Which of the following is an advantage of longer distribution channels?
A.Decreased profit margins
B.Lower markups
C.Lower product prices
D.Reduced selling costs in concentrated retail sectors
E.Greater market access
Answer:
Mountland Republic follows a system of social stratification that allows for flexibility
in terms of social mobility. In this system of open stratification the status of a person is
solely determined by his or her own socioeconomic achievements. Mountland Republic
is most likely to be following what type of system of social stratification?
A.Caste
B.Class
C.Religious
D.Grade
E.Bureaucratic
Answer:
Which of the following foreign exchange trading centers has the highest percentage of
activity?
A.Frankfurt
B.London
C.Paris
D.Hong Kong
E.Sydney
Answer:
Uniway Technologies Inc. has based its manufacturing units in the country of
Lanthania. The country’s stable economic and political environment has helped the firm
gain competitive advantage by lowering its production costs and improving product
quality. Other things being equal, the benefits realized from such a strategy can be
typically referred to as:
A.economies of scope.
B.location economies.
C.diseconomies of scale.
D.economies of power.
E.learning economies.
Answer:
All International Monetary Fund (IMF) loan packages come with conditions attached.
Which of the following is prevented due to these policies of the IMF?
A.Trade liberalization
B.Elimination of restrictive import licensing
C.Excessive government spending and debt
D.Privatization of state-owned assets
E.Deregulation of the economy to increase competition
Answer:
Establishment of which of the following would hold a coordinating bureaucracy
accountable to the citizens of member nations?
A.A political union
B.A customs union
C.An exclusive economic zone
D.A free trade agreement
E.A common market
Answer:
Generally, the costs and risks associated with doing business in a foreign country are
typically lower in:
A.less developed countries.
B.economically advanced countries.
C.totalitarian states.
D.countries with high inflation and falling living standards.
E.countries that lack intellectual property rights.
Answer:
Which of the following statements is most likely to be true about the economic
prospects of a country?
A.The economic system and property rights regime are reasonably good predictors of
economic prospects of a country.
B.Countries with command economies tend to achieve greater economic growth rates
than free market economies.
C.Countries which do not provide any protection for property rights tend to achieve
greater economic growth rates than the countries in which property rights are protected.
D.Countries where property rights are not well respected and where corruption is
rampant always have very low levels of economic growth.
E.The advantages of building brand loyalty and gaining experience in a country’s
business practices is greater for a last-mover than for a first-mover.
Answer:
Why is retaliation by government intervention a risky strategy?
A.It encourages dumping by foreign companies.
B.It could result in increased tariff barriers by the country that is being pressured.
C.It may expose certain industries that are important for national security to foreign
competition.
D.It allows firms to sell goods in the foreign market at below their fair market value.
E.It makes it difficult for domestic firms to make any investments by borrowing money
from the domestic capital market.
Answer:
Champion Works Inc. is an animation company, headquartered in the United States. The
CEO of the company has decided to outsource some of the production to companies in
developing countries, as the firm seems to be losing out on its competitive advantage.
This decision to shift functions or processes to less developed countries is most likely
due to their:
A.strong intellectual property rights laws.
B.lower labor costs.
C.accessibility to better technology.
D.sophisticated infrastructure.
E.currency appreciation.
Answer:
Which of the following supports the argument that customer demands for local
customization are on the decline worldwide?
A.Local and indigenous industries are increasingly filling up available demand.
B.High costs of local customization are deterring companies from doing so.
C.Governments across the world are standardizing their legal procedures.
D.Customer tastes have converged worldwide.
E.Managers worldwide ignore the differences in consumer tastes and preferences.
Answer:
Labor productivity increases over time as individuals understand the most efficient
ways to perform particular tasks. This is a result of:
A.diminishing returns.
B.location economies.
C.economies of time.
D.learning effects.
E.an efficiency frontier.
Answer:
If a company were to draw from the ideas proposed in the various theories of
international trade, from a profit perspective, how would it go about selecting locations
for its businesses?
A.It would concentrate its productive activities mostly in developing countries.
B.It would concentrate its productive activities in its home country.
C.It would disperse its productive activities to those countries where they can be
performed most efficiently.
D.It would disperse its productive activities across all countries that serve as its market.
E.It would concentrate its productive activities mostly in developed countries.
Answer:
The WTO was encouraged to extend its reach to encompass regulations governing
foreign direct investment, something the GATT had never done. Two of the first
industries targeted for this reform were:
A.global telecommunication and financial services industries.
B.scientific research and defense sector.
C.pharmaceuticals and heavy metal industry.
D.pharmaceuticals and biotechnology.
E.scientific research and global telecommunication.
Answer:
Which of the following is true of W. Edward Deming’s beliefs about the total quality
management philosophy?
A.Quality of supervision should be improved by allowing more time for supervisors to
work with employees.
B.Management should embrace the philosophy that mistakes are often acceptable.
C.Work standards should be defined only as numbers or quotas.
D.Achieving better quality requires commitment more at the top management than at
any other level.
E.Management should create an environment in which employees will follow
recommendations rather than recommend changes.
Answer:
The collapse of the fixed exchange rate system has been traced to the:
A.U.S. macroeconomic policy package of 1965-1968.
B.inflexibility of the fixed exchange rate system that led to high unemployment.
C.Marshall Plan, under which the United States lent money heavily to European
nations.
D.failure of the International Monetary Fund to impose monetary discipline.
E.increased taxes in the United States to finance its welfare programs.
Answer:
Which of the following refers to the total cumulative value of foreign investments?
