1) None of the new members of the EU has yet been allowed to adopt the euro as its
currency.
2) Upon selection of an executive for an expatriate posting, the most common
predeparture training involves a range of instructive profiles of major aspects of the
host country.
3) Toyota has been successful in Europe by exporting cars to Europe as well as
designing and manufacturing cars in Europe for the European market.
4) ADRs cannot be exchanged for the underlying shares of the foreign stock, therefore,
arbitrage cannot keep the prices in line with the foreign price of the stock.
5) The purpose of “Made in” labels on imported products is to enable countries to keep
records of the origin of imports.
6) Import trade controls, but not export trade controls, can be used as a weapon of
foreign policy.
7) A global strategy drives performance by making standardized products that are
marketed with minimum adaptation to local conditions.
8) Fundamental forecasters assume that if current exchange rates reflect all facts in the
market, then under similar circumstances, future rates will follow the same patterns.
9) British MNEs are more likely to use the forecast exchange rate to set the budget.
10) Managers need to understand not only the laws of countries where they operate, but
also how those laws are enforced
11) Expatriate failure, broadly defined, indicates there is a breakdown in a company’s
selection policies to staff its foreign operations.
12) Managers who take an active approach to political risk management are likely to
rely on statistical modeling to quantify the precise degree of political risk.
13) The benefits of managerial visits to foreign subsidiaries can easily be replicated
with frequently submitted and reviewed operational reports and schedules.
14) The Human Development Index measures the average achievements in a country on
three basic dimensions of human development: mortality, knowledge, and standard of
living.
15) The common values shared by a company’s employees are known as its
organization culture.
16) Which of the following is the purpose of a company’s value proposition?
A) to exceed customers’ expectations
B) to force competitors into a price war
C) to identify consumers for whom the company creates products
D) to explain why a consumer should buy the company’s products
17) Generally, HRM is more difficult for international companies for all of the
following reasons EXCEPT which one?
A) Dual career and family obligations make it tough to convince executives to leave the
home office to join a foreign subsidiary
B) Leadership styles and management practices are so similar from country to country
that it is difficult to create a culture of innovation
C) Complications arise due to enduring political, cultural, legal, and economic
differences between countries
D) Labor markets are dramatically different in the mix of workers, costs, and
productivity
18) Which of the following is NOT a factor affecting the payment amount of
international licensing contracts?
A) geographic scope of the sales territory
B) tax treaties between the parties’ home countries
C) length of time the asset will have market value
D) market experience of using the asset elsewhere
19) Defense arguments are sometimes used to prevent exports to unfriendly countries.
This runs the risk of the targeted country ________.
A) becoming politically destabilized
B) removing import restrictions
C) finding alternative sources of supply
D) banding with other countries to form a cartel
20) A freight forwarder performs which of the following functions?
A) arranging the fastest and cheapest transportation of products to and from foreign
suppliers
B) taking title to the goods it exports and imports from country to country
C) acting as a sales representative in a foreign market
D) valuing products that qualify for favorable tariffs
21) Which of the following reasons most compels companies to make location
decisions on one international opportunity at a time rather than comparing among two
or more?
A) The lack of comparability in data among countries renders comparison unfeasible
B) The information on some countries is so unreliable that companies must deal with
these countries separately
C) Decisions are made by teams, and it is usually not feasible to give so many people
time away from their usual duties to examine multiple proposals
D) If an important customer develops opportunities in a foreign country, a company
may have little alternative except to follow that customer’s lead
22) Assume that company executives at the firm would like to increase sales by
expanding into an international market Which of the following factors, if true, best
supports a decision to expand sales globally?
A) It can offshore most of its production
B) It can obtain all of its resources for the same price overseas
C) Its costs of making additional sales would not increase disproportionately
D) The foreign market has higher real interest rates
23) Suzanne, an investor, tends to invest in corporations that are headquartered in
countries that value financial transparency. A firm based in which of the following
countries would most likely appeal to Suzanne?
A) Japan
B) Germany
C) Switzerland
D) United Kingdom
24) A distinct advantage of an international strategy is ________.
A) transferring core competencies to foreign markets
B) reaping benefits of global learning
C) customizing product offerings to local conditions
D) leveraging local managers’ knowledge of their markets
25) Ellen, a U.S. citizen, worked for a U.S. firm in Germany for four years and was
transferred back to the firm’s home office in Chicago two months ago. Ellen feels
significant dissatisfaction with her job and life in Chicago, which is most likely a result
of ________.
A) reverse culture shock
B) polycentrism
C) culture shock
D) ethnocentrism
26) The stock market is also known as the ________.
A) capital market
B) foreign-exchange market
C) bond market
D) equity-capital market
27) Which of the following types of political risks often is caused by ethnic conflict or
civil disorder and includes those random political developments that adversely affect
the operations of all companies in a country?
A) systemic political risk
B) procedural political risk
C) catastrophic political risk
D) distributive political risk
28) Organization ________ refers to the formal arrangement of roles, responsibilities,
and relationships within an organization.
A) structure
B) systems
C) culture
D) strategy
29) Tanya is a manager at a global firm that has operations located in Brazil, India, and
Japan. Tanya is in the process of making a fundamental analysis in order to forecast
exchange rates in each country. Which of the following is a confidence factor that
Tanya should consider in trying to predict exchange rate movements in each country?
A) What are the expectations of the market with respect to the political environment?
B) Have there been significant national events that have appeared in the news lately?
C) At what rates do there appear to be buy and sell orders?
D) What trends do the charts show?
30) What term refers to a currency on deposit outside its country of issue?
A) Eurocurrency
B) Eurodollar
C) Euroyen
D) Europound