38) The Foreign Corrupt Practices Act prevents U.S. firms from ________.
a) paying or offering bribes excess commissions in exchange for favors
b) using sweatshops to produce goods for sale in the U.S.
c) employing child labor in plants that make goods for U.S. markets
d) participating in unsustainable development in third world countries
39) ________ are firms that employ workers at very low wages, for long hours, and in poor
working conditions.
a) Subsidiaries
b) Joint ventures
c) Multinational corporations
d) Sweatshops
40) ________ is the full-time employment of children for work otherwise done by adults.
a) Protectionism
b) Child labor
c) Global sourcing
d) Greenfield venturing
41) Currency risk is ________.
a) possible profit loss due to assets spread among multiple countries
b) possible profit from new laws and economic policies
c) possible profit loss due to fluctuations in foreign exchange rates
d) possible profit from nationalization of foreign assets
42) ABC Inc., a company based in the United States, operates a subsidiary in Egypt. ABC is
dealing with a loss of investment and control over its assets in Egypt due to instability and
political changes. Which of the following is ABC Inc. facing?
a) Cultural integration issues
b) Globalization
c) Political risk
d) Competitive threat
43) When Bolivia’s president nationalized the oil and gas industry without consideration for the
foreign companies operating there, the loss to the foreign countries was considered a ________
risk.
a) national
b) currency
c) global
d) political
44) The forecasting of political events that may impact foreign investments is called ________.
a) currency analysis
b) political-risk analysis
c) analytical forecasting
d) international forecasting
45) According to Transparency International, which of the following countries is perceived to be
the least corrupt in the public sector?
a) Somalia, Costa Rica, and Italy
b) Spain, India, and Vietnam
c) USA, Indonesia, and China
d) Denmark, Finland, and New Zealand
46) The two main ways of organizing multinational corporations for global operations are global
________ structures and global ________ structures.
a) economy; risk
b) area; economy
c) product; market
d) area; product
47) Products For You Inc. (PFY) is an international company with five presidents in charge of its
American, European, African, Asian, and ROW (rest of the world) operations. PFY uses a global
________ structure to organize its international operations.
a) area
b) matrix
c) product
d) vertical
48) ________ managers are those who are aware of international developments and competent in
working across cultures.
a) Senior
b) National
c) Global
d) Foreign
49) Which of the following is a universal facilitator of leadership success?
a) Acting uncooperative
b) Being irritable
c) Being informed
d) Acting autocratic
50) Which of the following is a universal inhibitor of leadership success?
a) Acting just
b) Being dynamic
c) Being communicative
d) Acting autocratic
Question type: True/False
51) In the global economy, resources, markets, and competition are worldwide in scope.
52) Importing is the process of buying goods from foreign companies and selling them overseas.
53) In global sourcing, firms purchase finished products from around the world for selling them
in domestic markets.
54) A foreign subsidiary is a local operation in which a foreign firm owns at least 51 percent.
55) Franchising involves selling the right to use your name and operating methods to foreign
companies.
56) A foreign subsidiary can be created either by buying out an existing firm or by building a
new firm from scratch.
57) The World Trade Organization has 90 members.
58) Most multinational corporations retain strong national identities even while operating around
the world.
59) Being a loner, acting uncooperative, and being irritable are considered universal inhibitors of
leadership success.
Question type: Text Entry
60) Shifting local jobs to foreign locations to take advantage of lower-wage labor in other
countries is called ___.
61) The process of growing interdependence among elements of the global economy is known as
___.
62) The form of international business involving the sale of locally made goods in foreign
markets is called ___.
63) A(n) ___ operates in a foreign country through co-ownership with local partners.
64) A local operation that is completely owned and controlled by a foreign company is called
a(n) ___.
65) The acronym WTO stands for a global institution called the ___.
66) MNC is an acronym that stands for ___.
67) ___ is a call for tariffs and favorable treatments to protect domestic firms from foreign
competition.
68) The term ___ is used to describe places in which employees are given low wages for
working long hours in poor, and often unsafe, working conditions.
69) ___ is the possible loss of profits because of fluctuations in foreign exchange rates.
70) ___ forecasts how political events may have an impact on foreign investments.
71) What are the pros and cons of conducting business internationally?
72) Distinguish between franchising and licensing.
73) Differentiate between a joint venture and a foreign subsidiary.
74) Define and differentiate between multinational and transnational corporations.
75) Do you believe that the Foreign Corrupt Practices Act puts U.S. firms conducting business
internationally at a competitive disadvantage? Give reasons.