1) The primary participants of the foreign exchange market are IMF and World Bank.
2) ACFTA is currently the largest Free Trade Area in terms of population.
3) Collectivists are more collaborative when dealing with in-group members.
4) In the context of tariff barriers, net losses that occur in an economy as a result of
tariffs are known as deadweight costs.
5) The effect of investors moving in the same direction at the same time leads to a
bandwagon effect.
6) The foreign exchange markets are influenced only by economic factors and free from
the effect of social or political pressures.
7) Greenfield operations and acquisitions have complete equity and operational control.
8) High uncertainty avoidance cultures are characterized by a greater willingness to
take risk with change.
9) Indirect exports are the most basic mode of entry, capitalizing on economies of scale
in production concentrated in the home country.
10) The GATT was a multilateral agreement governing the international trade of goods
(merchandise) before World War II.
11) The Ronen and Shenkar cluster divides the world into eight civilizations.
12) More than half of all GDP of emerging economies comes from _____.
a. the Four Asian Tigers (Hong-Kong, Singapore, South Korea, and Taiwan)
b. MIKT (Mexico, Indonesia, South Korea, Turkey)
c. the Commonwealth of Independent States
d. BRIC (Brazil, Russia, India, and China)
13) In an MNE, a perceived lack of talent and skills of HCNs often necessitates a(n)
_____ approach.
a. regiocentric
b. telocentric
c. ethnocentric
d. polycentric
14) A _____ is defined as an innovation that is adopted first in emerging economies and
then diffused around the world.
a. reverse innovation
b. reverse-engineered innovation
c. top down innovation
d. traditional innovation
15) Which of the following is a first-mover advantage?
a. Avoidance of clash with a dominant firm at home
b. Opportunity to free ride on second mover investments
c. Resolution of technological and market uncertainty
d. No difficulty in adapting to market changes
16) The Euro is currently used in _____.
a. all EU member countries
b. all European countries
c. 17 EU countries
d. Schengen countries only
17) Which of the following is an example of a firms technological resources and
capabilities?
a. Location of plants, offices, and equipment
b. Managerial talents of employees
c. Possession of patents, trademarks, copyrights, and trade secrets
d. Reputation of employees as socially responsible citizens
18) Which of the following can be considered as an economic argument against free
trade?
a. National security
b. Foreign policy
c. Consumer protection
d. Infant industry
19) Executives on the top management team (TMT) are led by the _____.
a. chief executive officer (CEO)
b. chief financial officer (CFO)
c. board of directors
d. chief operating officer (COO)
20) Factor endowment is _____.
a. the amount of change that patterns of trade undergo over time
b. the degree to which the government allows free trade to exist in its international trade
c. the extent to which different countries possess various factors of production
d. the cost of pursuing one activity at the expense of another given alternative activity
21) MNEs with a _____ strategic orientation follow an ethnocentric staffing approach.
a. home replication
b. localization
c. global standardization
d. transnational
22) Which of the following would be an example of a product undergoing reverse
innovation on the global economic pyramid?
a. Triad nation to Triad nation
b. Triad nation to second tier nation
c. Second tier to base tier nation
d. Base tier nation to Triad nation
23) The gross domestic product plus the income from non-resident sources abroad gives
the ____.
a. gross national product
b. per capita income
c. purchasing power parity
d. net national income
24) Which of the following strategies has the lowest interdependence on knowledge
management?
a. Global standardization strategy
b. Transnational strategy
c. Localization strategy
d. Home replication strategy
25) Which of the following is an advantage of direct exports?
a. No trade barriers
b. Low transportation costs for bulky products
c. Avoid export processes
d. Better control over distribution
26) In the United States, small- and medium-sized enterprises (SMEs) are defined as
firms with less than _____.
a. 20 employees
b. 250 employees
c. 1000 employees
d. 500 employees
27) In which of the following strategies is knowledge mostly developed and retained at
the center and key locations?
a. Global standardization strategy
b. Transnational strategy
c. Localization strategy
d. Home replication strategy
28) _____ divides consumers based on purchasing behavior.
a. Selective distribution
b. Sorting
c. Market segmentation
d. Market orientation
29) Which of the following is an example of regional economic integration?
a. The European Union
b. The British Commonwealth
c. The Cingular and AT&T merger
d. The Commonwealth of Independent States
30) Which of the following is an equity mode of entry?
a. Indirect exports
b. Wholly owned subsidiaries
c. R&D contracts
d. Licensing/franchising
31) Which of the following is true of a pure market economy?
a. All factors of production are owned by the government
b. All factors of production are privately owned
c. It has elements of both a market economy and a command economy
d. Its policies are based on religious decree
32) Which are the two primary pressures MNEs confront?
a. Ethics and governance
b. Cost reductions and local responsiveness
c. Liability of foreignness and investment risk
d. Ethics and local responsiveness
33) An original design manufacturer (ODM) differs from an original brand
manufacturer (OBM) in that an ODM _____.
a. does not include final assembly in its organizational boundary
b. does not include research and development in its organizational boundary
c. does not include marketing in its organizational boundary
d. only executes design blueprints provided by other firms
34) If a firm is operating in an environment with a high pressure for globalization,
which of the following is the most preferred strategy?
a. Defender strategy
b. Extender strategy
c. Dodger strategy
d. Collusion strategy
35) _____ are tariffs levied on imports sold below costs to drive domestic firms out of
business.
a. Antidumping duties
b. Import quotas
c. Local content requirements
d. Voluntary export requirements
36) Import quotas are a type of _____.
a. tariff barrier
b. nontariff barrier
c. voluntary export restraint
d. antidumping duty
37) To attract investment, developing countries may enter a “race to the bottom” by
lowering environmental standards and some may become “pollution havens.”
38) Licensing is mostly used in the service industries.
39) Fair labor practice groups that frequently challenge firms that allegedly fail to
provide decent labor conditions for employees are an example of the primary
stakeholder group.
40) Global sustainability is a key goal of CSR.
41) The institution-based view argues that among a number of firms governed by the
same set of rules, some excel more than others because of differences in firm-specific
capabilities that leverage advantage in corporate governance.
42) Summarize the advantages and disadvantages of the home replication strategy.
43) Differentiate between concentrated and diffused ownership.