1) In a multiple exchange-rate system, the government determines which kinds of
transactions are to be conducted at which exchange rate.
2) Major types of indirect intermediaries include export trading companies, distributors,
and freight forwarding companies.
3) The theory of absolute advantage holds that there are advantages to trade because
different countries can produce different goods more efficiently than others.
4) An ADR is a negotiable certificate issued by a U.S. bank in the United States to
represent the underlying shares of a foreign corporation’s stock held at a custodian bank
in the foreign country.
5) Internet sales complement traditional distributors, thus enhancing companies’ ability
to secure and hold traditional distributors.
6) In the U.S., international trade is hampered by homeland security issues and delays.
7) The notion of boundaries, within the context of neoclassical structures, refers to
those limitations that interfere with communication and collaboration between the firm
and its suppliers, distributors, allies, competitive rivals, and customers.
8) Meade Clocks has hired an intermediary to manage its export activity. Meade should
most likely expect ________.
A) lower profit margins
B) greater control over global sales
C) more responsibility for customer satisfaction
D) frequent misunderstandings about trade regulations
9) Roland Enterprises, an American company, has a manufacturing facility in France in
order to serve customers throughout Europe. Roland is most likely using a ________
manufacturing strategy.
A) centralized
B) regional
C) global
D) country-specific
10) If an MNE convinced a popular priest that its vitamin-enriched soft drink would
benefit parishioners’ health, the MNE would be using ________ to help bring about
change.
A) participation
B) reward sharing
C) an opinion leader
D) materialistic motivation
11) Which of the following statements most likely undermines the arguments for a
strategic trade policy?
A) Entrepreneurs, rather than governments, should take business risks
B) Developed countries have production lead time over developing countries
C) If big companies can figure out what products to develop, so can governments
D) Governments have limited resources, so industries with greater growth potential
should be targeted
12) The primary objective of the International Monetary Fund is to ________.
A) encourage euro adoption
B) promote exchange rate stability
C) establish a unilateral system of payments
D) foster the power of the foreign-exchange market
13) What was the primary purpose of the formation of Sinergia?
A) charge tariffs on Walmart imports
B) purchase Walmart’s major suppliers
C) better compete with Walmart on price
D) include Walmart in the regional supply chain
14) If the euro continues to remain strong against the U.S. dollar, which of the
following strategies would make the most sense for BMW?
A) It might be advantageous for them to consider exporting from Germany to the U.S.
to take advantage of cheaper costs
B) It might increase its manufacturing capacity in the United States to take advantage of
the cheaper dollar
C) It might consider raising prices in the United States to earn more profits for BMW
D) It really doesn’t make any difference to BMW since consumers will buy the cars no
matter what they cost
15) The most common predeparture training for an expatriate is ________.
A) an informational briefing
B) role playing
C) in-depth cultural seminars
D) language training
16) The nation offers a workable reference for studying cultural differences because
________.
A) a nation contains only one distinct culture
B) similarity among people is both a cause and effect of national boundaries
C) the commonality of language within a nation eases the process of conducting
surveys
D) different groups within the same country always have more in common with each
other than with groups in other countries
17) Which of the following is used as an illustration of the PPP theory for estimating
exchange rates?
A) the Composition of Official Foreign Exchange Reserves (COFER)
B) the black market rate
C) the import licensing ratio
D) the Big Mac Index
18) Budget versus actual comparisons, followed by some form of ROI, are most likely
used by ________ MNEs.
A) Japanese
B) American
C) British
D) German
19) What is the main motive for countries’ protection of their film/cinema industries?
A) to keep prices low for their citizens
B) to improve their balance of payments
C) to diversify their economies
D) to maintain their cultural sovereignty
20) Executives at a U.S. firm are debating whether to start a new operation in Russia or
acquire an existing one. Which of the following factors best supports a decision to start
up a new operation in Russia?
A) The Russian government places restrictions on the outward transfer of foreign
capital
B) Labor relations at existing Russian firms are poor and difficult to change
C) Russia’s currency is weak and stock market prices are significantly depressed
D) Existing companies have goodwill and positive brand recognition in Russia
21) The integration-responsiveness (IR) grid expresses how a company’s ________ is a
function of the relationship between its value chain and the prevailing pressures for
global integration or local responsiveness in its industry.
A) value proposition
B) target market
C) mission
D) strategy
22) Which of the following is the LEAST likely reason for inaccuracies in published
governmental data?
A) translation errors from the host country language
B) limitations of government resources and finances
C) purposeful publication of misleading information
D) false information provided to data collectors
23) Corbin Coffee plans to initiate activities in foreign markets through indirect
exporting. The firm is most likely to use ________.
A) local managers to pay tariffs and duties
B) external specialists to assist in the export process
C) the International Trade Administration to monitor exports
D) freight forwarders to act as distributors in foreign markets
24) As a center for foreign-exchange trading, London ________.
A) actually trades more U.S. dollars than are traded in the United States
B) usually opens up for business as trades are winding down in the United States
C) deals primarily in European currencies and is not as active in trading U.S. dollars
D) deals primarily in spot rather than forward trades
25) The essence of a differentiation strategy is to ________.
A) target the most sophisticated segment of the market
B) incorporate the greatest number of features into a product
C) offer a unique product that supports a premium price
D) outspend rivals on product advertising
26) ________ is an online collaboration model that brings manufacturers, distributors,
value-added retailers, and customers together to execute trading transactions.
A) Electronic data interchange (EDI)
B) ERP (enterprise resource planning)
C) Private technology exchange (PTX)
D) E-commerce
27) Which of the following is typically true of an export management company?
A) It is usually a division of a manufacturing company
B) Most EMCs in the United States are large, representing a wide range of products and
large number of companies
C) It operates on a contractual basis for a manufacturer by helping obtain orders for its
clients’ products
D) It usually takes title to products rather than act as an agent
28) What are the main arguments for and against Africa developing a common currency
like the EU?
29) What are the three main types of exporters? What are the three main types of
importers? Briefly describe the characteristics of each.
30) What is the difference between a classical structure and a neoclassical structure?
Provide examples of each type.
31) Why is global HRM more difficult than domestic HRM? How can staffing a foreign
facility with locals alleviate some of these HRM difficulties?
32) What is the difference between licensing and cross-licensing? What factors do firms
need to consider before entering into licensing agreements?
33) How do language differences affect international branding and promotion?
34) What is a transfer price? Why are transfer prices used?