1) Domestic transaction costs tend to be higher than international transaction costs.
2) Classical theories assume no foreign exchange complications.
3) In the context of NTBs, VERs are government payments to domestic firms.
4) A copyright is an example of an intellectual property.
5) The SWOT analysis exclusively focuses on the value and imitability aspects of the
resources and capabilities of a firm.
6) All Western countries practice the absolute laissez-faire philosophy in trade.
7) Product design is considered an upstream activity in the value chain.
8) Theocratic totalitarianism refers to the monopolization of political power in the
hands of one religious party.
9) Economist Adam Smith proposed the theory of comparative advantage.
10) A foreign exchange rate refers to the price of buying and selling commodities for
future delivery.
11) Intrafirm trade refers to international transactions between two subsidiaries in a
country controlled by two different MNEs.
12) Market-seeking firms go to countries that have a strong demand for their products
and services.
13) Turnkey projects cannot be established without FDI.
14) Many countries with high inflation have pegged their currencies to the yuan in
order to restrain domestic inflation.
15) When expatriates evaluate HCNs, cultural difference may create problems. In ____
countries, performance appraisals based on subordinate expressions could potentially
undermine the power and status of supervisors.
a. high individualism
b. high power-distance
c. high uncertainty avoidance
d. high masculinity
16) Inspired by the EUs success, ASEAN set up an FTA called _____ in 1992.
a. NAFTA
b. ACFTA
c. AFTA
d. CAFTA
17) The act of investigating prior to signing contracts is called _____.
a. due diligence
b. strategic fit
c. relational capability
d. hubristic motive
18) Which of the following staffing approaches focuses on the norms and practices of
the host country?
a. Polycentric approach
b. Geocentric approach
c. Regiocentric approach
d. Ethnocentric approach
19) Which of the following would be considered an example of intellectual property
rights?
a. Rights associated with ownership of vehicles
b. Rights associated with ownership of trademarks
c. Rights associated with ownership of buildings
d. Rights associated with ownership of business contracts
20) Social mobility refers to the degree to which _____.
a. members from a collectivist society move to an individualist society
b. members from a lower social category move to a higher social category
c. people from emerging economies move to developed economies
d. people from developed economies move to emerging economies
21) Which of the following is true of voluntary export restraints?
a. It is an extra tax imposed by a country on its exports
b. It is an example of a tariff barrier
c. It is a government payment to domestic firms
d. It is an export quota levied by a country on the quantity of its exports
22) A trade _____ is an economic condition in which a nation imports more than it
exports.
a. deficit
b. surplus
c. embargo
d. VER
23) The _____ is a free trade agreement among Canada, the United States, and Mexico.
a. Andean Community
b. ASEAN
c. NAFTA
d. Commonwealth of Independent States
24) _____ knowledge can be written down and transferred without losing much of its
richness.
a. Explicit
b. Implicit
c. Tacit
d. Inherent
25) Which of the following describes the maturing stage in the product life cycle
theory?
a. The demand and ability to produce the product grow in developed nations
b. The product is commoditized
c. The production of the product moves to low-cost developing nations
d. The production of a product commanding a price premium will be concentrated in
the lead innovation nation
26) The difference between the acquisition price and the market value of target firms is
called _____.
a. acquisition equity
b. acquisition cost
c. acquisition value
d. acquisition premium
27) The institution-based view driving alliances and acquisitions focuses on _____
concerns.
a. value
b. rarity
c. learning by doing
d. antitrust
28) Which of the following is a popular way to enter into international service markets?
a. Licensing
b. Harvest and exit
c. Franchising
d. Indirect exporting
29) Which of the following is true of SMEs?
a. They are less entrepreneurial than large firms, on average
b. They account for over 95 per cent of total firms around the world
c. They generate less employment than larger firms around the world
d. They generally have more than a thousand employees per firm
30) Marketing and supply chain management activities can be evaluated based on the
VRIO criteria.
31) Which of the following is an example of an intellectual property?
a. Home
b. Scientists laboratory
c. Office
d. Website
32) Harton, a car manufacturer based in UK, only assembles cars and does not
manufacture components in the UK. But in France, Harton enters into components
manufacturing through FDI. Hartons investment in France would be an example of a(n)
_____.
a. FPI
b. downstream vertical FDI
c. upstream vertical FDI
d. horizontal FDI
33) _____ refers to the replacement of cross-border markets with one firm locating in
two or more countries.
a. Location advantage
b. Ownership advantage
c. Internalization
d. Agglomeration
34) The general attitude of the top management using a(n) _____ strategy is that CSR is
an added cost or nuisance.
a. proactive
b. defensive
c. accommodative
d. reactive
35) Which of the following characterizes a customs union?
a. It requires each member to maintain different external policies regarding
non-members
b. It imposes common external policies on non-members
c. It integrates the political and economic affairs of a region
d. It permits the free movement of goods and people among its members
36) NAFTA is an example of a(n) _____.
a. free trade area
b. customs union
c. common market
d. economic union
37) Laws that make it illegal for an exporter to sell goods below cost abroad with the
intent to raise prices after eliminating local rivals are called _____ laws.
a. collusion
b. antidumping
c. antitrust
d. anticartel
38) _____ is a means by which investors, often in partnership with incumbent
managers, issue bonds and use the cash raised to purchase the firms stock.
a. Hedged tender
b. Flat trade
c. Adjustable-rate mortgage
d. Leveraged buyout
39) _____ entails the evaluation of employees work for promotion, retention, or
termination purposes.
a. Benchmarking
b. Replacement chart
c. Performance appraisal
d. Open-book management
40) Which of the following methods is directly derived from the theory of purchasing
power parity (PPP)?
a. The floating exchange rate
b. The fixed exchange rate
c. The stock market index
d. The Big Mac index
41) The ____ is defined as the difference between the offer price and the bid price in a
foreign exchange.
a. cost to serve
b. spread
c. forward discount
d. forward premium
42) Which of the following is true of globalization according to the pendulum view
perspective?
a. Globalization is being interrupted by artificial barriers to the flows of goods, services,
capital, and knowledge
b. Globalization is a Western ideology focused on exploiting and dominating the world
through MNEs
c. Globalization is a not a one-directional phenomenon
d. Globalization is a recent phenomenon of human trade
43) A vertical FDI refers to a type of FDI in which _____.
a. a firm duplicates its home country-based activities at the same value chain stage in a
host country
b. a firm invests in a portfolio of foreign securities but without active management of
those foreign assets
c. a firm moves upstream or downstream at different value chain stages in a host
country
d. a firm produces the same products or services in a host nation as it does at home
44) _____ is defined as a plan to raise prices after eliminating local rivals.
a. Dumping
b. Dodging
c. Collusion
d. Forbearing
45) Which of the following aspects of a culture would be categorized as an informal
institution?
a. Ethics
b. Politics
c. Economics
d. Laws
46) In which of the following ways is the theory of comparative advantage linked to the
Heckscher-Ohlin theory?
a. Sustainability of wealth in the short run
b. Dynamic changes in the patterns of trade over time
c. Dependency on a nations locally available abundant factors
d. Extent to which government influences international trade
47) Which of the following sets of words describes the initial set of actions a firm uses
to gain competitive advantage and the other firm’s response to it?
a. Tacit collusion, explicit collusion
b. Competition, cooperation
c. Attack, counterattack
d. Cooperation, signaling
48) Free market advocates believe that the first and foremost stakeholder group is
_____.
a. suppliers
b. employees
c. managers
d. shareholders
49) With respect to the motives for acquisition, _____ motives add value.
a. collusive
b. hubristic
c. managerial
d. synergistic
50) A(n) _____ refers to an industry dominated by a small number of players.
a. oligopoly
b. monopoly
c. perfect competition
d. free market
51) For equity, the cost of capital is the interest.
52) What is resource similarity? How does it affect firm rivalries?
53) Social issue participation qualifies as a value-adding firm resource.
54) The strategic response framework for analyzing CSR decisions are reactive,
defensive, accommodative, and proactive strategies.
55) Explain the resource-based views in light of their effect on entrepreneurial success.
56) Price leader is a firm that sets the highest price in the industry.
57) A joint venture (JV) is a form of equity-based alliance.
58) The best fit school argues that a firm needs to search for the best external and
internal fit.
59) Outline the differences between democracy and totalitarianism.