According to _____, suffering originates in people’s desires for pleasure.
A. Hinduism
B. Protestantism
C. Buddhism
D. Judaism
Which of the following is one of the reasons why acquisitions fail?
A. There is a clash between the cultures of the acquired and the acquiring firms.
B. The acquired firm often overpays for the assets of the acquiring firm.
C. The synergies of the two firms happens quickly and neither acquired nor acquiring
firm are prepared for full integration.
D. Despite adequate pre-acquisition screening, the entities encounter unexpected
governmental involvement.
Firms pursuing a(n) _____ are more centralized than enterprises pursuing a localization
or international strategy.
A. localization strategy
B. international strategy
C. global standardization strategy
D. transnational strategy
The benefits of doing business in a country are a function of which of the following?
A. The size of the market.
B. Its past wealth.
C. Its past growth.
D. Its future plans for infrastructure development.
Which of the following refers to the values and norms that the employees of an
organization share?
A. Vision statement
B. Cultural relativism
C. Organization culture
D. Power orientation
Which of the following is a major advantage of using a letter of credit?
A. It gives the importer time to resell the merchandise before payment.
B. It guarantees the exporter pre-export financing.
C. It helps international traders engage in trade with trust.
D. It guarantees the importer extra funds for other purposes.
Modern socialists trace their intellectual roots to _____, although socialist thought
clearly predates this individual.
A. David Hume
B. Karl Marx
C. Adam Smith
D. John Stuart
A draft used in international transactions:
A. is a document requesting payment.
B. explains the conditions of a contract.
C. is the same as a letter of credit.
D. gives a bank guarantee to an exporter.
_____ is required for a business environment to be conducive to innovation and
entrepreneurial activity.
A. State ownership of means of production
B. Strong legal protection of property rights
C. Barriers to foreign trade and investment
D. Government regulation of the market
Top management should be viewed as part of the firm’s _____.
A. primary activities
B. experience curve
C. infrastructure
D. universal strategy
The foreign exchange market is:
A. open for only 12 hours in a day.
B. the market never sleeps.
C. open for most of the day, but closes for 3 hours each day—between 2:00 AM and
5:00 AM Greenwich Mean Time.
D. open during normal business hours (9:00 AM to 5:00 PM, local time) in each of the
primary locations from which it operates: Tokyo, London, and new York.
A _____ allows for a delay in payment.
A. bill of lading
B. time draft
C. sight draft
D. letter of credit
_____ are international bonds, normally underwritten by an international syndicate of
banks and placed in countries other than the one in whose currency the bond is
denominated.
A. Micro bonds
B. Foreign bonds
C. Eurobonds
D. Regulatory bonds
A foreign service premium is:
A. paid when the expatriate is being sent to a difficult location.
B. the extra pay that an expatriate receives for working outside his or her country of
origin.
C. normally given to ensure that the expatriate can afford the same quality of housing in
the foreign country as at home.
D. paid to ensure that the expatriate enjoys the same standard of living in the foreign
posting as at home.
The Fisher effect states that:
A. a country’s “real” rate of interest is the sum of the “nominal” interest rate and the
expected rate of inflation over the period for which the funds are to be lent.
B. there is a weak relationship between inflation rates and interest rates.
C. a country’s “nominal” interest rate is the sum of the required “real” rate of interest
and the expected rate of inflation over the period for which the funds are to be lent.
D. when investors are free to transfer capital between countries, “nominal” interest rates
will be the same in every country.
Eurobonds are:
A. denominated in the currency of the country in which they are issued.
B. normally underwritten by an international syndicate of banks.
C. denominated in a currency that is accepted by the European Union.
D. sold outside the borrower’s county with reference to the originating currency.
Which of the following observations is correct?
A. The economic principles established in the Koran are against free enterprise.
B. The economic principles of Islam prohibit the payment or receipt of interest.
C. The Koran speaks disapprovingly of earning legitimate profit through trade and
commerce.
