1) skills in an mne are always generated at the headquarters location and are then
dispersed to the rest of the organization.
2) the fisher effect states that a country’s real interest rate is the sum of the nominal
interest rate and the expected rate of inflation over the period for which the funds are to
be lent.
3) a strong organizational culture might be beneficial at one point, leading to high
performance, but inappropriate at another time.
4) in the case of an ethnocentric approach, it is possible that managers may make
decisions that are ethically suspect because they do not understand the culture in which
they are managing.
5) the european parliament is an elected body that debates legislation proposed by the
european commission.
6) the customer is able to garner the benefit of the consumer surplus because one firm is
competing with other firms for the customer’s business, so the firm must charge a lower
price than it could if it were a monopoly supplier.
7) in a company using cultural controls, employees tend to control their own behavior.
8) new trade theory suggests that nations may benefit from trade even when they do not
differ in resource endowments or technology.
9) brand names are generally well-protected by international laws pertaining to
trademarks.
10) a channel is considered to be long when a producer sells through an import agent, a
wholesaler, and a retailer.
11) according to the theory of _____, it makes sense for a country to specialize in
producing the goods it produces most efficiently and buy the products it produces less
efficiently from other countries, even if it could produce the good more efficiently
itself.
a.strategic trade
b.pertinent advantage
c.comparative advantage
d.absolute advantage
12) which of the following is an advantage of franchising?
a.a firm takes profits out of one country to support competitive attacks in another
b.a firm is relieved of many of the costs and risks of opening a foreign market on its
own
c.it guarantees consistent product quality
d.it achieves experience curve and location economies
13) this occurs when both the host-country government and the parent company’s home
government tax the income of a foreign subsidiary.
a.double taxation
b.tax duplication
c.tax discrepancy
d.indirect taxation
14) which among the following allowances is paid when the expatriate is sent to a
location where basic amenities such as health care, schools, and retail stores are grossly
deficient by the standards of the expatriate’s home country?
a.housing
b.hardship
c.cost-of-living
d.education
15) a _____ combines the separate financial statements of two or more companies to
yield a single set of financial statements as if the individual companies were really one.
a.complied financial statement
b.harmonized financial statement
c.consolidated financial statement
d.operating financial statement
16) if media availability is limited, a firm should:
a.use a push strategy
b.use a pull strategy
c.consider a longer channel
d.consider a shorter channel
17) which of the following would be a typical responsibility of a product division in a
product divisional structure?
a.operating decisions
b.overall strategic development of the firm
c.financial control of the various divisions
d.none. all decisions are typically centralized
18) the simplest integrating mechanism in an mne is:
a.direct contact between managers
b.the use of teams
c.the introduction of liaisons
d.the establishment of the matrix structure
19) in china, class divisions:
a.have historically been of no importance
b.were strengthened during the high point of communist rule
c.increased even during reforms of the late 1970s and early 1980s
d.were weakened because of a rigid system of household registration
20) theses are decisions about how to manage the firm’s financial resources most
efficiently.
a.investment decisions
b.financing decisions
c.money management decisions
d.economic decisions
21) the main elements of the 1976 jamaica agreement include all of the following
except:
a.floating rates were declared unacceptable
b.gold was abandoned as a reserve asset
c.total annual imf quotas were increased to $41 billion
d.imf members were permitted to sell their own gold reserves at the market price
22) contrary to what the heckscher-ohlin theory would predict, the united states has
been a primary importer rather than an exporter of capital goods. this phenomenon is
referred to as the _____ paradox.
a.zero-sum
b.leontief
c.empirical
d.ricardo
23) factors that help a firm decide where to locate its manufacturing facilities can be
best grouped under three broad headings. these are:
a.political factors, social factors, and legal factors
b.country factors, technological factors, and product factors
c.product factors, service factors, and labor factors
d.language factors, cultural factors, and transportation factors
24) the amount of a currency need to purchase one ounce of gold under the gold
standard was known as the:
a.gold par value.
b.gold standard.
c.fixed gold rate.
d.pegged rate.
25) in terms of retail concentration, developed countries tend to have a higher degree of
concentration than developing countries for all of the following reasons except:
a.number of households with refrigerators and freezers
b.tradition of established local neighborhoods in which people walk to stores
c.increase in car ownership
d.number of two-income households that accompany development
26) a push strategy is appropriate when:
a.there are many choices of electronic media
b.the firm is selling consumer goods
c.distribution channels are long
d.the firm is selling complex new products
27) if market segments transcend national borders:
a.the company should develop unique products for each national market
b.the company can view the global market as a single entity and pursue a global
strategy
c.a localization strategy would be appropriate
d.consumers will have differing purchasing behavior in different nations
28) what are location-specific advantages? how do they help explain fdi?
29) explain the product life-cycle theory.
30) why do so many firms take a reactive approach to exporting rather than a proactive
approach?
31) how does the culture of a country influence the nature of its accounting system?
what is uncertainty avoidance?
32) discuss the demographics of world trade since the 1960s. how has the role of the
u.s. changed? how is world trade expected to change in the future?
33) how is a country’s accounting system affected by the providers of capital? explain
with the help of suitable examples.
34) compare and contrast currencies that are freely convertible, externally convertible,
and nonconvertible.
35) explain the trends in world trade and foreign direct investment over the last half
century.
36) what are the five interrelated issues confronting a firm as trade barriers fall and
global markets develop?
37) what is the difference between a spot exchange rate and a forward exchange rate?