1) LIBOR is best defined as the ________.
A) interest rate of the National Bank of London
B) short-term interest rate for dollars held in the Eurodollar market
C) interest rate of the European Union
D) deposit rate that applies to commercial loans in the European Union
2) Chapman Enterprises is an MNE that markets a diverse portfolio of products
including jewelry, luggage, and furniture. Which structure would most likely be used by
Chapman?
A) international division
B) functional division
C) geographic division
D) product division
3) Which of the following is a true statement about China?
A) The Chinese government’s shift from communism to capitalism has led to an
increase in FDI
B) China attracts FDI because the government has eliminated elaborate bureaucracies
C) The Chinese government manipulates market activities for political purposes
D) China lacks an educated pool of employees due to slowly developing
industrialization
4) A major benefit of the international division structure is ________.
A) the elimination of conflicts of interest among domestic and foreign operations
B) the integration of domestic and foreign operations
C) de-emphasis of economies of scale
D) cost effectiveness
5) Which of the following countries has a collectivist orientation?
A) Canada
B) Australia
C) Japan
D) Netherlands
6) Gap analysis is ________.
A) a method for estimating a company’s potential sales by identifying segments it is not
serving adequately
B) an investment advisor’s report on the future of one of the leading clothing retailers
C) the leap-frogging of demand in many developing economies whereby consumers
skip certain generations of products, buying the latest model instead
D) an estimation of the disparity in incomes between the very rich and the very poor in
a given market
7) In international trade, what is a quota?
A) a guarantee by one country to buy some minimum amount from another
B) a quantitative limit on the amount of a product that can be imported or exported
C) a countertrade arrangement that establishes the value of imports and exports
D) a bilateral agreement calling for mutual access to markets
8) Protectionism will most likely affect which aspect of a company’s operations?
A) selecting employees
B) investing short-term capital
C) acquiring foreign supplies
D) relocating personnel overseas
9) Bantam Enterprises, a multi-national enterprise, makes significant efforts to avoid
being perceived as socially irresponsible. What is the most likely reason for this?
A) Social irresponsibility can lead to labor strikes by international unions
B) Socially irresponsible companies usually have fewer exports and more imports
C) Cultural barriers increase for companies that are socially irresponsible, which
hinders expansion into additional countries
D) Social irresponsibility can lead to negative publicity from nongovernmental
organizations, which could hurt a company’s reputation
10) The march toward greater political freedoms and more expansive civil liberties,
beginning in the 1970s, strongly fueled a sense of ________.
A) less predictable operating conditions for companies
B) the inevitability of democracy
C) different rules for domestic versus international competition
D) weaker property rights
11) Coca-Cola has subsidiaries all over the world. The process of combining the results
of its far-flung operations into one set of financial statements for investors is known as
________.
A) combination
B) translation
C) consolidation
D) unification of results
12) What is the most likely reason that a universal scheme for assessing the
performance and potential of a country’s economic environment does NOT exist?
A) difficulties of identifying a definitive set of predictive economic indicators
B) a lack of reliable economic data from most developed economies
C) the isolation of most markets from each other
D) static nature of the marketplace
13) In a(n) ________ culture, people tend to regard seemingly peripheral information as
pertinent to decision making and infer meanings from things that people say either
indirectly or casually.
A) pragmatic
B) idealistic
C) fatalistic
D) high-context
14) Which of the following is the LEAST likely reason that global firms are shifting
away from formal organizational structures?
A) advancements in communication systems
B) changes in managerial standards
C) opportunities in new markets
D) demands of stockholders
15) The International Fisher Effect ________.
A) links interest rates and inflation
B) implies that the currency of the country with the lower interest rate will weaken in
the future
C) implies that the country with the higher interest rate should have lower inflation
D) links interest rates and exchange rates
16) Which of the following would most likely trigger internal tensions as a firm’s
modes of foreign operations change?
A) losing or gaining responsibilities
B) reluctance to learn about a culture
C) traveling for business purposes
D) geographic diversity
17) The U.S. automobile industry has attempted to counter import competition in all the
following ways EXCEPT ________.
A) concentrating on market niches that initially had less import competition
B) lobbying for customs deposits so that importers’ costs would be raised
C) moving some production to lower-cost countries and exporting to the United States
D) effecting internal adjustments, such as cost efficiencies and improved quality
18) Which of the following statements referring to intellectual property rights and
violations is INCORRECT?
A) Richer countries claim looser regulation of intellectual property rights will hinder
innovation
B) Companies can register a global patent, trademark, or copyright through the World
Trade Organization (WTO)
C) The International Anti-Counterfeiting Coalition estimates international trade in
counterfeit products at $600 billion a year
D) Developing markets claim tougher regulation of IPRs will slow, if not halt, their
economic development
19) At Tyson Manufacturing, departments and units are organized around discrete
business activities, such as finance, production, marketing, and human resources. Tyson
most likely has a ________ structure.
A) network
B) matrix
C) functional
D) divisional