Which of Hofstede’s dimensions focused on how a society deals with the fact that
people are unequal in physical and intellectual capabilities?
A.individualism versus collectivism
B.power distance
C.uncertainty avoidance
D.masculinity versus femininity
E.Confucian dynamism
Answer:
A lag strategy involves:
A.delaying the collection of foreign currency receivables when a foreign currency is
expected to appreciate.
B.delaying the collection of foreign currency receivables when a foreign currency is
expected to depreciate.
C.attempting to collect foreign currency receivables early when a foreign currency is
expected to appreciate.
D.paying foreign currency payables (to suppliers) before they are due when a currency
is expected to appreciate.
E.paying foreign currency payables (to suppliers) before they are due when a currency
is expected to depreciate.
Answer:
The new trade theory is at variance with which of the following theories, which
suggests that a country will predominate in the export of a product when it is
particularly well endowed with those factors used intensively in its manufacture?
A.Heckscher-Ohlin
B.Product life-cycle
C.Comparative advantage
D.Absolute advantage
E.National competitive advantage
Answer:
Who falls into the category of external stakeholders of an organization?
A.Employees
B.Customers
C.Trustees
D.Board of directors
E.Stockholders
Answer:
Which of the following is an aspect of nonverbal communication?
A.Grammar
B.Punctuation
C.Speech tone
D.Personal space
E.Voice modulation
Answer:
In the country of Burnada, the citizens are restricted from moving out of the strata they
are born into. Also, individuals are allowed to engage only in the occupation associated
with their particular strata. The system of social stratification being practiced in
Burnada can be identified as a:
A.cluster system.
B.caste system.
C.merit-based system.
D.class system.
E.bureaucracy-based system.
Answer:
A firm sells some products to a foreign country. The foreign country pays the firm in
dollars but in exchange the firm agrees to spend some of the proceeds from the sale on
textiles produced by the foreign country. In which of the following types of
countertrade arrangement are the two parties engaged?
A.Switch trading
B.Buyback
C.Counterpurchase
D.Barter
E.Compensation
Answer:
Which of the following is true of international firms considering foreign expansion?
A.The timing and scale of entry of foreign expansion are minor details in comparison
with the choice of foreign market.
B.The long-run economic benefits of doing business in a country are solely a function
of the country’s population size.
C.If the firm’s core competence is based on proprietary technology, entering a joint
venture might risk losing control of that technology to the joint-venture partner.
D.The costs and risks associated with foreign expansion are higher in economically
advanced nations.
E.Politically unstable and less developed nations offer favorable benefit-cost-risk
trade-off conditions.
Answer:
In the context of international labor relations, one of the reasons for a decline in union
influence is the:
A.introduction of a reciprocal tax treaty.
B.retention of low-skilled tasks in an international firm’s home country.
C.importing of employment practices and contractual agreements that are alien to the
host country.
D.increased bargaining power of organized labor.
E.increased ability to threaten to disrupt production, either by a strike or some other
form of work protest.
Answer:
Vernon theorizes that as the market in the United States and other advanced nations
matures:
A.it necessitates exports from the United States to those countries.
B.it is no longer worthwhile for foreign producers to produce for their home markets.
C.it obviates the need to look for low-cost production sites in other countries.
D.the product becomes more standardized, and price becomes the main competitive
weapon.
E.the resources used in production begin to become scarce.
Answer:
Which of the following is an element of a firm’s marketing mix?
A.Product attributes
B.Employee management
C.Customer service
D.Population demographics
E.Domestic competition
Answer:
Which of the following refers to the use of price as a competitive weapon to drive
weaker competitors out of a national market?
A.Multipoint pricing
B.Predatory pricing
C.Leader pricing
D.Price discrimination
E.Price skimming
Answer:
Which of the following positions is adopted by the inefficient market school of thought
toward exchange rate forecasting?
A.Forward exchange rates are the best possible predictors of future spot exchange rates.
B.Forward exchange rates represent market participants’ collective predictions of likely
spot exchange rates.
C.Companies cannot beat the markets because forward rates reflect all available
information about likely future changes in exchange rates.
D.Investing in forecasting services can improve the foreign exchange market’s estimate
of future exchange rates.
E.The foreign exchange market is efficient at setting forward rates, which are unbiased
predictors of future spot rates.
Answer:
Establishment of the euro required participating national governments to:
A.have a sound fiscal situation.
B.have stable exchange rates.
C.be democratic in nature.
D.give up control over monetary policy.
E.have a high degree of price stability.
Answer:
Which term was not defined in the International Monetary Fund’s Articles of Agreement
but was intended to apply to countries that had suffered permanent adverse shifts in the
demand for their products?
A.Competitive disadvantage
B.Capital flight
C.Fundamental disequilibrium
D.Break-even point
E.Diseconomies of scale
Answer:
All countries were to fix the value of their currency in terms of gold but were not
required to exchange their currencies for gold, according to the 1944:
A.Bretton Woods agreement.
B.Washington Consensus.
C.World Bank treaty.
D.Group of Five treaty.
E.United Nations agreement.
Answer:
Cadmia and Rhodia specialize in the production of textiles and agricultural products
respectively. They are the best at their respective specializations. Cadmia trades textiles
with Rhodia in exchange for agricultural products. Which of the following is illustrated
by this form of trade between Cadmia and Rhodia?
A.Product life-cycle theory
B.Heckscher-Ohlin theory
C.The concept of absolute advantage
D.Mercantilism
E.Theory of national competitive advantage
Answer:
Which of the following is most likely to be considered unethical?
A.Galaxy Inc. ceased its operations in some developing nations on account of low
employment standards in those countries.
B.Unicorn Inc. sells its medicines at a lower price in less developed nations.
C.Capricorn Inc., a multinational company operating in developing nations, pays its
labor 30 percent more than what the local competitors pay.
D.Centaur Inc. had to close down a production plant as the local management there had
employed child labor.
E.Orion Inc. sends its waste products for disposal to a developing nation because the
pollution control laws in its home country are much more strict than those in the
developing nation.
Answer:
From mid-2008 through early 2009, the value of the dollar moderately increased against
major currencies, despite the fact that the American economy was suffering from a
serious financial crisis. Which of the following was a reason for this phenomenon?
A.High real interest rates in the United States compared to any other developed region
in the world sparked an inflow of funds into the country.
B.U.S. assets were characterized by a high-risk, high-return payoff which prompted
foreign investors to park their funds.
C.Foreign investors were excited at the possibility of high returns following the
government bail-out of financial institutions.
D.Foreign investors put their money in low-risk U.S. assets such as low-yielding U.S.
government bonds.
E.Foreign investors saw opportunities in the United States as the level of indebtedness
had begun to reduce.
Answer:
Which of the following statements is true about the various exchange rate systems?
A.In a fixed exchange rate system, the value of a currency is adjusted according to the
day to day market forces.
B.In a clean float, the central bank of a country will intervene in the foreign exchange
market to try to maintain the value of its currency.
C.After the collapse of the Bretton Woods system of floating exchange rates in 1973,
the world has operated with a fixed exchange rate system.
D.Under the Bretton Woods system, currency devaluations over 10 percent were
allowed only with the approval of the IMF.
E.In dirty float, the exchange rate between a currency and other currencies is relatively
fixed against a reference currency exchange rate.
Answer:
Which of the following refers to an economic system in which the interaction of supply
and demand determines the quantity in which goods and services are produced?
A.Barter
B.Command
C.Market
D.Regulated
E.Centrally planned
Answer:
Adopting flexible manufacturing technology to produce a wide variety of end products
results in:
A.increased setup times for complex equipment.
B.increased utilization of individual machines.
C.reduced quality control.
