Historically, financial reports prepared by firms in Germany:
A. reveal less information than reports of British or U.S. firms.
B. contain detailed information required by individual investors.
C. overvalued assets and undervalued liabilities.
D. made more public disclosures compared to firms in other countries.
Which among the following should be done in order to reduce bias in the performance
appraisal process for expatriates?
A. More weight should be given to an off-site manager’s appraisal than to an on-site
manager’s appraisal.
B. The on-site manager should be of a different nationality as the expatriate manager.
C. Home-office managers should be consulted before an on-site manager completes a
formal termination evaluation.
D. A former expatriate who served in the same location as a current expatriate should
not be allowed to participate in the appraisal.
The _____ suggests that a firm will establish production facilities where foreign assets
or resource endowments that are important to the firm are located.
A. product life-cycle theory
B. internalization theory
C. multipoint competition theory
D. eclectic paradigm According to the eclectic paradigm, it requires the firm to establish
production facilities where those foreign assets or resource endowments are located.
Firms pursuing a transnational strategy:
A. have a low need for coordination.
B. require very few integrating mechanisms.
C. have a very high need for cultural controls.
D. operate with a worldwide product division structure.
The typical _____ is dedicated to the production of a family of parts or products
through the use of four to six machines capable of performing various operations.
A. minimum efficient scale
B. flexible machine cell
C. just-in-time machine
D. assembly line Flexible machine cells are a common flexible manufacturing
technology. A flexible machine cell is a grouping of various types of machinery, a
common materials handler, and a centralized cell controller (computer). Each cell
normally contains four to six machines capable of performing various operations. The
typical cell is dedicated to the production of a family of parts or products. The settings
on machines are computer controlled. This allows each cell to switch quickly between
the production of different parts or products.
Which of the following is a legal means by which the state can expropriate the profits
from innovation?
A. Demands for money to grant a license
B. Expropriation
C. Enforcing property rights
D. Excessive taxation
The state can expropriate the profits from innovation through legal means, such as
excessive taxation, or through illegal means, such as demands from state bureaucrats
for kickbacks in return for granting an individual or firm a license to do business in a
certain area (i.e., corruption).
Which of the following statements is true of pegged exchange rates?
A. A pegged exchange rate allows a country’s currency to be determined by market
forces.
B. A pegged exchange rate weakens the monetary discipline of a country.
C. Pegged exchange rates are popular among many of the world’s smaller nations.
D. Adopting a pegged exchange rate regime increases inflationary pressures in a
country.
The ultimate controlling unit within the EU is the _____.
A. European Commission
B. European Parliament
C. Court of Justice
D. Council of the European Union
It has been suggested that learning effects are important only during the start-up period
of a new process and that they cease after two or three years. Any decline in the
experience curve after such a point is due to:
A. reduction in fixed costs.
B. higher depreciation costs.
C. economies of scale.
D. obsolescence.
_____ is most likely to occur when the value of the domestic currency is depreciating
rapidly because of hyperinflation or when a country’s economic prospects are shaky in
other respects.
A. The random walk effect
B. The Fisher effect
C. The international Fisher effect
D. Capital flight
The minimum efficient scale of production is:
A. low when fixed costs are high.
B. low when production is centralized.
C. high when fixed costs are low.
D. high when production is decentralized.
A pull strategy should be used when:
A. the firm is selling industrial products.
B. the distribution channels are short.
C. the distribution channels are long.
D. few print or electronic media are available.
_____ makes it difficult to evaluate the performance of expatriate managers objectively.
A. Cultural relativism
B. Internal documentation
C. Unintentional bias
D. Others-orientation
The amount of a currency needed to purchase one ounce of gold was referred to as the
_____.
A. golden rule
B. gold standard
C. pegged gold value
D. gold par value
The concept of mobility between castes within an individual’s lifetime:
A. is an opportunity to adopt positions of responsibility and influence in society.
B. makes no sense to traditional Hindus.
C. shows a figurative “reincarnation” of a person.
D. is a sign of spiritual progression to traditional Hindus.
A _____ encourages fragmentation of the organization into highly autonomous entities.
A. worldwide area structure
B. global matrix structure
C. worldwide product structure
D. global network structure
New-product development:
A. rarely results in high returns.
B. has a high failure rate.
C. always earns enormous returns.
D. has a low failure rate.
Which of the following is an example of deregulation?
A. A country that implements a simplified income tax filing system
B. A country that takes over a leading private bank to prevent it from filing for
bankruptcy
C. A country that provides agricultural subsidies to farmers
D. A country that encourages foreign direct investment
Which of the following is a trade barrier that affects a firm’s strategy?
A. Tariffs lower the cost of exporting.
B. Quotas may enhance a firm’s ability to serve a country from outside of that country.
C. To conform to local content regulations, a firm may have to locate more production
activities in a given market than it would otherwise.
D. The threat of antidumping actions promotes the firm’s ability to use aggressive
pricing to gain market share in a country.
_____ enable a firm to reduce the costs of value creation and/or to create perceived
value in such a way that premium pricing is possible.
A. Core competencies
B. Global standardization strategies
C. Operations
D. Location economies
The _____ makes it illegal for American companies to bribe a foreign government
official in order to obtain or maintain business over which that foreign official has
authority, and requires all publicly traded companies to keep detailed records that would
allow determining whether a violation of the act has occurred.
A. Trade-Related Aspects of Intellectual Property Rights (TRIPS)
B. Foreign Corrupt Practices Act
C. Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions
D. Organisation for Economic Co-operation and Development (OECD)
Which of the following is true regarding a worldwide area structure?
A. It tends to be favored by firms with a high degree of diversification.
B. It inhibits local responsiveness.
C. It tends to be favored by firms with a domestic structure based on functions.
D. Decision-making responsibilities are centralized.
Economies of scale arise from which of the following sources?
A. Increasing fixed costs by limiting them to small volumes.
B. Serving domestic and international markets from the same production facilities.
C. Serving only domestic markets.
D. Bargaining with distributors to drive up the product costs.
When _____ is emphasized, an individual’s right to do something may be restricted on
the grounds that it runs counter to “the good of society.”
A. individualism
B. totalitarianism
C. collectivism
D. theocracy
What is the most important advantage of using a geocentric staffing policy?
A. It enables the firm to build a cadre of international executives who feel at home
working in a number of cultures.
B. It may be less expensive to implement than other policies, reducing the costs of
value creation.
C. The higher pay managers on an international fast track enjoy is a source of
inspiration within a firm.
D. It reduces the need for futile and time consuming documentation.
Import tariffs:
A. reduce the price of foreign goods.
B. create efficient utilization of resources.
C. reduce the overall efficiency of the world economy.
D. are unambiguously pro-consumer and anti-producer.
Which of the following terms refers to the extent to which a country is gifted with such
resources as land, labor, and capital?
A. Current accounts
B. Factor endowments
C. National balance
D. National accounts
A pegged exchange rate means that the value of a currency is:
A. fixed against other currencies based on an agreement.
B. not determined by free market forces.
C. fixed relative to a reference currency.
D. independent of the valuations of other currencies.
The _____ was established on October 24, 1945, by 51 countries committed to
preserving peace through international cooperation and collective security.
A. World Trade Organization
B. United Nations
C. G20
D. World Bank
Which of the following has enabled globalization of markets?
A. Marginal differentiation among national markets
B. Falling barriers to cross border trade
C. Reduced homogeneity of material culture across the world
D. Increased government ownership of factors of production
Firms pursuing a global standardization strategy:
A. have low performance ambiguity.
B. attempt to create value by transferring core competencies from home to foreign
subsidiaries.
C. are less centralized than enterprises pursuing a localization or international strategy.
D. have a high need for coordination and cultural controls.
To account for differences in the cost of living, one can adjust GNI per capita by _____,
which allows for a more direct comparison of living standards in different countries.
A. gross domestic product
B. Human Development Index
C. living standards rate
D. purchasing power
The _____ argues that a large proportion of the world’s new products had been
developed by U.S. firms.
A. product life-cycle theory
B. Porter Diamond Model
C. new trade theory
D. Leontief Paradox
The idea that businesspeople should consider the social consequences of economic
actions when making business decisions and that there should be a presumption in favor
of decisions that have both good economic and social consequences is known as:
A. moral relativism.
B. noblesse oblige.
C. ethical dilemma.
D. social responsibility.
Which of the following terms refers to the use of a specialized third-party trading house
in a countertrade arrangement?
A. Counterpurchase
B. Barter
C. Offset
D. Switch trading
