Which of the following ideas calls for assessing a country’s performance based on
factors such as life expectancy, leisure time, and income equality?
A) microeconomics
B) happynomics
C) macroeconomics
D) green economics
Which of the following would LEAST likely be caused by a high inflation rate?
A) rules against increasing export prices
B) inability to quote prices in letters or catalogs
C) difficulty making changes to vending machines
D) necessity to set an equivalent value in a stable currency
Comparing countries in international business is LEAST useful for determining the
________.
A) best location for sales and production
B) sequence of entering different countries
C) amount of resources to allocate in each country
D) selection of which managers to send to which countries
All countries face the questions of what, how much, and with whom they should import
and export. How they answer these questions primarily affects whether ________.
A) nontradable goods become tradable
B) products go through a lengthy life cycle
C) companies adhere to laissez-faire export policies
D) a company’s present production location will be competitive
A customs broker or other import consultant can help an importer minimize import
duties by ________.
A) bypassing duty rebates available through drawback provisions
B) incurring duties by using non-bonded warehouses and foreign trade zones
C) maximizing liability by improperly marking an import’s country of origin
D) valuing products in such a way that they qualify for more favorable duty treatment
MNEs most likely use offshore debt markets ________.
A) to hide their cash from tax authorities
B) to take advantage of their ability to access capital in different countries
C) since debt in foreign countries is always cheaper than in the home-country market
D) because investors don’t like to invest in companies that only raise capital in their
home markets
Which of the following is most important when designing an internal code of conduct?
A) requesting U.N. oversight and intervention when necessary
B) communicating the code of conduct only to employees
C) reporting results to external stakeholders
D) forming local policies for each subsidiary
A culture in which people prefer to finish one task before starting another is most
accurately characterized as which of the following?
A) low-context
B) monochronic
C) pragmatic
D) high power-distance
The Bretton Woods Agreement established a system of fixed exchange rates under
which each IMF member country set a ________.
A) quota
B) par value
C) gold standard
D) nominal interest rate
Which of the following is LEAST likely to trigger the standardization of consumer
preferences?
A) intrinsic functions of money
B) global access to common media
C) increasing nationalism
D) improved communications technologies
In a country’s balance of payments, the ________ tracks all trade activity in
merchandise.
A) capital account
B) current account
C) payment account
D) deficit account
According to the theory of success and reward expectation, the greatest enthusiasm for
work generally occurs when there is a ________ certainty of success combined with a
________ reward for success compared to the reward for failure.
A) high; high
B) high; low
C) low; high
D) low; low
Trade shifting to countries within a regional trade agreement at the expense of trade
with countries not in the agreement is called ________.
A) a dynamic effect
B) trade creation
C) trade diversion
D) economy of scale
A current sourcing dilemma that some companies face is whether or not they should
________.
A) use outsourcing as a reward to underperforming employees
B) make critical components for which they have competencies
C) outsource innovative processes
D) measure supplier performance
Which of the following best describes arbitrage?
A) using foreign exchange to fund new foreign direct investments
B) purchasing foreign currency in anticipation of long-term trends
C) using foreign-exchange instruments to speculate for profit
D) purchasing foreign currency on one market for immediate resale on another market
Why is China most likely considering a greater reliance on the SDR?
A) gains in the foreign-exchange market
B) concerns about the value of the U.S. dollar
C) demands to replace the dollar with the euro for reserves
D) requirements by the IMF to make China’s currency more flexible
Limitation of logging in the Amazon region is generally viewed as environmentally
beneficial for the planet as a whole; however, unemployed Brazilian workers have felt
that job creation inside Brazil is more important than climate protection outside Brazil.
This example best illustrates which of the following?
A) why smaller countries are concerned that large international companies are powerful
enough to dictate operating terms
B) why globalization is needed to foster uniform standards for combating
environmental problems
C) how cultural homogeneity threatens the cultural foundation of smaller nations
D) how global interests can conflict with a country’s local interests
Which of the following has the greatest potential to transform an industry’s structure?
A) a change in a competitor’s management
B) a change in a competitor’s pricing structure
C) the expansion of a distribution channel
D) the exit of a competitor from the industry
Skinner Electronics plans to expand into foreign markets. Top executives want the firm
to focus only on locations where the rule of law prevails. Which of the following should
most likely be considered by Skinner?
A) wealthier, westernized countries
B) developing, non-Western countries
C) emerging economies experiencing rapid growth
D) countries inclined toward totalitarian-style government
According to the optimum tariff theory, a foreign producer will most likely ________.
A) ship highly taxed goods internationally on a per-unit basis
B) lower its export prices if the importing country imposes an import tax on its products
C) assess a tax on goods shipped internationally based on a percentage of the goods’
value
D) seek import tariffs by using the comparable access argument
Metro Hotels, a U.S. hotel chain, has transferred several of its employees to Myanmar
where they will work for three or four years before returning to the United States. The
employees will be working with a Myanmar hotel to provide it with their extensive
knowledge regarding how to run a hotel. Metro is most likely involved in a ________.
A) franchise
B) turnkey operation
C) joint venture
D) management contract
The neoclassical structure implemented by Cisco primarily enables the firm to
________.
A) respond quickly to new opportunities
B) thoroughly assess new competitors
C) assign leaders to new products
D) clarify managers’ duties
Iverson Products is a U.S. firm that is considering expanding internationally by
exporting. Which of the following is the LEAST likely benefit for Iverson?
A) boosting marketplace flexibility
B) improving economies of scale
C) facing lower business risk compared to other foreign market entry options
D) requiring fairly few resources
The role of most commodity agreements now is to ________.
A) discuss issues and disseminate information about commodities
B) keep consumer countries from controlling commodity prices
C) allow producer countries to control inflation by keeping commodity prices low
D) stabilize prices through regional alliances between producer and consumer countries
The primary responsibilities of the ________ are the assessment and collection of all
duties, taxes, and fees on imported merchandise, the enforcement of customs and
related laws, and the administration of certain navigation laws and treaties.
A) U.S. Customs and Border Protection
B) U.S. Secret Service
C) Internal Revenue Service
D) Food and Drug Administration
In 2002, the ________ required adoption of International Financial Reporting Standards
(IFRS) by 2005.
A) EU
B) SEC
C) ASB
D) GAAP
Gibson Enterprises is an MNE that relies on just-in-time inventory management and
lean manufacturing systems to optimize quality and efficiency. For the last few years,
Gibson has used the same foreign sources for its raw materials. What is the most likely
risk faced by Gibson because of foreign sourcing?
A) quality of incoming inventory
B) uncertainty of arriving parts
C) few available suppliers
D) high inventory costs
Which of the following is NOT a primary duty of the U.S. Customs and Border
Protection?
A) assessing all duties, taxes, and fees on imported merchandise
B) collecting import and export tariffs
C) protecting the U.S. from threatening imports
D) policing smuggling operations
Citibank decides to open a call center in Mumbai, India because a detailed analysis of
the country-specific advantages suggests that India is the optimal place for responding
to customers’ calls. Citibank is exploiting ________ by running a call center in India.
A) value configuration synergies
B) location economies
C) geographic arbitrage
D) value offshoring
Preston Electronics is an MNE with facilities located in Taiwan, Singapore, and
Germany. Preston gives its local operations the authority to adapt value activities to
prevailing local economic, political, legal, and cultural conditions. Preston is most
likely using a(n) ________ strategy.
A) global
B) localization
C) international
D) continental
In a(n) ________ culture, people tend to regard seemingly peripheral information as
pertinent to decision making and infer meanings from things that people say either
indirectly or casually.
A) pragmatic
B) idealistic
C) fatalistic
D) high-context