Firms vary their marketing mix from country to country depending on differences in
national culture.
Answer:
Plato did not equate collectivism with equality.
Answer:
When the foreign exchange market determines the relative value of a currency, we say
that the country is adhering to a pegged exchange rate regime.
Answer:
Markets can be segmented by geography, demography, sociocultural factors, and
psychological factors.
Answer:
Issued by a bank at the request of an importer, a bill of lading states that the bank will
pay a specified sum of money to a beneficiary, normally the exporter, on presentation of
particular, specified documents.
Answer:
According to the World Values Survey, as countries get richer, a shift occurs away from
“traditional values” linked to religion, family, and country, and toward ‘secular rational”
values.
Answer:
The term ethics refers to accepted principles of right or wrong that govern the conduct
of a person, the members of a profession, or the actions of an organization.
Answer:
Rituals and symbols are the most visible manifestations of a culture and constitute the
outward expression of deeper values.
Answer:
The major problem with the gold standard was that no multinational institution could
stop countries from engaging in competitive devaluations.
Answer:
In international commerce, a person or business initiating a draft is known as the drafter
and the party to whom the draft is presented is known as the draftee.
Answer:
The WTO embraces the promotion of international trade in services.
Answer:
International firms that have a broad geographic scope are the most likely to have a
geocentric mindset.
Answer:
The European Parliament, which meets in Strasbourg, France, is primarily a legislative
rather than consultative body.
Answer:
In international business, when consumer demand is prone to large and unpredictable
shifts, the firm that can adapt most quickly to these shifts will gain an advantage.
Answer:
The Heckscher-Ohlin theory is the best predictor of real-world international trade
patterns.
Answer:
Containerization has revolutionized the transportation business, significantly lowering
the costs of shipping goods over long distances.
Answer:
In international businesses, a disadvantage of an ethnocentric staffing policy is that it
produces resentment in host-country nationals.
Answer:
The murabaha contract is the most widely used among the world’s Islamic banks,
primarily because it is the easiest to implement.
Answer:
In his book The Wealth of Nations, Adam Smith supported the mercantilist assumption
that trade is a zero-sum game.
Answer:
When a firm allows another enterprise to produce its products under license, the
licensee bears the costs or risks.
Answer:
Paul Krugman argues that although strategic trade policy looks unappealing in theory,
in practice it is most likely to be workable.
Answer:
Societal business ethics are not divorced from personal ethics.
Answer:
According to Adam Smith, market mechanism, rather than government policy, should
determine a country’s imports and exports.
Answer:
In terms of minimum efficient scale of output, the “unit cost curve” rises with output
until a certain output level is reached, at which point further increases in output realize
little reduction in unit costs.
Answer:
A caste system is a closed system of stratification in which social position is determined
by the family into which a person is born.
Answer:
In terms of regional economic integration, linking neighboring economies and making
them increasingly dependent on each other create incentives for political cooperation
between the neighboring states.
Answer:
The gross national income (GNI) per capita comes much closer to Amartya Sen’s
conception of how development should be measured than narrow economic measures
such as Human Development Index (HDI).
Answer:
Which of the following is a form of totalitarianism which advocates that socialism can
be achieved only through a totalitarian dictatorship?
A.Tribal totalitarianism
B.Democratic totalitarianism
C.Communist totalitarianism
D.Theocratic totalitarianism
E.Right-wing totalitarianism
Answer:
Which of the following statements supports the claim that the gap between the rich and
poor nations of the world has gotten wider because of globalization?
A.There are many countries that suffer from totalitarian governments.
B.A quarter of the countries with a GDP per capita of less than $1,000 in 1960 had
growth rates of less than zero from 1960 to 1995.
C.There is a rapidly growing population in many developing nations.
D.Unelected bureaucrats limit a nation’s ability to control its own destiny.
E.Endemic corruption has long been a problem in the national governments of
developing nations.
Answer:
Diminishing returns to specialization occur when:
A.resources can move freely from the production of one good to another within a
country.
B.more units of resources are required to produce each additional unit.
C.the cost of producing goods reduces substantially with increase in number of goods
produced.
D.the quality of resources comes down as a result of producing more goods.
