1) ________ focus on offering banking and other financial services to nonresident
customers.
A) Subsidiary banks
B) Branch banks
C) Affiliated banks
D) Offshore financial centers
2) Which of the following is a primary business objective for pursuing ethical behavior?
A) avoiding industrial sanctions
B) developing competitive advantages
C) developing creative advertisements
D) discouraging false commitments to the firm
3) To determine whether the standard of living within a country is rising or falling,
economists would most likely use which of the following measures?
A) per capita GNI
B) GNI growth rate
C) purchasing power parity
D) degree of human development
4) As described in the opening case, SpinCent’s CEO analyzed foreign markets,
assessed industries, prepped his company, traveled overseas, and hired trustworthy
distributors. SpinCent manages the export process including making and marketing its
products for foreign buyers. The nature of these activities shows that the leadership of
SpinCent is committing the company to ________.
A) countertrade
B) direct exporting
C) indirect exporting
D) third party logistics
5) According to the text, which of the following has resulted from GE’s Ecomagination
initiative?
A) rising profitability for many GE products
B) increasing doubt among GE’s foreign partners
C) reducing investments by GE due to poor returns
D) improving pollution levels near GE plants in China
6) Which term refers to the combination of external and internal mechanisms
implemented to safeguard the assets of a company and protect shareholders’ rights?
A) consolidation
B) transfer pricing
C) balanced scorecard
D) corporate governance
7) According to the diamond of national advantage theory, the domestic existence of all
four conditions best explains ________.
A) the essence of an industry’s development
B) the position of a product in its life cycle
C) where globally competitive firms develop and sustain themselves
D) why countries rely on abundant factor endowments
8) Which of the following begins with a company defining critical success factors and
specifying objective targets and hard deadlines?
A) coordination by standardization
B) coordination by consensus
C) coordination by plan
D) coordination by intervention
9) ________ is a system of shared values about what is important and beliefs about how
the world works among the employees of an organization.
A) Organizational system
B) Organizational structure
C) Organizational culture
D) Organizational vision
10) Appropriability theory refers to ________.
A) denying rivals access to competitive resources such as management know-how
B) categorizing the appropriateness of a firm’s foreign investments in terms of host
country objectives
C) explaining an investing firm’s choice of partner in a joint venture
D) predicting the general pattern of direct investment locations
11) Some observers feel that international institutions and the people working in them
cannot adequately handle the complexities of an interconnected world Based on this,
these observers believe that ________
A) globalization will slow in the future
B) globalization is nevertheless inevitable
C) international business will grow primarily on a regional basis
D) private companies will replace international organizations in running the world’s
economy
12) A situation in which several banks pool resources in the Eurocurrency market to
extend credit to a borrower and spread the risk is known as ________.
A) credit collaboration
B) leverage equity financing
C) syndication
D) short-term Eurocurrency financing
13) Grids are a useful method of comparing countries for international business
expansion because they ________.
A) generally show how countries will perform in the future
B) show risk on one axis and opportunity on another
C) set minimum scores for proceeding further
D) highlight first-mover advantages
14) Transfer pricing is a strategy that may be used by MNEs to
A) reduce consolidated corporate income taxes
B) partially finance a subsidiary in another country
C) transfer funds from a subsidiary to the parent corporation
D) all of the above
15) An example of a US merchandise import is an automobile made in ________ and
sold ________
A) the United States by a Japanese company; in the United States
B) the United States by a Japanese company; outside the United States
C) Japan by a Japanese company; in the United States
D) Japan by a US company; outside the United States
16) Which of the hypothetical new products, if successful, would most likely diffuse its
production and sales according to the product life cycle theory?
A) a Ferrari sports car selling for $200,000 to a niche, upper-end market
B) a Sony television that receives global transmissions without a satellite dish or cable
connection, introduced at a high price but targeted eventually for sale to a mass market
C) a new Diet Coca-Cola soft drink flavored with cranberries
D) a Kyocera plastic chip carrier, which is expected to be quickly obsolete because of
innovations
17) Why are options most likely so attractive to companies?
A) The writer of the option does not charge the company any fee for writing the option
B) Options provide companies with more flexibility than a forward contract
C) Options are usually cheaper than forward contracts
D) Options can be used for only foreign-exchange deals
18) Which of the following statements is most likely FALSE?
A) Developing countries trade mainly with developed countries
B) Developed countries trade mainly with other developed countries
C) Cultural similarity among countries enhances their trade with each other
D) The greater the geographic distance between countries, the greater the trade
19) Imports can stimulate exports by ________.
A) redistributing the work force
B) curtailing domestic competition
C) generating more tax revenue
D) increasing foreign income