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_____ covers a range of manufacturing technologies designed to reduce setup times for
complex equipment.
A. ISO 9000
B. TQM
C. Lean production
D. JIT
Which of the following is a major drawback of using Knickerbocker's theory in
explaining FDI?
A. It ignores the fact that firms invest in a foreign country when demand in that country
will support local production.
B. It does not explain why the first firm in an oligopoly decides to undertake FDI rather
than to export or license.
C. It fails to identify when it is profitable to invest abroad.
D. It ignores the fact that licensing as an entry strategy has its limitations. Although
Knickerbocker's theory and its extensions can help explain imitative FDI behavior by
firms in oligopolistic industries, it does not explain why the first firm in an oligopoly
decides to undertake FDI rather than to export or license.
Which of the following is a first-mover advantage?
A. Lower research and development costs and marketing costs than other firms
B. Ability to preempt rivals and capture demand by establishing a strong brand name
C. Ability to capitalize on the work done by other firms
D. Creation of innovative products at lower costs than other firms
Which of the following involves borrowing in one currency where interest rates are low,
and then using the proceeds to invest in another currency where interest rates are high?
A. Carry trade
B. Swing trade
C. Channel trade
D. Price action trade
_____ generally permits some individual economic freedom but restricts individual
political freedom, frequently on the grounds that it would lead to the rise of
communism.
A. Communist totalitarianism
B. Theoretical totalitarianism
C. Right-wing totalitarianism
D. Tribal totalitarianism
The U.S. government has used the threat of punitive trade sanctions to try to get the
Chinese government to enforce its intellectual property laws. This is an example of
government intervention based on:
A. human rights protection.
B. national security.
C. consumer protection.
D. retaliation.
The _____ is a research project spanning more than 100 countries that explores people's
values and norms, how they change over time, and what impact they have in society
and business.
A. World Values Survey
B. Global Leadership and Organization Behavior Effectiveness Instrument
C. Indulgence Versus Restraints Survey
D. Chinese Value Survey
The _____ tends to be adopted by firms with a low level of diversification whose
domestic structures are based on functions.
A. global matrix structure
B. worldwide product division structure
C. performance structure
D. worldwide area structure
Which of the following is a risk associated with globalization?
A. Restrictions on competition
B. Global financial contagion
C. Excessive market regulation
D. Differentiation of markets
The TRIPS agreement was designed to:
A. exclude China from all intellectual property agreements.
B. oversee a much stricter enforcement of intellectual property regulations.
C. hold a firm and its officers responsible when a product causes injury, death, or
damage.
D. support traded software and recorded property among developed markets. Under the
new agreement, known as the Trade Related Aspects of Intellectual Property Rights (or
TRIPS), as of 1995 a council of the World Trade Organization is overseeing
enforcement of much stricter intellectual property regulations.
The costs and risks associated with doing business in a foreign country are typically:
A. low in an economically advanced nation.
B. low in the countries of the European Union.
C. high in an economically advanced nation.
D. high in a politically stable democratic nation.
Currency _____ typically involves the long-term movement of funds from one currency
to another in the hopes of profiting from shifts in exchange rates.
A. hedging
B. risk mitigation
C. speculation
D. arbitrage
A(n) _____ can help new exporters identify opportunities and avoid common pitfalls.
A. MITI
B. Export-Import Bank
C. in-house trading department
D. export management company
_____ allow a firm to rapidly build its presence in the target foreign market.
A. Joint ventures
B. Acquisitions
C. Subsidiaries
D. Turnkey contracts
Under a currency board system:
A. inflation rates are maintained at high level.
B. countries issue domestic notes at will.
C. interest rates remain constant.
D. government lacks the ability to set interest rates.
It is common for a parent company to charge its foreign subsidiaries _____ for the
technology, patents, or trade names it has transferred to them.
A. transfer fees
B. royalties
C. an internal forward rate
D. usage fees
Integration mechanisms are the:
A. formal division of the organization into subunits.
B. mechanisms that enable each subunit to operate independently.
C. mechanisms for coordinating subunits.
D. location of decision making responsibilities within a structure.
A _____ is payable on presentation to the drawee.
A. bill of lading
B. time draft
C. sight draft
D. letter of credit
Which of the following is true of establishing greenfield venture in a foreign country?
A. Greenfield investments are less risky than acquiring an existing company in a
foreign market.
B. An inherent degree of uncertainty is associated with a greenfield venture because of
future revenue and profit prospects.
C. Greenfield investments virtually eliminate the possibility of a more aggressive global
competitor entering the market via acquisitions.
D. Greenfield investments are quick to establish.
Companies can strengthen the _____ of employees by committing themselves to not
retaliate against employees who complain about unethical actions.
A. moral courage
B. code of ethics
C. ethical strategies
D. organizational culture
If a producer sells through an import agent, a wholesaler, and a retailer, then:
A. a long channel exists.
B. the retail system must be concentrated.
C. the internet probably plays a big role in the economy.
D. there is no channel.
During the last two decades, change in Latin America has been characterized by:
A. an increase in debt.
B. hyperinflation.
C. the sale of state-owned enterprises to private investors.
D. protests against foreign investment.
At Six Sigma, a production process would be highly accurate and create just:
A. 3.4 defects per hundred thousand units.
B. 6.8 defects per million units.
C. 3.4 defects per million units.
D. 6.8 defects per hundred thousand units.
_____ are the metrics used to measure the performance of subunits and make judgments
about how well managers are running those subunits.
A. Cultural controls
B. Control systems
C. Output controls
D. Incentives
Michael Porter argues that:
A. those firms that create superior value will achieve superior profitability.
B. standardization of product is a basic strategy for attaining a competitive advantage in
an industry.
C. it is necessary for a firm to have the lowest cost structure or create the most valuable
product.
D. it is important that the gap between value and the cost of production be smaller than
that of competitors.
_____ involves removing legal restrictions to the free play of markets, the
establishment of private enterprises, and the manner in which private enterprises
operate.
A. Privatization
B. Developing command economies
C. Deregulation
D. Globalization
Accounting standards:
A. are rules for preparing financial statements.
B. define the levels of tax-payments needed.
C. specify the rules for performing an audit.
D. refer to the technical process of balancing accounts.
When a firm focuses on increasing profitability by customizing the product or service
so that they provide a good match to tastes and preferences in different national
markets, the firm is following a(n) _____ strategy.
A. transnational
B. localization
C. international
D. global standardization
A strategy that focuses on increasing the attractiveness of a product is referred to as a(n)
_____.
A. differentiation strategy
B. low cost strategy
C. effectiveness strategy
D. efficiency strategy
A firm can establish a wholly owned subsidiary in a country by building a subsidiary
from the ground up, called the _____.
A. joint venture
B. turnkey strategy
C. licensing agreement
D. greenfield strategy
A market economy encourages innovation because:
A. state ownership of enterprises reduces risks of innovation.
B. economic freedom leads to greater incentives for innovation.
C. government-owned and funded research centers become hubs of innovation.
D. the prices of goods and services, including new products, are fixed by government.
When a multinational corporation buys products or services from one of its suppliers
that produces them somewhere else, whether domestically or globally, it is referred to
as _____.
A. offshoring
B. insourcing
C. outsourcing
D. co-sourcing Outsourcing refers to when a multinational corporation buys products or
services from one of its suppliers that produces them somewhere else, whether
domestically or globally. In that sense, it also refers to external purchasing in relation to
purchasing strategy.
Companies receive a _____ when using the Eurocurrency market.
A. lower interest rate on deposits and pay more for loans
B. tax incentives
C. higher interest rate on deposits and pay less for loans
D. liquid asset reserve waiver
In a(n) ____, similarities in the underlying structure of economic activity make it
feasible to adopt a single currency and use a single exchange rate as an instrument of
macroeconomic policy.
A. optimal currency area
B. unified economic area
C. uniform currency zone
D. monetary zone
