A firm that adopts a polycentric staffing policy is less likely to:
A.isolate foreign subsidiaries from corporate headquarters.
B.implement an expensive staffing policy.
C.be controlled by corporate headquarters.
D.suffer from cultural myopia.
E.provide growth opportunities.
Answer:
Economic advances in many countries have led to the:
A.decline of middle and working classes.
B.rise of totalitarian reforms.
C.decline of property rights.
D.emergence of closed and self-contained societies.
E.emergence of increasingly prosperous middle and working classes.
Answer:
International businesses differ markedly in their approaches to international labor
relations. Which of the following current trends reflects international firms’ attempts to
rationalize their global operations?
A.Decentralized labor activities
B.Greater centralized control
C.Autonomy
D.Lateral relationships
E.National legislation
Answer:
Salcia is a country that depends heavily on domestic products. The Salcian government
decides on the products that can be imported and ensures that any product that can be
produced at home is not imported. A major part of Salcia’s trade is concentrated on
exporting agricultural produce and textiles. Which of the following influences Salcia’s
approach to international trade?
A.Mercantilism
B.Leontief’s paradox
C.Product life-cycle theory
D.New trade theory
E.Neo-Ricardian trade theory
Answer:
Which of the following best exemplifies facilitating or expediting payments in
business?
A.Making payments to government officials not to cancel the business license after
violating local laws
B.Paying a lump sum amount in order to win a government tender for road construction
in a foreign country
C.Making unsolicited payments to the concerned officers in return for employing child
labor
D.Making payments to customs officials in order to ship pirated merchandise
E.Making small payments to government officials in order to speed up the work they
are already obligated to perform
Answer:
Which of the following is the term for when a lower tariff rate is applied to imports
within the quota than those over the quota?
A.Tariff rate quota
B.Voluntary import restraint
C.Import duty
D.Quota rent
E.Import quota
Answer:
Many medium-sized and small firms are not proactive in seeking export opportunities
because:
A.they are familiar with the foreign market and do not find it challenging enough.
B.the export market is similar to the home market in terms of legal and business
practices.
C.they are intimidated by the complexities and mechanics of exporting to foreign
countries.
D.domestic regulations limit their ability to export profitably.
E.they can’t recruit managers with the expertise needed to cultivate business in foreign
countries.
Answer:
How can a wholly owned subsidiary be established in a foreign market?
A.Through a turnkey operation with a local partner
B.Through franchising
C.By acquiring an established firm in the host nation
D.By exporting
E.Through a licensing agreement
Answer:
Which of the following statements is true about a currency board system?
A.Under a strict currency board system, interest rates adjust automatically based on the
supply and demand of domestic currency.
B.To convert domestic currency on demand into another currency, a currency board
takes grants from the International Monetary Fund.
C.This system is a true fixed exchange rate regime, because the domestic currency is
fixed against other currencies.
D.A currency board can issue additional domestic currency even when there are no
foreign exchange reserves to back it.
E.A currency board authorizes the government to print money and set interest rates.
Answer:
Which of the following statements is true about the business implications of Japanese
society?
A.The determination of social status of an individual is independent of the standing of
the group to which he or she belongs.
B.It is difficult to find self-managing work teams within Japanese organizations.
C.It is more successful at pioneering radically new products and new ways of doing
business than the United States.
D.There is a low degree of movement from company to company among managers and
workers.
E.The managers and workers lack company-specific knowledge, experience, and a
network of interpersonal business contacts.
Answer:
Which of the following is true of countertrade?
A.The governments of developing nations sometimes insist on a certain amount of
countertrade.
B.Countertrade is a means of structuring an international sale when conventional means
of payment are cost-effective.
C.Nonconvertibility is an advantage for exporters.
D.Nonconvertibility implies that the exporter will be paid only in his or her home
currency.
E.Most exporters desire payment in a currency that is not convertible.
Answer:
Which of the following is a statistically based philosophy that aims to reduce defects,
boost productivity, eliminate waste, and cut costs throughout a company?
A.ISO 9000
B.Just-in-time
C.Six Sigma
D.Lean production
E.Total quality management
Answer:
The stock of foreign direct investment refers to:
A.the total accumulated value of foreign-owned assets at a given time.
B.the number of shares of a foreign firm held by the local investors.
C.the amount of FDI undertaken over a given time period (normally a year).
D.the dividend amount paid by the foreign firm to local investors.
E.the flow of foreign direct investment out of a country.
Answer:
Which of the following staffing approaches limits career mobility and isolates
headquarters from foreign subsidiaries?
A.Polycentric
B.Transnational
C.Geocentric
D.Ethnocentric
E.Global
Answer:
Assume that the yen/dollar exchange rate quoted in London at 3 p.m. is 120 = $1, and
the New York yen/dollar exchange rate at the same time (10 a.m. New York time) is 123
= $1. Which of the following transactions would yield immediate profit?