D. Protection of the right to private property is not embedded within Islam.
Centralization:
A. gives top management time to focus on critical issues by delegating more routine
issues to lower-level managers.
B. can give top-level managers the means to bring about needed major organizational
changes by concentrating power and authority in one individual or a management team.
C. permits greater flexibility because decisions do not have to be “referred up the
hierarchy” unless they are exceptional in nature.
D. can be used to establish relatively autonomous, self-contained subunits within an
organization.
Without a strong legal systems in a market economy:
A. the incentive to engage in economic activity can be increased substantially.
B. private-sector entrepreneurs can expropriate the profits generated by the efforts of
private and public entities.
C. mechanisms for contract enforcement fall to private and corporate lawyers.
D. private and public entities can expropriate the profits generated by the efforts of
private-sector entrepreneurs.
GNI per person figures can be misleading because ____.
A. they also include barter agreements
B. they provide a dynamic picture of development
C. they don’t consider differences in the cost of living
D. they don’t consider exchange rate
When a tourist goes to a bank in a foreign country to convert money into the local
currency, the exchange rate used is the _____.
A. currency swap rate
B. forward rate
C. carry trade
D. spot rate
It has been observed in the aircraft industry that, each time cumulative output of
airframes was doubled, unit costs typically declined to 80 percent of their previous
level. This is an example of the _____ curve.
A. core performance
B. location
C. strategic
D. experience
_____ allows a firm to reduce its cost of creating value and increase its profitability.
A. Moving down the experience curve
B. Moving up the experience curve
C. Moving down the learning effect curve
D. Moving up the learning effect curve
The influential Peruvian development economist Hernando de Soto has argued that
much of the developing world will fail to reap the benefits of capitalism until they:
A. have political stability.
B. invest in infrastructural development.
C. have better defined and secure property rights.
D. have adequate market regulation.
A(n) _____ is often placed near a competitor’s headquarters or main operations, near
the most demanding customers, or near key suppliers of unique and critically important
parts.
A. outpost factory
B. source factory
C. contributor factory
D. lead factory
The _____ is the rate at which a foreign exchange dealer converts one currency into
another currency on a particular day.
A. spot exchange rate
B. forward exchange rate
C. futures exchange rate
D. spread
In 2008 and 2009, the _____ became the forum though which major nations attempted
to launch a coordinated policy response to the global financial crisis, which started in
America.
A. GATT
B. Group of Ten (G20)
C. Group of Twenty (G20)
D. World Trade Organization
Host country citizens that are employed by an MNE following an FDI are an example
of a(n) _____ of FDI.
A. internality
B. direct effect
C. externality
D. indirect effect Direct effects of FDI arise when a foreign MNE employs a number of
host-country citizens.
One of the reasons for the spread of democracy is the emergence of _____ who have
pushed for democratic reforms.
A. a more vocal working poor
B. better educated lower classes
C. a desperate urban poor
D. increasingly prosperous middle and working classes
According to Knickerbocker’s theory:
A. when a firm has valuable know-how that cannot be adequately protected by a
licensing contract it engages in FDI.
B. when a firm’s skills and know-how are not amenable to licensing, it usually prefers
the FDI route.
C. by placing tariffs on imported goods, governments indirectly increase the cost of
exporting relative to foreign direct investment and licensing.
D. when a firm that is part of an oligopolistic industry expands into a foreign market,
other firms in the industry will be compelled to make similar investments. Imitative
behavior can take many forms in an oligopoly. One firm raises prices, the others follow;
one expands into a foreign market, and the rivals imitate lest they be left at a
disadvantage in the future.
Justice theories of business ethics focus on:
A. the moral worth of actions or practices.
B. minimum levels of morally acceptable behavior.
C. fundamental rights and privileges that transcend national boundaries.
D. the attainment of an equitable distribution of goods and services.