China Innovation Inc. is a devout follower of Confucian ethics. Hence, it hires people
who live by similar principles. Which of the following is most likely to be a
characteristic of this company?
A.The conflict between management and labor will be high.
B.The company’s management will expect blind loyalty from the workers.
C.It will often indulge in violations of business agreements.
D.The cost of doing business will be low for those companies that enter into a business
with it.
E.It will not have any relationship networks that are supported by reciprocal
obligations.
Answer:
Which of the following straw men approaches to business ethics is best summarized by
the maxim “When in Rome, do as the Romans”?
A.Cultural relativism
B.Just distribution
C.Kantian ethics
D.Righteous moralist
E.Sullivan principles
Answer:
According to the radical view of FDI, multinational enterprises (MNEs) that already
exist in a country should be:
A.immediately nationalized.
B.made to pay higher taxes.
C.converted into publicly traded companies.
D.banned from obtaining finance from the financial institutions in the host country.
E.immediately privatized.
Answer:
Jade, a working professional, began driving rashly ever since she got her car insured
against damage. She believed that the insurance claim would cover her in case of any
accidents. What does Jade’s behavior display?
A.Cognitive dissonance
B.Conflict of interest
C.Systemic risk
D.Moral hazard
E.Tragedy of the commons
Answer:
Which of the following statements is true about the global changes in political and
economic systems?
A.The West lost the Cold War, and East European communist ideology is now
widespread.
B.A lack of deregulation has been the cause for the global financial crisis of 2008-2009,
and the recession that followed.
C.It is guaranteed that democracy will thrive in most of the world’s newer democratic
states.
D.The multipolar world dominated by a number of civilizations of the Cold War era has
vanished, and is now being replaced by a bipolar world.
E.Many of the undeveloped and impoverished national markets of eastern Europe, Latin
America, Africa, and Asia are potentially enormous for international business.
Answer:
The distinctive culture of Wengiston has been losing its predominance among the
citizens of the country. This is due to the fact that the people of Wengiston are
extensively adopting certain universally accepted values and norms. This behavior of
the people in Wengiston demonstrates:
A.ethnocentrism.
B.the convergence hypothesis.
C.egocentrism.
D.Confucian dynamism.
E.social mobility.
Answer:
A current account deficit is also known as a(n):
A.stock deficit.
B.inventory deficit.
C.external deficit.
D.tariff deficit.
E.trade deficit.
Answer:
Porter, in his diamond model, suggested that there is a strong association between
which of the following and the creation and persistence of competitive advantage in an
industry?
A.Trade barriers
B.Vigorous domestic rivalry
C.Purchasing power parity
D.The availability of a captive market
E.First-mover advantages
Answer:
According to Mendenhall and Oddou, which of the following provides an expatriate the
ability to understand why people of other countries behave the way they do?
A.Cultural toughness
B.Perceptual ability
C.Self-orientation
D.Others-orientation
E.Willingness to communicate
Answer:
Which of the following is true regarding the inflow of FDI?
A.Even though developing nations still account for the largest share of FDI inflows,
FDI into developed nations has increased markedly.
B.Africa has historically been the largest recipient of inward FDI.
C.The United Kingdom and France have historically been the smallest recipients of
inward FDI.
D.There has been an increase in the importance of China as a recipient of FDI.
E.Latin America is the least important region in the developing world for FDI inflows.
Answer:
The Republic of Marwa has decided to open its economy to globalization. Which of the
following will facilitate this decision of Marwa?
A.A strong commitment to communism
B.A strong presence of private action in the nation
C.Adopting the Contracts for the International Sale of Goods (CIGS)
D.Creating a national environment that promotes public action
E.Breaking the rule of law
Answer:
Which of the following support functions is most likely to involve dealing with the
organizational structure, control systems, and culture of the firm?
A.Human resources
B.Logistics
C.Information systems
D.Company infrastructure
E.Inventory management
Answer:
Which of the following is most likely to involve establishment of a new operation in a
foreign country?
A.Consolidation
B.Greenfield investment
C.Acquisition
D.Licensing agreement
E.Mass customization
Answer:
The yen/dollar exchange rate is 120 = $1 in London and 123 = $1 in New York at the
same time. What is the net profit if a dealer takes $1,000,000 to purchase 123,000,000
in New York and engages in arbitrage by selling it in London?
A.$34,000
B.$20,390
C.$25,000
D.$46,666
E.$39,454
Answer:
Two product features impact location decisions. Which of the two reduces the need for
local responsiveness?
A.The product’s ability to serve universal needs
B.The product’s life cycle
C.The product’s packaging
D.The product’s flexible manufacturing technology
E.The product’s value-to-weight ratio
Answer:
The level of output at which most plant-level scale economies are exhausted is known
as:
A.mass customization.
B.break-even point.
C.minimum efficient scale.
D.just-in-time.
E.lean production.
Answer:
The currency of the country of Venadia falls sharply in value against the currency of
Lutetia, a neighboring country. Which of the following is a consequence of this
exchange rate movement?
