Scenario: Happyland
Happyland is a country characterized by beautiful beaches, vast natural resources, and a
highly skilled labor force. Happyland is now encouraging foreign direct investment
flows. The country has been exporting textiles, computer hardware, and software
programs. The net result of the trade is that Happyland exports far more goods and
services and receives more income from abroad than it imports and pays abroad.
Which of the following methods will Happyland use to encourage foreign direct
investment inflows?
A) tax incentives
B) sanctions
C) ownership restrictions
D) performance demands
Which of the following is a psychological process affecting employees living abroad
and is characterized by homesickness, irritability, confusion, aggravation, and
depression?
A) social loafing
B) groupthink
C) culture shock
D) halo effect
________ is a legal system which is based on a detailed set of written rules and statutes
that constitute a legal code.
A) International law
B) Civil law
C) Tribal law
D) Common law
Under ________ the government endorses private ownership of property and a
market-based economy but grants little or no political freedom.
A) left-wing totalitarianism
B) theocratic totalitarianism
C) secular totalitarianism
D) right-wing totalitarianism
A(n) ________ channel gives producers a good deal of control over the sale of their
product by channel members such as wholesalers and retailers.
A) exclusive
B) intensive
C) two-level
D) selective
Christopher Electronics plans to expand into foreign markets. Top executives want the
firm to focus only on locations where the rule of law prevails. Which of the following
should most likely be considered by Christopher?
A) wealthier, westernized countries
B) developing, non-Western countries
C) emerging economies experiencing rapid growth
D) countries inclined toward totalitarian-style government
Factor proportions theory was developed by ________.
A) Smith and Ricardo
B) Ricardo and Ohlin
C) Heckscher and Ohlin
D) Heckscher and Smith
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. Portfolio investment is the
purchase of physical assets of a company in another country to gain a degree of
management control.
Scenario: TeleToys Inc.
TeleToys Inc., a U.S.-based company, recently opened eighteen new toy stores in
Brazil, acquired a women’s clothing company in Canada, and closed its men’s clothing
line in Australia. The company has a structure that organizes its global operations into
geographic regions.
TeleToys recently opened eighteen new toy stores in Brazil. This move can best be
described as a ________ strategy.
A) growth
B) stability
C) retrenchment
D) differentiation
Which of the following is a contractual entry mode?
A) wholly owned subsidies
B) turnkey projects
C) joint ventures
D) strategic alliances