Which of the following represents the Fisher effect?
A) Cross Rate = Real Interest Rate + Nominal Interest Rate
B) Real Interest Rate = Nominal Interest Rate + Spot Rate
C) Nominal Interest Rate = Real Interest Rate + Inflation Rate
D) Real Interest Rate = Nominal Interest Rate + Unemployment Rate
ALADI refers to the ________.
A) Latin American Integration Association
B) Association of Southeast Asian Nations
C) Asia Pacific Economic Cooperation
D) Latin American Free Trade Association
Financial assistance given to domestic producers in the form of cash payments is an
example of a(n) ________.
A) ad valorem tariff
B) quota
C) subsidy
D) export tariff
Which of the following is best classified as an economic union?
A) Southern Common Market (MERCOSUR)
B) European Union (EU)
C) North American Free Trade Agreement (NAFTA)
D) Andean Community
Which of the following is true of employee compensation in international companies?
A) The most common inducement that companies offer managers to accept
international postings is free accommodation.
B) Companies need not cover the costs incurred by expatriate managers if the cost of
living abroad is lower than that at home.
C) The greater mobility of labor affects the wages of nonmanagerial workers today.
D) Managers recruited from within the host country generally receive a much higher
pay and lower perks than managers who work for local companies.
Scenario: Stephanie Wong
Stephanie Wong, a Chinese-American, owns a consultancy that advises clients on
strategies for business expansions into China. Wong is to lead a symposium for small
and mid-sized exporters who are planning on expanding their businesses in China.
Therefore, she is preparing answers in advance for questions that symposium
participants would most likely ask.
The first question that Stephanie expects participants to ask is: “Which is more
important for the Chinese, contacts or contracts?” Which of the following is the most
effective response Stephanie could give for this question?
A) Contracts are critical because of their extreme importance in Chinese business.
B) Face-to-face communications and personal relationships take priority over written
contracts.
C) Non-Chinese businesspeople should take time to agree on a legal contract before
developing personal relationships.
D) Business relationships are established only after successful legal dealings are
concluded.
Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc., a business that develops,
manufactures, and markets sports products. The company is looking to expand its
operations into the European market. Herb believes that if the company expands its
product line to include products reflecting sports that are popular in Europe, the
company will achieve success there. Herb knows that much of the success his company
enjoys is due to the patents and copyrights that protect the company’s products. If
Sports Stuff chooses an entry mode in which it grants another firm the right to use its
intangible property for a specified period of time, it would be engaging in ________.
A) a turnkey project
B) franchising
C) licensing
D) a joint venture
Which of the following terms refers to the decision of whether to produce a component
internally or to outsource it from another company?
A) buyer decision process
B) decision problem
C) per curiam decision
D) make-or-buy decision
American Depository Receipts (ADRs) are ________.
A) certificates that represent shares of stock in American companies
B) dollar deposits made by foreign firms conducting business in the U.S.
C) certificates that trade in the U.S. and represent shares of stock in a non-U.S.
company
D) currency deposits made in the U.S. by firms based in other countries
Scenario: Stephanie Wong
Stephanie Wong, a Chinese-American, owns a consultancy that advises clients on
strategies for business expansions into China. Wong is to lead a symposium for small
and mid-sized exporters who are planning on expanding their businesses in China.
Therefore, she is preparing answers in advance for questions that symposium
participants would most likely ask. ________ is the layer of corporate social
responsibility whereby a corporation donates money and, perhaps, employee time
toward a specific social cause.
A) Risk management
B) Strategic CSR
C) Socialist CSR
D) Traditional philanthropy
A company that makes its marketing program elements uniform, targeting an entire
region with similar products, is demonstrating ________.
A) customization
B) segmentation
C) standardization
D) differentiation
In his research, Alistair discovers a type of arrangement in which industrial equipment
is exported in return for products produced by that equipment. This arrangement is
known as ________.
A) barter
B) offset
C) switch trading
D) buyback
The calculation of each currency’s par value under the gold standard was based on the
concept of ________.
A) earnings per share
B) interbank interest rates
C) purchasing power parity
D) inflation rates
Which of the following types of joint ventures involve parties investing together in
downstream business activities?
A) backward integration
B) forward integration
C) multistage
D) buyback
According to the efficient market view, future exchange rates are most accurately
forecasted by ________.
A) forward exchange rates
B) cross rate
C) interbank interest rates
D) buy rate
A special region in which companies can engage in tariff-free importing and exporting
is called a(n) ________.
A) preferential trade area
B) export-processing zone
C) customs union
D) economic union