A.Lutetia’s products will achieve a competitive pricing in Venadia.
B.Venadia’s exports to Lutetia will increase, because Venadian goods will become
cheaper in Lutetia.
C.Venadia’s products will cost more in Lutetia.
D.There will be no difference in the volume or direction of trade.
E.Lutetia’s exports to Venadia will increase, because Lutetian goods will become
cheaper in Venadia.
Answer:
Jupiter Systems is a high-tech firm looking to set up operations in a foreign country.
The firm’s core competency is in technological know-how. Which of the following
modes of entry would be most favorable to the firm if it wants to keep a tight control
over its technology?
A.Wholly owned subsidiary
B.Joint venture
C.Franchising
D.Licensing
E.Turnkey project
Answer:
Mayer Life Systems, a manufacturer of surgical and medical appliances, invented and
patented a new dialysis machine that radically reduced maintenance and operational
issues. Responding to a global demand, it decided to sell the machines manufactured at
its plant in the United States to various markets across the globe. Since the product
features provided by Mayer were not provided by any other competitor, Mayer did not
feel any pressure for cost reductions. Which of the following strategies is most likely
being pursued by Mayer?
A.International
B.Localization
C.Global standardization
D.Transnational
E.Nationalization
Answer:
Which of the following is not concerned with the supernatural, has little to say about
the concept of a supreme being or an afterlife, and believes that loyalty to one’s
superiors is an absolute obligation?
A.Buddhism
B.Christianity
C.Hinduism
D.Confucianism
E.Islam
Answer:
Which of the following statements is true about ethical decision making?
A.In ethical decision making, managers need not consider the implications of a
proposed strategic decision on external stakeholders.
B.In ethical decision making, it is illegal to apply the moral principles articulated in any
company document other than the code of ethics.
C.Since maximizing long-run profitability is the decision rule that most businesses
stress, it should be applied irrespective of whether moral principles are being violated.
D.Companies should place their narrow economic interests before the interests of
stakeholders.
E.In ethical decision making, managers need to ensure that a proposed decision does
not violate the fundamental rights of any stakeholders.
Answer:
Three Torque Inc., a U.S.-based multinational company, allows its managers to make
facilitating payments in host countries to expedite government formalities. However, in
countries where such payments are considered as unethical, the company restricts its
managers from indulging in such activities. This behavior of the company illustrates the
straw man approach of:
A.the righteous moralist.
B.cultural relativism.
C.ethnocentrism.
D.just distribution.
E.cultural convergence.
Answer:
Which of the following is true about learning effects?
A.They tend to be more significant in nonrepetitive tasks.
B.They tend to be less significant when a task is technologically complex.
C.They typically last a lifetime.
D.They are important only during the start-up period of a new process.
E.They do not have any effect on the cost of production.
Answer:
In terms of licensing, which of the following is an intangible property?
A.Infrastructure
B.Machinery
C.Leased equipment
D.Advanced computing systems
E.Patent
Answer:
Which of the following is true with regard to a free trade area?
A.Factors of production are allowed to move freely between member nations.
B.Each member country is allowed to determine its own trade policies with regard to
nonmembers.
C.Member nations are required to have a common currency.
D.Member nations are required to have a common monetary and fiscal policy.
E.Member nations are required to have a central political apparatus that coordinates
economic, social, and foreign policy.
Answer:
Which of the following is a statistically based methodology for improving product
quality and a direct descendant of the total quality management philosophy, and is the
principal tool that most managers now use to increase the reliability of their product
offering?
A.Six Sigma
B.Lean manufacturing
C.Just-in-time inventory
D.ISO 9000
E.Mass customization
Answer:
The speculative element of the carry trade is that its success is based upon a belief that:
A.there will be no adverse movement in exchange rates or interest rates.
B.liquidity is the key factor in determining interest rates.
C.increasing money supply will not drive inflation.
D.spot exchange rates are more favorable than forward exchange rates.
E.hedging insures a company against foreign exchange risks.
Answer:
Supporters of globalization insist that dislocation in the form of lost jobs is a trade-off
that will ultimately lead to the economy being better off. Which of the following is
being justified in this case?
A.Protectionism and retaliatory trade policy
B.Free trade of goods and services
C.Rise of communism
D.High tariff on imports of manufactured goods
E.The need to be a self-contained nation
Answer:
Which of the following is most likely to be an objective of export tariffs?
A.Abiding by the rules enforced by the WTO
B.Curbing the competition offered by foreign firms to domestic firms
C.Reducing exports from a sector, often for political reasons
D.Maintaining a positive trade deficit
E.Increasing the flow of capital in the international market
Answer:
Which of the following is most likely to be the result of high degrees of class
consciousness in societies?
A.High levels of social mobility
B.Healthy relationship between management and labor classes
C.Low levels of industrial disruption
D.Increase in the costs of production
E.Greater opportunities for businesses to establish competitive advantage
Answer: