1) Although a company may have a good track record with collaborative arrangements,
this is of little help when negotiating new collaborative arrangements with different
companies.
2) A currency that is pegged to another currency is usually changed on a
supply-and-demand basis.
3) A common law system is based on tradition, judge-made precedent, and usage in
which the courts assign a preeminent position to existing case law to guide dispute
resolution.
4) Most trade groups contain countries in the same area of the world, even though
neighboring countries usually lack a common history and interests.
5) The fundamental outlook of the multidomestic strategy is standardization.
6) Ethnocentric firms typically use the same business practices in all cultures and
markets.
7) Arbitrage is the purchase of foreign currency on one market for immediate resale on
a foreign market in order to profit from a price discrepancy.
8) Liability of foreignness refers to the situation in which a government has more
stringent legal operating regulations on foreigners and foreign companies than on its
own citizens and companies.
9) Countertrade is an efficient way of doing business.
10) The challenge with setting an optimal transfer price is that there could be
conflicting conditions in the local country.
11) Countertrade refers to any one of several different arrangements that parties
negotiate so that they can trade goods and services with limited or no use of currency.
12) It is important when setting up a collaborative arrangement to agree on mutual
goals and expectations.
13) The dominant currencies in the international bond market are the euro and the U.S.
dollar.
14) The primary objective of multinational tax planning is to minimize the firm’s
worldwide tax burden.
15) Regional integration is better known as global integration through the World Trade
Organization.
16) The pushback against democracy has powered a rise in totalitarianism, a situation
that is likely to include which of the following?
A) increasing adoption of the principles of the rule of law
B) growing demands worldwide for greater fairness and justice in legal proceedings
C) increasing adoption of the principles of the rule of man
D) suppression of state-control in the direction of legal activities
17) All of the following tend to be more expensive when sourcing abroad, EXCEPT
________.
A) transportation costs
B) inventory holding costs
C) brokers and agents fees
D) labor rates
18) Which of the following handles the majority of all foreign-exchange activities?
A) multinational enterprises
B) commodities exchanges
C) commercial banks
D) regional banks
19) According to Transparency International, companies from which of the following
countries are more likely to pay bribes?
A) China
B) Japan
C) Singapore
D) Belgium
20) Formal reports, management performance evaluations, and financial metrics are
three examples of ________.
A) coordinating tools
B) coordinating systems
C) control systems
D) control mechanisms
21) As a trading currency, the euro is ________.
A) more widely traded than the U.S. dollar in seven of the top ten currency markets in
the world
B) widely traded in London but not in any other major foreign-exchange markets in the
world
C) becoming more popular than the U.S. dollar because of its global acceptance
D) gaining ground against the U.S. dollar in Eastern European countries
22) Which of the following is the LEAST likely reason that inaccuracies appear in
published information about countries?
A) inclusion of both legal and illegal economic activities
B) inclusion of both market and non-market economic activities
C) poor methodology used in data collection
D) use of different translation software
23) An example of an effective commodity agreement is ________.
A) the Organization of Petroleum Exporting Countries
B) the Organization of Petroleum Importing Countries
C) the International Tin Alliance
D) the International Cotton Alliance
24) There is growing consensus that human resource managers must hire, develop,
reward, and retain people whose performance explicitly improves the ________.
A) productivity of the firm’s core competencies
B) fit between the firm’s practices and industry standards
C) firm’s engagement of political authorities
D) firm’s responsiveness to customer complaints
25) Kevin, a marketing executive with Ace Electronics, has relocated to India for an
expatriate assignment. Kevin’s wife, Julia, and three children have joined him. Ace
Electronics provides the family with money intended to help Julia find a job and
develop cross-cultural skills. Which of the following is Ace providing the family?
A) repatriation allowance
B) hardship allowance
C) housing allowance
D) spouse allowance
26) Country X brings in a large number of unskilled immigrants to meet its labor needs.
Which of the following is the LEAST likely to occur in Country X as a result?
A) Country X will develop a long-term class of “have-nots” if the children of
immigrants remain unskilled
B) Country X will need more unskilled people in the future if immigrant children
become skilled
C) The continual supply of unskilled labor will delay the development of labor saving
technology in Country X
D) Country X will experience a significant transfer of knowledge and a resulting rise in
start-up businesses
27) Which of the following best supports a nation’s decision to implement a strategic
trade (industrial) policy?
A) The policies have usually resulted in big payoffs
B) Governments, rather than entrepreneurs, should take the risks of developing new
industries
C) Consumer needs would otherwise not be met
D) Government actions should target industries that are believed to give the country its
best export advantages
28) Craig, a manager at a global firm, is studying the cyclical nature of growth and
employment as a part of the process to forecast exchange rates. Which factor is Craig
most likely monitoring?
A) the institutional setting
B) fundamental analyses
C) cultural analyses
D) circumstances
29) A country’s central bank is responsible for ________.
A) distributing money to foreign countries that are in a debt crisis
B) encouraging disorderly conditions in foreign-exchange markets
C) the policies affecting the value of its country’s currency
D) establishing foreign-exchange markets
30) The World Bank reports that approximately ________ percent of the world’s
population is poor.
A) 50
B) 33
C) 80
D) 95
31) The advantage to host countries of international management contracts is that they
________.
A) receive state-of-the-art facilities
B) get assistance without foreign control
C) can pay in local currency
D) save on making capital investments
32) The attempt to resolve small issues before principles is a characteristic of which of
the following?
A) relativism
B) monochronic behavior
C) pragmatism
D) uncertainty avoidance