1) Countries benefit from global economic integration politically and economically.
Which of the following is an example of a political benefit?
a. Rules make life easier and discrimination impossible
b. Raise incomes and stimulate economic growth
c. Disputes are handled constructively
d. Promoting peace by promoting trade and investment
2) ____ had been embraced throughout Central and Eastern Europe and the former
Soviet Union until the late 1980s.
a. Communist totalitarianism c. Tribal totalitarianism
b. Theocratic totalitarianism d. Right-wing totalitarianism
3) “Born global” is a term referring to:
a. Establishing large firms with major international networks
b. Entrepreneurial firms that attempt to internationalize from inception
c. The newest generation of entrepreneurs
d. Firms that focus on domestic issues first, then cautiously approach international
opportunities
4) Which expression does the author use to describe contemporary globalization?
a. Global localization c. Semiglobalization
b. Total globalization d. Global standardization
5) American economist Raymond Vernon divided the world into:
a. Innovative nations c. Developing nations
b. Developed nations d. All of these answers
6) The view in global business which deals with external opportunity threats is also
called:
a. Global-business external view
b. Resource-based view
c. Institution-based view
d. Global-business internal view
7) The ____-based view suggests that in order to achieve remarkable success, a firm
must possess some very rare and powerful firm-specific resources and capabilities that
are the envy of their rivals around the globe.
a. Resource c. Capability
b. Asset d. Institution
8) The factor endowment theory is identified as:
a. Theory that suggests that strategic intervention by governments in certain industries
can enhance their odds for international success
b. Economic theory that accounts for changes in the patterns of trade over time
c. Proposition that nations will develop comparative advantage based on their locally
abundant factors
d. Theory that the competitive advantage of certain industries in different nations
depends on four aspects that form a “diamond”
9) The term for a global movement to help eradicate poverty by providing financing is:
a. Foreign direct investments c. Venture capital investment
b. Microfinancing d. Entrepreneurship
10) Which is an economic result when an MNE acts locally responsive?
a. The local government is unhappy
b. Regulations are loosened
c. Innovations are limited
d. Costs are increased
11) ____ refers to a manager’s overconfidence in his or her abilities.
a. Hubris c. Strategic fit
b. Relational capability d. Learning by doing
12) A(n) ____ is the transfer of the control of operations and management from one
firm to another with the former becoming a unit of the latter, while a(n) ____ is the
combination of operations and management of two firms to establish a new legal entity.
a. Equity-based alliance, contractual alliance
b. Merger, acquisition
c. Acquisition, merger
d. Contractual alliance, equity-based alliance
13) Which is a major reason for China looking more towards informal financing?
a. Microfinancing is a widespread effort
b. There is a lack of formal institutions such as venture capitalists
c. The Chinese government outlaws formal financing
d. Family relationships are valued highly, so investors turn towards them first
14) Democracy is defined as a(n) ____ in which citizens elect representatives to govern
the country on their behalf.
a. Economic system c. Political system
b. Legal system d. Emerging economy
15) Which of the following is the implication for action based on the information in this
chapter?
a. Managers need to build firm strengths based on the VRIO framework
b. Relentless imitation or benchmarking, while important, is not likely to be a
successful strategy
c. Managers need to build up resources and capabilities for future competition
d. All of these answers
16) ____ refers to the internalized, taken-for-granted values and beliefs that guide
individual and firm behavior.
a. Normative pillar c. Cognitive pillar
b. Regulatory pillar d. None of these answers
17) Which of the following is most focused on currency diversification?
a. Currency hedging c. Strategic hedging
b. Spot transactions d. Trading risk
18) Which of the following is NOT a benefit of regional economic integration?
a. Promoting peace by fostering closer economic ties
b. Setting consistent rules to make discriminatory regulations impossible
c. Allowing free trade to raise incomes and create new jobs
d. Increasing sovereignty of integrated countries
19) At present, ____ of the ____ EU member countries are in the Schengen zone.
a. none, 41 c. all, 27
b. 22, 41 d. 22, 27
20) Pay level is a common challenge in acquisitions. On average, Nomura employees
received ____ their Lehman counterparts.
a. Half the pay of
b. Double the pay of
c. The same pay as
d. None of the above
21) Identify the three characteristics of a growing entrepreneurial firm. Explain how
each is encouraged more in an environment friendly to entrepreneurs than in an
environment opposing entrepreneurship.
22) A first-mover advantage is the opportunity to free ride on first-mover investments.
23) A letter of credit is used when the exporter needs greater assurance that the importer
is going to pay for the goods or services received.
24) A deficit in the current account does not have to be balanced by other financial
accounts.
25) Analyze the process of overcoming market failure through FDI.
26) Smaller, internationally inexperienced firms sometimes outsource currency hedging
to specialists such as currency traders.
27) The foreign exchange market has no central physical location but operates 24/7 and
is the largest and most active market in the world.
28) State-owned investment funds have brought much needed cash to desperate Western
firms, but some host countries have raised concerns about them.
29) International division structure is an organizational structure typically set up when a
firm first engages in a home replication strategy.
30) Intangible resources and capabilities are hard to observe and difficult to quantify.