All of the following forces are leading to convergence of accounting standards around
the world EXCEPT ________.
A) global integration of capital markets
B) need of MNE’s to raise capital outside of their home markets
C) pressure from investors for more uniform standards
D) regional and political harmonization
MedCo uses an IT system that labels a product with an electronic tag to provide
real-time information. Which of the following does MedCo most likely use?
A) EDI (electronic data interchange)
B) RFID (radio frequency ID)
C) PTX (private technology exchange)
D) ERP (enterprise resource planning)
Under mercantilism, governments sought to influence trade by ________.
A) establishing bilateral trading agreements with other countries
B) limiting exports
C) limiting imports and subsidizing exports
D) encouraging the development of manufacturing in their colonies
The International Fisher Effect implies that ________.
A) the country with the higher interest rate should have lower inflation
B) the currency of the country with the lower interest rate will strengthen in the future
C) the currency of the country with the higher interest rate will strengthen in the future
D) interest rates and inflation are not linked at all
Which of the following is a characteristic of India that discourages MNE investment?
A) slow market growth
B) restrictive labor laws
C) poor communication infrastructure
D) government controlled market
Which of the following is NOT a likely reason for companies to act more ethically?
A) Consumer boycotts may result from unethical corporate behavior.
B) Irresponsible and unethical actions may lead to legal problems for MNEs.
C) Unethical or irresponsible behavior can negatively impact employee morale.
D) The company would like to raise its ranking on the Transparency International scale.
________ is the matter of how the company balances centralization versus
decentralization of decision making, whereas ________ is the matter of how the
company opts to divide itself into specific units to do specific jobs.
A) Horizontal differentiation; vertical differentiation
B) Vertical differentiation; systemic differentiation
C) Schematic differentiation; schematic differentiation
D) Vertical differentiation; horizontal differentiation
Assume that company executives at the firm would like to increase sales by expanding
into an international market. Which of the following factors, if true, best supports a
decision to expand sales globally?
A) It can offshore most of its production.
B) It can obtain all of its resources for the same price overseas.
C) Its costs of making additional sales would not increase disproportionately.
D) The foreign market has higher real interest rates.
Which stakeholder group primarily wants additional sales and increased productivity?
A) customers
B) shareholders
C) society at large
D) government
The HRM requirements of a(n) ________ strategy are well matched with a geocentric
staffing policy.
A) multidomestic
B) transnational
C) domestic
D) international
When selling a commodity for which there is little possibility of product differentiation,
a company would likely use which of the following orientations internationally?
A) customer orientation
B) production orientation
C) sales orientation
D) strategic marketing orientation
What is the most likely reason that governments cooperate with each other through
treaties, agreements, and consultations?
A) to gain an advantageous division of labor
B) to be in compliance with United Nations’ requirements
C) to attack problems jointly that one country acting alone cannot solve
D) to assure that all countries get an equitable share of taxes from multinational
enterprises
Vertical and horizontal constraints that segment employees and their tasks within an
organization are generally referred to as ________.
A) structures
B) networks
C) boundaries
D) classifications
A black market exists when ________.
A) a country closely monitors and adjusts the foreign-exchange rate
B) people pay more for hard currency than the official rate
C) a country is running a budget surplus
D) a country is experiencing a recession
Fortis Manufacturing Systems uses a highly focused system of quality control that takes
a statistical approach and scrutinizes the firm’s entire production system. Fortis most
likely uses ________.
A) total quality management
B) acceptable quality levels
C) just-in-time processes
D) Six Sigma processes
Bantam Enterprises, a multinational enterprise, makes significant efforts to avoid being
perceived as socially irresponsible. What is the most likely reason for this?
A) Social irresponsibility can lead to labor strikes by international unions.
B) Socially irresponsible companies usually have fewer exports and more imports.
C) Cultural barriers increase for companies that are socially irresponsible, which
hinders expansion into additional countries.
D) Social irresponsibility can lead to negative publicity from nongovernmental
organizations, which could hurt a company’s reputation.
At Tyson Manufacturing, departments and units are organized around discrete business
activities, such as finance, production, marketing, and human resources. Tyson most
likely has a ________ structure.
A) network
B) matrix
C) functional
D) divisional
Which of the following would most likely indicate that a company should handle its
own distribution?
A) high-volume sales and non-complex after-sales servicing
B) local customers and low-tech products
C) low sales volume and few business-to-business sales
D) global customers and high technology
The principle that an individual has the freedom to pursue his or her interests is called
________.
A) socialism
B) totalitarianism
C) individualism
D) collectivism
According to U.S. tax law, if a foreign subsidiary earns income, ________.
A) its income is immediately taxable to the parent, irrespective of the type of income
earned
B) that income is not taxable to the parent company as long as the subsidiary pays
income taxes in the country where it is earned
C) passive income is taxable to the parent unless the parent company is a controlled
foreign corporation
D) active income is taxable to the parent when it is remitted as a dividend
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
Companies most likely use the foreign-exchange market to ________.
A) establish fair currency trading policies
B) facilitate regular business transactions
C) establish a global market presence
D) diversify their hedge funds
Which of the following statements about approaches to political risk management is
NOT true?
A) Passive political risk management discourages managers from fully or partially
hedging their bets against exposure to political hazards.
B) Passive political risk management assumes that it is difficult, if not impossible, to
systematically model political risk.
C) Active political risk management assumes that positive and negative political events
in any country are neither independent nor random events.
D) Active political risk management assumes that political events unfold in observable
patterns that statistical methods can detect.
Which EU country has NOT adopted the euro?
A) Germany
B) France
C) Denmark
D) Greece
Successful implementation of a ________ strategy requires a company to develop
unique competencies that rivals find hard, if not impossible, to match or copy.
A) differentiation
B) cost leadership
C) globalization
D) marketing
Export restrictions have a tendency to ________.
A) favor domestic consumers
B) protect employment in the export-restricted industries
C) lower prices in foreign markets
D) encourage the development of substitutes in the restricting country
A push strategy for international sales is most likely preferable to a pull strategy when
________.
A) there are few prohibitions on advertising
B) the price of the product is high relative to incomes
C) people rely on friends’ opinions before buying a product
D) literacy rates are high
Thomas is planning a vacation to Country X. On a tourism Web site, he reads that the
government of Country X limits the amount of money a tourist may convert into the
country’s currency. Country X most likely uses which of the following?
A) import deposit requirements
B) multiple exchange rates
C) import licensing
D) quantity controls
Which of the following was most responsible for the early success of Tommy Hilfiger
clothing?
A) The products were mass-marketed through discount stores.
B) Internet mail-order sales were developed when people had less time to shop.
C) Products were developed to fit the specific needs of different country markets.
D) Brand awareness was developed through advertising.
In which of the following transactions is one currency swapped for another on one date
and then swapped back on a future date?
A) reverse transaction
B) spot transaction
C) FX swap
D) outright forward transaction
The term protectionism, when applied to international trade, refers to ________.
A) governmental restrictions and competitive support actions to affect trade flows
B) payments to dock workers to prevent pilferage of imported shipments
C) border checks to prevent entry of illegal aliens
D) methods used to prevent intellectual property theft
The ________ is the European Union’s ultimate decision-making body and is composed
of the different ministers of the member countries.
A) European Commission
B) Council of the European Union
C) European Parliament
D) European Court of Justice
Marrin Associates is an MNE with operations in Hong Kong, India, and Canada. The
firm strives to leverage its core competencies worldwide, reduce costs by exploiting
location economics, and adapt when efficient to local conditions. Marrin is most likely
following a(n) ________ strategy.
A) global
B) localization
C) transnational
D) international