Silver Tape Corporation has developed a new type of adhesive tape. Which of the
following types of legal protections can grant the company exclusive rights for a
defined period to the manufacture, use, or sale of the new adhesive tape?
A.Warrant
B.Patent
C.Copyright
D.Trademark
E.Writ
Answer:
Early outsourcing efforts were primarily confined to:
A.accounting services.
B.manufacturing activities.
C.testing services.
D.educational activities.
E.consulting services.
Answer:
Davis is the manager of a pharmaceutical manufacturing facility in a developing
country. The manufacturing unit does not meet the acceptable standards of the
manufacturing facility in the home nation. He knows that demanding a better
manufacturing unit will raise the cost of the drugs mainly exported to other less
developed countries, and hence its price. But he also realizes that by not demanding a
better unit, the employees are prone to serious health issues. Davis is facing:
A.a role conflict.
B.the tragedy of the commons.
C.a positivity offset.
D.an ethical dilemma.
E.a negativity effect.
Answer:
A legal system which is based primarily on religious teachings is referred to as a:
A.civil law system.
B.theocratic law system.
C.common law system.
D.precedent law system.
E.public law system.
Answer:
In the context of “knowledge” economy of the twenty-first century, which of the
following statements is true about intellectual property?
A.Intellectual property has become an increasingly important source of economic value
for businesses.
B.Protecting intellectual property has become increasingly easy in the twenty-first
century.
C.Intellectual property laws limit the creativity and the ability of people to search for
novel ways of doing things.
D.Firms always choose to stay out of countries where intellectual property laws are
strict.
E.Companies in a country are more likely to commit themselves to extensive basic
research if the country prohibits the use of patents.
Answer:
Which of the following statements is true about political systems?
A.The political system of a country is independent of its economic and legal systems.
B.The political system of a country is of no importance to international business.
C.It is not possible to have democratic societies that emphasize a mix of collectivism
and individualism.
D.It is possible to have totalitarian societies that are not collectivist.
E.The societal culture of a country does not influence its political system.
Answer:
How can firms avoid incurring high transport costs when exporting bulk products?
A.By taking a minority equity interest
B.By entering into a turnkey project with a foreign firm
C.By manufacturing bulk products regionally
D.By setting up subsidiaries irrespective of market reach
E.By reducing the quantity of the product offering
Answer:
Which of the following is an advantage of franchising as a mode of entry into foreign
markets?
A.The franchiser is relieved of many of the costs and risks of opening a foreign market
on its own.
B.The franchiser is allowed to take profits out of one country to support competitive
attacks in another.
C.The franchiser can easily maintain uniform quality across many geographically
dispersed franchisees.
D.Manufacturing concerns can be effectively coordinated across adjacent processes.
E.The franchiser can support its short-term interests in a country with an unstable
economy.
Answer:
The members of a cross-functional team should have:
A.low standing within their respective functions.
B.the ability to put functional and national advocacy first.
C.the ability to contribute functional expertise.
D.the ability to solely focus on the ongoing work of their respective functions.
E.the ability to work on several projects simultaneously.
Answer:
Which of the following is an impediment to cooperation between national unions?
A.The retention of highly skilled tasks in the host country
B.The reciprocal tax treaty
C.The wide variation in the structure and ideology of unions
D.The common perception unions have about multinational companies
E.The decreasing bargaining power of multinational companies
Answer:
Which of the following steps is most likely to be involved in the deregulation of an
economy?
A.Increasing restrictions on direct investment by foreign enterprises and international
trade
B.Privatizing state-owned enterprises
C.Exercising a high degree of state control over production and pricing
D.Abolishing laws related to the protection of property rights
E.Opposing democracy by adopting communism
Answer:
Which of the following are the most popular form of regional economic integration,
accounting for almost 90 percent of regional agreements?
A.Licensing agreements
B.Economic unions
C.Common markets
D.Free trade agreements
E.Political unions
Answer:
Firms that pursue which of the following strategies focus on increasing profitability and
profit growth by reaping the cost reductions that come from economies of scale,
learning effects, and location economies?
A.International
B.Transnational
C.Localization
D.Global standardization
E.Nationalization
Answer:
Which of the following is a major issue confronting the North American Free Trade
Agreement?
A.Economic stability
B.Reduction in purchasing power
C.Political stability
D.Expanding the membership of the agreement
E.Lack of resources
Answer:
Strong enforcement of intellectual property laws:
A.reduces the piracy (theft) of intellectual property.
B.reduces the attractiveness of a country as a market or investment site.
C.reduces the investments made by companies on basic research.
D.limits creativity and innovation among people.
E.prohibits a company from having a monopoly over its breakthrough inventions.
Answer:
Which of the following is most likely to prove detrimental to democracy and
international business?
A.Emergence of increasingly prosperous middle and working classes
B.Development of new information and communication technologies
C.Dominance of a universal civilization which leads to the establishment of a more
harmonious world
D.Transformation of nations from centrally planned command economies to
market-based economies
E.Emergence of different civilizations, each of which has its own value systems and
ideology
Answer:
A computer manufacturing firm from the United States invests in a microprocessor
manufacturing plant in Taiwan. This is an example of:
A.insourcing.
B.stock consolidation.
C.foreign direct investment.
D.product differentiation.
E.market segmentation.
Answer:
Patents, copyrights, and trademarks establish ownership rights over what type of
property?
A.Intellectual
B.Real
C.Tangible
D.Non-performing
E.Stolen
Answer:
The agreement of the member-states of the Central American Common Market joined
by the Dominican Republic to trade freely with the United States is known as the:
A.Central American Free Trade Agreement.
B.Central American Common Market.
C.Free Trade Area of the Americas.
D.CARICOM.
E.Caribbean Single Market and Economy.
Answer:
Which of the following is a step taken to manage foreign exchange risk?
A.Firms should focus solely on managing transaction and translation exposures.
B.Forecasting future exchange rate movements should be avoided as it is speculative.
C.Firms need to develop strategies for dealing with economic exposure.
D.Firms should avoid central control of exposure.
E.Firms should not distinguish between transaction and translation exposure and
economic exposure.
Answer:
To cater to the growing demand for luxury cars, Terabithia Republic agreed to buy
5,000 cars from MotoSporto Inc. in exchange for 5,000 gallons of oil. Due to a lack of
trust, Terabithia decided to make it a one-time-only deal. Which of the following forms
of countertrade is the country most likely to use?
A.Counterpurchase
B.Offset
C.Switch trading
D.Barter
E.Buyback
Answer:
In terms of the gold standard, the amount of currency needed to purchase one ounce of
gold was referred to as the:
A.gold to bond ratio.
B.gold reserve ratio.
C.gold mix ratio.
D.gold par value.
E.gold net value.
Answer:
Which of the following is a major reason why many economists remain critical of the
infant industry argument?
A.It makes the domestic industry inefficient.
B.It does not provide guaranteed employment for the citizens.
C.It affects the standards of living and per capita income of the people.
D.It promotes foreign direct investment.
E.It leads to reduced prices in domestic markets.
Answer:
Which of the following is a violation of ethics according to Kantian philosophy?
A.Employing people to work at sweatshops
B.Treating people as ends rather than as means
C.Practicing superior standards of employment in the host country
D.Empowering people with fundamental rights and privileges
E.Treating employees as conscious moral beings
Answer:
The collapse of communism will result in the new world order that will be dominated
by a universal civilization characterized by democratic regimes and free market
capitalism, according to:
A.Amartya Sen.
B.Samuel Huntington.
C.Jeffrey Sachs.
D.Francis Fukuyama.
E.Adam Smith.
Answer:
Who initially isolated four dimensionspower distance, uncertainty avoidance,
individualism versus collectivism, and masculinity versus femininitythat he claimed
summarized different cultures?
A.Abraham Maslow
B.B. F. Skinner
C.Geert Hofstede
D.Michael Porter
E.Max Weber
Answer:
The objective of establishing the World Bank was to:
A.revive the gold standard.
B.promote general economic development.
C.control and manage the International Monetary Fund.
D.promote a floating exchange rate system.
E.approve large currency devaluations.
Answer:
In terms of expatriate pay, which of the following is true of a foreign service premium?
A.It ensures that expatriates’ children receive adequate schooling.
B.It helps to evaluate expatriates’ performance without any unintentional bias.
C.It ensures that expatriates are prepared for reentry into their home-country
organization.
D.It is paid as a percentage of base salary, with 16 percent being the average premium.
E.It allows a firm to pay expatriates’ income tax in the host country.
Answer:
How is a currency classified if only nonresidents may convert it into a foreign currency
without any limitations?
A.Externally convertible
B.Nonconvertible
C.Leading
D.Freely convertible
E.Lagging
Answer:
The Foreign Corrupt Practices Act was subsequently amended to allow for speed
money or grease payments, which are payments made to:
A.secure contracts that would not otherwise be secured.
B.obtain exclusive preferential treatment in a foreign market.
C.influence foreign bureaucrats in the company’s favor.
D.ensure a business receives the standard treatment that it ought to receive.
E.secure monopoly rights in less developed countries.
Answer:
Which of the following creates a barrier to subsequent entries in an industry dominated
by first movers?
A.The laissez-faire stance toward trade adopted by first movers
B.Implementation of policies to maximize imports and minimize exports
C.Specializing in the production of goods for which firms have an comparative
advantage
D.The ability of first movers to benefit from increasing returns
E.Decrease in the variety of goods available to consumers and increase in the cost of
existing goods
Answer:
Which of the following is a home-country policy for limiting outward FDI?
A.Eliminating double taxation of foreign income
B.Manipulating tax rules to encourage the firms to invest at home
C.Withdrawing government-backed insurance programs provided to local investors
D.Reducing interest rates earned on domestic investments
E.Prohibiting organizations from entering into a cartel
Answer: