1) The Big Mac Index suggests that exchange rates should leave Big Mac hamburgers
costing the same in the U.S. as abroad.
2) A problem of advertising through media that reach multiple countries is that the
product may not be available everywhere it is advertised.
3) Higher disposable income and technological advances help overcome many
geographic constraints on product demand and distribution.
4) The Foreign Corrupt Practices Act applies only to companies registered in the United
States.
5) International business includes all commercial transactions between two or more
countries
6) The top 10 exporting countries are dominated by developing countries.
7) Civil conflict, tax discrimination, weak legal systems, and terrorist actions are
political risks faced by MNEs operating in foreign countries.
8) The belief that there are universal standards of behavior that all cultures should
follow is called ________.
A) humanism
B) relativism
C) normativism
D) naturalism
9) Which of the following members of the European Union has NOT adopted the euro?
A) United Kingdom
B) Estonia
C) Germany
D) Greece
10) When no single company has control over a collaborative arrangement, ________.
A) the operation may lack direction
B) none of the partners is responsible for legal violations
C) differences in corporate culture are likely to grow
D) one partner’s interests are likely to be put ahead of the other partner’s interests
11) Generally, HRM does NOT emphasize which of the following characteristics when
evaluating the adaptability of an expatriate candidate?
A) self maintenance
B) technology skills
C) cultural empathy
D) sensitivity to host environments
12) Country X is withholding goods from international markets in an attempt to raise
prices abroad. Such actions will be most effective for Country X if the nation
________.
A) supports the development of substitutions
B) provides domestic industries with tax breaks
C) receives low-interest loans from foreign banks
D) holds a monopoly on the product or resource
13) What is the most common way of identifying market segments within a country?
A) psychographics
B) the Internet
C) gap analysis
D) demographics
14) What is the gray market?
A) sales targeted to elderly consumers
B) selling goods through unofficial distributors
C) a legal black market run by governments
D) selling counterfeit merchandise
15) Which of the following assumptions was made in the original theories of absolute
and comparative advantage?
A) Specialized labor seeks efficiency
B) Labor resources are fully employed
C) Countries pursue objectives other than economic efficiency
D) Production networks enable countries to concentrate on particular functions
16) The incremental internationalization view of exporting holds that companies first
target countries that are ________ their home market.
A) different from
B) similar to
C) smaller than
D) larger than
17) Ryan, a foreign-exchange dealer, sold U.S. dollars for Swiss francs in the U.S., then
sold Swiss francs for Japanese yen in Switzerland, and then sold the Japanese yen for
U.S. dollars in the U.S. Ryan hopes that he will end up with more U.S. dollars than
when he began. Which term best describes Ryan’s actions?
A) arbitrage
B) speculation
C) spot transaction
D) outright forward
18) Which of the following best depicts a push strategy for a U.S. company selling in
Mexico?
A) Tupperware selling through parties in homes
B) Gillette selling razor blades through supermarkets
C) KFC selling chicken dinners at its franchises
D) Google advertising on television
19) The government of Country X imposes import restrictions on steel to help the
domestic steel industry in depressed areas. What is the most likely result of such
restrictions?
A) damaging other industries in Country X
B) devaluing the currency of Country X
C) lowering steel prices in Country X
D) triggering boycotts in Country X
20) Johnson & Johnson delegates to its subsidiaries a great deal of authority to respond
to local conditions. Many subsidiaries have their own manufacturing, marketing,
research, and human resource functions. This value chain configuration illustrates the
________ strategy.
A) transnational
B) global
C) multidomestic
D) international
21) History suggests that if the economic crisis worsens, we are likely to see more
people question the ________.
A) fall of communism
B) legitimacy of capitalism
C) practicality of mixed market economies
D) correlation between economic freedom and prosperity
22) Which of the following is most likely a FALSE statement about income inequality?
A) The richest 1% of the world’s population claims as much income as the bottom 57%
B) GNI is the most effective tool for estimating the relative wealth of a nation’s citizens
C) Among industrialized nations, the U.S. has the largest inequality gap between rich
and poor
D) Income inequality between metropolitan and rural areas threatens a country’s social
stability