1) Gross domestic product is the value of production that takes place within a nation’s
border, without regard to whether the production is done by domestic or foreign factors
of production.
2) The Netherlands is an example of a country that is micro-based from an accounting
perspective, as opposed to macro-uniform based.
3) The various activities of HRM perform best when managers link them to the strategy
of the firm.
4) The IMF uses the quota system to determine how much a country may borrow from
the Fund.
5) Companies and individuals transfer capital internationally primarily because of
expectations of earning higher returns.
6) Gaining some understanding of international business is important for any business
student because global events and competition affect almost all companies
7) The lowering of a foreign producer’s price as a result of an imposed import tax is
known as an optimum tariff.
8) The major trade groups in South America are CAN and MERCOSUR.
9) According to the PLC theory of trade, most new products are produced in countries
where wage rates are low.
10) The view that regionalization, rather than globalization, will prevail in the future is
largely based on the use of common languages among countries in a region
11) Configuration is the linking or integrating of activities into a unified system.
12) A firm that begins operating in a culturally similar foreign country will most likely
face few necessary cultural adjustments.
13) Value-Mart has achieved the status of overall low-cost producer in its industry,
which means that Value-Mart ________.
A) can strongly defend its market position in the event of a price war
B) will earn the largest profits of any company in the industry
C) makes the most appealing product in its industry
D) can block the entry of new firms into the industry
14) EBS and Reuters provide customers with electronic foreign-exchange services as
well as current market data.
15) Which of the following statements about the English language is most likely NOT
true?
A) The largest portion of global output is in English-speaking countries
B) A large portion of MNEs are headquartered in English-speaking countries
C) English is the official national language in most countries where FDI is encouraged
D) Many MNEs from non-English speaking countries use English as their operating
language
16) In nearly half the cases in which U.S. firms have requested protection from imports,
one or more U.S. companies in the industry opposed the protection. What was the
reason for opposing protection?
A) They did not want consumers to have to pay higher prices that would result from
protection
B) These were foreign-owned companies that saw the opportunity to serve the U.S.
market
C) They feared that they would lose foreign export markets because of retaliation
D) They believed that they could compete against global and domestic rivals
17) Vanessa, a manager at an MNE, has been given the task of measuring the firm’s
performance by using the balanced scorecard approach. Which of the following would
be best for Vanessa?
A) review financial and nonfinancial factors broadly
B) create a multidomestic strategy for the future
C) closely compare industry and firm standards
D) calculate the firm’s return on investment
18) People generally prefer little consultation between superiors and subordinates in
cultures where ________ is high.
A) power distance
B) fatalism
C) individualism
D) self-actualization
19) A system of ________ law sets the framework for the system of government and
defines the authority and procedure of political bodies to establish laws and regulations.
A) criminal
B) constitutional
C) civil
D) commercial
20) A company should probably use a concentration strategy for international expansion
when there are ________.
A) high needs for product adaptation and low growth in each market
B) short competitive lead times and low spillover effects
C) high growth rate and long competitive lead times
D) low sales stability and short competitive lead times
21) Taylor Enterprises wants to expand its operations into Asia. Managers are focusing
on countries with high degrees of economic freedom most likely because the firm is
interested in a country with ________.
A) minimal government intervention
B) standardized minimum wages
C) laws favoring sustainability
D) state-run corporations
22) What problem most likely arises when a company wishes to sell
techniques/technology that it has either not yet fully developed or used commercially?
A) A buyer is reluctant to buy what it has not seen, and a seller risks divulging secretive
information
B) Most governments want to see contract details, which companies feel are proprietary
C) It is difficult to develop a rapport between negotiating parties in this type of situation
D) Parties can seldom agree on the desired level of quality control
23) Based on the hierarchy-of-needs theory, in which of the following would fulfillment
of lower-order needs be the best motivator?
A) wealthy countries
B) Protestant countries
C) high femininity countries
D) very poor countries
24) The EU organization that ensures consistent interpretation and application of EU
treaties is the ________.
A) European Commission
B) Council of Ministers
C) Court of Justice
D) Council of Treaties and Laws
25) An example of a first-mover advantage in international operations is ________.
A) gaining economies of scale at a lower output level than competitors
B) increasing sales response functions and customer service
C) using a small country for market tests prior to entering a large country
D) lining up the best suppliers and distributors before competitors enter the market