Source effects occur when the receiver of the message evaluates the message based on
the status or image of the sender.
Most modern democratic states practice representative democracy.
If a firm manufactures its product in a particular country, it can sell directly to the
consumer, to the retailer, or to the wholesaler. The same options are not available to a
firm that manufactures outside the country.
The righteous moralist approach to ethics is typically associated with managers from
developing and under-developed nations.
Decentralization of production is appropriate when the product does not serve universal
needs.
The bulk of intra-ASEAN trade consisted of goods whose tariffs had been reduced
through an ASEAN preferential trade arrangement.
Products sell well when their attributes match consumer needs.
A key assumption in the Heckscher-Ohlin theory is that technologies are the same
across countries.
Because of the fact that everyone benefits from economic integration, it is easy to
achieve and sustain.
New information and communication technologies have enabled the spread of
democratic ideals.
Elasticity of demand for a product in a given country is determined by income level and
competitive conditions.
Labor unions generally prefer it if an international business keeps highly skilled tasks in
its home country and farms out only low-skilled tasks to foreign plants.
Heckscher-Ohlin theory stresses that comparative advantage arises from differences in
productivity.
Market forces have produced a stable dollar exchange rate under a floating exchange
rate regime.
Folkways include rituals and symbolic behavior.
It is important to realize that organizational change will occur regardless of the
commitment of senior managers to it.
John Dunning pioneered the eclectic paradigm.
A knowledge network is a network for transmitting information within an organization
that is based on formal organizational structure.
The argument for centralizing production will be greater if the minimum efficient scale
of a plant relative to total global demand is low.
The fixed exchange rate system established at Bretton Woods failed due to speculative
pressures on the U.S. dollar.
Flexible manufacturing technologies enable companies to customize products to the
demands of small consumer groups.
Totalitarian states promote human freedom and human development, which facilitates
economic progress.
GNI allows a more direct comparison of living standards in different countries.
Peruvian development economist Hernando de Soto has argued that the chronic
inability of property owners to establish legal title to the property they own is a key
problem for innovation, and entrepreneurial activity in developing nations.
Outsourcing some manufacturing to independent suppliers based in other countries
would help firms capture more orders from that country.
A citizen of Japan who moves to the United States to work at Microsoft would be
classified as an inpatriate.
The parties to an agreement normally resort to contract law when one party feels the
other has violated either the letter or the spirit of an agreement.
Firms would prefer buying component parts, or an entire product, from independent
suppliers to protect proprietary product technologies.
The judges of the European Court of Justice are required to act as representatives of
national interests, rather than as independent officials.
Tariffs are unambiguously pro-consumer and anti-producer.
There are no impediments to the free flow of goods and services in an efficient market.
Accounting information is the means by which firms communicate their financial
position to the providers of capital.
Payment of dividends is an uncommon method of transferring funds from foreign
subsidiaries to the parent company.
The U.S. Department of Commerce organizes trade events that help potential exporters
make foreign contacts and explore export opportunities.
Life expectancy at birth is one of the measures used by the Human Development Index
(HDI) to measure the quality of human life in different nations.
Overpayment for assets of an acquired firm is one reason acquisitions fail.
If a country has an externally convertible currency:
A. neither residents nor nonresidents are allowed to convert it into a foreign currency.
B. both residents and nonresidents can purchase unlimited amounts of a foreign
currency with it.
C. only nonresidents may convert it into a foreign currency without any limitations.
D. when the government limits convertibility to preserve their foreign exchange
reserves.
Social rules and guidelines that prescribe appropriate behavior in particular situations
are best described as _____.
A. norms
B. values
C. culture
D. society
A flexible machine cell is:
A. a component of a source factory.
B. used to perform a standardized operation.
C. a component of a lead factory.
D. a grouping of various types of machinery, a common materials handler, and a
centralized cell controller.
Which of the following ethical theories explicitly rejects the idea that businesses should
undertake social expenditures beyond those mandated by the law and required for the
efficient running of a business?
A. The naive immoralist
B. The Friedman doctrine
C. Cultural relativism
D. The righteous moralist
Universal needs exist when:
A. the tastes and preferences of consumers in different nations are similar if not
identical.
B. conventional commodity products requested in one country are different than those
requested in another country.
C. the tastes and preferences of consumers in the same nation are similar if not
identical.
D. consumers are willing to pay a high price for a product regardless of what country
they reside in.
In some countries, the official GNI per capita measured at PPP data does not reflect the
actual the total annual income because:
A. it doesn’t consider differences in the cost of living.
B. it gives a static picture of development.
C. it fails to include income earned from other countries in the form of dividends.
D. large amounts of economic activity may be in the form of barter agreements.
Which of the following is a disadvantage of the integration facilitated by technology?
A. Segregated international capital markets will emerge as a result of technology.
B. Complexity in processing large volumes of data will increase.
C. Shocks that occur in one financial center will spread globally.
D. Systems integration hinders real-time data transfer across different countries.
Talking with _____ is a good way to discern a potential employee’s ethical
predisposition.
A. human resource personnel
B. prior employers regarding someone’s reputation
C. someone’s psychologists
D. someone’s family
Businesses can give potential employees psychological tests to try to discern their
ethical predisposition, and they can check with prior employees regarding someone’s
reputation (e.g., by asking for letters of reference and talking to people who have
worked with the prospective employee). The latter is common and does influence the
hiring process.
Bringing managers together in one location for extended periods and rotating them
through different jobs in several countries is a part of:
A. the ethnocentric approach.
B. the global standardization strategy.
C. cultural toughness programs.
D. management development programs.
Which of the following occurs when lower-cost external suppliers are replaced by
higher-cost suppliers within the free trade area?
