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81. Which of the following refers to a system in which prices of different currencies move up and down based on the
demand for and the supply of each currency?
a. Floating exchange rates
b. Dumping
c. Countertrade
d. Trade exchange
82. Which of the following indicates a benefit of outsourcing?
a. Increased corporate growth
b. Chances of increased production delays
c. Rising wages in the developing world
d. Decreases efficiency
83. The stage in which multinationals set up foreign subsidiaries to handle sales in one country is the _______________
in developing a global business.
a. first stage
b. second stage
c. third stage
d. fourth stage
84. Often small ventures are skeptical about entering the global market because it:
a. limits access to advanced technologies in less developed countries.
b. slows down the rate at which people’s living standards increase.
c. involves various trade laws or tariffs.
d. empowers governments to abuse the freedom and property of their citizens.
85. Khokho’s Coffee House was the first company to introduce flavored coffee in the global market. It blends coffee in
several different flavors, such as blueberry, cinnamon, and cranberry, based on the flavors each country prefers. In this
scenario, Khokho’s Coffee House is involved in _____.
a. product invention
b. promotion adaptation
c. global marketing standardization
d. product adaptation
86. Which of the following is a similarity between joint ventures and licensing agreements?
a. Both involve joining with a foreign company to create a new entity.
b. Both depend heavily on contract manufacturing.
c. Both are free from government interference.
d. Both are free from risks.
87. Active ownership of a foreign company or of overseas manufacturing or marketing facilities is called ____________.
a. direct foreign investment
b. foreign institutional investment
c. contract manufacturing
d. licensing
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88. Which of the following denotes the example of more than 100 unique Pringles potato chip flavors having been
invented for international markets?
a. Product invention
b. Promotion adaptation
c. Product promotion
d. Global marketing standardization
89. Marketing that aims at markets across the world is called _________.
a. global marketing
b. outsourcing
c. inshoring
d. regional marketing
90. A law compelling a company earning from the markets overseas to sell it to a control agency, usually a central bank, is
called ___________.
a. exchange control
b. market grouping
c. quota
d. tariff
91. Which of the following refers to altering a basic product to meet local conditions?
a. Product invention
b. Promotion adaptation
c. Product adaptation
d. Global marketing standardization
92. In a direct foreign investment arrangement, which statement is true of the direct investors?
a. They do not have a controlling interest in the firm.
b. They possess the lowest potential risk.
c. They have the highest potential reward.
d. They have a small minority interest in the foreign firm.
93. Which of the following refers to the total market value of all final goods and services produced in a country during a
given time period?
a. Gross domestic product
b. Intermediate product
c. Final product
d. International commerce
94. Which of the following is NOT a factor of external environment?
a. Culture of a country
b. Global economy
c. Demographics
d. Human resources of the organization
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95. Nessca Motors, a well-known company based in Nebolina, manufactures engines. Its management recently signed a
joint venture with Singletone Inc., a small company based in Trinitia. Of the following scenarios, which would be the
most likely to happen?
a. The government of Trinitia will restrict Nessca Motors’s entry into the country.
b. Nessca Motors and Singletone Inc. will switch to contract manufacturing as the next step.
c. Nessca Motors will buy a part of Singletone Inc.
d. Singletone Inc. will pay a royalty to Nessca Motors.
96. Which of the following statements is true of the term boycott?
a. It refers to a limit on the amount of a specific product that can enter a country.
b. It refers to a tax levied on the goods entering a country.
c. It refers to the exclusion of all products from certain countries or companies.
d. It refers to an agreement to stimulate international trade.
97. Sinesia is a country that has very few sources of potable water. Given this information, which of the following is most
likely to happen?
a. Sinesia’s international marketing will remain unaffected because petroleum is the only factor that affects
international marketing.
b. Sinesia will remain an importer of foodstuffs.
c. Sinesia will become an attractive target for military intervention. Sinesia will not be having absolute water
scarcity.
d. Sinesia’s wealth will equal that of countries with rich sources of water.
98. Which of the following is NOT true about culture from the perspective of a global marketer?
a. Culture underlies the family, the educational system, religion, and the social class system.
b. A company that does not understand a country’s culture may try other means to succeed in the country.
c. Cultural blunders lead to misunderstandings and often perceptions of rudeness or even incompetence.
d. Culture is the common set of values shared by its citizens that determines what is socially acceptable.
99. Which of the following statements is true of globalization?
a. It expands economic freedom and increases the living standards of people.
b. It increases prices and decreases product and service quality.
c. It has curbed the growth of the middle class in developing countries.
d. It leads to a monopoly of domestic producers.
100. Fourlotts Inc. is a renowned technological firm. It manages many strategic business units (SBUs) in which each
SBU:
a. has its own return on investment.
b. shares the same goals and employs the same strategies as Fourlotts Inc.
c. plans collaboratively with Fourlotts Inc.’s other SBUs.
d. refrains from performing manufacturing functions.
101. Identify and discuss the economic factors that influence the external business environment.
102. Discuss the four stages in which multinational corporations develop their global businesses.
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103. Discuss the most common legal structures that affect international trade.
104. What is franchising and why are foreign fast-food franchises so popular? Discuss and provide examples of successful
international franchises.
105. Explain the role of the Internet in global marketing and how old brick-and-mortar rules restrain the global economy.
106. How is a marketing mix relevant for firms entering the global market, and what are the steps to creating that
successful marketing mix?
107. Discuss the impact of international trade on the United States.
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Answer Key
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