Why did many Japanese firms invest in North America and Europe in the 1970s?
A. To avoid a highly competitive domestic market.
B. To exploit high domestic tariff barriers.
C. To create a hedge against unfavorable currency movements.
D. To take advantage of low labor costs.
Products such as refined sugar, certain bulk chemicals, paint, and petroleum products:
A. cannot travel through a global supply chain.
B. have low value-to-weight ratios.
C. come from offshore factories.
D. have high value-to-weight ratios.
Japan’s _____ have offices all over the world, and they proactively, continuously seek
export opportunities for their affiliated companies large and small.
A. sogo shosha
B. kaizen
C. MITI
D. Samurai
_____ refers to the movements in a stock portfolio’s value that are attributable to
macroeconomic forces affecting all firms in an economy.
A. Diversification
B. Capital flow
C. Systematic risk
D. Correlation movement
What is the most enduring free trade area in the world?
A. NAFTA
B. EFTA
C. ASEAN
D. Mercosur
In a seminal study, R. L. Tung found that for American multinationals, the biggest
impediment to expatriate success was the:
A. inability of the spouse to adjust.
B. manager’s inability to adjust.
C. manager’s inability to cope with larger overseas responsibilities.
D. lack of adequate technical training.
Broadly speaking, a geocentric approach is compatible with:
A. an international strategy.
B. both global standardization and transnational strategies.
C. a localization strategy.
D. both an international and a localization strategy.
Which of the following is a step involved in the deregulation of a command economy?
A. Adding price controls
B. Temporarily restricting international trade
C. Abolishing laws regulating the establishment and operation of private enterprises
D. Increasing restrictions on direct investment by foreign enterprises
Expatriate failure refers to:
A. expatriates who follow host-country norms instead of their home-country norms.
B. the inability of expatriate managers to treat foreign nationals as if they were
home-country nationals.
C. the premature return of an expatriate manager to his or her home-country.
D. the ethical drawbacks of the ethnocentric staffing approach.
Bank charges on letters of credit will depend on the:
A. exporter’s creditworthiness.
B. size of the transaction.
C. exporter’s means of finance.
D. time taken to approve the sale.
David Ricardo’s theory of comparative advantage explains global trade in terms of the:
A. first mover advantage that certain countries and firms enjoy.
B. geographical differences between various countries.
C. international differences in labor productivity.
D. late mover advantage that certain countries and firms possess.
A _____ states that the bank will pay a specified sum of money to a beneficiary,
normally the exporter, on presentation of particular, specified documents.
A. bill of exchange
B. bill of lading
C. letter of credit
D. bank statement
Responding to pressure for _____ requires that a firm differentiate its product offering
and marketing strategy from country to country.
A. cost reductions
B. experience effects
C. lowering the costs of value creation
D. being locally responsive
When a company emphasizes personal selling, the company is probably using a _____.
A. standardized strategy
B. push strategy
C. localized strategy
D. pull strategy
In practice, the dual-hierarchy in a global matrix structure:
A. lessens all forms of conflict.
B. makes it easy to ascertain accountability.
C. results in extremely quick decision making.
D. can lead to perpetual power struggles.
Firms use fronting loans to:
A. avoid host-country restrictions on the remittance of funds from a foreign subsidiary.
B. implement a cost-based and fair pricing policy across an international business.
C. increase the profit center revenue of a subsidiary functioning in another country.
D. implement a market-driven and fair pricing policy across an international business.
The most important aspect of a country’s cultural differences, particularly important in
foodstuffs and beverages, is the impact of _____.
A. values
B. traditions
C. norms
D. attitudes
_____ refers to shared decision-making opportunities and operational collaboration of
key global supply chain activities.
A. Global supply chain coordination
B. Make-or-buy decision
C. Reverse logistics
D. Global sourcing Global supply chain coordination refers to shared decision-making
opportunities and operational collaboration of key global supply chain activities.
_____ can avail loans from Ex-Im Bank to pay U.S. suppliers.
A. Foreign borrowers
B. Individuals
C. Domestic borrowers
D. U.S.-based corporations
Which of the following is an example of a primary activity in a firm’s value chain?
A. Information systems
B. Research and development
C. Logistics
D. Human relations
Which of the following decisions is typically centralized at a firm’s headquarters?
A. Production decisions
B. Human resource management
C. Marketing decisions
D. Overall firm strategy
Which of the following arises when a country is importing more goods and services
than it is exporting?
A. Current account surplus
B. Trade deficit
C. Trade surplus
D. Trade balance A current account deficit, or trade deficit as it is often called, arises
when a country is importing more goods and services than it is exporting.
_____ denotes a whole range of barter-like agreements and its principle is to trade
goods and services for other goods and services when they cannot be traded for money.
A. Countertrade
B. Cross-selling
C. Matchmaking
D. Letter of credit
An American firm that sets up production units in China is accused of releasing
untreated chemical waste into water bodies. The manager of the firm defends the firm
stating that, factories in China set up by French and British firms also release untreated
chemical waste into water bodies. What approach to business ethics is the manager
using?
A. Righteous moralist
B. Utilitarian
C. Naive immoralist
D. Cultural relativist
Supporters of globalization maintain that the apparent decline in real wage rates of
unskilled workers:
A. is due to technological changes that create greater demand for skilled workers.
B. is due to the migration of low-wage manufacturing jobs offshore.
C. can be checked by increasing government ownership of enterprises.
D. can be checked by limiting free trade and foreign investment.
According to political scientist’s thesis is global terrorism a product of the tension
between civilizations and the clash of value systems and ideology?
A. Amartya Sen
B. Samuel Huntington
C. Francis Fukuyama
D. Hernando de Soto
Which of the following is one of the important factors in determining the elasticity of
demand for a product in a given country?
A. Personal selling
B. Logistics
C. Operating revenue
D. Income level
The Japanese government was pressurized by the U.S. government to place limits on
the number of vehicles exported to the United States by Japanese automobile producers
in 1981. This is an example of:
A. tariff rate quota.
B. specific tariffs.
C. voluntary export restraint.
D. ad valorem tariff.
Global expansion offers companies the opportunity to generate greater profits than
companies that focus strictly on _____.
A. value creation
B. economies of scale
C. location economies
D. the domestic market
A(n) _____ tends to be adopted by firms that are reasonably diversified.
A. worldwide area structure
B. international division structure
C. worldwide product division structure
D. global matrix structure
Which is the most enduring free trade area in the world?
A. Central America Free Trade Association (CAFTA)
B. European Free Trade Association (EFTA)
C. Association of Southeast Asian Nations (ASEAN)
D. North American Free Trade Association (NAFTA)
Which of the following statements is true of the Leontief Paradox?
A. It shows an anomaly that occurs when a nation has high domestic demand for a
product.
B. It explains the relationship between domestic demand and comparative advantage.
C. It disproved Ricardo’s theory of comparative advantage.
D. It raised questions about the validity of the Heckscher-Ohlin theory.
The rate at which one currency is converted into another is known as the _____.
A. exchange rate
B. currency swap rate
C. fluctuation rate
D. carry over rate
Hofstede’s masculinity versus femininity dimension looked at the relationship between
gender and work roles and found that in:
A. feminine cultures, sex roles were sharply differentiated, and traditional “feminine
values” determined cultural ideals.
B. feminine cultures, sex roles were less sharply distinguished, however, there was a
great deal of differentiation between men and women in the same job.
C. masculine cultures, sex roles were less sharply distinguished, and little
differentiation was made between men and women in the same job.
D. masculine cultures, sex roles were sharply differentiated, and traditional “masculine
values” determined cultural ideals.
The _____ is the main instrument of financial control in an organization.
A. chief financial officer
B. corporate accounting
C. audit
D. budget
Describe the problem of blocked earnings.
Explain the concept of transfer pricing.
Discuss the impact of technology on the growth of the global capital market.
What are the nine possible combinations of the three exchange rates proposed by
Lessard and Lorange in the control process?
What are the factors that determine the costs of doing business in a country?
The impact of currency exchange rates on the reported financial statements of a
company is called economic exposure.
What are the advantages of using royalties and fees to move money across borders?
Why is managing an international business different from managing a purely domestic
business?
Why should a firm pursue an ethnocentric approach to staffing? What are the
disadvantages of this approach?
Discuss the effect of country factors on the decision of where to locate production?
All other things being equal, a firm should locate its manufacturing activities in
countries where the political, economic, and cultural conditions are conducive to the
performance of those activities.
Briefly differentiate accounting standards and auditing standards.
What are state-owned companies? Why do they usually perform poorly?
To maximize the learning benefits of an alliance, a firm must try to learn from its
partner and then apply the knowledge within its own organization.
What is meant by the phrases ‘the dollar is selling at a discount’ on the 30-day forward
market and ‘the dollar is selling at a premium’ on the 30-day forward market?
Do you think businesses can influence government policies? Explain your answer.
Why do organizations appoint an ethics officer?
How does the ownership structure of newly privatized firms affect its functioning?
What is the World Trade Organization? What is its role in the world economy?
Explain make-or-buy decisions with an example.