A.Purchasing power parity
B.Multipoint pricing
C.Stock of foreign direct investment
D.Switch trading
E.Bill of lading
Answer:
According to Mendenhall and Oddou, perceptual ability refers to:
A.an expatriate’s willingness to use the host-country language.
B.an expatriate’s ability to strengthen his or her self-esteem.
C.an expatriate’s ability to empathize.
D.the relationship between the country of assignment and how well an expatriate
adjusts to a particular posting.
E.the ability to develop long-lasting friendships with host-country nationals.
Answer:
Which of the following statements is true of Geert Hofstede’s work on cultural
dimensions?
A.His power distance dimension looked at the relationship between gender and work
roles.
B.His work fails to consider that many countries have more than one culture.
C.According to him, high uncertainty avoidance cultures were less emotionally resistant
to change.
D.His findings are inconsistent with standard Western stereotypes about cultural
differences.
E.He and his associates argued that Confucianism is not good for economic growth.
Answer:
FDI is risky because of the problems associated with:
A.sharing a valuable technological know-how with a potential competitor.
B.an increase in transportation costs, especially for those products that have a low
value-to-weight ratio.
C.doing business in a different culture where the rules of the game may be very
different.
D.the possibility of an increase in trade barriers such as import tariffs or quotas.
E.increased production costs.
Answer:
Which of the following statements is true about the difference between contracts in
common law and civil law systems?
A.Contracts drafted under a common law system tend to be longer than those drafted
under a civil law system.
B.Contracts drafted under a civil law system tend to be more specific than those drafted
under a civil law system.
C.It is more expensive to draw up contracts in a civil law system than in a common law
system.
D.Resolving contract disputes tends to be less adversarial in common law systems than
in civil law systems.
E.Civil law systems have the advantage of greater flexibility and allow for judges to
interpret a contract dispute in light of the prevailing situation but this feature is absent
in common law systems.
Answer:
Which of the following is a characteristic feature of an ethnocentric staffing policy?
A.It requires host-country nationals to be recruited to manage subsidiaries.
B.It is used when a firm places a low value on its corporate culture.
C.It increases advancement opportunities for host-country nationals.
D.It seeks the best people for key jobs throughout the organization, regardless of
nationality.
E.It places parent-country nationals in key management positions.
Answer:
Which of the following is true of a firm that pursues a global standardization strategy?
A.It ensures that it pursues a high-cost strategy on a global scale.
B.It has its production, marketing, and R&D activities in only one optimum location.
C.It tries to customize its products to local conditions.
D.It has shorter production runs.
E.It reaps maximum benefits from economies of scale and learning effects.
Answer:
Which of the following refers to the gold standard?
A.Pegging currencies to gold and guaranteeing convertibility
B.Conducting international trade by physically exchanging gold
C.The most valuable currency in the world at any given point in time
D.The common global standard of gold quality to be maintained
E.The quality of merchandise to be maintained for it to be exportable
Answer:
Those who attempt to achieve the same ideologies as that of the communists without
violent revolution and totalitarian dictatorship are:
A.pure capitalists.
B.social democrats.
C.individualists.
D.anarchists.
E.aristocrats.
Answer:
Which of the following is a disadvantage of franchising?
A.The franchiser has to bear development costs and risks associated with foreign
expansion.
B.Franchising leads to undesirable results for service firms.
C.It is difficult to maintain quality control across foreign franchisees that are distant
from the franchiser.
D.The franchiser has no long-term interests in the foreign country.
E.It forces a franchiser to take out profits from one country to support competitive
attacks in another.
Answer:
Which of the following is an objective of lean production?
A.Reducing the quality of a product to keep unit costs low
B.Reducing setup times for complex equipment
C.Replacing product variety with standardized output
D.Decreasing utilization of individual machines through scheduling
E.Increasing the level of minimum efficient scale of output
Answer:
Which of the following is a statement made by Theodore Levitt about the globalization
of world markets?
A. Capitalism is the force that drives the world toward a converging commonality.
B. Global corporations consider the world to consist of distinct and unique entities.
C. Accustomed differences in national or regional preferences are becoming more
significant.
D. Multinational corporations are in danger of losing out to small businesses.
E. Global markets for standardized consumer products have emerged on a large scale of
magnitude.
Answer:
The direct exchange of goods and/or services between two parties without a cash
transaction is referred to as:
A.switch trading.
B.counterpurchase.
C.barter.
D.offset.
E.buyback.
Answer:
An international firm that adopts a polycentric staffing policy is more likely to suffer
from cultural myopia.
Answer:
Which of the following is most likely to be the advantage of locating a value creation
activity in the optimal location for that activity?
A.It increases the costs of value creation.
B.It decreases consumer surplus.
C.It helps the firm to achieve a high-cost position.
D.It nullifies all trade barriers.
E.It enables a firm to differentiate its product offering from those of competitors.
Answer:
New trade theory argues that, through its impact on economies of scale, trade can:
A.increase the average costs of goods.
B.enable the global market to support a wide range of enterprises.
C.negatively affect the first-mover advantage for all products.
D.increase the variety of goods available to consumers.
E.prevent diminishing of returns and promote constant returns to specialization.
Answer:
While seeking opportunities for profitable exporting, large firms generally tend to be:
A.passive.
B.risk averse.
C.wary.
D.proactive.
E.neutral.
Answer:
The European Community was established with the signing in 1957 of the Treaty of:
A.Paris.
B.Brussels.
C.Switzerland.
D.Rome.
E.Lisbon.
Answer:
When a bill of lading specifies that the carrier is obligated to provide a transportation
service in return for a certain charge, it serves as a:
A.contract.
B.receipt.
C.document of title.
D.letter of credit.
E.bill of exchange.
Answer: