1) The Single European Act set steps to accomplish monetary union in the European
Union, including the creation of the euro.
2) The use of JIT does not depend on the quality of incoming parts or the time of their
arrival.
3) An arbitrageur is an exporter that seeks to conduct countertrade in emerging markets.
4) A geocentric staffing policy seeks the best qualified people for key jobs throughout
the organization, irrespective of their nationality.
5) The strategy of a firm using an international strategy is likely to entail producing and
marketing mostly standardized products worldwide, with some customization where
and when necessary.
6) Export controls are highly effective for digital products, such as computers, TVs, and
cameras.
7) A transfer price is a price on goods and services sold by one member of a corporate
family to another.
8) The International Fisher Effect implies that the country with the higher interest rate
should have lower inflation.
9) Luxury products are the most likely types of products to behave according to the
product life cycle theory of trade.
10) Low-cost Eurocurrency loans can be obtained in offshore financial centers.
11) The Big Mac Index perfectly explains the relative size of economies.
12) In a practical sense, the term political system is meant to signify the ________.
A) organization of military power in a country
B) working government in a country
C) philosophical orientations in a country
D) cultural values in a country
13) Which of the following problems in China is blamed for the annual loss of $250
billion by American MNEs?
A) intellectual property violations
B) environmental hazards
C) child labor violations
D) embezzlement
14) Google essentially views the entire world as one market and assumes that there are
no fundamental differences among countries with regard to consumers’ preferences.
Google is engaging a(n) ________ strategy.
A) international
B) multidomestic
C) transnational
D) global
15) German companies like Deutsche Bank and Daimler Chrysler have been relatively
optimistic and transparent in their financial reporting compared with many Germanic
companies because ________.
A) German accounting standards have always been optimistic and transparent
B) they adopted U.S. Generally Accepted Accounting Standards
C) they do not have to adopt International Accounting Standards
D) most of their revenues are from the United States and United Kingdom
16) Managers should understand the effect of trade protectionism because ________.
A) trade protectionism may limit the number of people permitted to practice a specific
profession
B) trade protectionism requires the payment of high insurance rates to transport goods
internationally
C) trade protectionism may prevent companies’ enactment of merger and acquisition
agreements
D) trade protectionism may make it difficult for a company to buy what it needs from
foreign suppliers
17) The HRM requirements of a(n) ________ strategy are well matched with a
geocentric staffing policy.
A) multidomestic
B) transnational
C) domestic
D) international
18) The accounting value that illustrates how companies are more liberal in their
recognition of income is ________.
A) optimism
B) transparency
C) income-based accounting
D) measurement
19) Which of the following most accurately describes the current state of HRM efforts
to staff international operations?
A) Fewer women are accepting international assignments
B) The length of permanent assignments is rising among middle managers
C) There are historic shortages of executive talent for international assignments
D) Third-country nationals are quickly being replaced by localized expatriates
20) The comparative advantage theory holds that a country will gain from trade
________.
A) when it exports products for which it has an acquired advantage and imports
products for which another country has a natural advantage
B) if it exports goods it can produce more efficiently than other countries and imports
goods other countries can produce more efficiently than it can
C) even though it can produce all goods more efficiently than other countries
D) if it exports products using its abundant production factors in exchange for products
for which it has scarce production factors
21) The ________ of a firm is the share of its total output that is exported.
A) freight forward
B) incremental export
C) export intensity
D) intermodal export
22) Jack, an American accounts manager, is preparing a presentation for a group of
Japanese business people. Jack’s presentation would be most effective if he ________.
A) told an opening joke to put everyone at ease
B) used slang to create an informal atmosphere
C) used long words to impress his counterparts
D) budgeted extra time for translation and clarification
23) Which of the following is most likely a true statement regarding the rule of law?
The rule of law is a hallmark of ________.
A) a totalitarian government
B) a democratic government
C) societies that place ultimate power in the hands of one person
D) countries that are considered “partly free”
24) All of the following are areas in which commercial activities take place outside the
territory of any nation EXCEPT ________
A) noncoastal areas of the oceans
B) the Panama and Suez Canals
C) outer space
D) Antarctica
25) Which of the following has NOT been a major force increasing globalization in
recent decades?
A) liberalization of cross-border trade
B) increase in and expansion of technology
C) growing pressure from consumers
D) decreasing prices of natural resources
26) What is the difference between translation exposure, transaction exposure, and
economic exposure?
27) In a short essay, describe the various affiliations upon which a person’s status can be
based and discuss how social stratification affects such business functions as marketing
and employment practices.
28) In a short essay, discuss the theory of absolute advantage and the reasons a
country’s efficiency improves based on this theory.
29) What is meant by the idea of economic freedom? What factors are used in the
Economic Freedom Index? For managers, what role does the Economic Freedom Index
play in analyzing the potential of a country?
30) List and define the types of nontariff barriers that limit the quantity of goods traded:
quotas, embargoes, buy local legislation, standards and labels, specific permission
requirements, administrative delays, and reciprocal requirements.
31) Explain the static effects and dynamic effects of economic integration. What is the
difference between trade creation and trade diversion resulting from economic
integration?