An early entrant find may find itself at a disadvantage if it:
A.is trying to realize location and experience curve economies.
B.incurs low development costs.
C.faces a subsequent change in business regulations in the host-country.
D.has a core competence based on control over technological know-how.
E.considers a greenfield strategy.
Answer:
Most of the International Monetary Fund’s loan activities since the mid-1970s have
been targeted toward developing nations typically because:
A.developed nations are not willing to enact certain macroeconomic policies in return
for money.
B.developing nations are more than twice as likely to experience financial crises as
developed nations.
C.it does not have enough funds to lend to large and developed countries.
D.only developing nations are allowed to be its beneficiaries.
E.of relatively slow economic growth in the developed countries of Europe.
Answer:
Which of the following refers to a condition where people tend to perceive themselves
in terms of their class background, and this shapes their relationships with members of
other classes?
A.Social mobility
B.Class consciousness
C.Cross-culture literacy
D.Social awareness
E.Class representativeness
Answer:
The government of Ugania had been extending huge amounts of loans to the business
enterprises in the country. However, the borrowers failed to generate the profits
necessary to repay their debts. As a result, national banks in Ugania had a lot of
nonperforming assets on their books, and the Uganian currency was devalued. In this
context, the business enterprises in Ugania are most likely to face which of the
following type of risk?
A.Ethical
B.Economic
C.Technological
D.Legal
E.Sociological
Answer:
One of the rebuttals to Samuelson’s critique of the free trade model is that:
A.the United States’ ability to achieve constant returns to specialization is unparalleled.
B.the strict immigration policies of the United States help insulate the economy from
inward migration.
C.introducing trade barriers may in fact be beneficial to developed nations to some
extent.
D.developing nations are unlikely to upgrade the skill level of their workforce rapidly
enough.
E.the developing nations are unlikely to run into diminishing returns in a near future.
Answer:
When social unrest and disorder in a country causes drastic changes in its business
environment that adversely affect the profit and other goals of a business enterprise, the
business enterprise is said to be facing which of the following type of risk?
A.Political
B.Demographic
C.Ethical
D.Technological
E.Physiological
Answer:
Which of the following is a factor that resulted in the establishment of the European
Union (EU)?
A.The spectacular success of the North American Free Trade Agreement (NAFTA)
B.The trade impasse following the oil crisis in the 1970s that occurred due to collusion
among oil producing nations
C.The devastation of Western Europe during two world wars and the desire for a lasting
peace
D.The emergence of Japan as an economic and industrial superpower despite the
nuclear holocaust
E.The rise of communism in Europe
Answer:
Repayment of medium- and long-term loans U.S. commercial banks make to foreign
borrowers for purchasing U.S. exports is guaranteed by the:
A.United Nations.
B.Central Bank.
C.World Bank.
D.Ex-Im Bank.
E.Export Credit Insurance Association.
Answer:
Which of the following is an argument for a fixed exchange rate system?
A.Governments can contract their money supply without worrying about the need to
maintain parity.
B.Trade balance adjustments do not require the intervention of the International
Monetary Fund.
C.It ensures that governments do not expand the monetary supply too rapidly, thus
causing high price inflation.
D.Speculations in exchange rates boost exports and reduce imports.
E.Each country should be allowed to choose its own inflation rate.
Answer:
Which of the following philosophies of ethics holds that people should be treated as
ends and never purely as means to the ends of others?
A.Kantian ethics
B.The Friedman doctrine
C.Cultural relativism
D.Righteous moralism
E.Naive immoralism
Answer:
Who asserts that all economic goods and services should be distributed equally except
when an unequal distribution would work to everyone’s advantage?
A.John Rawls
B.Leon Sullivan
C.Garrett Hardin
D.Milton Friedman
E.Carol Gilligan
Answer:
Which of the following indicates that the dollar is selling at a discount on the 30-day
forward market?
A.The spot exchange rate is $1 = 120 currently and $1 = 130 after 30 days.
B.The spot exchange rate is $1 = 120 currently and $1 = 100 after 30 days.
C.The current spot exchange rate is $1 = 120 and the 30-day forward rate is $1 = 110
after 30 days.
D.The current spot exchange rate is $1 = 120 and the 30-day forward rate is $1 = 130
after 30 days.
E.The current spot exchange rate is $1 = 120 and the 30-day forward rate is $1 = 120
after 30 days.
Answer:
Mr. X finds it hard to dine with his American colleagues as his religion prohibits the
consumption of pork and alcohol. He also quit his previous job in a bank because his
religion considers the payment or receipt of interest as exploitative and unjust.
According to this information, Mr. X is a follower of:
A.Protestantism.
B.Hinduism.
C.Judaism.
D.Confucianism.
E.Islam.
Answer:
Which of the following is a drawback of licensing as a mode of entry into foreign
markets?
A.The licensor has to bear all costs and risks associated with developing a foreign
market.
B.Licensing does not give a firm tight control over manufacturing, marketing, and
strategy.
C.Licensing does not benefit firms lacking the capital to expand operations overseas.
