1) The basic concept of protectionism and mercantilism is the same.
2) Internalization can help reduce opportunistic behavior in international trade.
3) Tangible resources differ from intangible resources in that tangible resources are
easier to imitate.
4) Environmental and social responsibility can be used as political arguments to initiate
trade intervention against certain countries.
5) The former Soviet Union is an example of a political union.
6) According to the VRIO framework, valuable, but common resources and capabilities,
will lead to a temporary competitive advantage.
7) All members of the EU have adopted the euro as their currency.
8) Location-specific advantages never change and only tend to grow.
9) The Trans-Pacific Partnership (TPP) is a multilateral free trade agreement that aims
to further liberalize the economies of the entire Western Hemisphere.
10) The preemption of scarce resources is a first mover advantage.
11) The free market type of FDI is the most prevalent type of FDI practiced.
12) The resource-based view of global business differs from the institution-based view
of global business in that the resource-based view _____.
a. postulates the ideology of localization
b. supports the ideology of total globalization
c. focuses on the internal strengths on the firm
d. advocates adopting a single method for achieving globalization
13) People who earn _____ a year comprise the base of the global economic pyramid.
a. between $2,000 to $20,000
b. less than $2,000
c. between $20,000 to $40,000
d. more than $40,000
14) Without adjusting for PPP, emerging economies contribute about 26% of the global
GDP. Adjusting for PPP, they now contribute approximately 45% of the global GDP.
The reason there is a huge difference between the two measures is because:
a. the cost of living in emerging economies tends to be lower than that in developed
economies
b. the purchasing power parity is much higher in emerging countries
c. the population in emerging economies is much higher than that in developed
economies
d. the deficit spending in emerging economies is much larger than that in developed
economies
15) Which of the following was the first international trade theory to account for
changes in the patterns of trade over time?
a. Comparative advantage theory
b. Absolute advantage theory
c. Product life cycle theory
d. Factor endowment theory
16) Which of the following is a late-mover advantage?
a. Pre-emption of scarce resources
b. Fewer technological and market uncertainties
c. Proprietary and technological leadership
d. Good relationships with key stakeholders such as governments
17) Which of the following types of employees in MNEs are often known as locals?
a. Multinationals
b. Third-country nationals
c. Parent-country nationals
d. Host-country nationals
18) Which of the following conforms to the notion put forward by the school of thought
associated with stage models?
a. Firms will enter culturally distant countries during their first stage of
internationalization
b. Considerations of strategic goals are more important than cultural/institutional
considerations
c. Natural resourceseeking firms have compelling reasons to enter culturally and
institutionally distant countries
d. Firms enter culturally distant countries in later stages when they may gain more
confidence
19) Which of the following ideas is closely linked to the theory of absolute advantage?
a. All international trade must be closely regulated by governments
b. Free market forces should determine how much to trade with minimal government
intervention
c. Governments should actively protect domestic industries from imports and
vigorously promote exports
d. Nations should specialize in economic activities in which they have comparative
advantage
20) In which of the following examples can the role of the cognitive pillar be
identified?
a. A firm being exposed after one of its employees turned whistleblower
b. A firm being punished for corporate espionage by the courts
c. A firm not being able to sell a certain product in a country due to the prevalent
cultural beliefs
d. A firm outsourcing its jobs
21) Which of the following is one of the four major characteristics associated with a
growing entrepreneurial firm?
a. Monotonousness
b. Internationalization
c. Inimitability
d. Informality
22) People who live in the Triad countries comprise the _____ of the global economic
pyramid.
a. top tier
b. second tier
c. base
d. outlier
23) Which of the following is an example of a customs union?
a. The former Soviet Union
b. The EU (European Union)
c. The Andean Community (South America)
d. The NAFTA (North American Free Trade Agreement)
24) State ownership differs from private ownership in that in state ownership _____.
a. maximizing profits is the sole objective of a firm
b. management appointments are made by owners and investors based on merit
c. protecting jobs and minimizing social unrest is the objective of a firm
d. managers compensation is determined by competitive market forces
25) _____ includes setting up subsidiaries abroad so that the work done is in-house but
the location is foreign.
a. Captive sourcing
b. Onshoring
c. Offshoring
d. Insourcing
26) Which of the following is a disadvantage of the home replication strategy?
a. It lacks local responsiveness
b. It is organizationally complex and difficult to implement
c. It focuses too much on the foreign country
d. It has higher costs due to duplication of efforts in multiple countries
27) ____ perform an important “middleman” function by linking sellers and buyers
overseas.
a. Export intermediaries
b. Indirect exporters
c. Sporadic exporters
d. Alliance partners
28) In foreign exchange, a(n) _____ is said to have occurred when investors move in
the same direction at the same time, like a herd.
a. placebo effect
b. bandwagon effect
c. edge effect
d. positive correlation
29) ____ is the sale of products made by entrepreneurial firms in their home country to
customers in other countries.
a. Direct exports
b. Letters of credit
c. Licensing
d. Indirect exports
30) Which of the following strategies is usually the first one adopted when firms
venture abroad?
a. Global strategy
b. Home replication strategy
c. Localization strategy
d. Transnational strategy
31) _____ knowledge is noncodifiable and its acquisition and transfer requires hands-on
practice.
a. Explicit
b. Tacit
c. Lucid
d. A priori
32) An original equipment manufacturer refers a firm that _____.
a. executes design blueprints provided by other firms and manufactures such products
b. both designs and manufactures products
c. designs, manufactures, and markets branded products
d. licenses its patented inventions to other firms for manufacturing
33) Which of the following strategies would suit a firm activity that is both
firm-specific and industry-specific?
a. Keep the activity in-house
b. Offshore the activity to a foreign supplier
c. Outsource the activity to a domestic firm
d. Set up a subsidiary in a foreign location to perform the activity
34) Which of the following conditions will attract foreign funds into a country?
a. If the country has high trade deficits
b. If the countrys interest rate is relatively high compared to other countries
c. If the countrys currency is depreciated
d. If the country is experiencing high levels of inflation
35) Which of the following countries is included in BRIC?
a. Belgium
b. Russia
c. Italy
d. Canada
36) Which is one of the four phases in an alliance dissolution?
a. Imitation
b. Going public
c. Strategizing
d. Opportunism
37) For which of the following customer categories are firms advised to leverage the
global brands and their relatively more standardized products and services?
a. Global dreamers and antiglobals
b. Global citizens and global dreamers
c. Antiglobals and global agnostics
d. Global agnostics and global citizens
38) A form of corporate theft that diverts resources from the firm for personal or family
use is called _____.
a. tunneling
b. swapping
c. flipping
d. paging
39) _____ is defined as the extent to which a given competitor possesses strategic
endowment comparable, in terms of both type and amount, to those of the focal firm.
a. Mutual forbearance
b. Game theory
c. Resource similarity
d. Collusion
40) Which of the following would be regarded as a dragon MNE?
a. MNEs from developed countries
b. MNEs belonging to the Triad economies
c. MNEs coming exclusively from the European Union
d. MNEs from emerging markets
41) In the third stage of the product life cycle theory, the _____.
a. demand and ability to produce the product grow in developed nations
b. product is standardized
c. lead innovation nation starts exporting more and importing less
d. production of a product commanding a price premium will be concentrated in the
lead innovation nation
42) _____ are represented by laws, regulations, and rules.
a. Normative institutions
b. Sociocultural institutions
c. Cognitive institutions
d. Formal institutions
43) Which of the following types of contracts are used between exporters and importers
to reduce transaction risks?
a. Letter of credit
b. Articles of incorporation
c. License
d. Bill of lading
44) In developed economies, a firm’s key concern is to cut cost and enhance
competitiveness to fight off low-cost rivals from emerging economies.
45) Firms with fewer than 500 employees in the United States are considered small-
and medium-sized enterprises.
46) Firms whose units are loosely controlled are better mutual forbearers than more
centrally coordinated firms.
47) The global economy may be viewed as a pyramid. The growing number of
opportunities at the base of the pyramid highlights the role this bottom tier will play in
the years to come. How can MNEs take advantage of this often-ignored level?
48) Give an account of the political argument against outsourcing practiced by US
firms.
49) Codes of conduct tangibly express values that organizational members view as
central and enduring.