Like the European Union commissioners, EU justices are required to act in the interest
of their native countries.
Objectives at the highest level in a company are always stated in the most specific
terms.
A focus strategy works best with mass-marketed products aimed at price-sensitive
buyers.
Scenario: Excelsior’s Limited
Excelsior’s Limited, a manufacturer of health and beauty aids, is expanding its presence
in several countries around the world. Excelsior’s president is surprised at some of the
responses the company is receiving from other countries.
The automobile industry is typically protected for national security reasons.
A push strategy is the most efficient promotional strategy when distribution channels
are lengthy.
The World Trade Organization’s dispute settlement system has the ability to penalize
offending nations.
A government with a currency board is legally bound to hold an amount of foreign
currency that is at least equal to the amount of domestic currency.
A solid grasp of local values, customs, and traditions can help reduce a company’s
exposure to political risk.
The ability of a nation to produce a good more efficiently than any other nation is called
its comparative advantage.
The pattern of imports and exports that would result in lesser trade barriers is called free
trade.
It is important for low-cost competitors to locate near their markets in order to keep
track of buyer preferences.
Economist David Ricardo developed the theory of comparative advantage.
The international bond market consists of all bonds sold by issuing companies,
governments, or other organizations ________.
A) within their own countries
B) outside their own countries
C) within developing nations
D) within developed nations
An exchange rate of ¥117.87/$ indicates ________.
A) that 117.87 yen buys one dollar
B) that 117.87 dollars buys one yen
C) a direct quote on the dollar
D) an indirect quote on the yen
Scenario: Stephanie Wong
Stephanie Wong, a Chinese-American, owns a consultancy that advises clients on
strategies for business expansions into China. Wong is to lead a symposium for small
and mid-sized exporters who are planning on expanding their businesses in China.
Therefore, she is preparing answers in advance for questions that symposium
participants would most likely ask. Another question that Stephanie anticipates
concerns the acceptability of certain topics of discussion like: “Should we avoid
discussing our families and spouses?” Which of the following represents the most
effective response to this question?
A) Absolutely, family is kept completely separate from business in China.
B) Yes, because it is considered very rude by businesspeople to discuss family.
C) No, Chinese businesspeople may invite business partners to family functions.
D) It’s fine to discuss family, but never agree to go to a business partner’s house.
Which of the following requires an importer to pay for the imported goods when they
are delivered?
A) sight draft
B) inland bill of lading
C) air way bill of lading
D) time draft
When creating a market-potential indicator for an emerging market, ________ is
estimated by determining a nation’s volume of international trade as a percentage of
GDP.
A) market receptivity
B) market intensity
C) market consumption capacity
D) market size
Which of the following terms applies to the sale of a particular brand of jeans
manufactured in the U.S. and sold in Canadian stores?
A) exporting
B) outsourcing
C) insourcing
D) importing
Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin
America. To that end, Blickinstock is trying to decide whether to purchase an existing
company in a remote region of Argentina or build its own subsidiary. Keith Moon,
Blickinstock’s vice president of global business development, will be making a
presentation to the board outlining the company’s options.
The difference between the balances of the current and capital accounts of a country’s
balance of payments caused by errors in recording methods is called a(n) ________.
A) round-off error
B) type I error
C) currency crisis
D) statistical discrepancy
The world’s three most important financial centers are ________.
A) Zurich, Paris, and Washington
B) China, Brazil, and Mexico
C) Tokyo, London, and New York
D) Dubai, Beijing, and Germany
Which of the following is the most common method of buying and selling goods
internationally?
A) exporting and importing
B) countertrade
C) a turnkey project
D) A merger or an acquisition
Which of the following was created by the Bretton Woods Agreement to enforce the
rules of the international monetary system?
A) International Bank for Reconstruction and Development
B) International Capital Market
C) International Monetary Fund
D) World Bank
Which of the following is the most common form of social stratification in the world
today?
A) racial segregation
B) class system
C) gender-based division
D) language-based stratification