E.the quality of goods produced per unit of resource begins to improve.
Answer:
Companies can deal with the problem of nonconvertibility of currency by engaging in:
A.price discrimination.
B.countertrade.
C.arbitrage.
D.price skimming.
E.currency speculation.
Answer:
For foreign direct investment (FDI) to occur, a firm should primarily:
A.conduct cross-border bartering with neighboring countries.
B.invest resources in business activities outside its home country.
C.export goods or services to consumers in another country.
D.import goods or services from producers in another country.
E.erect formidable barriers to international trade.
Answer:
Which of the following is true of a letter of credit in international trade?
A.No cash deposit or collateral is required from the importer.
B.The exporter pays the trusted third party (usually a bank) a fee for the service.
C.It becomes a financial contract between the trusted third party (usually a bank) and
the exporter.
D.It is issued by the exporter at the request of the importer.
E.The creditworthiness of the importer is irrelevant when issuing a letter of credit.
Answer:
In the modern era, countertrade arose in the 1960s as a way to purchase imports for:
A.the United States.
B.the Soviet Union.
C.Germany.
D.Japan.
E.Africa.
Answer:
Which of the following is a disadvantage of large-scale entry into a foreign market?
A.Decrease in a firm’s exposure to the foreign market
B.Difficulty attracting customers and distributors for the product
C.Inability to build rapid market-share irrespective of the scale of entry
D.Limited product acceptance due to the avoidance of potential losses
E.Availability of fewer resources to support expansion in other desirable markets
Answer:
When should a firm configure its value chain to maximize value at each stage?
A.When government regulations relax
B.When cost pressures are intense
C.When rapid imitation is expected
D.When the number of consumers increases
E.When incumbent competitors exist
Answer:
Which of the following is a strategic step taken to increase a firm’s probability of
exporting successfully?
A.Avoiding the use of export management companies to contain costs
B.Entering several markets simultaneously to hedge risk
C.Entering a foreign market on a small scale
D.Waiting for export opportunities
E.Avoiding recruitment of local personnel
Answer:
Managing an alliance successfully requires building interpersonal relationships between
the firms’ managers, or what is sometimes referred to as:
A.relational capital.
B.interorganizational synergy.
C.power equilibrium.
D.symbiotics.
E.intraorganizational coordination.
Answer:
The strategic behavior theory:
A.explains the constraints of exporting and licensing.
B.seeks to explain the challenges faced by a firm during the establishment of a new
operation in a foreign country.
C.seeks to explain the patterns of FDI flows based on the idea that FDI flows are a
reflection of strategic rivalry between firms in the global marketplace.
D.reviews the theories that have been used to explain foreign direct investment.
E.explains how greenfield investments are better than FDI.
Answer:
Which of the following is most likely to be observed in today’s global economy?
A.Increasing U.S. share of world output
B.Large U.S. entrepreneurial firms dominating the international business scene
C.Increasing U.S. dominance in the world economy and world trade picture
D.Most of the nations being governed by centrally planned economies of the
communist world
E.Rapid rise in the share of world output accounted for by developing nations such as
China and India
Answer:
Flexible manufacturing technologies are specially targeted at enabling companies to:
A.establish multiple manufacturing facilities in each major national market.
B.build large inventories.
C.achieve product standardization across markets.
D.increase their work in progress.
E.produce customized products without a significant cost penalty.
Answer:
A multinational corporation that adopts the naive immoralist approach to ethics will
most likely:
A.lack cultural sensitivity.
B.demonstrate moral imperialism.
C.be highly ethical in its business in a host nation irrespective of the ethical standards
followed by other corporations in that host nation.
D.believe that, in a host country, any action is ethically justified if everyone is doing it.
E.demonstrate a high degree of ethnocentrism.
Answer:
Which of the following was founded in India in the sixth century B.C. by Siddhartha
Gautama, an Indian prince who renounced his wealth to pursue an ascetic lifestyle and
spiritual perfection?
A.Hinduism
B.Buddhism
C.Confucianism
D.Islam
E.Judaism
Answer:
Which of the following is the function of a value chain that controls the transmission of
physical materials through the value chain, from procurement through production and
into distribution?
A.Human resource
B.Finance
C.Marketing
D.Logistics
E.Research and development
Answer:
The euro/dollar exchange rate is €1 = $1.20. According to the law of one price, how
much would a camera that retails for $300 in New York sell for in Germany?
A.€320
B.€300
C.€250
D.€360
E.€150
Answer:
When schools emphasize respect for others, obedience to authority, honesty, neatness,
being on time, and use a grading system, they are:
A.teaching children to be noncompetitive.
B.impinging on fundamental freedoms and values.
C.indirectly teaching cultural values and norms.
D.indirectly creating a rigid caste system.
E.unnecessarily deviating from formal education.
Answer:
Under a fixed exchange rate regime, what would be the result if a country rapidly
increased its money supply by printing currency?
A.It would lead to an increase in the worth of the currency.
B.The prices of imports would become more attractive in the country.
C.The country’s goods would be highly competitive in world markets.
D.Trade surplus in the country would increase.
E.It would lead to price deflation in the country.
Answer:
Which of the following is considered to be the ultimate objective of antidumping
policies?
A.Protecting consumers from high prices
B.Preventing domestic firms from unloading their excess production in domestic
markets
C.Protecting domestic producers from unfair foreign competition
D.Protecting consumers from substandard and hazardous products
E.Preventing foreign products from entering domestic market
Answer:
International trade secretariats have been minimally successful because of the:
A.similarity in the structure of unions on a global level.
B.common perception unions have about multinational companies.
C.reciprocal tax treaty.
D.competition between national unions to attract investment from international
businesses.
E.retention of highly skilled tasks in the host country.
Answer:
Many of which of the following believe that the way to achieve nirvanaa state of
complete spiritual perfectionis to lead a severe ascetic lifestyle of material and physical
self-denial, devoting life to a spiritual rather than material quest?
A.Christians
B.Hindus
C.Muslims
D.Protestants
E.Confucians
Answer:
Which of the following refers to a cooperative agreement between potential or actual
competitors?
A.Tactical union
B.Strategic alliance
C.Political affiliation
D.Economic association
E.Nationalization
Answer:
When firms do not wish to accept the rules of the CIGS, what do they often opt for to
settle contract disputes?
A.UN involvement
B.Arbitration
C.Collective bargaining
D.The common law system of the United States
E.Islamic law
Answer:
Which of the following is a characteristic of a time draft?
A.It has no value given the deferred nature of the document.
B.It is generally not preferred in international transactions.
C.It is a negotiable instrument.
D.It is also known as a bill of lading.
E.It cannot be sold by an exporter.
Answer:
Which of the following is a threat facing the emergence of single markets?
A.Getting engulfed in a trade war
B.Increased price competition throughout the European Union
C.Increase in price differentials across nations
D.Reduced environmental standards in order to lure investments
E.Overabundance of greenfield investments
Answer:
Which of the following is true of monetary contraction in a fixed exchange rate system?
A.It requires low interest rates.
B.It increases the demand for money.
C.It puts downward pressure on a fixed exchange rate.
D.It leads to an inflow of money from abroad.
E.It can lead to high price inflation.
Answer:
In the context of expatriate compensation, what is the role of a balance sheet approach?
A.It equalizes purchasing power across countries so employees can enjoy the same
living standard in their foreign posting that they enjoyed at home.
B.It helps expatriate managers and their families to adjust to the day-to-day life of the
host country.
C.It rewards expatriates on the basis of merit and performance.
D.It helps expatriates to come to terms with the standard of living of the host country.
E.It is offered as an inducement to accept foreign postings and live away from family.
Answer:
Which of the following drafts is payable on presentation to the drawee?
A.Bill of lading
B.Sight draft
C.Letter of credit
D.Time draft
E.Offset
Answer:
In the context of barriers to international communication, which term refers to the
amount of other messages competing for a potential consumer’s attention?
A.Alternative signals
B.Source effects
C.Noise
D.Channel effects
E.Country of origin effects
Answer:
Which kind of distribution channel is difficult for outsiders to access?
A.Exclusive
B.Intensive
C.Selective
D.Concentrated
E.Fragmented
Answer: