1) When comparing economic and demographic variables among countries, one should
consider that consumers in developing countries do not necessarily follow the same
historical patterns as those in more developed countries.
2) English-speaking peoples account for a larger portion of global output than people
who speak any other language.
3) Companies tend to use geographic divisions when they have large foreign operations
that are not dominated by a single country or market.
4) Change agents intentionally cause or accelerate social and cultural change.
5) A company that develops different capabilities and contributions from different
countries and shares them in integrated worldwide operations is using a transnational
strategy.
6) Export intermediaries are third-party firms that market products and services abroad
on behalf of manufacturers, farm groups, and distributors.
7) The Third Wave of Democratization was partially triggered by improved
communication systems.
8) Pursuing responsible behavior for strategic and financial success is an example of
relative behavior.
9) ACE Computers established an assembly operation in Malaysia so that it would be
close to its key suppliers. ACE is most likely engaging in ________.
A) industrial clustering
B) horizontal sourcing
C) zero sourcing
D) offshoring
10) Citibank decides to open a call center in Mumbai, India because a detailed analysis
of the country-specific advantages suggests that India is the optimal place for
responding to customers’ calls. Citibank is exploiting ________ by running a call center
in India.
A) value configuration synergies
B) location economies
C) geographic arbitrage
D) value offshoring
11) Which of the following is the primary limitation of the transnational strategy?
A) poor local adaptation
B) cross-unit coordination difficulties
C) duplication of subsidiary activities
D) inability to leverage core competencies
12) Companies are likely to export products abroad in all of the following situations
EXCEPT which one?
A) when their average cost per unit of home country production declines substantially
by increasing output
B) when they want to use the riskiest but most profitable method to engage
international trade
C) when they aim to increase degree of market diversification
D) when they are new to international business
13) Because consumers want a greater variety of goods and services at lower prices,
many governments have ________
A) reduced their restrictions on the international movement of goods and services
B) acted to tax most imports at a lower rate than domestic products
C) sought to eliminate reciprocal advantages negotiated through international
organizations and treaties
D) increased their participation in multinational problem-solving efforts
14) An advocate of the legal-justification standard would most likely assert that the law
________.
A) develops slowly in response to evolving societal dilemmas
B) protects business activities that are unethical but not illegal
C) contains enforceable rules that apply to everyone
D) offers necessary moral flexibility for a society
15) Which of the following is a unique provision of NAFTA?
A) tariff elimination
B) common currency
C) environmental standards
D) immigration oversights and policies
16) Which of the following is the most likely benefit of a network structure?
A) encouraging competition among members for resources
B) facilitating supplier changes anywhere in the value chain
C) developing core competencies in a broad range of value activities
D) maintaining a strong sense of organization in the face of dynamic partnerships
17) What is an international joint venture?
A) an international agreement between two or more companies to have access to each
other’s patents
B) the ownership of a company by two or more companies, of which at least one is a
foreign company where the venture is located
C) an international agreement between two or more firms for the use of a trademark
D) an agreement between two or more organizations to share management expertise
18) Which of the following accurately describes a difference between jobs in the home
office versus those in a foreign subsidiary?
A) Cultural empathy is essential for employees in the home office, but is not necessary
for employees in a foreign subsidiary
B) Employees in the home office do not need to be familiar with a second language, but
employees in a foreign subsidiary must be proficient in the language of the subsidiary’s
host country
C) Expatriate executives in foreign subsidiaries are less expensive for a company to
employ than executives in the home office
D) Employees in foreign subsidiaries typically have broader job responsibilities than
employees in the home office
19) All countries face the questions of what, how much, and with whom they should
import and export. How they answer these questions primarily affects whether
________.
A) nontradable goods become tradable
B) products go through a lengthy life cycle
C) companies adhere to laissez-faire export policies
D) a company’s present production location will be competitive
20) The neoclassical structure implemented by Cisco primarily enables the firm to
________.
A) respond quickly to new opportunities
B) thoroughly assess new competitors
C) assign leaders to new products
D) clarify managers’ duties
21) Which of the following is characterized by low dependence on an organization and
a desire for personal time, freedom, and challenges?
A) collectivism
B) democracy
C) individualism
D) anarchy
22) A manager needs to prepare a grid to compare countries for location of the firm’s
international operations. It would be most useful for the manager to ________.
A) prepare an opportunity analysis in-house, but out-source the risk analysis
B) have agents within each country supply governmental data
C) prepare the risk analysis in-house, but out-source the opportunity analysis
D) use a team made up of people from different functions within the company
23) Fundamentally, countertrade is best described as a(n)________ transaction.
A) simple
B) common
C) desirable
D) inefficient
24) According to purchasing power parity, if the domestic inflation rate is ________
than that in the foreign country, the domestic currency should be ________ than that of
the foreign country.
A) lower; weaker
B) higher; higher
C) lower; stronger
D) higher; stronger
25) Which of the following groups of countries is most likely to form a regional trading
group?
A) India, Argentina, France
B) Canada, United States, Mexico
C) Brazil, Ukraine, Japan
D) Spain, South Africa, Mongolia
26) Which term refers to two or more companies that share ownership of an FDI?
A) turnkey operation
B) transnational firm
C) joint venture
D) franchise
27) What is a Eurodollar?
A) a euro held by an American
B) a U.S. dollar deposited in a European bank
C) a euro deposited in a U.S. bank.
D) any currency deposited in a country other than the country of issue
28) The Organization of Petroleum Exporting Countries ________.
A) uses import tariffs to control oil prices
B) stabilizes prices based on demand
C) uses quotas to control oil prices
D) produces all of the world’s oil