The main benefit of a global strategy is that it allows companies to monitor buyer
preferences closely in each local market.
An excess money supply creates a borrower’s market, forcing down interest rates and
the cost of borrowing.
Trade between most nations is presently characterized by a certain degree of
isolationism.
Inflation is a result of the supply and demand for a currency.
Volunteer work and unpaid household work are included in GNP.
Scenario: Cleanshot USA in Russia
When Cleanshot USA, a photography products company, decided to enter the
international arena, it chose Russia as its main market. Although Russia has been in
transition for years, Cleanshot managers believe their company has tremendous
opportunities there.
U.S. individuals are exempt from being prosecuted for bribery under the Foreign
Corrupt Practices Act.
Citizens who are working and living in their home country are called expatriates.
Inflation in an economy can be controlled by lowering the interest rates.
The factor proportions theory of international trade was developed by Wassily Leontief.
According to Michael Porter, advanced factors account for the sustained competitive
advantage a country enjoys in a product.
In the maturing product stage of the international product life cycle theory, increased
competition creates pressures to reduce production costs.
One goal of currency restriction is to preserve hard currencies to pay for imports and to
finance trade deficits.
Transportation costs are a driving force behind the globalization of the steel industry.
Dual extension method extends the same home-market product and marketing
promotion into target markets.
A sight draft extends the period of time following delivery by which the importer must
pay for goods.
Which of the following functions does a copyright perform?
A) It protects the trade secrets of an organization, including its business plans.
B) It prevents a company from monopolizing an invention.
C) It distinguishes the product and manufacturers from competitors through distinct
words and symbols.
D) It gives creators of original work the freedom to publish or dispose of them as they
choose.
While designating an exchange rate, the ________ is always the denominator.
A) counter currency
B) base currency
C) cross currency
D) quoted currency
Which of the following is an assumption made by the comparative advantage theory?
A) maximization of production and consumption
B) government interference and control in trade activities
C) creation of trade deficits
D) creation of trade surpluses
Scenario: Markowitz Tools
Susan Markowitz is analyzing potential markets where Markowitz Tools can sell its
products, and she has narrowed her search to three markets. Country A is a developing
country with a low literacy rate, Country B has a group-oriented culture, and Country C
is a highly developed nation.
If Susan wants to obtain information in the least expensive way, she should use
________.
A) secondary market research
B) consumer panels
C) structured interviews
D) large focus groups followed by surveys
________ requires each individual to be focused on the quality of his or her own
output.
A) Total quality management
B) Quality-of-life index
C) Integrated business planning
D) Organizational restructuring
Which of the following is a contractual entry mode in which one company supplies
another with intangible property and other assistance over an extended period?
A) franchising
B) management contract
C) licensing
D) strategic alliance
Scenario: Better Mousetrap Inc.
Better Mousetrap Inc. is a manufacturing company that sells pest control products.
Recently the company launched an innovative mousetrap with a unique design that has
been selling well in the U.S. market. Senior Vice President Marc Wallace, even
recommended expanding sales overseas in order to increase company revenues.
Wallace expects that markets abroad will soon become fully aware of the existence of
the product and its benefits. Which of the following life cycle stages will the product be
a part of during that period?
A) maturing product stage
B) product decline stage
C) standardized product stage
D) new product stage
Which of the following industries is typically protected for national security reasons?
A) agriculture
B) textile
C) automobile
D) housing
Scenario: Indy Bats LLC
Indy Bats LLC is looking for new markets for its products. Matt Johnson has been
appointed head of a special team that has been given the responsibility of identifying
new markets for the company’s products. The company is especially interested in
exploring emerging economies.
To estimate an emerging market’s openness, Matt could analyze its ________.
A) market receptivity
B) differentiation strategy
C) commercial infrastructure
D) country risk
Local content regulations are primarily intended to ________.
A) address cultural differences between local employees and expatriates
B) encourage MNEs to increase production activities in a country
C) address contract negotiation difficulties
D) assess local tax rates on MNEs
Global products are most commonly seen in industries where there is ________.
A) little convergence of buyer preference across national borders
B) low pressure to contain costs
C) high demand for customized products
D) significant price competition
Mr. Yoshimura’s daughters are extremely unhappy and have been complaining every
night about their lifestyle in the United States. They insist on returning to Japan. If Mr.
Yoshimura gives in to his family members’ pleas and decides to return home, which of
the following will most likely be true about his experience?
A) He and his family will experience reverse culture shock.
B) He will leave his company within one year of returning home.
C) His case will represent an instance of expatriate failure.
D) He will be terminated from employment for failing to complete his assignment.
The efficient market view holds that ________.
A) companies can search for new pieces of information to improve forecasting
B) forward exchange rates provide the least accurate forecasts of future exchange rates
C) companies must spend time and money collecting and examining information
believed to affect future exchange rates
D) prices of financial instruments reflect all publicly available information at any given
time
What are the two types of family groups? Why does the family play an important role in
affecting business activities across the world?
Discuss the disadvantages of an ethnocentric staffing policy. How do bonuses, tax
incentives, and employee expectations contribute to high personnel costs?
Compare and contrast the purposes of the World Bank and the International Monetary
Fund.
Explain how technological innovation has benefitted entrepreneurs.
Why would an exporter use a sales representative or a distributor? Why would the
exporter be reluctant to offer an open account payment method?
Describe the role of special government agencies in promoting exports and imports.
Discuss the challenges involved in forecasting exchange rates.
Discuss “political union” as a level of economic integration and “political cooperation”
as a benefit of economic integration.