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a well-functioning market economy requires laws protecting private property rights and
providing mechanisms for contract enforcement.
Accounting standards are rules for preparing financial statements.
governments do not always act in the national interest when they intervene in the
economy; politically important interest groups often influence them.
a countrys balance of payments accounts keep track of both its payments to and its
receipts from other countries.
if a bond has a stated value of $1,000 and a contractual interest rate of 6 percent, then
the interest paid annually will be $60.
eurobonds are usually offered to residents of the country in whose currency they are
denominated.
cross-cultural literacy refers to:
a.an individuals self-concept derived from perceived membership in a relevant social
group
b.the phenomenon of merging and converging cultures
c.abstract ideas about what a group believes to be good, right, and desirable
d.an understanding of how cultural differences can affect business
Under a currency board system, ____.
A.inflation rates are maintained at high level
B.countries issue domestic notes at will
C.interest rates remain constant
D.government lacks the ability to set interest rates
which of the following is a factor that transforms a low-cost location to a high-cost
location?
a.appreciation of local currency
b.use of fixed exchange rates
c.use of pegged exchange rates
d.implementation of free trade regime
when the straight-line method of amortization is used for a bond discount, the amount
of interest expense for an interest period is calculated by
a.adding the amount of discount amortized for that period to the amount of cash paid
for interest during the period
b.subtracting the amount of discount amortized for that period from the amount of cash
paid for interest during the period
c.multiplying the face value of the bonds by the stated interest rate
d.multiplying the face value of the bonds by the market interest rate
the _____ school of thought argues that forward exchange rates do the best possible job
of forecasting future spot rates and therefore investing in forecasting services would be
a waste of money.
a.inefficient market
b.efficient market
c.random walk
d.speculative
rsa is a bicycle manufacturing company. which of the following is a make-or-buy
decision that the company will have to make?
a.should the company increase its responsiveness toward the retailers?
b.what are the products that the company should manufacture?
c.should the company outsource production to a low-cost vendor?
d.what should be the pricing strategy of the companys product?
which of the following statements is true of the leontief paradox?
a.it shows an anomaly that occurs when a nation has high domestic demand for a
product
b.it explains the relationship between domestic demand and comparative advantage
c.it disproved ricardos theory of comparative advantage
d.it raised questions about the validity of the heckscher-ohlin theory
the social organization of western society tends to emphasize on:
a.a group orientation
b.collectivist values
c.individual achievement
d.work groups
the _____ helps us to compare the relative prices of goods and services in different
countries.
a.interest rate
b.gdp growth rate
c.exchange rate
d.tariff rate
studies of privatization in central europe have shown that the process often fails to
deliver predicted benefits if the newly privatized firms:
a.stop receiving subsidies from the government
b.are completely owned by private individuals
c.are sheltered from foreign competition
d.are allowed to restructure their operations
when an exporting firm finds that its local agent is also carrying competitors products,
the firm may switch to a _____ to handle local marketing, sales, and service.
a.wholly owned subsidiary
b.franchising arrangement
c.turnkey operation
d.licensing agreement
an international u.s. based company sets up a production unit in a developing country
with poor environmental regulations. this contributes to:
a.the noblesse oblige situation
b.the inequity aversion
c.the global tragedy of the commons
d.the friedman effect
Which of the following is a function of World Bank?
A.Implementing a rigid fixed exchange rate regime
B.Promoting gold standard across the world
C.Lending money to governments for development
D.Implementing a flexible fixed exchange rate regime
which of the following statements is true about the growth of foreign direct investment
in the world economy over the last few decades?
a.fdi has experienced a slower growth than world output
b.fdi has accelerated faster than world trade growth
c.fdi has remained the same over the past few decades
d.fdi has dropped dramatically
centralization and decentralization differ because:
a.centralization hinders coordination, while decentralization facilitates coordination
b.centralization prevents top-level managers from making required organizational
changes, while decentralization gives top-level managers greater power to make
organizational changes
c.centralization ensures that decisions are consistent with organizational objectives,
while decentralization can result in decisions at variance with organizational goals
d.centralization promotes flexibility, while decentralization reduces flexibility
in the balance sheet, the account premium on bonds payable is
a.added to bonds payable
b.deducted from bonds payable
c.classified as a stockholders equity account
d.classified as a revenue account
a large-scale entrant is more likely than a small-scale entrant to be able to capture
first-mover advantages associated with ____.
a.scale economies
b.diseconomies of scale
c.pioneering costs
d.diseconomies of scope
chang company retired bonds with a face amount of 90,000,000 at 98 when the carrying
value of the bond was 89,670,000. the entry to record the retirement would include a
a.gain on bond redemption of 1,470,000
b.loss on bond redemption of 330,000
c.loss on bond redemption of 1,800,000
d.gain on bond redemption of 2,130,000
firms pursuing a global standardization strategy:
a.have low performance ambiguity
b.attempt to create value by transferring core competencies from home to foreign
subsidiaries
c.are less centralized than enterprises pursuing a localization or international strategy
d.have a high need for coordination and cultural controls
_____ are international bonds, normally underwritten by an international syndicate of
banks and placed in countries other than the one in whose currency the bond is
denominated.
a.micro bonds
b.foreign bonds
c.eurobonds
d.regulatory bonds
what are the possible adverse effects of fdi on a host countrys balance-of-payments
position?
describe an exclusive distribution channel. consider the implications of channel
exclusivity for outside firms.
explain the concept of price elasticity of demand. what are its determining factors?
how will eu countries benefit from the establishment of a single currency? what, if any,
are the costs of a single currency?
describe the five-step process that businesses can use to think through ethical problems?
a method of amortizing bond discount or premium that allocates an equal amount each
period is the ________________ method.
why should a firm pursue an ethnocentric approach to staffing? what are the
disadvantages of this approach?
if a $1 million, 10%, 10-year bond issue was sold at 97, the cash proceeds from the
issuance of the bonds amounted to $________________.
