1) Vertical and horizontal constraints that segment employees and their tasks within an
organization are generally referred to as ________.
A) structures
B) networks
C) boundaries
D) classifications
2) An argument against limiting exports to unfriendly countries is that ________.
A) the costs of the sanctions are borne by innocent people rather than by leaders
B) markets cannot be regained after the countries become friendly
C) one country’s essential product is superfluous to another
D) the exporting nation’s cultural identity is harmed
3) ________ is a form of locking the value of a country’s currency onto another
currency.
A) Managed floating
B) Monetarization
C) Dollarization
D) Floating
4) Which of the following best explains why Burger King has developed such a strong
presence in many of the small countries of Latin America and the Caribbean?
A) These business environments allowed Burger King to take advantage of economies
of scale
B) These countries are close to a Burger King’s headquarters
C) These countries offered greater mobility of funds than countries in the European
Union
D) Unlike the BRIC countries, these business environments did not require escalation
of commitment
5) Which of the following is LEAST likely to trigger the breakup of a joint venture?
A) The partners place a different degree of importance on the joint venture
B) The partners develop different capabilities to contribute to the joint venture
C) The partners come from different industries
D) Objectives evolve differently over time
6) Tax-haven subsidiaries categorically referred to as International Offshore Financial
Centers, have the following characteristics EXCEPT ________.
A) A low tax on foreign investment or sales income earned by resident corporations and
a low dividend withholding tax on dividends paid to the parent firm
B) A stable currency to permit easy conversion of funds into and out of the local
currency. This requirement can be met by permitting and facilitating the use of
Eurocurrencies
C) A stable government that encourages the establishment of foreign-owned financial
and service facilities within its borders
D) All of the above are tax-haven subsidiary characteristics
7) ________ is the matter of how the company balances centralization versus
decentralization of decision making, whereas ________ is the matter of how the
company opts to divide itself into specific units to do specific jobs.
A) Horizontal differentiation; vertical differentiation
B) Vertical differentiation; systemic differentiation
C) Schematic differentiation; schematic differentiation
D) Vertical differentiation; horizontal differentiation
8) Why is the argument that “anything legal is ethical” most likely insufficient?
A) Everything that is unethical is also illegal
B) The law is an extremely efficient way to solve ethical dilemmas
C) Laws are frequently based on imprecisely defined moral concepts
D) Laws can never be changed; thus, rules for all possible ethical dilemmas are found
in the law
9) The Ethical Trading Initiative (ETI)is primarily focused on ________.
A) fair trade laws for undeveloped countries
B) tiered pricing by pharmaceutical firms
C) greenhouse gas emission reduction
D) employment practices of MNEs
10) Which of the following is NOT an example of a service export?
A) a management firm providing advice to a foreign client
B) an investment bank arranging financing for a foreign firm
C) a coffee chain opening a new store in a foreign country
D) an engineering firm building roads in a foreign country
11) A greenfield investment is another name for a company’s decision to ________.
A) acquire an interest in an existing foreign operation
B) implement sustainable marketing practices
C) construct a new facility in a foreign market
D) build a facility for a local company
12) Executives at Wilson Enterprises need to determine how to leverage and improve
the firm’s existing competencies on a global basis. What are the two most basic
questions that they must answer?
A) Which markets should we serve and where should production be located to serve
those markets?
B) What are the short-term competitive advantages of the project and what is the return
on investment?
C) What is the total investment required and what are the managerial resources needed
to supervise the investment?
D) What is the availability of land and what is the cost of labor?
13) The principle by which the tax authorities allow firms to reduce their tax liability by
the amount of income taxes paid to foreign governments is known as ________.
A) transfer pricing
B) a tax credit
C) lag strategies in tax planning
D) passive income reductions
14) Research has shown that past exchange rates are an accurate predictor of future
exchange rates ________.
A) only in the long run
B) only in the very short run
C) only during times of economic crisis
D) only during times of economic calm
15) According to research, expatriates posted to ________ encounter the greatest
difficulty in finding accommodations, locating health care, and setting up finances.
A) Australia
B) Saudi Arabia
C) Thailand
D) South Africa
16) A firm that concentrates on national cultural differences in terms of averages is
more likely to ________.
A) underestimate market demands
B) increase political risks
C) seek cultural collision
D) overlook outliers
17) Which of the following is NOT a likely reason to study international business?
A) Global events affect almost all companies
B) Differences among countries in physical, social, and competitive conditions may
cause companies to alter their operating methods from country to country
C) Business conducted outside the limits of any one country is inexplicably on the
decline
D) Firms may be better able to obtain better or less expensive resources by operating
internationally