1) There is a strong relationship between skewed income distributions and the split
between those who live in urban settings versus those who live in rural areas.
2) A differentiation strategy works well in situations where there are many ways to
differentiate a product or service and many buyers perceive these differences as having
value.
3) The comparable access argument for import restrictions is a more valid economic
argument for products using small-scale technology than for products requiring
substantial economies of scale to be competitive.
4) A growing number of MNEs are increasing expatriate allowances to entice
employees to move overseas.
5) Totalitarian countries are favored by MNEs because state governments typically
favor foreign investors over local companies.
6) The U.N. Global Compact is a legally binding document that requires MNEs to
establish codes of conduct.
7) There is a strong correlation between the intensity of religious belief and attributes
that lead to economic growth, such as obeying laws and thriftiness.
8) Serendipity is often an export trigger for companies that purposefully look to
internationalize their operations.
9) The International Fisher Effect links interest rates and exchange rates.
10) In collaborative arrangements, when one partner cedes control to another partner, it
is no longer responsible for problems.
11) The countries most likely to be successful at using trade retaliation are large trading
countries.
12) When a company is seeking protection from imports, it can usually improve its
chances of getting that protection if it allies with most of the companies in the industry.
13) The trade theory that says a country should export more than it imports is known as
________.
A) mercantilism
B) absolute advantage
C) comparative advantage
D) import substitution
14) All of the following are generally true about trade-displaced workers EXCEPT
which one?
A) They move abroad to take new jobs
B) They earn less in their new jobs than they earned in their old ones
C) They spend their unemployment benefits on living rather than retraining
D) They have difficulty finding new work because of educational deficiencies
15) Dixon Electronics recently introduced a new computer with features unavailable
from other products on the market. Dixon is charging a very high price for the computer
and has plans to progressively lower the price over the next year. Dixon is most likely
using a ________ strategy.
A) cost-plus
B) skimming
C) penetration
D) diversification
16) Governments have signed treaties to protect foreign-owned property rights, such as
investments and patents A primary reason for doing so is to ________
A) gain reciprocal advantages
B) reduce the domestic effects of other countries’ economic policies
C) deal with areas of concern outside the territory of any one country
D) reduce national conflicts leading to violent political demonstrations
17) The most preferred exchange rate used by British MNEs to translate the budget is
the ________.
A) current-rate method
B) temporal method
C) budgeted rate
D) forecast rate
18) The recent global credit crisis has interrupted the trend of national economies
________.
A) rapidly adopting the command market model
B) steadily adopting the free market model
C) moving from the mixed to the command model
D) turning away from the mixed model
19) Which level of moral development involves an individual learning role-conformity
from peers, parents, and laws?
A) conventional
B) principled
C) autonomous
D) preconventional
20) U.S. companies monopolize much of the international entertainment media, which
largely portrays U.S. products and lifestyles as glamorous and appealing. This situation
would most likely be used as an example of ________.
A) the stronger work ethic typical of developed countries
B) the spread of high-context cultures
C) cultural fragmentation
D) cultural imperialism
21) In deciding whether to make or buy, MNEs should focus on those parts that are
________ to the product and that they are ________ at making.
A) critical; distinctively good
B) incremental; distinctively good
C) critical; marginally good
D) incremental; marginally good
22) Most counterfeit goods are made in markets in which ________ is the basis of the
legal system.
A) the rule of man
B) the rule of law
C) religious doctrine
D) corporate precedent
23) The Bretton Woods Agreement established a system of fixed exchange rates under
which each IMF member country set a ________.
A) quota
B) par value
C) gold standard
D) nominal interest rate
24) Which of the following best describes a result of cultural collision in international
business?
A) A company implements practices that are less effective than intended
B) Local employees are overlooked for promotions by home country managers
C) Expatriate managers rely too heavily on local employees for negotiating business
deals
D) Foreign and domestic companies make adjustments for the local culture and legal
environment
25) Which of the following countries has an individualistic orientation?
A) Venezuela
B) Japan
C) Egypt
D) Canada
26) A U.S. firm with a production facility in Brazil uses its own personnel to handle
almost all activities because their outsourcing would be too costly and inefficient. Its
internalization will most likely lead to cost savings because the firm can avoid
________.
A) costly customs brokers
B) high, fixed start-up costs
C) the costs of enforcing an agreement
D) sharing profits
27) What is the relationship between the five-forces model and a firm’s international
business strategy? Provide examples to illustrate your answer.
28) In a brief essay, discuss the strategy used by Zara, the firm described in the opening
case. Also discuss the features of Zara’s value chain.
29) In a short essay, discuss the standardization of two marketing components:
advertising and distribution.
30) What are the main arguments for limiting trade in services? What is your opinion on
limiting trade in services?
31) In a short essay, discuss how companies use foreign exchange.
32) What is the difference between individualism and collectivism? What is the
relationship between government and business under each orientation?
33) What is dumping? What are the possible effects of dumping on a country’s
economy?
34) What are the disadvantages of import restrictions in regards to creating domestic
employment opportunities?
35) How can an MNE operating in a developing country have a positive influence on
labor policies? Illustrate your answer with an example.
36) From an economic standpoint, why do production factors move from one country to
another? How does factor movement affect international trade?