D.Licensing deals fail when there are barriers to foreign investment in a particular
country.
E.A firm that enters into a licensing deal with a foreign country will have no long-term
interest in that country.
Answer:
The sale of state-owned enterprises to independent, nonpublic investors is referred to
as:
A.privatization.
B.nationalization.
C.collectivism.
D.communalism.
E.public action.
Answer:
According to Mendenhall and Oddou’s dimensions that predict success in a foreign
posting, which of the following is a result of the attribute of others-orientation?
A.The expatriate has high self-esteem.
B.The expatriate empathizes with the host-country nationals.
C.The expatriate speaks to the host-country nationals in the local language.
D.The expatriate adjusts to the inhospitable climate of the host country.
E.The expatriate is comfortable working in a male-dominated environment.
Answer:
Superior value creation relative to rivals requires that the firm:
A.creates similar products as its competitors so that consumers do not have to pay a
premium price.
B.has the highest cost structure in the industry.
C.creates the least valuable product in the eyes of consumers.
D.ensures that the gap between value and cost of production is greater than the gap
attained by competitors.
E.drives up the cost structure of its business.
Answer:
The Palladian government required that all imported products that came from
Lovaskiya be checked by Palladian customs inspectors. The inspection was done at a
container freight station that was both remote and poorly staffed. This delayed the
Lovaskiyan consignment from reaching the consumers in Palladia. The inspection
strategy adopted by the customs officers in Palladia is an example of a(n):
A.antidumping policy.
B.voluntary export restraint policy.
C.administrative trade policy.
D.monopolistic competition policy.
E.tariff rent policy.
Answer:
By dispersing different stages of its value chain to those locations around the world
where the value added is maximized or where the costs of value creation are minimized,
a firm creates a(n):
A.integral circle.
B.dispersal chain.
C.global web.
D.international mesh.
E.worldwide circle.
Answer:
Franchising as a mode of entry into foreign markets is employed primarily by:
A.service firms.
B.manufacturing companies.
C.online outfits.
D.high-technology companies.
E.primary industries.
Answer:
Which of the following is an advantage of a letter of credit for an importer?
A.The importer does not have to pay for the merchandise until the documents have
arrived.
B.Obtaining pre-export financing becomes easier.
C.It helps the importer to get goods for a lower price.
D.It results in lower shipping costs.
E.The importer does not have to pay the third party a fee for facilitating the transaction.
Answer:
Which of the following explicitly rejects the idea that businesses should undertake
social expenditures beyond those mandated by the law and required for the efficient
running of a business?
A.The Friedman doctrine
B.The Sullivan principles
C.Utilitarianism
D.Marxism
E.Kantian ethics
Answer:
Which of the following is the most restrictive countertrade arrangement?
A.Counterpurchase
B.Offset
C.Barter
D.Switch trading
E.Buyback
Answer:
Which of the following is true of price discrimination as a part of international pricing
strategy?
A.The more competitors there are, the lesser consumers’ bargaining power will be.
B.The more competitors there are, the less likely consumers will be to buy from the
firm that charges the lowest price.
C.A firm may charge a higher price for its product in a country where competition is
limited than in one where competition is intense.
D.Many competitors cause low elasticity of demand.
E.If a firm raises its prices above those of its competitors, consumers will refuse to
switch to the competitors’ products.
Answer:
Which of the following communication strategies relies primarily on mass media
advertising as opposed to personal selling?
A.Telemarketing
B.Pull strategy
C.Push strategy
D.Customized advertising
E.Point-of-purchase advertising
Answer:
Which of the following terms best represents the requirements that are the same all over
the world, such as steel, bulk chemicals, and industrial electronics?
A.Universal needs
B.Efficiency frontier
C.Global web
D.Lateral requirements
E.Supreme needs
Answer:
Which of the following is a goal of market segmentation?
A.To optimize the fit between the purchasing behavior of consumers in a given segment
and the marketing mix
B.To increase participation in shared global conversations by drawing upon shared
symbols that include global brands
C.To reduce cultural and economic differences which act as a barrier to the emergence
of global trends
D.To standardize products, manufacturing, and the institutes of trade and commerce
E.To increase the costs of value creation and add value by better serving customer
needs
Answer:
The purchasing power parity (PPP) theory tells us that a country with a high inflation
rate will see:
A.appreciation in its currency exchange rate.
B.a decrease in interest rates.
C.the collapse of the gold standard.
D.depreciation in its currency exchange rate.
E.a decrease in its money supply.
Answer:
Which of the following is a variable used in exchange rate forecasting models based on
fundamental analysis?
A.Relative strength indicator
B.Moving average
C.Inflation rate
D.Business cycles
E.Regression
Answer:
Yuriko, a citizen of Japan, was working as a manager in the Japanese branch of an
American firm. Due to her efficiency, she was assigned a temporary posting at the
headquarters of the firm in America. In this situation, she is known as a(n):
A.repatriate.
B.inpatriate.
C.third-country national.
D.beneficiary.
E.parent-country national.
Answer: