1) The EU became an economic union when the ____ went into affect in 1993.
a. Treaty of Rome c. Treaty of Bristles
b. Maastricht Treaty d. Madrid Treaty
2) Which of the following is NOT a reason why global business should be studied?
a. Because many ambitious students aspire to join the top ranks of large firms
b. To acquire hands-on global experience in global business
c. Because many top rank managers are selected from the pool of expatriate managers
d. In order for one’s earning potential to be maximized
3) ____ is defined as a combination of innovative, proactive, and risk-seeking behavior
that crosses national borders and is intended to create wealth in organizations.
a. Foreign direct investment
b. International entrepreneurship
c. International alliance partnering
d. Microfinancing
4) The ____-based view suggests that the formal and informal rules of the game, known
as institutions, shed a great deal of light on what is behind firm performance around the
globe.
a. Resource c. Capability
b. Asset d. Institution
5) The ____ is defined as the difference between the offered price and the bid price.
a. Offer rate c. Discount
b. Spread d. Premium
6) The combination of resources and assets that enables a firm to gain a competitive
advantage is also called:
a. Core assets c. Resource assets
b. Competitive assets d. Complementary assets
7) What measure did worried Latin American governments take to restrain the value of
their currencies?
a. They bought foreign reserves
b. They extended reserve requirements for banks sales of foreign exchange
c. They made deposits into the Central Bank that attracted no interest
d. All of the above
8) ____ is the method of sending out exports based on unsolicited inquiries.
a. Direct exporting c. SME exporting
b. A letter of credit d. Sporadic exporting
9) If an MNE wishes to maintain innovation-based firm heterogeneity (being different
from other firms), which of the following best describes a potentially successful
strategy?
a. Invest much more in a centralized, close-knit R&D
b. Spread R&D work across different locations and teams around the world
c. Outsource R&D to other firms
d. Make alliances with other firms that have strong R&D departments
10) Firms prefer FDI to licensing because:
a. FDI reduces dissemination risks
b. FDI provides tight control over foreign operations
c. Certain know-how is difficult to convey without FDI
d. All of these answers
11) More than 80 countries practice:
a. Common law c. Theocratic law
b. Civil law d. Social democracy
12) Regarding motives for acquisitions, synergistic motives add value while hubris and
managerial motives reduce value.
13) Explain the location advantages of FDI. Discuss the value of acquiring and
neutralizing location advantages with an example that highlights how a location
advantage does not necessarily overlap a country-level advantage.
14) The CSR approach argues that economic self-interests are not a trustworthy guide
for firm decision making and may breed greed, excesses, and abuses.
15) In global business, the institution-based view deals with internal strengths and
weaknesses
16) Companies with a global strategic orientation follow a geocentric staffing policy.
17) The United States runs the worlds largest trade deficit.
18) A stakeholder is any group or individual who can affect or is affected by a firms
actions.
19) Explain how the European Union, as an economic union, has helped its member
countries break down barriers to regional trade.
20) Clustering economic activities in a certain location is often referred to as
agglomeration.
21) The theory of comparative advantage states that even if a country does not have
absolute advantage in production, the country can still profitably specialize if the
country is relatively more efficient.