In the face of unpredictable movements in exchange rates, businesses should pursue
strategies that will reduce their economic exposure.
a countrys economic system and property rights regime are reasonably good predictors
of economic prospects.
trade unions around the world employ the same union structure.
the utilitarian approach to ethics is a straw men approach to business ethics that has
some inherent value, but is unsatisfactory in important ways.
product liability sets certain safety standards to which a product must adhere.
even if a country can be characterized as having a single homogenous culture, often that
national culture is a mosaic of subcultures.
a central reason for the establishment of the eu was the devastation of western europe
during two world wars and the desire for a lasting peace.
the fisher effect states that a countrys “real” rate of interest 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.
the threat of antidumping action limits the ability of a firm to use aggressive pricing to
gain market share in a country.
A dirty float occurs when a country uses pegged exchange rates to value its currency.
banks charge borrowers a lower interest rate on eurocurrency borrowings than for
borrowings in the home currency.
The total size of a firms cash pool increases when it pools cash reserves of subsidiaries.
the andean pact is a highly successful common market modeled after the eu.
The current system of foreign exchange is a mixed system of government intervention
and speculative activity.
which of the following statements is true of strategic alliances?
a.the fixed costs and associated risks of developing new products or processes are borne
by the alliance partner
b.they are a way to bring together complementary skills and assets that both companies
develop
c.they limit the entry of firms into foreign markets
d.firm risks giving away technological know-how and market access to its alliance
partner
Of the five combinations, Lessard and Lorange recommend that firms use the _____
spot exchange rate to translate both the budget and performance figures into the
corporate currency.
A.ending
B.initial
C.final
D.projected
which of the following is a major advantage of using a letter of credit?
a.it gives the importer time to resell the merchandise before payment
b.it guarantees the exporter pre-export financing
c.it helps international traders engage in trade with trust
d.it guarantees the importer extra funds for other purposes
a pull strategy should be used when:
a.the firm is selling industrial products
b.the distribution channels are short
c.the distribution channels are long
d.few print or electronic media are available
the idea that valuable knowledge does not reside just in a firms domestic operations but
can also be found in its foreign subsidiaries is called _____.
a.global learning
b.global production processes
c.global economics
d.global factors
which of the following is true of asean?
a.china, india, south korea, and singapore are among its members
b.collectively, the member states account for about 55 percent of world trade
c.it is slowly progressing toward establishing a free trade zone
d.it has been successful in fulfilling its basic objective of fostering freer trade between
member countries
an advantage of engaging in in-house production of products and components is that
_____.
a.the firm will have fewer subunits to control by making products in-house
b.it will help the firm capture more orders from other countries
c.it enables a firm to protect the proprietary technologies that it has
d.firms can make better use of the location advantages of certain countries
_____ is the most common method by which firms transfer funds from foreign
subsidiaries to the parent company.
A.Issue of long-term loans
B.Payment of annual fee
C.Issue of bonds
D.Payment of dividends
which of the following terms refers to the use of a specialized third-party trading house
in a countertrade arrangement?
a.counterpurchase
b.barter
c.offset
d.switch trading
identify an advantage of adopting a low minimum efficient scale.
a.it helps companies reduce the level of initial capital required for business
b.it allows the firm to accommodate demands for local responsiveness
c.it allows firms discount political risks and other global capital risks
d.a minimum efficient scale of a plant allows decentralization of production
the cost of capital is the ____.
a.interest received on investments made by the company
b.price of borrowing money
c.difference between cost of inputs and outputs
d.total value of raw materials that a company uses
the movement toward regional economic integration been most successful in asia.
A currency crisis occurs due to ____.
A.the loss of confidence in a countrys banking system
B.heavy foreign debt obligations
C.high levels of trade deficit
D.a speculative attack on the exchange value
rawls philosophy that inequalities are justified if they benefit the position of the
least-advantaged person is known as the:
a.inequality principle
b.equity principle
c.difference principle
d.ignorance veil principle
which of the following is true of acquisitions?
a.it is a time-consuming process and takes a lot of time to execute
b.they are less risky than greenfield ventures in the sense that there is less potential for
unpleasant surprises
c.they give the firm a much greater ability to build the kind of subsidiary company that
it wants
d.in many cases, firms make acquisitions to preempt their competitors
which of the following is a document used to give the title of the products to a bank?
a.bill of lading
b.letter of credit
c.draft
d.promissory note
A countrys trade balance is in surplus when _____.
A.its exports are more than its imports
B.it experiences negative inflation
C.its exports equal the imports
D.the prices of commodities are low in the country