A. Efficiency gain
B. Trade diversion
C. Trade deficit
D. Trade creation
_____ agreements enable firms to hold each other “hostage,” thereby reducing the risk
they will behave in an opportunistic manner toward each other.
A. Turnkey
B. Franchising
C. Cross-license
D. Integrated license
A(n) _____ seeks the best people for key jobs throughout the organization, regardless of
nationality.
A. polycentric staffing policy
B. ethnocentric staffing policy
C. geocentric staffing policy
D. uniform staffing policy
Transnational financing occurs when a firm based in one country enters another country
to raise capital:
A. by borrowing from financial institutions.
B. from the sale of stocks or bonds.
C. by borrowing from banks.
D. through exchange policies of governments.
_____ argued that individual diversity and private ownership are undesirable.
A. Karl Marx
B. Plato
C. John Stuart Smith
D. Aristotle
A geocentric staffing policy:
A. requires host-country nationals to be recruited to manage subsidiaries, while
parent-country nationals occupy key positions at corporate headquarters.
B. leads to ineffective use of human resources.
C. requires extensive documentation.
D. is compatible with both international and localization strategy.
When individuals gain knowledge of the most efficient ways to perform particular
tasks, they are saving costs through _____.
A. location economies
B. value creation effects
C. experience curve effects
D. learning effects
In countries such as the United States and Britain, firms typically raised capital by:
A. obtaining funding from the government.
B. borrowing money from national banks.
C. issuing stock or bonds to investors.
D. borrowing money from international banks.
Which of the following is a major drawback of engaging in countertrade?
A. Countertrade is not useful when trading with developing nations.
B. Financing is difficult when engaging in a countertrade.
C. It is not attractive to small organizations.
D. Countertrade may involve the exchange of unusable goods.
The term _____ also means culture.
A. folkway
B. society
C. country
D. norm
The _____ states that 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.
A. PPP theory
B. efficient market theory
C. law of one price
D. Fisher effect
_____ exists when the causes of a subunit’s poor performance are not clear.
A. Performance ambiguity
B. Vertical differentiation
C. Output controls
D. Horizontal differentiation
Control through a system of rules and procedures that directs the actions of subunits is
_____.
A. personal control
B. bureaucratic control
C. output control
D. cultural control
Establishing _____ involves a business to resolve to place moral concerns ahead of
other concerns in cases where either the fundamental rights of stakeholders or key
moral principles have been violated.
A. a veil of ignorance
B. a difference principle
C. moral imagination
D. moral intent
Diminishing returns to specialization occurs when:
A. each additional unit is produced with lesser number of laborers.
B. a nation’s gross domestic product declines for a few years.
C. production possibility frontier appears as a rectangle.
D. more units of resources are required to produce each additional unit.
In a(n) _____ society, the welfare of society is best served by letting people pursue their
own economic self-interest.
A. individualist
B. capitalist
C. democratic
D. totalitarian
The _____ dimension of Hofstede’s study explores how a society deals with the fact
that people are unequal in physical and intellectual capabilities.
A. power distance
B. individualism versus collectivism
C. uncertainty avoidance
D. masculinity versus femininity
Which of the following products will most likely have high value-to-weight ratios?
A. Pharmaceuticals
B. Refined sugar
C. Bulk chemicals
D. Petroleum products
A Eurocurrency is:
A. the currency used by the countries of the European Union.
B. the currency formerly used in many European countries before the formation of the
European Union and the institution of the euro.
C. any currency banked outside of its country of origin.
D. any currency banked within a European country.
When companies disperse different stages of the value chain to those locations around
the world where perceived value is maximized or where the costs of value creation are
minimized, companies create:
A. a differentiated organization.
B. a location economy curve.
C. economies of scale.
D. a global web of value creation activities.
NAFTA was passed only after:
A. China agreed to establish a higher minimum wage.
B. the United States agreed to limit the number of jobs that could be outsourced.
C. Mexico committed to tougher enforcement of environmental protection regulations.
D. Canada committed to establish new limits on FDI.
Which control system is most widely used by small firms?
A. Personal
B. Output
C. Bureaucratic
D. Cultural
Identify the currency that was convertible to gold under the Bretton Woods system.
A. Pound
B. Yen
C. Euro
D. Dollar
Which of the following factors has had a positive effect on the volume of foreign trade
investments?
A. Emerging social democracies
B. Fluctuating current rates
C. Aging demographics
D. World economy globalization The globalization of the world economy is also having
a positive effect on the volume of FDI. Many firms see the whole world as their market,
and they are undertaking FDI in an attempt to make sure they have a significant
presence in many regions of the world.
Describe the benefits of global expansion for firms.
Describe the different exchange rate policies that are in practice today.
What factors affect the success of a firm’s international communications?
What is a capital market?
What is the International Monetary Fund? What is the World Bank? What is their
relationship, if any, with each other?
Discuss why firms selling products with low value-to-weight ratios choose FDI over
exporting.
Compare and contrast the Fisher Effect and the International Fisher Effect.
What is the difference between profitability and profit growth?
Discuss the Doha Round of trade talks.
Briefly describe the trends observed in the global deregulation of financial services.
Explain how the theories of trade differ in terms of their support to governmental
intervention.
What are the assumptions that we make when we discuss a simple Ricardian model to
support free trade?
What are the ways in which host governments restrict inward FDI?
Describe the notion of management development programs as a tool for increasing the
overall skill levels of managers. What is the goal of this type of program?
Explain the differences between common law and civil law systems by the approach of
each to contract law.