Which of the following is a support activity in the operations of a firm?
A.Research and development
B.Customer service
C.Marketing and sales
D.Creation and maintenance of information systems
E.Production
Answer:
What is meant by economic exposure?
A.The extent to which a firm’s future international earning power is affected by changes
in exchange rates
B.The impact of currency exchange rate changes on the reported financial statements of
a company
C.The extent to which the income from individual transactions is affected by
fluctuations in foreign exchange values
D.The extent to which the quantity of money in circulation rises faster than the stock of
goods and services
E.The extent of disparity in prices, when expressed in the same currency, of similar
products in different countries
Answer:
The architects of the Bretton Woods agreement built limited flexibility into the fixed
exchange rate system in order to:
A.avoid high unemployment.
B.facilitate competitive currency devaluations.
C.widen balance-of-payments gap between countries.
D.increase money supply and thereby price inflation.
E.avoid balance-of-trade equilibrium between countries.
Answer:
Which of the following is an implication of a mass production system?
A.It results in short production runs.
B.It fails to realize economies of scale.
C.It reduces the number of defects and eliminates waste.
D.It helps to accommodate consumer preferences for product diversity.
E.It creates massive inventories that have to be stored in large warehouses.
Answer:
Which of the following is responsible for proposing European Union legislation,
implementing it, and monitoring compliance with European Union laws by
member-states?
A.Council of the European Union
B.European Commission
C.European Parliament
D.Court of Justice
E.European Community
Answer:
Which of the following is true of the Treaty of Rome?
A.It obliged all European Union members to adopt the euro.
B.It committed the European Community to establish common policies in agriculture
and transportation.
C.It called for the establishment of internal trade barriers.
D.It allowed members to determine the level of protection applied to goods coming
from outside.
E.It called for the abolition of a common external tariff.
Answer:
Which of the following products has a low value-to-weight ratio?
A.Electronic components
B.Personal computers
C.Medical equipment
D.Computer software
E.Cement
Answer:
In what type of economy are all businesses state owned, the rationale being that the
government can then direct them to make investments that are in the best interests of
the nation as a whole rather than in the interests of private individuals?
A.Free market
B.Deregulated
C.Pure command
D.Mixed
E.Laissez-faire
Answer:
Which of the following is the economic level corresponding to the least integration?
A.A free trade area
B.A customs union
C.A common market
D.An economic union
E.A political union
Answer:
Which of the following products is best manufactured in multiple locations close to
major markets to reduce transportation costs?
A.Pharmaceuticals
B.Petroleum products
C.Books
D.Magazines
E.Electronics
Answer:
The code of ethics of a company draws heavily upon documents such as the UN
Universal Declaration of Human Rights, which itself is grounded in Kantian and
rights-based theories of moral philosophy. In the context of this information, this
company is most likely to:
A.restrict its employees from joining a trade union.
B.set unrealistic performance goals for its employees.
C.promote employees on the sole basis of their particular characteristics such as race,
sex, nationality, and class.
D.make its employees work under unfavorable working conditions.
E.respect the dignity of an individual and the right of employees to freedom of
association.
Answer:
Which of the following is true about legal systems?
A.All countries have the same, uniform legal environment.
B.Unlike the economic system of a country, the legal system is independent of the
country’s political system.
C.The government of a country defines the legal framework within which firms do
business.
D.The attractiveness of a country as an investment site or market is unaffected by its
legal system.
E.Collectivist-inclined totalitarian states tend to enact laws that are pro-private
enterprise.
Answer:
Which of the following observations is true of technical analysis, an approach to
exchange rate forecasting?
A.It draws on economic theory to construct models for predicting exchange rate
movements.
B.The variables contained in this model typically include relative money supply growth
rates, inflation rates, and interest rates.
C.There is a sound theoretical rationale for the assumption of predictability underlying
this approach.
D.Owing to its drawbacks, this approach has declined in importance over the last few
years, giving way to fundamental analysis.
E.It does not rely on a consideration of economic fundamentals.
Answer:
Animax Limited got an order to sell 50,000 central processing units (CPUs) to Palladia,
but the Palladian government stipulated that 15 percent of the component parts of those
CPUs must be produced in Palladia. This stipulation by the Palladian government
would be example of a(n):
A.voluntary export restraint.
B.quota rent.
C.import quota.
D.local content requirement.
E.antidumping policy.
Answer:
Which of the following is a reason for the emergence of the gold standard?
A.Expansion in the volume of international trade due to the Industrial Revolution
B.Inability of governments to convert gold into paper currency on demand at a fixed
rate
C.Widening gap between the developed and the developing nations
D.Failure of the Bretton Woods fixed exchange rate system
E.Failure of the U.S. dollar to act as a reference currency
Answer:
Which of the following statements is true of the utilitarian approach to business ethics?
A.It holds that an action is judged desirable if it leads to the maximization of
stockholders’ wealth.
B.The best decisions, from a utilitarian perspective, are those that produce the greatest
profits for businesses.
C.It recognizes that a business should pursue only those actions where the social
benefits outweigh the costs.
D.It asserts that managers should not follow ethical norms if they see that others firms
are also not following them.
E.It fails to consider the idea that actions have multiple consequences.
Answer:
A country characterized with low uncertainty avoidance and low masculinity will:
A.place a premium on job security and career progression for both men and women.
B.support stringent managerial control and competition between men and women.
C.be less resistant to change and less distinguishing between men and women in the
same job.
D.have a strong need for rules and exertion of power in the society and gender
egalitarianism.
E.oppose risk-taking and gender egalitarianism.
Answer:
Collectivist-inclined totalitarian states tend to enact laws that severely restrict private
enterprises, whereas the laws enacted by governments in democratic states, where
individualism is the dominant political philosophy, tend to be pro-private enterprise and
pro-consumer. This indicates that the:
A.economic system of a country is independent of its legal system.
B.legal system of a country is not influenced by the prevailing political system.
C.legal system does not affect the attractiveness of a country as an investment site or
market.
D.all countries have the same legal environments.
E.the legal framework of a country reflects the rulers’ dominant political ideology.
Answer:
Many of the world’s developing nations peg their currencies, primarily to the:
A.U.S. dollar.
B.Saudi riyal.
C.Japanese yen.
D.Chinese yuan.
E.German deutsche mark.
Answer:
What is meant by arbitrage?
A.To provide insurance or hedge against the risks that arise from volatile changes in
exchange rates
B.A transaction between two parties that involves exchanging currency and executing a
deal at some specific date in the future
C.Simultaneous purchase and sale of a given amount of foreign exchange for two
different value dates
D.The purchase of securities in one market for immediate resale in another to profit
from a price discrepancy
E.To borrow in one currency where interest rates are low and use the proceeds to invest
in another currency where interest rates are high
Answer:
An export credit insurance is necessary when the exporter:
A.is exposed to the risk that the importer may default on payment.
B.is dealing in a country that has a nonconvertible currency.
C.is unable to obtain any pre-export financing.
D.has received a letter of credit from the importer’s bank.
E.has to enter a barterlike agreement.
Answer:
Which of the following refers to the expertise, competencies, and skills of established
retailers in a nation, and their ability to sell and support the products of international
businesses?
A.Channel exclusivity
B.Channel quality
C.Channel length
D.Channel dominance
E.Channel concentration
Answer:
According to the survey undertaken by Towers Watson, which of the following
countries provides the highest pay to CEOs?
A.Switzerland
B.The United States
C.Japan
D.Australia
E.Argentina
Answer:
Which of the following statements is true about Buddhism?
A.Buddhism was founded in the fifth century B.C. by K’ung-Fu-tzu, in China.
B.The emphasis on wealth creation that is embedded in Protestantism is not found in
Buddhism.
C.Buddhism advocates the kind of extreme ascetic behavior that is encouraged by
Hinduism.
D.Like Hinduism, Buddhism also supports the caste system.
E.Unlike Hinduism, Buddhism does not stress afterlife and spiritual achievement.
Answer:
Which of the following steps in ethical decision making is most likely to help
businesspeople know if their decision process is working and if changes should be
made to ensure greater compliance with a code of ethics?
A.Judging the ethics of the proposed decision
B.Auditing past decisions
C.Establishing a moral intent
D.Involving in moral imagination
E.Identifying the concerned stakeholders
Answer:
Which of the following is most likely to lead to unethical behavior in a business
setting?
A.A strong sense of personal ethics exhibited by employees
B.Expatriate managers working away from their ordinary social context and supporting
culture
C.Providing managers with a moral compass or an ethical algorithm
D.Large business corporations making social investments in host countries
E.Multinational corporations advocating the concept of noblesse oblige
Answer:
Manufacturing firms should typically aim at lowering the costs of value creation by:
A.decreasing inventory turnover.
B.stocking huge amounts of inventory.
C.lowering the quality of products.
D.increasing after-sales services cost.
E.reducing production costs.
Answer:
Which of the following refers to the extent to which the reported consolidated results
and balance sheets of a corporation are affected by fluctuations in foreign exchange
values?
A.Economic exposure
B.Transaction exposure
C.Translation exposure
D.Countertrade
E.Carry trade
Answer:
Concentration of production makes most sense when:
A.trade barriers are low.
B.the product’s value-to-weight ratio is low.
C.important exchange rates are volatile.
D.flexible manufacturing technology does not exist.
E.the production technology has low fixed costs.
Answer:
Which of the following statements is true about the late influential political scientist
Samuel Huntington’s vision of the new world?
A.Samuel Huntington maintained that as societies continue modernizing they will also
become more Western.
B.Samuel Huntington theorized that modernization in non-Western societies can result
in a retreat toward the traditional.
C.Samuel Huntington predicted that the universalization of Western liberal democracy
will be the final form of human government.
D.Samuel Huntington envisioned the end of the war of ideas between different
civilizations.
E.Samuel Huntington suggested that most developing countries will stop adopting the
material paraphernalia of the modern world.
Answer:
Which of the following is true of market segmentation?
A.An important market segment in a foreign country always has a parallel in a firm’s
home country.
B.Markets can be segmented only on the basis of geography and demography.
C.The structure of market segments is quite similar across various countries.
D.Since market segments are similar across various countries, firms can pursue a global
marketing strategy without varying the marketing mix.
E.For a segment to transcend national borders, consumers in that segment must have
some compelling similarities along important dimensions.
Answer:
If Argonia exports vast quantities of cheap toys to Cadmia, selling them at below their
costs of production, it would constitute:
A.monopolism.
B.dumping.
C.offshoring.
D.nearshoring.
E.subsidizing.
Answer: