1) Each country in NAFTA sets its own tariffs to the rest of the world.
2) Stockholders are typically more interested in corporate social responsibility than in
earning profits.
3) A multidomestic strategy makes the most sense for companies that see high pressures
for local responsiveness and low pressures for cost reductions.
4) Because many regional trading groups prohibit companies from producing in more
than one member country, companies need to understand how to evaluate international
geographic alternatives.
5) Import restrictions are becoming less important because consumers increasingly
want to buy goods and services produced in their own countries
6) An exchange rate is the number of units that buys one unit of another currency.
7) Tel-Comm Tek is a company that believes it has core competencies that its
competitors in foreign markets lack and that it faces relatively weak pressures for local
responsiveness and cost reductions. Tel-Comm Tek is likely to adopt an international
strategy.
8) The so-called “misery index” is the sum of a country’s inflation and unemployment
rates.
9) The financial management activity that determines the proper mix of debt and equity
is ________.
A) capital structure
B) long-term financing
C) capital budgeting
D) working capital management
10) According to the concept of green economics, measuring a country’s economic
performance should also take into account ________.
A) market share
B) population size
C) ecological costs
D) cost-of-living increases
11) Which of the following best describes arbitrage?
A) using foreign exchange to fund new foreign direct investments
B) purchasing foreign currency in anticipation of long-term trends
C) using foreign-exchange instruments to speculate for profit
D) purchasing foreign currency on one market for immediate resale on another market
12) Costa Rica applied the concepts of the diamond of national advantage theory to
help transform its economy by ________.
A) building domestic demand for its products and services
B) looking globally to develop favorable conditions
C) following import substitution policies
D) concentrating on nontradable goods
13) The price on the sale of goods from one member of a corporate family to another is
known as a ________.
A) transfer price
B) sale/resale price
C) global price
D) multidomestic price
14) The ________ theory seeks to define the relationship between currencies based on
relative inflation.
A) inflation growth rate
B) revaluation
C) purchasing power parity
D) interest rate
15) All of the following are arguments for governments to limit foreign control of key
industries EXCEPT which one?
A) Host countries don’t need foreign resources such as technology and export markets
for these industries
B) History shows that home governments have used powerful foreign companies to
influence policies in the countries where they operate
C) Important decisions can be made abroad that are contrary to the country’s best
interest
D) Foreign companies can find means of profiting in these industries without having to
control them
16) The European Union is an example of ________ integration.
A) regional
B) relative
C) global
D) bilateral
17) Assume a government places restrictions on a specific product from a specific
foreign country. What would be the government’s most likely concern about the foreign
country’s response?
A) the foreign producers raising the prices of their exports
B) the foreign country restricting its own imports
C) the foreign country restricting its exports in that industry
D) the foreign producers seeking other markets
18) Barton Accessories has two retail stores and one production facility where the firm’s
line of leather belts and purses are assembled. Barton employs 430 people and
generates nearly $1 million in revenue each year through domestic and international
sales. Which term best describes the status of Barton?
A) SME
B) MNE
C) MNC
D) FDI