1) Horizontal differentiation is concerned with how the managers of a firm decide to
divide the company into discrete subunits.
2) Executives from the home office typically demand richer compensation packages
and impose higher relocation costs than third-country nationals do.
3) Unlike the geocentric and polycentric mindsets, the ethnocentric mindset is not tied
to a particular home or host nation.
4) A potential problem of polycentrism is failure to introduce innovative superiority.
5) Independent suppliers can connect to a company’s intranet to help automate and
organize delivery of components to that company.
6) Creolization refers to the mixing of cultural elements that occurs during cultural
diffusion.
7) Countries enact trade policies based on trade theories, which, in turn, affect
companies’ optimum production locations.
8) Research indicates that democracy is declining around the world and that totalitarian
regimes are increasing.
9) The finite nature of natural resources should work as a disadvantage for the export
prices of developing countries.
10) In the spot market, the spread is the difference between the bid and offer rates and is
the trader’s profit margin.
11) Improvements in transportation and communications enable managers to better
oversee foreign operations
12) The terms multinational corporation and multinational company are frequently used
synonyms for strategic alliances
13) OPEC is an example of a producer’s cartel that is successful because of its ability to
institute tariffs on oil exports.
14) Fundamentally, the task of HRM is putting the right person into the right job in the
right place at the right time for the right salary.
15) Critics complain that pharmaceutical research budgets emphasize non-debilitating
conditions common in developed countries rather than life-threatening diseases
common in developing countries. People answering this criticism have contended that
________.
A) correction of developed country conditions, such as balding, are necessary to
stimulate developing country innovations that push global economic growth
B) very small portions of research budgets actually target these non-debilitating
conditions
C) by being located almost entirely in developed countries, pharmaceutical companies
lack access to locations where they can study diseases such as malaria and sleeping
sickness
D) pharmaceutical companies cannot recoup expenses for research on some of the
developing country problems, so governmental research centers and nonprofit
foundations should handle this research
16) A manager who refuses to bribe customs officials in a foreign country, even though
it is morally acceptable in that country, is most likely to believe in which of the
following perspectives on ethics?
A) relativism
B) normativism
C) humanism
D) existentialism
17) Executives want to set export prices below those that the firm charges domestically.
What is the most likely problem the company will experience?
A) WTO antidumping regulations
B) consumer complaints
C) FDI restrictions
D) high tariffs
18) Inbound logistics is also known as ________.
A) internal logistics
B) materials management
C) the internal supply chain
D) value-added management
19) Why might companies sometimes narrow the product line that they sell in a foreign
country as compared to the product line they sell at home?
A) Government restrictions typically limit how many products a company can sell
locally
B) Selling cost per unit increases substantially when a company offers a broad product
line
C) Not all products have sufficient demand in every market
D) Firms cannot sell products with product line gaps
20) Which of the following is generally the most costly information source for
companies?
A) individualized reports
B) reports from international agencies
C) reports from government agencies
D) published reports by accounting firms
21) Although English is referred to as the “international language of
business,”________.
A) it is less frequently used than French in international business
B) there is a growing disagreement over which version of English to use, e.g. British,
American, or Australian
C) companies headquartered outside English-speaking countries all use their official
language as their operating language
D) monolingual English speakers may experience more difficulty in the future in
communicating on a worldwide basis
22) Countries most likely establish export restrictions to ________.
A) ensure their population obtain the goods first
B) raise prices in foreign markets
C) encourage substitute products
D) reduce domestic production
23) The ________ sets the expatriate’s salary in terms of the salary of a comparable job
in the city where the MNE has its headquarters.
A) host-based method
B) home-based method
C) headquarters-based method
D) culturally based method
24) The long-term financing dimension of cash management ________.
A) deals with the selection, issuance, and management of long-term debt and equity
B) is unaffected by currency changes because everyone borrows in U.S. dollars
C) focuses on the analysis of investment opportunities
D) is independent of the capital structure of an MNE
25) All of the following are true about passive exports EXCEPT that ________.
A) companies adapt their products very little to foreign consumer preferences
B) companies frequently export only if they have excess capacity
C) companies generally quote higher prices on exports than on domestic sales
D) they refer to the filling of unsolicited requests from abroad
26) A black market exists when ________.
A) a country closely monitors and adjusts the foreign-exchange rate
B) people pay more for hard currency than the official rate
C) a country is running a budget surplus
D) a country is experiencing a recession
27) When selling a commodity for which there is little possibility of product
differentiation, a company would likely use which of the following orientations
internationally?
A) customer orientation
B) production orientation
C) sales orientation
D) strategic marketing orientation
28) Rapid Technologies owns its entire supplier network, which means that the firm
most likely uses ________.
A) industrial clustering
B) competitive sharing
C) vertical integration
D) global outsourcing
29) When a company does business in another country whose official language is the
same as its home country’s, the company should most likely ________.
A) assume that communications will go smoothly
B) use back-translation on all written documents
C) realize that words may have different meanings
D) assume that word meanings are the same despite spelling differences
30) A broker or other import consultant can help an importer minimize import duties by
________.
A) bypassing duty rebates available through drawback provisions
B) incurring duties by using non-bonded warehouses and foreign trade zones
C) maximizing liability by improperly marking an import’s country of origin
D) valuing products in such a way that they qualify for more favorable duty treatment
31) What are the functions of the European Commission, the European Parliament, the
Council, and the European Court of Justice?