porters theory of national competitive advantage recommends unrestricted free trade
between countries.
a spot exchange rate is quoted for 30 days, 90 days, and 180 days into the future.
the need to integrate r&d and marketing to adequately commercialize new technologies
poses special problems in the international business because commercialization may
require different versions of a new product to be produced for various countries.
the pragmatic nationalist view highlights only the benefits of fdi.
IDA loans receive direct funding from the World Bank.
a $150,000 bond with a quoted priced of 102 is sold for $153,375.
when two parties agree to exchange currency and execute the deal at some specific time
in the future, a forward exchange occurs.
Dividends have certain tax advantages over royalties and fees.
in the 1970s, the united states passed the foreign corrupt practices act which requires all
publicly traded companies, whether or not they are involved in international trade, to
keep detailed records that would reveal whether a violation of the act has occurred.
beyond the initial functional division of the organization, further horizontal
differentiation may be required if the firm significantly diversifies its product offering,
which takes the firm into different business areas.
for the home country, the current account of the balance of payments improves if the
purpose of the foreign investment is to serve the home market from a low-cost
production location.
differences in the spot exchange rate and the 30-day forward rate are normal and reflect
the expectations of the foreign exchange market about future currency movements.
profit growth is measured by the percentage increase in net profits over time.
according to the strategic trade policy argument:
a.government intervention is not required because firms can borrow money from the
capital markets to finance the required investments
b.selling goods in a foreign market at below their “fair” market value is legally and
ethically justified
c.government support can help domestic firms overcome the first-mover advantages
enjoyed by foreign competitors
d.a government should use subsidies to support promising firms that are active in old,
established industries
the relatively low correlation between the movement of stock markets in different
countries indicates that ____.
a.diversifying a portfolio will increase the risk of investing
b.most countries face similar economic conditions
c.countries pursue different macroeconomic policies
d.different stock markets are not segmented from each other
which view of fdi traces its roots to classical economics and the international trade
theories of adam smith and david ricardo?
a.imperialist
b.conservative
c.free market
d.radical
what has been the most significant impact of nafta?
a.its economic effects
b.its political effects
c.its psychological effects
d.its social effects
_____ is pursued primarily by manufacturing firms and _____ is employed primarily by
service firms.
a.licensing; franchising
b.franchising; licensing
c.franchising; exporting
d.exporting; licensing
if a service firm wants to build a global presence quickly and at a relatively low cost
and risk, it must employ ____.
a.chartering
b.exporting
c.a turnkey strategy
d.franchising
an important drawback of a purely domestic capital market is that the ____.
a.investments does not receive protection from governments
b.investments are riskier than in global capital markets
c.market lacks a strong regulatory mechanism
d.cost of capital tends to be higher than it is in a global market
if a company recruits host-country nationals to manage subsidiaries while
parent-country nationals occupy key positions at corporate headquarters, the firm is
following a(n):
a.polycentric staffing policy
b.ethnocentric staffing policy
c.geocentric staffing policy
d.internal staffing policy
firms usually respond to pressures for cost reduction by trying to:
a.lower the costs of value creation
b.be locally responsive
c.undertaking product differentiation
d.diversifying product lines
which of the following is an example of a positive source effect?
a.a 3m post-it note
b.a dell laptop
c.an audi r8
d.an apple ipod
national regulations including local content rules and policies pertaining to layoffs
might act as a source of inertia.
when a company charges whatever the market will bear, the company is using:
a.strategic pricing
b.price discrimination
c.a push strategy
d.a pull strategy
according to knickerbockers theory:
a.when a firm has valuable know-how that cannot be adequately protected by a
licensing contract it engages in fdi
b.when a firms skills and know-how are not amenable to licensing, it usually prefers the
fdi route
c.by placing tariffs on imported goods, governments indirectly increase the cost of
exporting relative to foreign direct investment and licensing
d.when a firm that is part of an oligopolistic industry expands into a foreign market,
other firms in the industry will be compelled to make similar investments
selected data from 2011 financial statements of xi corporation include the following
(amount in millions):
the debt to total assets ratio is
a.70.8%
b.53.3%
c.1.41%
d.6.2 times
the interest charged on a $200,000 note payable, at the rate of 6%, on a 90-day note
would be
a.$12,000
b.$6,000
c.$3,000
d.$1,000
an italian corporation issues a bond denominated in dollars. this is an example of a
____.
a.foreign bond
b.eurobond
c.micro bond
d.regulatory bond
by lowering production costs, _____ help domestic producers compete against foreign
imports.
a.subsidies
b.duties
c.quotas
d.tariffs
discuss the maastricht treaty. what did it accomplish?
explain smiths theory of absolute advantage.
bonds that mature at a single specified future date are called _________________
bonds, whereas bonds that mature in installments are called __________________
bonds.
briefly differentiate between constant returns to specialization and diminishing returns
to specialization.
describe the notion of management development programs as a tool for increasing the
overall skill levels of managers. what is the goal of this type of program?
should a firm pay executives in different countries according to the prevailing standards
in each country, or should it equalize pay on a global basis?
what are the four strategies pursued by international companies, and what is the role of
hrm in these?
what are output controls?
do you think a new trade theorist would stress the role of luck and entrepreneurship?
explain.