Archives: Quiz

1) Callable bonds may be retired by the issuer before their specified due date. 2) If a company prepares a statement of stockholders’ equity, net income is added to retained earnings on this statement. Answer: TRUE 3) When reconciling a […]

1) Because the cash received from the sale of long-term assets is reported in the investing activities section of the statement of cash flows, any gain or loss is ignored when reporting the cash flow from operating activities under the […]

1) The Financial Accounting Standards Board (FASB) has expressed a strong preference for the indirect method, but allows companies to use the direct method in calculating the cash flow from operating activities. 2) The three forms or states in the […]

1) Every adjustment involves at least one income statement and one balance sheet account. 2) The purpose of financial reporting is to provide economic information to external decision makers only. Answer: FALSE 3) U.S. standards do not require a classified […]

1) Liability of foreignness is the inherent disadvantage experienced by foreign firms in host counties because of their non-native status. 2) Even though a country may have a high currency risk, the country might still be worthy of investment. Answer: […]

1) Engaging in thorough due diligence concerning both strategic and organizational fit is a wise strategy during the post-acquisition phase. 2) The resource-based view focuses on the value, return on investment, imitability, and operations. Answer: F 3) If firms from […]

1) Why is “organization” considered the complementary asset to a firm gaining profitability from following CSR? 2) The going rate approach is the most widely used method in expatriate compensation. Answer: F 3) How does the resource-based view answer the […]

1) Define the two core propositions of the institution-based view. 2) NAFTA is an example of a common market. Answer: F 3) Iran and Saudi Arabia are common law countries. Answer: F 4) The multilateral trading system resolves disputes between […]

1) Discuss the national competitive advantage of industries. 2) Repatriation, if not managed well, can be traumatic for expatriates and their families, but not for the firm. Answer: F 3) According to the resource-based view, managers need to understand the […]

1) Because of globalization, it is always better for a firm to quickly internationalize and take advantage of foreign opportunities than to focus on domestic issues first and ease into foreign markets. 2) The insight that competitors do not share […]

1) If an Azerbaijani importer does not pay an American exporter on time, it is safe to assume it is being opportunistic because all international transactions must follow the same guidelines. 2) The main decision made during the first stage […]

1) Common law is “the oldest, the most influential and the most widely distributed around the world.” 2) The gold standard propelled the US dollar to commanding heights in the global economy. Answer: F 3) A key insight of the […]

1) The rise of a country’s productivity is usually accompanied by increased demand for its home currency. 2) What is legal is always ethical. Answer: F 3) Most top managers of large firms lack significant global competence. Answer: F 4) […]

1) Brazil, China, Hungary, India, Ireland, and Russia have adopted more FDI-friendly policies. 2) A firm’s resources and capabilities are tangible assets a firm uses to choose and implement its strategies. Answer: F 3) Why is it difficult for companies […]

1) Intellectual property rights (IPRs) include rights associated with patents, trademarks, and copyrights. 2) What are the problems associated with inpatriation? Answer: Some inpatriates are paid according to the going rate in their home (typically developing) countries, which usually is […]

1) CSR is becoming something that many firms are integrating into the core of their operations and mindset. 2) Implicit knowledge can be written down and transferred without losing much of its richness. Answer: F 3) One of the benefits […]

1) FDI stock refers to accumulation of inbound FDI in a country or outbound FDI from a country. 2) Onshoring is the opposite to offshoring, meaning outsourcing to a domestic company. Answer: T 3) Describe the differences among the three […]

1) Explain how a countrys gross domestic product (GDP) is changed after adjusting for purchasing power parity (PPP). 2) Identify the basic characteristics of formal and informal institutions. Answer: An institutional framework is made up of formal and informal institutions […]

1) Limitability between alliance partners has much more to do with integration, and limitability between acquisition members has to do with trust. 2) Desirable expatriate attributes include a positive attitude, emotional stability, and previous international experience. Answer: T 3) The […]

1) Bureaucratic rules that make it harder to import foreign goods are defined as administrative policies. 2) It is only crucial that managers pay attention to long-run movements informed by PPP, productivity changes, and balance of payments because short-run fluctuations […]

1) Only smaller, younger firms are considered entrepreneurial. 2) Global business includes both international (cross-border) activities as well as domestic business activities. Answer: T 3) Compare and contrast absolute advantage and comparative advantage trade theories. Answer: The economic advantage one […]

1) The more tacit and hard to describe a firms capabilities, the greater the preference for equity involvement. 2) MNEs intend to eventually replace even top-level expatriates with HCNs, in part to save cost. Answer: T 3) The distinction between […]

1) The Bretton Woods system was formed at a conference in England. 2) The global standardization strategy, despite its complexity, is still the best option at being cost effective and locally responsive. Answer: F 3) Democracy was pioneered by the […]

1) Describe how Hofstede’s power distance and uncertainty avoidance dimensions influence decision-making styles. 2) Approximately 80 million people worldwide are employed by foreign-owned firms. Answer: T 3) The global product division structure seeks to balance local responsiveness with efficiency while […]

1) Financial, physical, and technological resources and capabilities are all tangible assets. 2) The best way to reduce expatriate turnover is a career development plan. Answer: T 3) Overall there are three core perspectives that shed light on a firm’s […]

1) NAFTA, a free trade agreement between Canada, Mexico, and the United States, secured Mexico a preferential treatment for 80% of its exports. 2) National competitive advantage of industries is the most recent, most complex, and most realistic among various […]

1) What is the definition of outsourcing? Provide an example. 2) There are numerous differences in formal and informal institutions governing the rules of the game in different countries. Answer: T 3) Managers considering working abroad should have a thorough […]

1) Institutional transactions in countries such as China, Poland, Russia, Brazil, India and South Africa create both huge challenges and tremendous opportunities for domestic and international firms. 2) How do institutions and resources affect human resource management? Answer: HRM is […]

1) Although founded in 1967, the Association of Southeast Asian Nations (ASEAN) had not been economically active until 1996. 2) Managers should continue to keep CSR on the backburner until regulations and social issues in developing countries rise. Answer: F […]

1) Define informal institutions and explain how ethnocentrism affects cultural intelligence. 2) Entrepreneurship flourishes more in environments with more formal institutional procedures. Answer: F 3) Setting up subsidiaries abroad so the work can be performed in-house but in the foreign […]

1) Indirect export is a strategy of exporting through domestically based export intermediaries. 2) Explain the importance of organization in an acquisition. Answer: Organization is the web that ties value, rarity, and limitability together into a profit-creating being. How the […]

1) Turning over an organizational activity to an international firm is also called: a. Captive sourcing c. Offshoring b. Inshoring d. Outsourcing 2) When an expat employee returns to her or his current employer but the employer does not provide […]

1) Non-MNE firms can also do business abroad by: a. Licensing and franchising b. Outsourcing and engaging in FDI c. Exporting and importing d. All of these answers 2) Foreign market entry is a(n) ____ overseas actions. a. Obstacle to […]

1) Knowledge that can be written down and transferred without losing much of its richness is known as: a. Explicit c. Valid b. Implicit d. Legible 2) ____ are defined as “fundamental and comprehensive changes introduced to the formal and […]

1) Jewish and Islamic law are examples of: a. Common law c. Civil law b. Theocratic law d. Quasi-democracy 2) Which is NOT one of the primary types of foreign exchange transactions? a. Swaps c. Spot transactions b. Direct transactions […]

1) ____ are exclusive legal rights of firms to use specific names, brands, and designs to differentiate their products from others. a. Patents c. Copyrights b. Trademarks d. Intellectual property rights 2) Companies with efficiency-seeking strategic goals search for: a. […]

1) Out of the following, which one is an example of regional economic integration? a. European Union b. British Commonwealth c. AT&T and T-Mobile merger d. Coca-Cola international operations 2) Which of the following is a comparative advantage strength? a. […]

1) Which one of the following was agreed upon and launched at the end of the Uruguay Round trade talks? a. GATT c. The WTO b. The EU d. The Multifiber Arrangement 2) ____ is an individual’s ability to understand […]

1) Home Depot and Lowe’s both being able to monitor that their lumber suppliers in Latin America are only working out of renewable forests is an example of valuable capabilities but low ____. a. Rarity c. Organization b. Imitability d. […]

1) What determines the success or failure of businesses in foreign market entries? a. Overwhelming resources and capabilities to offset the liability of foreignness b. Understanding the rules of the game governing competition in foreign countries c. Matching efforts in […]

1) An economic theory that accounts for changes in the patterns of trade over time is known as: a. Strategic trade theory b. First-mover advantage theory c. Product life cycle theory d. Strategic trade policy 2) ____ is the structures, […]

1) The firm that engages in foreign direct investment is a: a. Global firm b. Multinational enterprise c. International enterprise d. Foreign direct investor 2) The share of FDI-based value added of foreign affiliates of MNEs in world GDP: a. […]

1) The EU became an economic union when the ____ went into affect in 1993. a. Treaty of Rome c. Treaty of Bristles b. Maastricht Treaty d. Madrid Treaty 2) Which of the following is NOT a reason why global […]

1) Which best describes the tension between central control and subsidiary initiative in a large firm? a. The central management must realize social capital in order to take advantages of the complex subsidiary relationships b. The central management’s main motivation […]

1) Between the 1950s and the early 1980s, the radical view was influential throughout Africa, Asia, Eastern Europe, and Latin America. 2) When US firms offshore to India, how much do they save on each dollar invested? a. 58% c. […]

1) The “division of labor” thesis was first advanced by: a. Adam Smith c. Max Weber b. Douglass North d. Francis Fukuyama 2) Which of the following is not one of the five dimensions outlined in the Dimensions Approach? a. […]

1) Which one of the following is NOT a function of WTO? a. Regulation of subsidies on agricultural products b. Dispute settlement c. Trade policy reviews d. Regulation of trade of goods, services, and intellectual property 2) What is the […]

1) One advantage of wholly owned subsidiaries is: a. Protection of know-how b. Complete equity and operation control c. Fast entry speed d. All of these answers 2) Which best describes the weakness behind enterprise resource planning (ERP) packages and […]

1) The point at which an industry-specific activity becomes common across industries and the need to keep it proprietary no longer exists is also called: a. Commoditization c. Break even point b. Specification d. Pinnacle 2) Which does ASEAN stand […]

1) What was one of the major reasons the gold standard fell apart? a. Countries fighting in World War I printed excessive amounts of money to finance their war efforts b. Military campaigns during World War I stole much of […]