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1) Under the ________ form of totalitarianism, the regime confines itself to political
control of the state. It does not regulate the economic and social structure of society.
A) fascist
B) communist
C) theocratic
D) authoritarian
2) A bond that is issued by Nestle, a Swiss company, which is denominated in yen and
sold to residents of Japan is most likely a ________.
A) Eurobond
B) global bond
C) foreign bond
D) country fund
3) Exporting below cost or below the home country price is called ________.
A) countertrade
B) an export-led development policy
C) a strategic trade policy
D) dumping
4) The 1997 Kyoto Protocol is best described as an agreement that requires ________.
A) all members of the United Nations to reduce their greenhouse gas emissions by 5.2
percent
B) the United States and Japan to control greenhouse gas emissions by 8% below 1995
levels
C) the signatory countries to cut greenhouse gas emissions to 5.2 percent below 1990
levels
D) the signatory countries to reduce greenhouse gas emissions by 80% by 2050
5) The free trade theories of specialization primarily assume that ________.
A) specialization leads to unemployment, but production gains compensate for job
losses
B) resources can move internationally from the production of one good to another
C) resources can move domestically from the production of one good to another
D) countries have objectives other than economic efficiency
6) Which of the following is NOT among the five forces in the Five-Forces Model of
Industry Structure?
A) governments
B) substitute products
C) potential new entrants
D) suppliers of raw materials
7) Which strategy champions worldwide consistency and standardization to support the
firm's goal to become the low-cost leader?
A) international strategy
B) multidomestic strategy
C) global strategy
D) transnational strategy
8) Which of the following calls for economic activity that meets present needs without
hindering the future needs of society?
A) privatization
B) state capitalism
C) economic freedom
D) sustainable development
9) Ethical dilemmas tend to be ________ for MNE managers than for domestic
managers.
A) more complicated
B) less controversial
C) easier to decide
D) less common
10) In which of the following situations would tax rate differences among countries be
most important for deciding where to place an investment?
A) Companies find advantages in being located near specialized private and public
institutions
B) Companies must compare the benefits of labor- versus capital-intensive production
C) Companies want to serve an entire region within a regional trading bloc
D) Companies must deal with difficult start-up regulations
11) The owner of a US football team and the owner of a Canadian hockey team
purchase a British soccer team This is an example of a ________
A) royalty
B) portfolio investment
C) turnkey operation
D) joint venture
12) How does arbitrage differ from speculation?
A) Speculation, unlike arbitrage, is never used to protect against risk
B) A speculator buys or sells foreign currency with the hope that that currency will
either weaken or strengthen in the future, resulting in a profit
C) Speculation is the purchase of foreign currency on one market for the immediate
resale on another market
D) Arbitrage is another way to speculate for profit or protect against risk
