An offshore financial center is a territory whose financial sector features very few
regulations and few, if any, taxes.
If the law of one price is applied and upheld, an arbitrage opportunity arises.
Scenario: Moonland Union
Twenty-six nations of Moonland region, have decided to cooperate with one another to
eliminate trade barriers among them and create the Moonland Union. They are not sure,
however, to what extent they want to cooperate.
The stated aim of Asia Pacific Economic Cooperation (APEC) is to strengthen the
multilateral trading system.
Letters of credit are popular among traders because banks assume most of the risks.
The marketing communication process involves encoding and decoding of the
promotional message.
Products made in emerging countries tend to be evaluated more positively than those
from relatively more developed countries.
The European monetary system is still in practice today.
A joint venture is an example of a retrenchment strategy of an organization.
The exchange rate at the beginning of a year between the Indian Rupee (R) and the U.S.
dollar is R43.125/$. The annual inflation rates in India and in the United States are 19
percent and 3 percent respectively. What would be the new exchange rate at the end of
the year?
A) R49.8224/$
B) R37.327/$
C) R0.0267/$
D) $37.327/R
The three main goals of the World Trade Organization (WTO) are to help the free flow
of trade, help negotiate the further opening of markets, and ________.
A) measure the extent of globalization across the world
B) settle trade disputes between its members
C) accelerate technological innovation
D) fund small traders in developing nations
Scenario: Old World Ltd.
Old World Ltd., a London-based furniture manufacturer, is establishing its global
distribution, pricing, and promotion strategies. Being new to global business, the firm is
seeking your help in making its decisions.
If Old World adopts different selling prices in export markets than it has in the British
market, it would be following a ________ pricing strategy.
A) dual
B) transfer
C) target
D) worldwide
A ________ is a political system in which government leaders are elected directly by
the wide participation of the people or by their representatives.
A) democracy
B) theocracy
C) plutocracy
D) autocracy
Economic integration whereby countries remove barriers to trade and the movement of
labor and capital among members, set a common trade policy against nonmembers, and
coordinate their economic policies is called a(n) ________.
A) customs union
B) common market
C) economic union
D) free trade area
TeleToys’ organizational structure can best be referred to as a(n) ________ structure.
A) international division
B) global product
C) global matrix
D) international area
Goods and services purchased abroad and brought into a country are called ________.
A) gross domestic products
B) exports
C) gross national products
D) imports
A manager could most likely gain information on a local area’s housing, health care,
transportation, schools, and climate by participating in ________.
A) language training
B) environmental briefings
C) field experience
D) sensitivity training
The pattern of imports and exports that occurs in the absence of trade barriers is called
________.
A) vertical integration
B) autarky
C) protectionism
D) free trade
In a quoted exchange rate of $1.69/British pound, the British pound is called the
________.
A) base currency
B) counter currency
C) cross currency
D) quoted currency
According to the international product life cycle theory, in which of the following
stages is a good produced in the home country because of uncertain domestic demand
and to keep production close to the research department?
A) standardized product stage
B) maturing product stage
C) declining product stage
D) new product stage
Which of the following international assignment preparation methods involves a trainee
feeling the stresses inherent in living in the culture?
A) language training
B) field experience
C) sensitivity training
D) cultural orientation
A(n) ________ strategy deals with the primary and supports activities in an
organization that create value for customers.
A) business-level
B) department-level
C) corporate-level
D) international
________ dominates the foreign exchange market.
A) London
B) New York
C) Tokyo
D) Beijing
Which of the following is considered as a support activity in an organization?
A) inbound logistics
B) marketing and sales
C) procurement
D) customer service
________ are all goods and services sold abroad and sent out of a country.
A) Net national products
B) Exports
C) Gross domestic products
D) Imports
Scenario: Global Manufacturing Inc. (GMI)
Global Manufacturing Inc., a fast-growing U.S. company, plans for a production system
in which two components of its product will be manufactured in locations where the
cost of production is lowest. The components will then be taken to maquiladoras for
final assembly. GMI plans to purchase an existing company in Brazil to produce
component A and build a subsidiary in Thailand to produce component B.
Which of the following systems of production is used by GMI?
A) job
B) craft
C) rationalized
D) customized
Which of the following forecasting techniques employs charts of past trends in currency
prices and other factors to forecast exchange rates?
A) financial analysis
B) fundamental analysis
C) value chain analysis
D) technical analysis
How might a company benefit from the globalization of production?
Explain why a person’s ability to bridge cultural differences must be considered during
‘selection” for international assignments. How can eTraining help in bridging cultural
differences?
What is meant by dumping? Describe the various roles of the World Trade
Organization, including when a country is accused of dumping.
Differentiate between culture shock and reverse culture shock. How can companies help
employees deal with such issues?
How does the eclectic theory explain the concept of FDI? How can a host country offer
incentives to attract FDI?
Explain how exchange rates adjust to inflation.
What is privatization? What role does it play in economic transition?
How does the theory of comparative advantage differ from the factor proportions
theory? Include a description of the factor proportions theory in your answer.
What factors influence the wages of nonmanagerial workers?