________ are usually located on small island nations or territories with favorable tax
and/or secrecy laws.
A) Cybermarkets
B) Over-the-counter markets
C) Booking centers
D) Operational centers
Which of the following financing methods entails the greatest risk for importers?
A) documentary collection
B) advance payment
C) letter of credit
D) open account
The Court of Justice is the ________ of the European Union.
A) court of honor
B) court of appeals
C) small-claims court
D) arbitral tribunal
Scenario: ABC Software
ABC Software is a producer of educational software for children below the age of
twelve. The company has operations in Switzerland and would like to expand its
foreign operations with a new facility in China.
The London Interbank Bid Rate (LIBID) is the interest rate that London banks charge
other large banks for borrowing Eurocurrency.
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. Blickinstock has identified a
company that it can acquire or merge with. Which of the following statements would
represent the least likely reason for Blickinstock to go ahead with the merger?
A) The merger would help increase Blickinstock’s global competitiveness.
B) The merger would allow the company to get a foothold in the nascent Latin
American market.
C) The merger would help to fill the gaps in Blickinstock’s product line.
D) The merger would bring in increased cash-flows that Blickinstock can use to acquire
other firms.
Which of the following is true of American Depository Receipts (ADRs)?
A) Investors who buy ADRs have to pay a currency-conversion fee.
B) There is a minimum purchase requirement for ADRs.
C) Companies offer ADRs in the U.S. to appeal to mutual funds.
D) ADRs are listed and traded in London and Luxembourg.
Scenario: Konesia Joins the World
Konesia, a former totalitarian economy and pariah state, is taking steps toward a free
market economy. The government wants to encourage trade but also wants to find a
balance so that local businesses and industries are not harmed. Which of the following
is the most likely reason for Konesia’s government to impose an import quota?
A) to maintain adequate supplies of a product in the home market
B) to maintain market shares and prices of domestic producers
C) to restrict the supply of a product to world markets
D) to maintain the exports of a product at target levels
The ________ theory states that when an aspect of the market makes a transaction less
efficient than it could be, a company will undertake foreign direct investment to
internalize the transaction and thereby remove the efficiency-reducing aspect.
A) market power
B) eclectic
C) international product life cycle
D) market imperfections
Which of the following reasons encourages companies to make a product rather than
buy it?
A) Making a product gives managers greater control over the production process.
B) Making a product lowers the risk associated with the production process.
C) Making a product increases the company’s flexibility to respond to market
conditions.
D) Making a product gives companies a great deal of power in their relationships with
suppliers.
Scenario: The French Government
The French Government has placed many restrictions upon the use of the English
language within their borders. They argue that the inflow of English movies, music, and
literature is responsible for the dilution of their rich culture.
Which of the following statements, if true, weakens their argument?
A) Hollywood movies star French actors very often.
B) English novels are more expensive than French novels.
C) Contemporary French artists have failed to come up with original songs.
D) A larger number of children are being given English names than traditional French
names.
Which of the following statements is true of the strategic factors that influence a
company’s international entry mode selection?
A) Low tariffs and high quota limits encourage market entry by means of investment.
B) Companies that produce goods with high shipping costs prefer exporting.
C) Companies set up production units in a host market if the total cost of production is
lower in the home market.
D) Markets that are likely to remain relatively small consider exporting as a viable
option.
In which of the following ways did the Uruguay Round of Negotiations modify the
original General Agreement on Tariffs and Trade (GATT) treaty?
A) It helped standardize intellectual property rules around the world.
B) It called on developing and least-developed economies to cut agricultural tariffs
significantly.
C) It relaxed the additional tariffs imposed on companies charged with dumping.
D) It increased barriers to trade in all developed, developing and least-developed
nations.
Any commercial transaction that crosses the borders of two or more nations is known as
________.
A) domestic marketing
B) market segmentation
C) international business
D) global manufacturing