Which of the following is least likely a reason for companies to seek cross-border
mergers and acquisitions?
A) to get a foothold in new geographic markets
B) to raise company budgets for increased research and development activities
C) to increase a firm’s global competitiveness
D) to fill the gaps in companies’ product lines in a global industry
Devaluation of a nation’s currency ________.
A) gives foreign companies in the country an edge over domestic companies
B) leads to a decline in the supply of goods and services
C) increases the price of a country’s imports
D) increases consumers’ buying power
Which of the following is true of the value densities of products?
A) The cost of transporting goods with high value-density ratios is high relative to their
value.
B) Products with high value-density ratios are integrated into the manufacturing process
at points close to their original locations.
C) Most commodities, including cement, iron ore, and crude oil, have high
value-density ratios.
D) The lower a product’s value density, the more localized the distribution system.
A currency used as an intermediary to convert funds between two other currencies in
the foreign exchange market is called a ________.
A) local currency
B) vehicle currency
C) community currency
D) private currency
Which of the following terms is defined as the set of values, beliefs, rules, and
institutions held by a specific group of people?
A) law
B) philosophy
C) culture
D) science
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.
A culture’s values tend to become more flexible over time.
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. Not all factors of production
are internationally mobile.
The requirement that a sufficient portion of a product’s content must originate within a
certain market to escape tariff charges is an example of a(n) ________.
A) ad valorem tariff
B) market imperfection
C) tariff-quota
D) subsidy
A company that is closing factories with unused capacity and laying-off workers is most
likely following a ________ strategy.
A) growth
B) retrenchment
C) stability
D) combined
A(n) ________ is a system that allocates financial resources in the form of debt and
equity according to their most efficient uses.
A) international equity market
B) forward market
C) capital market
D) eurocurrency market
One of the major pillars upon which the practice of mercantilism rested was ________.
A) economies of scale
B) pricing mechanism
C) excessive imports
D) trade surpluses
Scenario: Foodland and Drinkland
Two countries, Foodland and Drinkland, produce food and drinks. In Foodland, one
resource unit produces 20 tons of food and one resource unit produces 10 tons of
drinks. In Drinkland, one resource unit produces 12 tons of food and one resource unit
produces 24 tons of drinks. Food Drinks
Foodland 20 10
Drinkland 12 24
A third country, Funland, also produces food and drinks. In Funland, one resource unit
produces 8 tons of food and 6 tons of drinks. Which of the following is true about
Funland, Foodland, and Drinkland?
A) Funland has a comparative advantage in producing drinks.
B) Funland has a comparative advantage in producing food.
C) Funland has an absolute advantage in producing food.
D) Funland has an absolute advantage in producing drinks.
Which of the following strategies is designed to guard an organization against change?
A) stability strategy
B) growth strategy
C) retrenchment strategy
D) differentiation strategy
An expatriate manager who returns after a few years from an overseas assignment to
find that there is no position for him in his home country office experiences a(n)
________.
A) reverse culture shock
B) expatriate failure
C) cognitive dissonance
D) assimilation effect
________ is an effective alternative to traditional distribution channels for firms that
sell digitized products.
A) Dual licensing
B) Electronic distribution
C) Visual merchandising
D) Digital switchover
The board will also examine new production techniques the company could use to
create its product. This examination is a part of ________.
A) capacity planning
B) process planning
C) facilities location planning
D) centralized production
Some researches consist of errors due to misinterpretations by foreign language
interpreters. Which of the following difficulties associated with conducting
international market research does this example signify?
A) protection of data
B) availability of data
C) cultural differences
D) political differences