1) The U.N. Global Compact is best described as a(n) ________.
A) corruption mandate
B) environmental initiative
C) external code of conduct
D) international trade guideline
2) Why do turnkey operators often require a feasibility study as part of the contract?
A) By adding to the cost, they earn more money
B) This lessens the risk of contract cancellation when political leadership changes
C) This lowers their risk of foreign-exchange losses
D) This helps to define what constitutes ‘satisfactory completion” of the project
3) Which of the following is most likely a benefit for firms that participate in the global
capital market?
A) numerous investment opportunities
B) large pool of financing sources
C) equally balanced capital structure
D) quick sale of stocks and bonds
4) Instead of comparing different proposals involving foreign operations, companies
often make decisions by looking at proposals one at a time. All of the following are
reasons for this behavior EXCEPT which one?
A) Companies need to respond quickly to opportunities
B) Defensive decisions typically need to be made rapidly
C) A lack of comparable data on different countries renders comparison impossible
D) Conclusion of different proposals or studies does not usually happen simultaneously
5) Which of the following most likely complicates ethical behavior for firms that
expand overseas?
A) local laws and values
B) expatriate management
C) unstable financial settings
D) international codes of conduct
6) A virtual organization is ________ of a traditional vertical hierarchy.
A) an elaboration
B) the antithesis
C) the latest interpretation
D) a selective application
7) Imported flowers are now a stronger competitor to US grown flowers in the US
market Which of the following is likely the MOST important factor for this increase in
imports?
A) more effective production techniques
B) advances in communication systems
C) advances in transportation and logistics
D) cross-national cooperation
8) Eileen, a manager at an international restaurant chain, wants to know if it will be
most cost effective to buy 1,000 pounds of sugar in Country X or in Country Y using
U.S. dollars. Which of the following is Eileen most likely trying to determine?
A) purchasing power parity
B) economic growth rate
C) gross domestic income
D) gross national product
9) Which of the following best defines international business?
A) It includes all economic flows between two or more countries
B) It includes all private economic flows between two or more countries
C) It includes all business transactions involving two or more countries
D) It includes all business transactions in countries other than your home country
10) A company would most likely export at a price lower than its production and
distribution costs in order to ________.
A) use a skimming strategy abroad before using one domestically
B) test a market before making a big commitment
C) use a cost-plus strategy globally
D) encourage gray market sales
11) Country X has a floating rate for luxury goods and a lower rate for
semi-manufactured goods. Which of the following is most likely used by Country X?
A) import deposit requirements
B) multiple exchange rates
C) import licensing
D) quantity controls
12) The rationale for the infant-industry argument for trade protection is that ________.
A) incubator centers in which business, government, and academia cooperate will
develop entrepreneurial companies
B) a country should give one firm in an industry a monopoly status so that it will grow
large enough to be competitive internationally
C) it takes time for an industry to become competitive in world markets, so protection is
needed to help this industry pass through the critical period
D) lower restrictions should be placed on products coming from countries where a
government has a large sphere of political influence
13) Which of the following is NOT a factor driving local responsiveness among global
firms?
A) cross-national differences in distribution channels
B) diverging consumer tastes and preferences
C) cross-national differences in product standards
D) host government support of freer international trade
14) Which of the following statements about Zara is most likely FALSE?
A) Zara puts fewer products on clearance racks than most of its competitors in the
industry
B) Zara’s large advertising budget generates word-of-mouth and attracts new buyers
C) New products and designs are delivered to Zara stores every three to four weeks
D) Most of Zara’s products move through the firm’s distribution center in Spain
15) The relationship between import substitution policies and export-led development
policies is best characterized by which of the following?
A) Import-substitution policies are more likely to lead to production of mature products,
whereas export-led development policies result in production of growth products
B) The two are hard to distinguish because production under import substitution may
eventually be exported
C) Production under import substitution policies, as opposed to export-led development
policies, is more likely to be located in urban areas
D) Production under import substitution policies, as opposed to export-led development
policies, is likely to be more labor-intensive
16) Firms that pursue a(n) ________ strategy create value by transferring core
competencies from the home market to foreign markets in which local rivals lack a
competitive alternative.
A) transnational
B) multidomestic
C) global
D) international
17) At Cooper Industries, Jake is responsible for evaluating potential acquisitions
abroad, managing cash flow, tax planning, and internal auditing. Which of the following
is most likely Jake’s position at Cooper?
A) CEO
B) treasurer
C) regulator
D) controller