Which of the following indicates that a firm has a full outright stake in an acquisition?
A.Anderson Corporations acquires at least 75 percent of a company.
B.Sheffield Enterprises acquires at least 60 percent of a company.
C.Arthur Enterprises acquires 98 percent of a company.
D.Maximus Corporations acquires 100 percent of a company.
E.Dream Animax acquires at least 85 percent of a company.
Answer:
A number of studies have observed that a product’s production costs decline by some
quantity about each time:
A.annual output is halved.
B.cumulative output doubles.
C.the workforce is trimmed by 75 percent.
D.fixed investment triples.
E.foreign domestic investment doubles.
Answer:
Which of the following refers to an association of English-speaking Caribbean states
that are attempting to establish a customs union?
A.CARICOM
B.Central American Free Trade Agreement
C.Central American Common Market
D.Free Trade Area of the Americas
E.Caribbean Single Market and Economy
Answer:
Profit growth is measured by:
A.dividing the net profits of the firm by total invested capital.
B.subtracting the previous year’s gross profit from the current year’s gross profit.
C.calculating the difference between the previous year’s profitability and the current
year’s profitability.
D.the percentage increase in net profits over time.
E.adding the profitability of the last two fiscal years.
Answer:
The Fisher effect states that:
A.a country’s “nominal” interest rate (i) is the sum of the required “real” rate of interest
(r) and the expected rate of inflation over the period for which the funds are to be lent
(I).
B.by comparing the prices of identical products in different currencies, it is possible to
determine the “real” or purchasing power parity exchange rate that would exist if
markets were efficient.
C.a country in which price inflation is running wild should expect to see its currency
depreciate against that of countries in which inflation rates are lower.
D.when the growth in a country’s money supply is faster than the growth in its output,
price inflation is fueled.
E.in competitive markets free of transportation costs and trade barriers, identical
products sold in different countries must sell for the same price.
Answer:
According to the critics of the International Monetary Fund (IMF), how should the
problem of moral hazard exhibited by banks be resolved?
A.The IMF should use a “one-size-fits-all” approach to macroeconomic policy.
B.The IMF should establish a mechanism for accountability.
C.The IMF should free all banks from the obligation of financial reporting.
D.The banks should be forced to pay the price for their rash lending policies.
E.The IMF should bail out the banks whose loans gave rise to financial crises.
Answer:
Which of the following is broadly defined as the development of new products,
processes, organizations, management practices, and strategies?
A.Privatization
B.Economic deregulation
C.Boundary spanning
D.Innovation
E.Benchmarking
Answer:
Repatriation refers to:
A.sending expatriate managers to a new host country.
B.training expatriate managers to adjust to the new environment of the host country.
C.reentry of expatriate managers into their home-country organization.
D.helping expatriate managers build rapport with local employees.
E.increasing expatriate managers’ effectiveness in dealing with host-country nationals.
Answer:
A push strategy is emphasized when:
A.distribution channels are short.
B.sufficient print and electronic media are available to carry the marketing message.
C.consumers have a low level of literacy.
D.the products being sold are consumer goods.
E.professional services are being offered.
Answer:
Representatives of the U.S. Department of Commerce accompany groups of U.S.
businesspeople abroad to meet with qualified agents, distributors, and customers, as
part of the:
A.matchmaker program.
B.”best prospects” listing.
C.SCORE program.
D.”comparison shopping service.”
E.export-import program.
Answer:
Which of the following is the initial reason for the establishment of a foreign
production facility?
A.Employee turnover is high.
B.Products are not labor-intensive.
C.Inventory turnover is low.
D.Exchange rate fluctuations are high.
E.Labor costs are low.
Answer:
Which of the following exists whenever consumers in different countries are charged
different prices for the same product?
A.Penetration pricing
B.Premium pricing
C.Predatory pricing
D.Price discrimination
E.Price skimming
Answer:
What are mini-multinationals?
A.Multinational firms from relatively small countries in terms of area
B.Multinationals from the developing nations of the world
C.Multinational firms that operate in only one foreign country
D.Medium-sized and small multinationals
E.Subsidiaries of large multinationals in foreign countries
Answer:
According to Mendenhall and Oddou, which of the following dimensions that predicts
success in a foreign posting strengthens an expatriate’s self-esteem, self-confidence, and
mental well-being?
A.Cultural toughness
B.Others-orientation
C.Perceptual ability
D.Self-orientation
E.Empathy
Answer:
The nominal interest rate is 9 percent in Brazil and 6 percent in Japan. Applying the
international Fisher effect, the Brazilian real should:
A.appreciate by 3 percent against the Japanese yen.
B.depreciate by 3 percent against the Japanese yen.
C.appreciate by 1.5 percent against the Japanese yen.
D.depreciate by 1.5 percent against the Japanese yen.
E.appreciate by 15 percent against the Japanese yen.
Answer:
A product’s value-to-weight ratio affects location decision primarily because of its
influence on:
A.transportation costs.
B.shelf life.
C.work-in-progress inventory.
D.inventory turnover.
E.capacity utilization.
Answer:
The use of a specialized third-party trading house in a countertrade arrangement is
known as:
A.counterpurchase.
B.offset.
C.switch trading.
D.buyback.
E.barter.
Answer:
Chinese is the mother tongue of the largest number of people, but English is the most
widely spoken language in the world. This indicates that:
A.many people speak English as a second language.
B.many native English speakers are learning Chinese.
C.the population of native English speakers exceeds that of China.
D.Chinese will soon overtake English as the most widely spoken language.
E.Chinese is increasingly becoming the language of international business.
Answer:
The long-term goal for organized labor to establish international trade secretariats was
to:
A.import employment practices and contractual agreements from the home country of
the multinational firm.
B.retain low-skilled tasks in the host country.
C.prevent multinational firms from switching production from one location to another
as economic conditions warrant.
D.introduce a reciprocal tax treaty.
E.be able to bargain transnationally with multinational firms.
Answer:
Which of the following statements is most likely to be true regarding the effects of FDI
on employment?
A.FDI does not result in job creation.
B.FDI has only indirect effects on employment in the host country.
C.The indirect employment effects of FDI are always smaller than the direct effects.
D.When FDI takes the form of an acquisition of an established enterprise in the host
economy as opposed to a greenfield investment, the immediate effect is always an
increase in the employment.
E.A beneficial employment effect claimed for FDI is that it brings jobs to a host country
that would otherwise not be created there.
Answer:
How have new information and communication technologies, including the Internet,
affected the political economy in general?
A.They have led to the spread of communism.
B.They have reduced a state’s ability to control access to uncensored information.
C.They have led to the collapse of democracy.
D.They have created new conduits for the spread of closed societies.
E.They have led to increased suppression of political and economic freedoms.
Answer:
Which of the following is a great strength of the gold standard?
A.It helped establish the dollar as a predominant vehicle currency.
B.It helped governments raise foreign exchange reserves thereby increasing economic
stability.
C.It contained a powerful mechanism for achieving balance-of-trade equilibrium by all
countries.
D.It helped reduce inflation to near-zero levels in all countries engaged in international
trade.
E.It helped to establish a common currency across the globe to fund international trade.
Answer:
In order to build large production units and expedite certain routine government actions
related to this, Scorpius Inc. made legal payments to the government officials of a host
nation. Such payments are typically referred to as:
A.bribes.
B.speed money.
C.customs duties.
D.excise taxes.
E.preferred dividends.
Answer:
The tendency to aggressively court FDI believed to be in the national interest of a
country is an aspect of:
A.pragmatic nationalism.
B.the radical view.
C.nationalism.
D.imitative theory.
E.eclectic paradigm.
Answer:
Which of the following states that combining location-specific assets or resource
endowments and the firm’s own unique assets often requires FDI, and it also requires
the firm to establish production facilities where those foreign assets or resource
endowments are located?
A.Strategic trade policy
B.Integration approach
C.Scramble theory
D.Eclectic paradigm
E.Infant industry argument
Answer:
Which of the following is a law system based on a detailed set of laws organized into
codes?
A.Civil
B.Theocratic
C.Common
D.Traditional
E.Precedent
Answer:
Which of the following is a drawback of the product life-cycle theory?
A.Its relevance in the modern world seems limited.
B.It makes many simplifying assumptions.
C.It fails to explain the pattern of international trade during the period of American
global dominance.
D.It fails to explain what happens when a product’s market in the United States and
other advanced nations matures.
E.It fails to account for diminishing returns.
Answer:
Who among the following can claim product liability from the offender?
A.Jason wants to sue a multinational company for mass manufacturing one of his
inventions without purchasing the rights.
B.Rebecca’s patented jewelry designs have been imitated and sold at a low price under
her brand name.
C.The airbags in Brian’s car, manufactured by Zigwheels Inc., failed to inflate when his
car met with an accident. This injured Brian and damaged the car.
D.Fred has accused his employer of forcing him and his teammates to work in an
unsafe environment.
E.Samantha claims that her neighbor has stolen valuable ancestral antiques from her
house.
Answer:
Which of the following proposed that all impediments to the formation of a single
market be eliminated by December 31, 1992, resulting in the Single European Act?
A.Delors Commission
B.Andean Pact
C.Treaty of Rome
D.North American Free Trade Agreement
E.Maastricht Treaty
Answer:
Which of the following is a drawback of adopting a polycentric staffing approach?
A.It is expensive to implement.
B.It leads host-country managers to make mistakes due to cultural misunderstandings.
C.It limits advancement opportunities for host-country nationals.
D.It invariably makes a firm suffer from cultural myopia.
E.It bridges the gap between the headquarters of a firm and its foreign subsidiaries.
Answer:
Under a more traditional system as opposed to a just-in-time inventory system,
warehousing parts for weeks before they are used:
A.reduces the total working capital required by a firm.
B.allows many defective parts to be produced before a problem is recognized.
C.results in a near error-free production process.
D.reduces the costs related to inventory holding.
E.reduces the need to write off excess unsold inventory against earnings.
Answer:
According to Vernon, which of the following factors obviates the need for pioneering
U.S. firms to look for low-cost production sites in other countries?
A.The uncertainties and risks inherent in introducing new products are very low.
B.The demand for most new products tends to be based mainly on price.
C.U.S. labor costs are relatively low compared to global standards.
D.Firms can charge relatively high prices for new products.
E.The production of innovative products in other advanced countries limits the potential
for exports from the United States.
Answer:
Without currency devaluation, a country in “fundamental disequilibrium” would
experience:
A.a persistent trade surplus.
B.a balance-of-payments equilibrium.
C.an increase in exports.
D.high unemployment.
E.deflation.
Answer: