1) Uneven income distribution ________.
A) exists in almost every country
B) is largely a problem for poorer nations
C) primarily affects people in urban settings
D) is limited to a small share of the world population
2) Tom, a manager at an MNE, has been given the task of identifying a pool of
companies with which the firm might form collaborative arrangements. Which of the
following activities would be LEAST useful for Tom?
A) attending technical conferences
B) monitoring industry journals
C) attending trade fairs
D) constructing turnkey facilities
3) The diamond of national advantage would be best used to answer which of the
following questions?
A) How do developed countries prevent the trade of blood diamonds?
B) How can developing countries create a significant trade surplus?
C) Why do specialized competitive advantages differ among countries?
D) Why do most innovative products originate in developed countries?
4) Neomercantilism describes the approach of countries that try to run a favorable
balance of trade to ________.
A) build up gold reserves
B) achieve a social or political objective
C) lower their rates of inflation
D) buy raw materials more cheaply
5) A negotiable certificate issued by a U.S. bank to represent the underlying shares of a
foreign corporation’s stock is called a(n) ________.
A) Euroequity
B) American Depositary Receipt
C) Global Depositary Receipt
D) European Depositary Receipt
6) According to the Ethical Trading Initiative (ETI), ________.
A) child labor cannot be used unless there are no suitable alternatives
B) employment need not be freely chosen in order to be acceptable
C) no harsh or inhumane treatment of workers should be allowed
D) MNEs are not responsible for establishing codes of conduct
7) Dispersing value activities where and in how many places in the world is the issue of
________.
A) logistics
B) clustering
C) coordination
D) configuration
8) ________ effects of economic integration are the overall growth in the market and
the impact on a company caused by expanding production and by the company’s ability
to achieve greater economies of scale.
A) Dynamic
B) Static
C) Economic
D) Barrier
9) Countries with a ________ legal system tend to encourage precise, detailed
contracts, whereas countries with a ________ legal system tend to encourage shorter
and less specific contracts.
A) theocratic; mixed
B) common; civil
C) civil; customary
D) customary; common
10) In the U.S., the unemployment rate indicates the ________.
A) percentage of the labor force that wants to work full-time but can only find part-time
employment
B) number of people who have stopped looking for work because full-time jobs are
unavailable
C) percentage of unemployed workers seeking paid work relative to the total labor force
D) number of workers eligible for government services and unemployment benefits
11) The Human Development Index measures the average achievements in a country on
three basic dimensions of human development, including ________.
A) promotion of cultural values
B) quantity of free time
C) extent of knowledge
D) sustainability
12) Meeting the needs of the present without compromising the ability of future
generations to meet their own needs is known as ________.
A) competitive advantage
B) the Kyoto Protocol
C) sustainability
D) externality
13) Which of the following is NOT one of the three basic configurations that MNEs
consider when establishing a global manufacturing strategy?
A) regional manufacturing
B) centralized manufacturing
C) multidomestic manufacturing
D) multicultural manufacturing
14) Which of the following BEST explains how a firm reduces risk by operating
internationally?
A) taking advantage of business-cycle differences among countries
B) buying competitive risk insurance unavailable domestically
C) preventing competitors from operating in the countries it has entered
D) operating in less competitive environments than those at home
15) Assume that U.S. MNE A earns $100,000 of foreign source income, that the tax rate
in the foreign country is 40 percent, and that the tax rate in the United States is 35
percent. How much total (both domestic and foreign) tax would the company pay on
that foreign source income, assuming that the tax credit principle applies?
A) $40,000
B) $35,000
C) $75,000
D) $5,000
16) Which of the following is most likely to occur when a firm segments markets by
country?
A) achieving objectives by following a sales orientation strategy within that market
B) initially targeting the high-income consumers within that market
C) overlooking similarities between different countries
D) introducing multiple products to assess demand
17) Improving explanatory power of the IO paradigm can be done by considering the
potential for ________ to lead to a company’s sustained competitive advantage.
A) bright, motivated managers
B) political trends and events
C) cultural institutions
D) new markets
18) Which of the following best explains the increase in trading activity in recent years?
A) growing emphasis on hedge funds
B) availability of more global currencies
C) demands for immediate money access
D) advances in communication technology
19) ________ is the pricing of goods, services, and technology between related
companies.
A) Among pricing
B) Retail pricing
C) Transfer pricing
D) Wholesale pricing