Scenario: You’re Hired!
Erica Els has just been promoted as vice president of human resources for Hudson
Foods, a U.S.-based international frozen food corporation. Erica’s first task is to staff
the company’s European subsidiary.
One challenge facing Hudson Foods as it expands into Europe is getting through all the
bureaucratic and legal regulations surrounding the food industry. Erica plans to hire a
manager to ensure that this challenge is overcome. Who among the following will Erica
most likely recruit for this position?
A) a local manager with strong government contacts
B) an experienced manager from the Hudson Foods U.S. headquarters
C) a native of the target market who is a recent U.S. college graduate
D) a candidate from the U.S. with extensive management experience in the frozen food
industry
A requirement that all WTO members extend the same favorable terms of trade to all
members that they extend to any single member is called ________.
A) normal trade relations
B) antidumping duties
C) local content requirements
D) countervailing duties
A(n) ________ is anything that represents a culture’s way of life, including gestures,
material objects, traditions, and concepts.
A) social structure
B) social status
C) cultural baggage
D) cultural trait
Which of the following is established by a company that builds an entirely new facility?
A) a divestiture
B) a shadow economy
C) a greenfield investment
D) a shell corporation
In ________ cultures, economic systems tend to provide incentives and rewards for a
person’s private business initiatives.
A) individualist
B) high uncertainty avoidance
C) feminine
D) large power distance
Export/import financing in which a bank acts as an intermediary without accepting
financial risk is called ________.
A) documentary collection
B) counterpurchase
C) buyback
D) open account
Individuals from the home country manage operations outside the home country in
________ staffing.
A) ethnocentric
B) polycentric
C) regiocentric
D) geocentric
________ is the term used to refer to a production technique in which inventory is kept
to a minimum and inputs to the production process arrive exactly when they are needed.
A) Just-in-time manufacturing
B) Lean manufacturing
C) Continuous production
D) Flow production
Which of the following treaties was signed by the members of the European Coal and
Steel Community in 1957 for creating the European Economic Community?
A) the Treaty of Rome
B) the Maastricht Treaty
C) the Treaty of Paris
D) the Treaty of Versailles
Adam Smith believed that ________.
A) governments should determine trade flows
B) market forces should determine trade flows
C) international trade should be restricted by tariffs and quotas
D) countries should produce most goods themselves and trade as little as possible
Which of the following is true about a quote of ¥117.87/$?
A) It is equal to $.008484/¥.
B) The quote is in U.S. dollars.
C) This is an indirect quote on the yen.
D) It costs a little more than a dollar to buy one yen.
Which of the following statements is true regarding total quality management (TQM)?
A) TQM emphasizes on a single effort at the start to improve the quality of its products.
B) TQM largely increases the responsibility on each individual to focus on quality.
C) TQM philosophy initially took hold in the U.S.
D) TQM applies solely to an employee’s activities based inside a factory.
Which of the following statements is true of the environmental forces that affect
strategy formulation?
A) Socialist economic systems normally levy light taxes on business profits.
B) Countries that excessively spend on R&D tend to have lower levels of prosperity.
C) Approval of the host government is almost always necessary for making direct
investments.
D) Free-market economies tend to levy high taxes on business profits.
Which of the following statements is true regarding the assumptions of the absolute and
comparative advantage theories?
A) The theories assume that there are many number of countries engaged in the
production and consumption of just two goods.
B) The theories assume that there are additional costs for transporting traded goods
from one country to another.
C) The theories assume labor to be the only resource used in the production process.
D) The theories assume that specialization in the production of one particular good
results in gains in efficiency.
The annual income considered below the poverty line in one country is the annual
income of a middle-class family in another country. Which of the following difficulties
associated with conducting international market research does this scenario illustrate?
A) availability of data
B) protection of data
C) marketability of data
D) comparability of data
Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin
America. To that end, Blickinstock is trying to decide whether to purchase an existing
company in a remote region of Argentina or build its own subsidiary. Keith Moon,
Blickinstock’s vice president of global business development, will be making a
presentation to the board outlining the company’s options.
Which of the following is the type of production illustrated in the automobile industry?
A) customized production
B) rationalized production
C) job production
D) craft production
Governments impose currency restrictions in their countries to ________.
A) encourage future investment outflows
B) indirectly reduce imports and exports
C) protect currencies from speculators
D) exhaust their reserve of hard currencies
Donna Bader, Globalization opponent
Donna Bader spent her final year at college studying the effect of various economic
factors on the economy of developing nations. Based on the results of her study, she
concluded that globalization does these countries more harm than good.
Which of the following statements, if true, weakens her argument?
A) The employment rate of developed nations has been declining because of
international outsourcing.
B) With the exposure to new technology and cultural trends, the standard of living in
developing countries has improved.
C) People in high-wage countries often can’t afford hospital care without financial
assistance.
D) Labor market flexibility across the world has seen little improvement over the last
decade.