1) Home country consumers are typically active in preventing their domestic companies
from dumping products into foreign markets.
2) The three levels of quality standards are general, international, and industry-specific.
3) Agricultural subsidies by developed countries impede the competitiveness of
agricultural exports by developing countries.
4) HIV/AIDS is affecting the operations of Anglo American PLC by forcing the
company to invest outside of South Africa to avoid having to deal with workforce
health issues.
5) A go/no-go decision for foreign expansion means that management reviews existing
information and decides whether more information is needed.
6) The lack of cultural guidebooks and research specifically for international managers
poses a significant problem for global firms.
7) The use of management contracts has been significant in hotel operations.
8) Although central banks are responsible for foreign-exchange policy, they have no
power to intervene in exchange rate markets.
9) The sums needed to develop and market many new products are out of reach for
most companies acting alone.
10) The largest market in foreign exchange is in London.
11) The global integration of capital markets is a major force leading to the convergence
of accounting standards.
12) The recent expansion of technology has contributed to the growth in international
business by creating new products that are important in world trade
13) Different country standards, such as safety regulations, add complexity to whether
companies decide to use a globally standardized product.
14) In a mixed economy, all dimensions of economic activity, including pricing and
production decisions, are determined by a central government plan.
15) Which of the following perspectives would LEAST likely be considered in a
balanced scorecard?
A) financial
B) customer
C) industry standards
D) learning and growth
16) In a ________, one party directs another party to make payment.
A) reverse letter of credit
B) commercial bill of exchange
C) commercial bill of trade
D) confirmed irrevocable foreign-exchange transaction
17) Which of the following most accurately compares the techniques of scanning versus
detailed analysis of countries?
A) Scanning is used for planning and detailed analysis is used for control
B) Detailed analysis is used to consider countries overlooked in the scanning process
C) Scanning considers a large number of countries so that only the most promising ones
undergo a detailed analysis
D) Scanning compares one country to another, whereas detailed analysis compares
regions within a single country
18) Commodity agreements ________.
A) were initially established to attempt to stabilize commodity prices
B) are effective in regulating the price of grains but not minerals
C) are effective in regulating the prices of both grains and minerals
D) were disbanded by the United Nations for being non-competitive
19) Assume that a U.S.-based MNE has operations in Germany and that the revenues
and expenses are mostly incurred in Euros. Which translation method is the MNE most
likely to use?
A) current-rate method
B) temporal method
C) translate-restate method
D) consolidation method
20) The manufacturing plants of Orion Computers are located closer to customers rather
than in low-wage areas. What is the most likely reason for this strategy?
A) competitor locations in emerging markets
B) overseas producers with innovative designs
C) customer demand for dependability
D) diversification of product lines
21) Organizing work differently to improve productivity will likely fail ________.
A) if the work force has a low tolerance for authoritarianism
B) if workers participate in planning the improvement
C) unless changes are compatible to competitor’s practices
D) if changes interfere with strongly held value systems
22) The staffing policy at Hanover International is to seek the best people for key jobs
throughout the organization, regardless of nationality. Hanover most likely follows a(n)
________ staffing approach.
A) geocentric
B) intercentric
C) polycentric
D) ethnocentric
23) Which of the following is NOT a component of modern legal systems?
A) constitutional law
B) criminal law
C) commercial law
D) private law
24) Some countries opt for a mixed economic system in the belief that although an
economic system should aspire to achieve the efficiencies created by free markets, it
must also support policies to ________.
A) destabilize poverty rates
B) achieve low unemployment
C) restrict economic growth
D) inequitably distribute wealth
25) What is an international consortium?
A) the ownership of a company by a government and a foreign company
B) an agreement signed by most governments to protect intellectual property rights
C) an international joint venture owned by at least three organizations
D) an agreement between two or more governments to provide for reciprocal foreign
investment protection
26) If a foreign currency is quoted in American terms (the direct quote) and the forward
rate is greater than the spot rate, the foreign currency is selling at a ________.
A) forward premium
B) forward discount
C) backward discount
D) discounted premium
27) Why is the United States both an exporter and importer of such products as vehicles
and passenger aircraft?
A) Buyers procure similar products for replacement parts
B) Transportation costs and cultural differences limit exporters
C) Companies differentiate products to appeal to different consumers
D) Bilateral trading agreements require this interchange for a number of products
28) Why does price escalation most likely occur in exporting?
A) The WTO requires that prices increase
B) Companies rely on skimming price strategies
C) Greater distances and more intermediaries increase distribution costs
D) Uncertain currency value changes necessitate charging higher prices
29) Nontradable goods are best defined as ________.
A) products and services for which exporting costs are excessive
B) factors of production that exceed safety regulations
C) goods used for national defense
D) products that comprise a portion of the inputs for finished products
30) The three major responsibilities of the ________ are legislative power, control over
the budget, and supervision of executive decisions.
A) European Commission
B) European Council
C) European Parliament
D) European Court of Justice
31) Which of the following is one of the biggest barriers to expanding the use of
outsourcing?
A) long-term independence from an external organization
B) loss of operational control
C) cultural opportunities in the organization
D) language barriers
32) Carnival Cruise Lines lowers its taxes by all of the following EXCEPT ________
A) hiring host-country nationals who pay no taxes
B) taking advantage of taxation laws in foreign countries
C) sailing in international waters outside countries’ tax jurisdiction
D) paying substantial port fees instead of taxes during stopovers