When examining economic and demographic variables to compare countries’ sales
potential for your product, which the following should you NOT consider?
A) Countries may depend heavily on the import of raw materials.
B) Consumers in some countries may more conveniently substitute certain products
than consumers in some other countries.
C) Consumers in developing countries may leapfrog technologies by first purchasing
the latest products.
D) Trading blocs may enhance sales potential above what is indicated in individual
country figures.
Which of the following is an example of an acquired group membership?
A) national origin
B) religion
C) gender
D) race
All of the following are part of the global financial system EXCEPT the ________.
A) New York Stock Exchange
B) World Trade Organization
C) International Monetary Fund
D) Bank for International Settlements
Firms that operate in countries that have adopted the Kyoto Protocol are required to
either reduce emissions or ________.
A) purchase carbon credits from other firms
B) file petitions to appeal the requirement
C) cease manufacturing operations
D) pay fines to the UN
A letter of credit that provides an exporter with the guarantee of another bank in
addition to the importer’s bank is called ________.
A) a confirmed letter of credit
B) a time draft letter of credit
C) an amendable letter of credit
D) a cash in advance letter of credit
A firm that concentrates on national cultural differences in terms of averages is more
likely to ________.
A) underestimate market demands
B) increase political risks
C) seek cultural collision
D) overlook outliers
Which of the following is the largest source of foreign-exchange income in Mexico?
A) FDI
B) tourism
C) foreign aid
D) remittance income
The crowding of a foreign market to prevent competitors’ advantages is known as
________.
A) oligopolistic reaction
B) concentration strategy
C) liability of foreignness
D) a harvesting strategy
What is the most likely reason that companies such as Gillette (razor blades) and 3M
(scouring pads) sell products in smaller package sizes in some developing countries?
A) Family size is small in those countries.
B) Some governments require the smaller sizes.
C) In those countries, many consumers lack sufficient cash to buy larger quantities.
D) These are products for which the cost of altering package size is negligible.
Encouraging ethical behavior for the purpose of developing competitive advantages
will most likely result in all of the following for a firm EXCEPT ________.
A) strategic accomplishment
B) consumer commitment
C) industry resolutions
D) financial success
The Fed wants to counter downward pressure on the dollar, so it will most likely
________.
A) sell dollars for foreign currency
B) sell dollars and buy foreign stocks
C) buy Treasury bills with dollars
D) buy dollars with foreign currency
Foreman Enterprises produces and sells a variety of products for the home. Foreman
recently introduced a new detergent at a very low price with the hope that a high
number of consumers will try it out. Foreman is most likely using a ________ strategy.
A) cost-plus
B) skimming
C) penetration
D) diversification
The major use of the matrix as a tool in international location strategy is to ________.
A) pinpoint acceptable and unacceptable characteristics of countries
B) indicate the relative placement of countries in terms of attributes
C) rank countries on the basis of expected investment return
D) show the degree of certainty for projected returns
The two main categories in the balance of payments are the ________.
A) merchandise exchange account and the services account
B) external debt and the unilateral transfers account
C) merchandise trade account and the capital account
D) current account and the capital account
Which of the following is the most likely benefit of a network structure?
A) encouraging competition among members for resources
B) facilitating supplier changes anywhere in the value chain
C) developing core competencies in a broad range of value activities
D) maintaining a strong sense of organization in the face of dynamic partnerships
Brain drain is a term that describes ________.
A) a country’s loss of educated, productive people
B) a nation’s shift from an emerging market to a developed economy
C) the exportation of high-technology products in exchange for low-technology
products
D) the unauthorized use of patents, copyrights, and technology by the counterfeiting
industry
All of the following are important when establishing and managing a collaborative
agreement EXCEPT ________.
A) setting up mutual goals and expectations
B) avoiding interference about how the partner handles its duties in the operation
C) determining whether the agreement is reaching its goals
D) assessing periodically whether a different operational form would be preferable
Assume that a U.S.-based MNE has operations in Germany and that the revenues and
expenses are mostly incurred in euros. Which translation method is the MNE most
likely to use?
A) current-rate method
B) temporal method
C) translate-restate method
D) consolidation method
Which of the following best explains why MNEs often employ more locals than
expatriate managers in foreign facilities?
A) lower compensation expense
B) better support from unions
C) improved economies of scale
D) better grasp of core competencies
In a ________, one party directs another party to make payment.
A) reverse letter of credit
B) commercial bill of exchange
C) commercial bill of trade
D) confirmed irrevocable foreign-exchange transaction
In comparing international and domestic marketing, it is best to state that ________.
A) similar principles are at work
B) mass-market orientations are most effective
C) principles differ for product and price, but not for advertising
D) the differences between them can be studied through gap analysis
When a company does business in another country whose official language is the same
as its home country’s, the company should most likely ________.
A) assume that communications will go smoothly
B) use back-translation on all written documents
C) realize that words may have different meanings
D) assume that word meanings are the same despite spelling differences
Eileen, a manager at an international restaurant chain, wants to know if it will be most
cost effective to buy 1,000 pounds of sugar in Country X or in Country Y using U.S.
dollars. Which of the following is Eileen most likely trying to determine?
A) purchasing power parity
B) economic growth rate
C) gross domestic income
D) gross national product
________ is an online collaboration model that brings manufacturers, distributors,
value-added retailers, and customers together to execute trading transactions.
A) Electronic data interchange (EDI)
B) ERP (enterprise resource planning)
C) Private technology exchange (PTX)
D) E-commerce
The industrialization argument for trade protection in developing countries is based on
the assumption that ________.
A) the protected industry will become competitive over time with economies of scale
B) unemployment and underemployment exist in rural areas, so little agricultural output
is lost as people move into industrial jobs
C) subsidizing production is a better means of protection than limiting imports
D) it is better to depend on buying agricultural surpluses from developed countries than
to produce these agricultural goods
Assume an enterprise is considering establishment of a foreign production facility.
Which of the following best supports this decision?
A) Its foreign competitors have higher production costs than it has.
B) Its main competitor successfully opened a foreign plant.
C) Its suppliers follow an agglomeration strategy.
D) None of its competitors have foreign production facilities.
A company would most likely export at a price lower than its production and
distribution costs in order to ________.
A) use a skimming strategy abroad before using one domestically
B) test a market before making a big commitment
C) use a cost-plus strategy globally
D) encourage gray market sales
Forecasters must predict the magnitude, direction, and ________ of an exchange rate
change or movement.
A) length
B) timing
C) altitude
D) depth
Which of the following was a notable trend in political systems during the second half
of the 20th century and beginning of the 21st century?
A) A wave of democratic transformations occurred as countries around the world
moved away from totalitarian systems.
B) A wave of theocratic revolutions occurred as people around the world looked to
spirituality to guide them.
C) Socialistic revolutions swept the world as countries aspired toward greater social
justice.
D) A totalitarian revolution swept the world as people looked to strong state leadership
in uncertain times.
Johnson & Johnson distributes decision-making power among departments and
divisions. This policy provides managers with a sense of ownership and control at the
company. Johnson & Johnson is best described as a ________ organization.
A) vertical
B) centralized
C) horizontal
D) decentralized
The global integration of capital markets ________.
A) is a major force leading to the convergence of accounting standards
B) is a counterforce to regional political and economic harmonization
C) is being led by the strengthening of worldwide unions rather than investors
D) highlights the importance of maintaining differences in accounting worldwide