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The Asian economic crisis and the global financial of 2008-2009 crisis were caused by
_____.
A. high inflation rates
B. excessive debt
C. low inflation rates
D. a huge trade surplus
A country is said to be in balance-of-trade equilibrium when:
A. it has the potential to produce all goods that its residents want without engaging in
foreign trade.
B. the income its residents earn from exports is equal to the money its residents pay for
imports.
C. the country import all goods that its residents want by engaging in foreign trade.
D. it has the potential to balance the production and procurement of the basic amenities
that it needs.
Which of the following is true of exporting?
A. It avoids the often substantial costs of establishing manufacturing operations in the
host country.
B. It is the best choice if lower-cost manufacturing locations are available abroad.
C. Low transportation costs may make exporting uneconomical.
D. Tariff barriers may make exporting the most attractive option.
_____ separated national equity markets from each other historically.
A. Substantial regulatory barriers
B. Fixed exchange rates
C. Financial similarities
D. Desire for high levels of profit
A common law system is different from a civil law system because:
A. a common law system is based on religious teachings, while a civil law system is
based on cultural traditions.
B. a common law system is very rigid, while a civil law system tends to be more
flexible.
C. in a common law system a judge relies on legal codes to make rulings, while in a
civil law system a judge relies on his intuition and moral reasoning to make judgments.
D. in a common law system a judge has the power to interpret the law, while in a civil
law system a judge has the power only to apply the law.
Which of the following is an argument favoring decentralization?
A. It can facilitate coordination.
B. It can help ensure that decisions are consistent with organizational objectives.
C. It can give top-level managers the means to bring about needed major organizational
changes.
D. It permits greater flexibility.
A(n) _____ customizes the product offering to local demands and increases the value of
that product in the local market.
A. transnational strategy
B. global standardization strategy
C. international strategy
D. localization strategy
A key issue in the "millennium round" of the WTO was to:
A. increase barriers to cross-border trade in agricultural products.
B. extend GATT to cover trade in commodities.
C. further reduce barriers to cross-border trade and investment.
D. extend GATT rules to cover trade in services.
The cost of capital is:
A. higher in a purely domestic capital market than in a global market.
B. lower in a domestic capital market than in an international market.
C. higher in a global market than in a purely domestic capital market.
D. the same in either a global market or a purely domestic capital market.
The majority of cross-border investment in the developed world is in the form of _____.
A. hostile takeovers
B. greenfield investments
C. competitive investments
D. mergers and acquisitions The majority of cross-border investment is in the form of
mergers and acquisitions rather than greenfield investments.
_____ occurs when a domestic firm legally allows a foreign firm the right to produce its
product, to use its production processes, or to use its brand name or trademark.
A. Licensing
B. Acquisition
C. Internalization
D. Merger Licensing occurs when a domestic firm, the licensor, licenses to a foreign
firm, the licensee, the right to produce its product, to use its production processes, or to
use its brand name or trademark. In return, the licensor collects royalty fees on every
unit the licensee sells, or on total licensee revenues. The licensor also benefits from the
arrangement in that the licensee bears the cost and risk of expanding into a foreign
market.
_____ enables managers to walk away from a decision that is profitable but unethical.
A. Utilitarianism
B. Righteousness
C. Just distribution
D. Moral courage
The _____ was established to increase multinational cooperation in view of the
economic rise of the Pacific nations and the growing interdependence within the region.
A. Mercosur
B. Asia-Pacific Economic Cooperation
C. Andean Community
D. Association of Southeast Asian Nations
According to Hernando de Soto, which of the following factors is essential for the
developing world to be able to reap the benefits of innovation and entrepreneurship?
A. Detailed state planning
B. Restricting direct investment by foreign enterprises
C. Strong property rights
D. Market regulation
The stock of FDI is the:
A. amount of FDI undertaken over a given period of time.
B. total accumulated value of foreign-owned assets at a given time.
C. flow of FDI out of a country.
D. amount of foreign direct investment made by domestic companies over a given
period of time. The stock of FDI refers to the total accumulated value of foreign-owned
assets at a given time.
Which of the following is a desired outcome of flexible manufacturing technology?
A. Minimizing the utilization of individual machines
B. Reducing setup times for complex equipment
C. Standardizing the output of a system
D. Implementing specialized equipment in production
Which of the following is one of the factors that impact a spouse adjusting to
expatriation?
A. The inability of the spouse to get a job in the foreign country due to poor training
and education.
B. Laws against spouses freely coming and going from their home in the foreign
country.
C. Spouses not being welcomed into the expatriate community.
D. Language differences make it difficult for them to make new friends, making the
spouse feel trapped at home.
_____ means standing in the shoes of a stakeholder and asking how a proposed decision
might impact that stakeholder.
A. Veil of ignorance
B. Difference principle
C. Moral imagination
D. Noblesse oblige
What is the difference between an ethnocentric and a polycentric staffing approach?
A. An ethnocentric staffing approach alleviates cultural myopia, while a polycentric
staffing approach can lead to cultural myopia.
B. An ethnocentric staffing approach is more expensive compared to a polycentric
staffing approach.
C. An ethnocentric staffing approach seeks host-country nationals for all key positions,
while a polycentric staffing approach seeks the best people for key jobs regardless of
nationality.
D. An ethnocentric staffing approach is now used in most international businesses,
while the polycentric staffing approach is on the wane.
The Export-Import Bank:
A. is an international financial institution that provides loans for capital programs.
B. provides finance to facilitate trade between United States and other countries.
C. is an independent agency of the United Nations.
D. focuses on policies that have an impact on the exchange rate and the balance of
payments.
The _____ helps us to compare the relative prices of goods and services in different
countries.
A. interest rate
B. GDP growth rate
C. exchange rate
D. tariff rate
Which of the following is less likely to add to the pressure for a firm to be locally
responsive?
A. National differences in consumer tastes and preferences
B. Differences in infrastructure and traditional practices
C. Switching costs for consumers
D. Host-government demands
If a firm can realize location economies by moving production elsewhere, it should
avoid _____.
A. exporting
B. turnkey contracts
C. licensing
D. wholly owned subsidiaries
A U.S. investment firm, Fin-Smart, set up a customer service call center in India to take
advantage of the lower labor costs. This is called ____.
A. homogenizing markets
B. vertical integration
C. international outsourcing
D. horizontal integration
Which of the following is a safeguard that representative democracies use to ensure that
their elected officials are held responsible for their actions?
A. Unlimited terms for elected representatives
B. A court system that is integrated with the political system
C. An individual's right to freedom of expression, opinion, and organization
D. A political police force and armed service
The idea that valuable knowledge does not reside just in a firm's domestic operations
but can also be found in its foreign subsidiaries is called _____.
A. global learning
B. global production processes
C. global economics
D. global factors
A(n) _____ staffing policy seeks the best people for key jobs throughout the
organization, regardless of nationality.
A. ethnocentric
B. polycentric
C. eurocentric
D. geocentric
Assume that an American company today invests some of its spare cash in a Hungarian
money market account that will earn 8 percent for a period of two months. Which of the
following, if it happens during the next two months, would imply that the company will
earn less than 8 percent on its investment?
A. The Hungarian forint rises in value against the dollar.
B. Interest rates in the United States move down.
C. Short-term interest rates in Hungarian money markets shoot up.
D. The dollar appreciates against the Hungarian forint.
_____ and its extensions can help to explain imitative FDI behavior by firms in
oligopolistic industries.
A. Internalization theory
B. The eclectic paradigm
C. The noninterventionist theory
D. Knickerbocker's theory Knickerbocker's theory and its extensions can help to explain
imitative FDI behavior by firms in oligopolistic industries.
Differences in _____ constrain the globalization of markets.
A. technical standards
B. measurement systems
C. manufacturing processes
D. government regulations
Which of the following is a drawback of the Eurocurrency market?
A. Borrowing funds within their home country can expose a company to foreign
exchange risk.
B. The probability of a bank failure that would cause depositors to lose their money is
greater.
C. The system is over-regulated and, therefore, more costly.
D. The higher interest rate received on home-country deposits reflects the costs of
insuring against bank failure.
Large strategic commitments:
A. have many benefits and little to no risks.
B. increase strategic flexibility.
C. have many risks and little to no benefits.
D. limit strategic flexibility.
