1) Indirect exporters sell goods to a foreign intermediary, who then sells the product in
the domestic market to the final consumer.
2) An MNE would most likely benefit from converting local currency into its
home-country currency when exchange rates are most favorable so it can maximize its
return.
3) The primary benefit of neoclassical structures is the ability of MNEs to coordinate
responses and maintain effective control of various units.
4) Unlike grids, matrices do not require managers to determine weights for factors that
indicate risk.
5) When planning international geographic expansion, decision makers use scanning to
reduce the number of options available to a manageable number for further detailed
analysis.
6) The three variables predicted by forecasting are the timing, magnitude, and length of
exchange rate movements.
7) The international mobility of labor includes workers, students, tourists, and retirees
who travel to another country.
8) In a country with a high masculinity score, people have a tendency to feel sympathy
towards individuals who are unemployed or homeless.
9) When customs officials set a value on which to place an import tariff, they ordinarily
use the declared invoice price unless they doubt its authenticity.
10) When analyzing the key elements of a country’s economic environment, it is best to
apply a systems perspective.
11) Few turnkey projects to date have been in remote areas of the world.
12) Commercial banks look at foreign-exchange trading as a service extended primarily
to important customers, not as a major business activity of its own.
13) The European Union is an example of regional integration.
14) People who argue for keeping the U.S. trade embargo with Cuba claim all of the
following EXCEPT which one?
A) There is not much economic potential from trade given Cuba’s small population and
low per capita income
B) Removal of the embargo will cause much more Cuban immigration to the United
States
C) If the Cuban economy is weakened just a bit more, the Cuban political-economic
system cannot be sustained
D) There will be a backlash among countries supplying such commodities as sugar to
the United States if the U.S. buys them from Cuba instead
15) MNEs most likely use offshore debt markets ________.
A) to hide their cash from tax authorities
B) to take advantage of their ability to access capital in different countries
C) since debt in foreign countries is always cheaper than in the home country market
D) because investors don’t like to invest in companies that only raise capital in their
home markets
16) Dependencia theory holds that ________.
A) countries should seek to diversify their economies
B) low-income countries have practically no power in dealings with MNEs
C) in a globalized world, no nation can be independent economically or politically
D) there is a natural division of labor whereby developing countries depend on
production using fairly unskilled labor and developed countries depend on highly
educated workers
17) Arden Shoes runs a different marketing campaign every four weeks abroad. Which
of the following best describes the advantage of doing so?
A) It enables Arden to attract more sales personnel
B) It helps Arden create an image of having quality products
C) It allows Arden to change prices in highly inflationary economies
D) It enables Arden to switch quickly and inexpensively to a local emphasis
18) Which of the following problems with the euro most likely worsened the financial
crisis in Greece?
A) excessive flexibility with interest rates
B) cultural disagreements on labor reform
C) lack of uniform fiscal regulation standards
D) unclear policies of the European Central Bank
19) Since the late 1980s, the growing emergence of freer markets has been powered by
the realization that ________.
A) economic growth is directly related to economic freedom
B) economic growth has a limited effect on the standard of living
C) adoption of free market principles contributes to social injustices
D) centrally planned economies are best designed to deliver progress
20) Gross national income (GNI), the broadest measure of economic activity for a
country, is defined as the ________.
A) total of all consumption and investment that takes place in a national economy
B) income generated in one country, regardless of who owns the productive assets
C) total of all economic activity in one country less services, such as government
administration, health services, and education
D) income generated by both total domestic production and the international production
activities of national companies
21) A driving factor for the growth in imports is the impact of ________.
A) government programs
B) labor specialization
C) consumer preferences
D) social trends
22) Which of the following is a common shortcoming of studies examining culture in
different countries and regions?
A) Cultures are static, which leads researchers to draw false conclusions from old data
B) It is impossible to compare countries because of differences in data
C) Responses are reported in averages, which can lead to a belief in unrealistic
stereotypes
D) People are reluctant to complain about their own cultures, so they present only
positive opinions to researchers
23) The primary limitation with the product division structure is the ________.
A) cost of duplicated functions and international activities
B) poor response to local market demands for a product
C) inability to transfer core competencies within units
D) difficulty of selling product lines
24) Comparing countries in international business is LEAST useful for determining the
________.
A) best location for sales and production
B) sequence of entering different countries
C) amount of resources to allocate in each country
D) selection of which managers to send to which countries
25) Which of the following is the LEAST likely reason that small countries worry about
overdependence caused by globalization?
A) A large country on which they depend may pressure them on political matters
B) A large international firm may dictate its terms of operations in a small country
C) A large company may exploit legal loopholes to avoid tax payments
D) A large country may substantially increase its demand for the small country’s
production
26) Promotion using direct selling techniques is ________.
A) a pull strategy
B) necessary where inflation is high
C) a standardized advertising technique
D) a push strategy
27) Compared to the European Union, the North American Free Trade Agreement
________.
A) has a stronger currency linkage due to the U.S. dollar
B) has more trade problems since it is a customs union
C) is significantly larger in population and total GNI
D) is slightly smaller in population and GDP
28) The major use of the matrix as a tool in international location strategy is to
________.
A) pinpoint acceptable and unacceptable characteristics of countries
B) indicate the relative placement of countries in terms of attributes
C) rank countries on the basis of expected investment return
D) show the degree of certainty for projected returns
29) Financial statements typically include ________.
A) accompanying footnotes, a balance sheet, and a cash-flow statement
B) translations into the languages of every country where the company lists shares
C) different currency results to reflect the different countries where the company has
investments or generates revenues
D) different reports detailing the differences in generally accepted accounting principles
used by the company in different countries
30) Which term refers to the network that links together the different aspects of the
value chain and coordinates materials, information, and funds from the initial
raw-material supplier to the ultimate customer?
A) logistics strategy information system
B) materials management device
C) customer service
D) supply chain
31) Profile the idea and features of horizontal differentiation, paying particular attention
to its implications to how managers design their company’s structure.
32) Why do most companies examine expansion proposals one at a time rather than
comparing various expansion proposals? Do you think this is effective? Why or why
not?
33) What assumptions underlie the theories of specialization in international trade?
What are the limitations of these assumptions?
34) What is the difference between exporting and importing? What are the unique
characteristics of service exports and service imports?
35) What is foreign direct investment? What social factors in the external environment
might affect FDI?
36) What is culture shock? How can an international employer help prevent culture
shock and improve the success of expatriates?