According to the opponents of globalization, which of the following occurs as a result
of worker dislocation brought about by globalization?
A) increased labor costs for companies
B) lower workers’ wages in developed nations
C) surfeit of jobs in developed nations
D) increased investment in individual education
Which of the following refers to the ability of a nation to produce a good more
efficiently than any other nation?
A) mercantilism
B) comparative advantage
C) absolute advantage
D) neomercantilism
The ________ called for large-scale reduction of the debt owed by poorer nations, the
exchange of old loans for new low-interest loans, and the making of debt instruments
that would be tradable on world financial markets.
A) Brady Plan
B) Louvre Accord
C) Bretton Woods Agreement
D) Smithsonian Agreement
Which of the following communication strategies adapts both the product and its
marketing communication to suit the target market?
A) product/communications extension
B) product extension/communications adaptation
C) product adaptation/communications extension
D) product/communications adaptation
The market consisting of all the world’s currencies that are banked outside their
countries of origin is called the ________.
A) foreign exchange market
B) interbank market
C) Eurocurrency market
D) offshore financial center
Scenario: Frankfurter Friday
Betty Cleveland is the vice president of Frankfurter Friday, a highly successful hot dog
joint in Oceania. Her company decides to expand to Asia and identifies China as the
ideal market. Before she leaves for China, she studies their culture extensively and
discovers that the number four is considered extremely unlucky, that not everybody is
fluent in China’s official language-Mandarin-and that punctuality is a highly valued trait
in the country.
Ethnocentricity facilitates the establishment of new businesses abroad.
A major flaw of the original General Agreement on Tariffs and Trade (GATT) was that
it lacked the power to ________.
A) displace the WTO
B) reduce nontariff barriers to international trade
C) govern exchange rates
D) enforce world trade rules
Whereas relocating production to low-cost locales traditionally meant production of
goods almost exclusively, it increasingly applies to the production of ________.
A) domestic products
B) perishables
C) services
D) global brands
Scenario: Moonland Union
Twenty-six nations of Moonland region, have decided to cooperate with one another to
eliminate trade barriers among them and create the Moonland Union. They are not sure,
however, to what extent they want to cooperate.
The regional trading bloc that Zucoland will be joining is most likely a(n) ________.
A) economic union
B) free trade area
C) customs union
D) political union
A group of fifty-three nations on the African continent joined forces in 2002 to create
the ________.
A) Economic Community of West African States
B) African Union
C) African Unification Front
D) Organisation of the African Unity
Which of the following steps of the market screening process involves the analysis of
the quality of workforce, materials, and infrastructure?
A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site
Because Scooters Inc. caters to a very narrow niche of wealthy individuals, the CEO is
interested in implementing a worldwide pricing scheme. Which of the following is most
likely a reason for the establishment of such a scheme?
A) Their production costs differ from market to market.
B) The currency values fluctuate fairly predictably.
C) Their distribution channels are lengthy in each market.
D) Their customers have similar levels of purchasing power.
The exchange rate at which a bank will purchase a currency is called a ________ rate.
A) prime
B) buy
C) ask
D) forward
Scenario: ABC Software
ABC Software is a producer of educational software for children below the age of
twelve. The company has operations in Switzerland and would like to expand its
foreign operations with a new facility in China.
ABC Software has had difficulty obtaining funds to expand. A friend of the CEO
recommends that the company should explore an offshore financial center, which
________.
A) is a country or territory whose financial sector features very few regulations and few,
if any, taxes
B) tends to be characterized by political and economic instability making, it is an
inexpensive but risky source of funds
C) typically lends money to companies that have had difficulty getting financing
elsewhere because of poor credit records
D) is a financial center located in a resort community and is characterized by poor
telecommunications infrastructure
Scenario: Chong’s analysis of international markets
John Chong is an inexperienced entrepreneur in global business. He wants to sell his
product, Zulu doll, a toy for kids below the age of eight, in every corner of the world.
He wants to examine all potential markets but wants to keep his costs low. John has
asked you to explain a few things about analyzing international markets.
The income-elasticity coefficient for Zulu doll is 1.2, which means the demand for Zulu
doll will ________.
A) increase 1.2 percent for every 1.0 percent increase in income
B) decrease 1.0 percent for every 1.2 percent increase in income
C) decrease 1.2 percent for every 1.0 percent increase in income
D) remain stagnant since 1.2 is the equilibrium value
Scenario: Global Manufacturing Inc. (GMI)
Global Manufacturing Inc., a fast-growing U.S. company, plans for a production system
in which two components of its product will be manufactured in locations where the
cost of production is lowest. The components will then be taken to maquiladoras for
final assembly. GMI plans to purchase an existing company in Brazil to produce
component A and build a subsidiary in Thailand to produce component B.
GMI’s investments are examples of ________.
A) foreign direct investment
B) portfolio investment
C) vertical integration
D) horizontal integration
Which of the following is a marketplace of underground transactions that typically
appear because a product is either illegal or tightly regulated?
A) black market
B) niche market
C) two-sided market
D) vertical market