D.increased unit cost of products.
E.lesser need for scheduling.
Answer:
The government organization that employs 76 district international trade officers and 10
regional international trade officers throughout the United States as well as a 10-person
international trade staff in Washington, D.C. to help potential exporters is the:
A.Federal Trade Commission.
B.U.S. Commercial Service.
C.International Trade Administration.
D.Small Business Administration.
E.sogo shosha.
Answer:
Which of the following involves granting a foreign entity the right to produce and sell
the firm’s product in return for a royalty fee on every unit sold?
A.Outsourcing
B.Exporting
C.Licensing
D.Diverging
E.Hedging
Answer:
Which of the following observations is true of the Bretton Woods agreement?
A.The participating countries were required to exchange their currencies for gold.
B.Devaluation was accepted as a tool of competitive trade policy.
C.The agreement called for a system of floating exchange rates.
D.For weak currencies, devaluation of up to 10 percent was allowed without any formal
approval by the International Monetary Fund.
E.A fixed exchange rate system was deemed impractical.
Answer:
Which of the following best exemplifies noblesse oblige?
A.Multinational corporations gaining monopoly rights in developing countries in order
to weaken the local competition
B.Multinational corporations funding schools, universities, and hospitals in developing
countries
C.Multinational corporations altering the laws of a host country to suit their businesses
D.Multinational corporations bribing poorly paid government officials in a foreign
market
E.Multinational corporations moving production to developing countries to exploit their
lower employment standards
Answer:
Radical writers argue that:
A.a multinational enterprise (MNE) is an instrument of economic development rather
than economic domination.
B.MNEs are more beneficial to host countries than to their home countries.
C.important jobs in the foreign subsidiaries of MNEs go to host-country nationals rather
than to citizens of the home country.
D.FDI by the MNEs of advanced capitalist nations keeps the less developed countries
of the world relatively backward.
E.MNEs exploit their home countries for the exclusive benefit of their host countries.
Answer:
Survival values typically stress the importance of:
A.diversity in the society.
B.economic and physical security.
C.self-expression.
D.participation in political processes.
E.capitalism.
Answer:
Which of the following has no impediments to the free flow of goods and services, such
as trade barriers?
A.Economic Union
B.Currency Board
C.Efficient market
D.Carry trade
E.European Monetary System
Answer:
What does Article 29 of the Universal Declaration of Human Rights convey?
A.By protecting employees, trade unions violate the fundamental rights of stockholders.
B.It is ethical to pay less than subsistence wages, if that happens to be the practice in
some countries.
C.Multinationals can compensate for the violation of fundamental rights by taking up
social expenditures.
D.Everyone has duties to the community in which alone the free and full development
of a person is possible.
E.Nations should vary the fundamental rights granted to their citizens based on their
respective cultures.
Answer:
According to R. L. Tung’s study, which of the following is the most important reason
for expatriate failures for U.S. multinationals?
A.Inability of spouse to adjust
B.Difficulties with new environment
C.Insufficient pay
D.Personal or emotional problems
E.Lack of technical competence
Answer:
Which of the following refers to cost savings that come from acquiring knowledge from
doing a task?
A.Learning effects
B.Exponential effects
C.Ancillary effects
D.Economies of scale
E.Location economies
Answer:
Which of the following is true of the efficient market school of thought toward
exchange rate forecasting?
A.Forward rates are not unbiased predictors of future spot rates.
B.Accurate predictions of future spot rates can be calculated from publicly available
information.
C.Prices do not reflect all available information about the market.
D.Inaccuracies in predictions will not be consistently above or below future spot rates;
they will be random.
E.Forecasts might provide better predictions of future spot rates than forward exchange
rates do.
Answer:
The European Community became the European Union in 1993 following the
ratification of the:
A.Maastricht Treaty.
B.Warsaw Pact.
C.Treaty of Rome.
D.Single European Act.
E.Lisbon Treaty.
Answer: