) how does a global capital market, as compared to a purely domestic market, benefit
investors?
30) what prompted the formation of the european union?
31) discuss the foreign corrupt practices act.
32) compare and contrast the export assistance provided to german and japanese
companies with that given to american companies. discuss the implications of the
differences between the countries.
33) what is intangible property? how can intangible property be protected in a licensing
agreement?
34) what is the international monetary fund? what is the world bank? what is their
relationship, if any, with each other?
35) why should a firm pursue an ethnocentric approach to staffing? what are the
disadvantages of this approach?
36) what are the four basic strategies that firms use to compete in international markets?
under what conditions is each strategy most appropriate?
37) what are fronting loans? why are they used by multinationals?