Firms may choose to issue stock in foreign markets in order to tap into a broader
investor pool.
The United States has only about 10 percent of the world’s population, so the vast
proportion of most companies’ potential customers are located elsewhere.
Export drafts must be paid before the buyer receives shipping documents.
The source of international law is frequently the United Nations.
As international companies increasingly take the geocentric view, we can be certain to
see less use of third-country nationals.
ASEAN, whose initial goal was political, to foster peaceful relations among members,
includes China as its core member.
In the United States, punitive damage rulings have no measureable effect on medicine.
The United States avoids trade barriers on imports in support of free trade principles.
Transfer pricing is what the company charges for transfers within the company. It is a
bookkeeping cost of goods transferred across national borders.
Once in export markets, new exporters tend to maintain their focus on them, despite
what is happening in the home market.
Packaging and transportation requirements for a product can significantly influence
logistics costs, and these factors should be addressed during the postdesign steps in a
company’s value chain.
Through 2035, fossil fuels are expected to remain the world’s dominant energy source.
In CIF (cost, insurance, freight, foreign port) the buyer quotes a price that includes the
cost of the goods, insurance, and all transportation and miscellaneous charges to the
named foreign port in the country of final destination.
In collectivist cultures such as Thailand, accountability is assumed at the group level.
A candidate’s fluency in the host country’s language is a strong indicator of his or her
ability to effectively adjust within the host country.
In cases where the product serves the same function but must be adapted to different
conditions, the product may be left unchanged but a different message is required.
CIF and CFR terms are more convenient for foreign buyers because they merely have
to add the import duties, landing charges, and freight from the port of arrival to their
warehouses to establish their cost.
International business managers need to be able to communicate across cultural
borders, even if they don’t speak foreign languages.
The marketing mix is a set of strategy decisions made in the areas of product,
production, promotion, and pricing in order to satisfy the needs and desires of
customers in a target market.
Repetition of the bottom-up or top-down planning process until all differences are
reconciled is sequential planning.
Relatively few expatriate failures are family-related. Most relate to the expatriate’s lack
of technical skills.
Globally, the overall level and rate of growth of merchandise exports exceed those of
commercial services.
The UN International Court of Justice hears cases that involve disputes between
national governments.
A central reserve asset is a holding that has value that is held by private banks in case of
a liquidity crisis.
The family is the basic unit of institutions based on free association.
The world stock of outward foreign direct investment was $19 trillion at the beginning
of 2010, which was more than nine times what it was in 1990.
Corporate anthropology refers to the process of obtaining market research data through
focus groups and surveys.
Changing the method of going abroad from exporting to overseas production is often
necessary to protect foreign markets.
Sanctions are a trade restriction that is effective in forcing change.
The utility of risk analyses of social, political, and economic factors increases rapidly
over longer time spans.
Former British prime minister Tony Blair led the privatization movement.
Rare earths are a group of elements used in:
A. jewelry.
B. technology applications.
C. farming.
D. solar applications.
According to the text, the failure rate for expatriate assignments, including failing to
achieve performance targets for an international assignment or prematurely returning
from the assignment, ranges from _______ percent.
A. 6 to 10
B. 15 to 25
C. 25 to 45
D. 30 to 55
E. 41 to 65
The present floating exchange rate system was:
A. designed by the IMF and implemented flawlessly in 1973.
B. established by the major trading nations in 19721 after Nixon closed the gold
window.
C. implemented in tandem with a reintroduction of the gold standard.
D. established after several trials in which central bankers set rates incorrectly and
speculators corrected them in the markets, and it was formalized after the fact in the
IMF’s Jamaica Agreement.
Foreign reserves are used to:
A. help foreigners who need additional funds.
B. provide military support to foreign operations, for example, the French legion and
UN peacekeepers.
C. cover foreign debt, import purchases, and other demands for foreign currency that
banks might encounter.
D. support foreign operations that are branches but not subsidiaries.
Managerial functions associated with the movement of materials such as raw materials,
work in progress, or finished goods are referred to as:
A. standards.
B. processes.
C. logistics.
D. value chains.
E. none of the above.
There are several criteria for segmenting markets. Which of the following is not a
criterion for segmenting?
A. Definable
B. Accessible
C. Small
D. Actionable
E. None of the above (All are criteria for segmenting.)
Antitrust law is intended to:
A. challenge successful businesses to allow proper levels of competition.
B. prevent large concentrations of economic power, such as monopolies.
C. create a more trusting business environment.
D. allow socialism to flourish.
E. two of the above.
The proportion of world commercial services exports accounted for by ___________
has evidenced an overall decline since 1980.
A. the European Union
B. Africa
C. the United States
D. all of the above
E. two of A, B, and C
___________ is(are) economic data that serve as yardsticks for measuring the relative
market strengths of various geographic areas.
A. Market factors
B. Trend analysis
C. Cluster analysis
D. Market indicators
E. None of the above
Exporters of a turnkey project may include which of the following?
A. A contractor that specializes in designing and erecting plants in a particular industry
B. A producer of a factory
C. A sales company
D. All of the above
E. Two of A, B, and C
Global leaders confront increased ambiguity because:
A. they find themselves unable to make decisions.
B. their environment is more difficult than that of the domestic leader.
C. much of the information they receive is difficult to give meaning to because it lacks
clarity or has unclear cause-and-effect relationships.
D. they function in a world with too much clarity.
E. A and B.
The United States and the EU:
A. both apply antitrust law extraterritorially.
B. both oppose the Japanese Anti-Monopoly Law.
C. share a commitment to the per se concept in law.
D. two of the above.
E. all of A, B, and C.
The Chinese concept of guanxi is an example of:
A. an informal, cognitive institution.
B. a regulative, formal institution.
C. a favorite cooking method of Chairman Mao.
D. taken-for-granted approaches to friendship relations.
Cooperation as a global team norm:
A. is scarce and unlikely to develop.
B. helps to overcome the disadvantage of geographic dispersion.
C. is overrated according to research.
D. contributes to high levels of out-group feelings.
E. C and D.
In order to strengthen the U.S. dollar, the Federal Reserve might sell yen and buy
dollars, in which case the yen functions as:
A. a stronger currency than the dollar.
B. an intervention currency.
C. an arbitrage currency.
D. none of the above.
Monochronic time is best illustrated by:
A. university scheduling patterns.
B. a rock concert.
C. high-context cultures, such as Arab and Asian cultures.
D. all of the above.
EU rulings:
A. affect all businesses headquartered within the EU.
B. affect all businesses within the EU and those that trade within the EU.
C. limit businesses outside the EU but not in the United States.
D. are of no importance outside the EU.
A company can engage in indirect exporting by using which of the following companies
in its own country?
A. Import merchants
B. Sales companies
C. Export commission agents
D. Overseas merchants
E. Two of the above
Electronic procurement exchanges:
A. can facilitate efforts to obtain letters of credit.
B. can permit bid/quote systems for buyers and suppliers.
C. protect companies from potential loss of proprietary data.
D. two of the above.
E. all of A, B, and C.
The EU’s impact on international business is:
A. negligible, since the EU members tend to trade with each other.
B. not significant, since the EU members need to trade with other developed
economies.
C. substantial, since EU standards, especially in the areas of ecology and sustainability,
impact any firm that wants to do business in the EU.
D. substantial, since the EU is a major exporter into developing nations.
The only cultural framework described in the text that is based on communication styles
is:
A. Trompenaars’ dimensions.
B. the Globe study.
C. Hall’s high and low context.
D. Hofstede’s dimensions.
The value-added tax is levied on:
A. luxury items and paid by the consumer.
B. export items only and thus a direct tax.
C. nonessential goods and paid by the consumer.
D. all goods and is indirect, collected from the value adder.
Due to the expanding importance of foreign-owned firms in local economies, host
governments have made their policies toward these companies:
A. more strict.
B. more liberal.
C. harsher.
D. more confronting.
E. two of the above.
According to the Exporter Data Base, small and medium-sized enterprises accounted
for ___________ of all U.S. exporters.
A. under 10 percent
B. 25 percent
C. nearly half
D. 86 percent
E. nearly 98 percent
Firms from __________ had the largest total outstanding stock of direct overseas
investment at the beginning of 2010.
A. Germany
B. the United States
C. the United Kingdom
D. Japan
E. China
Parent-company nationals might be concerned with:
A. the rate at which industrial skills are learned by host-country nationals.
B. how quickly they can learn the local language in their host country.
C. the exchange rate movement of their host country’s currency.
D. all of the above.
E. two of A, B, and C.
According to the text, management contracts usually stipulate that a fee of __________
be paid to the firm providing the management expertise.
A. 2 to 5 percent of sales
B. 30 to 50 percent of sales
C. 2 to 5 percent of profits
D. 30 to 50 percent of profits
E. 5 to 7 percent of profits
Official prices ensure that:
A. imported goods will be sold at minimum prices, to avoid dumping.
B. a black market will be healthy and available for imported goods.
C. low-priced invoices to avoid tariffs will not be successful.
D. two of the above.
E. none of A, B, and C.
Under the country screening process, in what order is the selection of foreign markets
process presented in the textbook?
A. Basic needs, sociocultural, economic/financial, political, and competitive
B. Basic needs, economic/financial, political, sociocultural, and competitive
C. Basic needs, political, economic/financial, competitive, and sociocultural
D. Basic needs, competitive, political, economic/financial, and sociocultural
E. None of the above
The dollar value of total world exports in 2010 was greater than the gross national
product of every nation in the world except China.