A.Forward exchange
B.Carry trade
C.Currency swap
D.Arbitrage
E.Currency speculation
Answer:
Which of the following is true with respect to the international and domestic practices
of settling trade transactions?
A.In an international transaction, a formal promise to pay is required before the buyer
can obtain the merchandise.
B.In an international transaction, the seller usually ships merchandise on an open
account.
C.In a domestic transaction, a draft is used to settle trade transactions.
D.In an international transaction, the exporter sends a commercial invoice that specifies
the amount due and the terms of payment to the importer.
E.In an international transaction, there is more trust between the exporter and the
importer than in a domestic transaction.
Answer:
Which of the following is an argument against embracing strategic trade policy?
A.It hampers the chances of a country’s firms to effectively exploit the first-mover
advantages.
B.It is certain to be captured by special-interest groups within the economy, which will
distort it to their own ends.
C.It increases the prices of the products for the domestic consumers.
D.It hampers the abilities of the domestic firms to achieve a dominant position in the
global industry.
E.It leads to a compromise in national sovereignty.
Answer:
Which of the following is a drawback of longer distribution channels?
A.Higher selling costs in a fragmented retail sector
B.The inability to enter exclusive distribution channels
C.Lower selling costs in a concentrated retail sector
D.Higher prices charged to consumers
E.Greater aggregate markups due to a lack of intermediaries
Answer:
As an incentive to encourage domestic firms to undertake FDI, many countries have:
A.eliminated double taxation of foreign income.
B.started imposing local content requirements.
C.imposed higher import tariffs.
D.abolished the use of custom duties.
E.eliminated subsidies.
Answer:
According to the new trade theory, trade, through its impact on economies of scale, is
most likely to:
A.reduce the volume of the goods produced.
B.decrease the variety of goods available to consumers.
C.decrease the average costs of goods.
D.inhibit first-mover advantages in all industries.
E.benefit only nations that differ in resource endowments or technology.
Answer:
Which of the following does NOT reinforce that the best interests of international
business are served by a free trade stance?
A.The increasing integration of the world economy
B.The internationalization of production
C.The trend toward greater protectionism
D.The drawbacks of government intervention
E.The dispersion of production activities
Answer:
Which of the following is a result of certain products having small national markets, in
the absence of trade?
A.The variety of products available to consumers increases.
B.Limited demand for such products leads to non-realization of economies of scale.
C.Each nation will specialize in producing a narrower range of products than it would
in the presence of trade.
D.At low volumes of production, unit costs and prices would be lowered.
E.The first movers in an industry may get a lock on the world market that discourages
subsequent entry.
Answer:
Which of the following is a philosophy that was widely adopted, first by Japanese
companies and then American companies during the 1980s and early 1990s and from
which the Six Sigma methodology directly descended?
A.Total quality management
B.Enterprise resource planning
C.Business process reengineering
D.Just-in-time
E.Business process outsourcing
Answer:
Which of the following factors constrains a firm’s ability to sell a standardized product
to a global market using a standardized marketing strategy?
A.Modern transportation
B.Modern communications technologies
C.Rise of the global media phenomenon
D.Development of a global culture
E.Differences in product and technical standards
Answer:
Which kind of retail systems tend to promote the growth of wholesalers to serve
retailers, which lengthens distribution channels?
A.Centralized
B.Focused
C.Concentrated
D.Fragmented
E.Exclusive
Answer:
According to Mendenhall and Oddou, expatriate managers who tend to treat foreign
nationals as if they were home-country nationals lack the dimension of:
A.cultural toughness.
B.self-orientation.
C.others-orientation.
D.perceptual ability.
E.willingness to communicate.
Answer:
A zero-sum game is a situation in which:
A.the market mechanism determines what a country imports and what it exports.
B.a country engages in international trade even for products it is able to produce for
itself.
C.an economic gain by one country results in an economic loss by another.
D.limits on imports are often in the interests of domestic producers, but not domestic
consumers.
E.one country has an absolute advantage in the production of all goods.
Answer:
Cost reduction pressures tend to be particularly intense in industries that:
A.create products that serve universal needs.
B.create customized products.
C.are not involved in international business.
D.produce products that have inelastic demand.
E.serve different customers with different needs.
Answer:
Which of the following functions of an international business is required to create new
products?
A.Supply chain
B.Logistics
C.Operations
D.Research and development
E.Customer service
Answer:
Which of the following is the most important determinant of channel length?
A.The degree to which the retail system is fragmented
B.The increase in car ownership and two-income households
C.The level of consolidation in the global retail industry
D.The amount of difference between product or technical standards
E.The level of economic development of a country
Answer:
Which of the following statements best defines personal space?
A.It is the amount of distance to be maintained from the audience in order to be audible
to them.
B.It is a psychological phase wherein a person has free flowing thoughts.
C.In ergonomics, it is the minimum amount of space required by an average employee
in order to work efficiently.
D.It is the comfortable amount of distance between you and someone you are talking
with.
E.It is the amount of space a country has per person and is arrived at by dividing the
country’s total geographical area by its total population.
Answer: