1) The foreign-born population as a percentage of total population is substantial for
some countries and insignificant for others.
2) GE’s Ecomagination program has enabled the firm to develop a competitive
advantage over its competitors.
3) The U.S. government has more than 10,000 tariff classifications and more than half
of them are subject to interpretation.
4) The principle by which the tax authorities allow firms to reduce their tax liability by
the amount of income taxes paid to a foreign government is known as a tax credit.
5) A company may use outsourcing as an implied threat to underperforming employees.
6) There is a strong yet inconsistent relationship between the strategic performance of
an MNE and the decisions it has made in managing its human resources.
7) The international regulatory situation for trade is becoming more, rather than less,
complex.
8) The teleological approach asserts that individuals make moral judgments
independent of consequences.
9) A political ideology is the collection of ideas that expresses the goals, theories, and
aims that constitute a sociopolitical program.
10) Intellectual property refers to the creative ideas, innovative expertise, or intangible
insights that give an individual, company, or country a competitive advantage.
11) Capital budgeting requires companies to determine free cash flows, which are
affected by factors such as local tax rates.
12) A typical U.S. company uses the following balance sheet format: assets = liabilities
+ shareholders’ equity.
13) Political systems based on the ________ paradigm, such as those of Japan and
China, accept the principle that government may intervene to ensure that business
practices benefit society.
A) individualistic
B) collectivistic
C) pluralistic
D) laissez-faire
14) Which of the following is true concerning countries’ distribution systems?
A) They reflect the economic levels of countries, so countries at similar economic
levels have similar distribution systems
B) They are difficult to change because they have evolved over time, reflecting
countries’ cultural, economic, and legal environments
C) They are more similar among countries than pricing and promotional systems are
D) When standardized, they offer more cost savings for international companies than
when products are standardized
15) Elison Enterprises is planning international geographic expansion. A manager at
Elison has been given the task of scanning for locations primarily to ________.
A) reduce the number of options available to a manageable number for further detailed
analysis
B) assure the compatibility between the mode of corporate operation and the country
C) assure that all countries within a region have similar investment climates
D) decide whether to use a concentration or a diversification strategy
16) Which of the following is most typical of a command economy?
A) Consumers have choices of many substitutes for any given product
B) Quality of products and services tends to be consistent
C) The prices of goods and services frequently change
D) Many products are usually in short supply
17) The ability to compare production costs among countries in an effort to determine
where to locate production is significantly hampered by all of the following EXCEPT
________.
A) the number of ways the same product can be made
B) restrictions on the international flow of data
C) the ways that laws may be enforced
D) future costs from exchange rate changes
18) Gary is a manufacturing manager at Forman Enterprises. Gary works at the MNE’s
headquarters in the United States. Before Gary can implement any major changes or
decisions, he must communicate and coordinate his plans with Raj, a sales manager at
Forman’s facility in India. Which structure is most likely used by Forman Enterprises?
A) global
B) matrix
C) product division
D) geographic division
19) The global integration of capital markets ________.
A) is a major force leading to the convergence of accounting standards
B) is a counterforce to regional political and economic harmonization
C) is being led by the strengthening of worldwide unions rather than investors
D) highlights the importance of maintaining differences in accounting worldwide
20) Which of the following best explains Blockbuster’s failed expansion into Germany?
A) laws limiting hours of operation
B) lack of public interest in films
C) inadequate tax incentives
D) communication problems
21) All of the following are features of the diamond of national advantage theory
EXCEPT ________.
A) firm strategy, structure, and rivalry
B) strategic trade policy regulations
C) related and supporting industries
D) demand conditions
22) All of the following are examples of international labor mobility EXCEPT
________.
A) a manager assigned by an MNE to work short-term abroad
B) a refugee who takes up employment in another country
C) a college student on a study abroad program
D) an illegal immigrant working in another country
23) ________ is a general, sustained rise in prices measured against a standard level of
purchasing power.
A) Deflation
B) Inflation
C) Expansion
D) Reflation
24) An exchange rate variance results from ________.
A) setting the budget at the actual exchange rate at that time and final performance at
the rate used when the budget was set
B) translating the budget and actual performance at the forecasted exchange rate
C) translating the budget at the projected exchange rate and final results at the actual
exchange rate
D) translating the budget using the current-rate method and actual results at the new
current-rate method
25) Why are offsets considered protectionist measures?
A) Exporters must often find markets for goods outside their lines of expertise
B) Exports must be sold at a certain percentage price below the price of domestic
producers
C) Companies must submit samples to government authorities before receiving export
permission
D) Trading companies must incur additional inventory carrying charges and pay
significantly higher tariffs
26) A ________ results when free mobility of factors of production is added to a
customs union.
A) customs union
B) common market
C) free trade agreement
D) regional trade agreement
27) ________ typically results when demand decreases and supply increases.
A) Inflation
B) Chronic inflation
C) Reflation
D) Deflation
28) Since production has shifted to more efficient producers due to comparative
advantage, consumers in Country X have had access to more goods at lower prices.
Which of the following most likely exists?
A) trade specialization
B) trade diversion
C) trade creation
D) trade internalization
29) The CFO’s function in a company focuses on ________.
A) improving distributor relationships
B) acquiring financial resources
C) handling accounting issues
D) creating financial statements
30) Marrin Associates is an MNE with operations in Hong Kong, India, and Canada.
The firm strives to leverage its core competencies worldwide, reduce costs by
exploiting location economics, and adapt when efficient to local conditions. Marrin is
most likely following a(n) ________ strategy.
A) global
B) multidomestic
C) transnational
D) international
31) The ________ approach to expatriate compensation equalizes purchasing power
across countries; this helps employees enjoy the same living standard in their foreign
posting that they enjoyed at home.
A) balance sheet
B) equalization
C) merit
D) differential
32) In a diversification strategy for international expansion, a company would move
________.
A) rapidly into many foreign countries, and then gradually increase its presence in those
countries
B) rapidly into a few foreign countries with many of its products and most of its
resources
C) into one foreign country and fully expand its product lines in that country before
moving to another country
D) quickly into a regional foreign market but build up its resources in only a few of the
countries in the region