Archives: Quiz

1) Explain how interaction differs between tacit collusion and explicit collusion. 2) Managerial human capital refers to some of the most valuable, rare, and hard-to-imitate skills and abilities acquired by top managers and directors. Answer: T 3) Explain the advantages […]

1) Identify and explain the dilemma behind transaction costs and international entrepreneurial opportunities. 2) Explain the benefits of gaining international business experience and working as an expat. Answer: Answers may vary. People skills and greater understanding of the complexity of […]

1) Making a rival aware of an attack makes it easier for the attacker to achieve its objective. 2) In the context of internal governance mechanisms, if accounting-based measures are adopted, stock prices obviously are subject to too many forces […]

1) Knowledge inflow faces the common problem of Not invented here syndrome. 2) Alliances permit firms to sequentially increase their investment should they decide to pursue acquisitions. Answer: T 3) MNEs that engage in a transnational strategy promote global learning. […]

1) In international marketing, the country-of-origin effect refers to the positive or negative perception of firms and products from a certain country. 2) In the context of achieving alignment, if a recognized leader in a supply chain exercises power, it […]

1) What is the stage model? Can SMEs internationalize faster than what is suggested by the stage model? 2) Family background and educational attainment correlate with entrepreneurship. Answer: T 3) The best way to reduce expatriate turnover is a career […]

1) The four Ps of marketing are: product, price, positioning, and place. 2) Describe the different roles of expatriates. Answer: Expatriates play four important roles: strategist, daily manager, ambassador, and trainer. 1) Expatriates are strategists representing the interests of the […]

1) Most inpatriates are expected to eventually return to their home country to replace expatriates. 2) Discuss whether global and regional economic integration create more benefits or more challenges. Answer: In the absence of global economic integration, regional economic integration […]

1) In the United States, unionized employees earn less than non-unionized employees. 2) The International Trade Administration investigates antidumping cases in the United States. Answer: T 3) Ethnocentrism continues to characterize many MNEs: knowledge transfer is typically one wayfrom headquarters […]

1) Explain, with the help of examples, the three primary types of foreign exchange transactions. 2) Discuss the characteristics of the modern trade theories. Answer: The product life cycle theory accounts for changes in the patterns of trade over time […]

1) What are the potential issues that arise during repatriation? 2) A letter of credit increases transaction costs by increasing transaction risks. Answer: F 3) Identify the benefits and costs of FDI to host countries. Answer: The benefits of FDI […]

1) Compared to large firms, innovators at SMEs have limited ability to personally profit from their innovations because property rights usually belong to the corporation. 2) Discuss direct exporting, licensing, and franchising as strategies for entering a foreign market. Explain […]

1) Tunneling is a legal method of solving principal-principal conflicts. 2) From a resource-based view, explicit knowledge is strategically more important than tacit knowledge. Answer: F 3) A reactive strategy is indicated by relatively little or no support by top […]

1) In MNEs adopting the home replication strategy, knowledge is developed at the center and transferred to subsidiaries. 2) Agility refers to the ability to change supply chain configurations in response to longer-term changes in the environment and technology. Answer: […]

1) LBO-based private equity transactions are associated with three major changes in corporate governance. List these changes. 2) Compare and contrast the two primary strategies companies use to cope with the currency risks. Answer: There are two primary strategies companies […]

1) Capital inflow can help improve a host countrys balance of payments. 2) The Andean Communitys largest trading partner is the United States. Answer: T 3) Confucianism has been a leading philosophy in East Asian business ethics. Answer: T 4) […]

1) According to the institution-based view, informal institutions must be sought when formal institutions fail. 2) Informal institutions are closely related to ethnocentrism. Answer: T 3) According to the VRIO framework, imitable but well organized resources and capabilities will provide […]

1) An acquisition is an example of a wholly owned subsidiary. 2) The infant industry argument demands lesser government intervention in international trade. Answer: F 3) A firms financial resources and capabilities are an example of its intangible assets. Answer: […]

1) Original design manufacturers are firms that both design and manufacture products. 2) Licensing and franchising are examples of equity modes of entry. Answer: F 3) Original equipment manufacturers are firms that design, manufacture, and market branded products. Answer: F […]

1) According to Max Weber, Protestant work ethics led to the rise of capitalism in Europe. 2) On the global economic pyramid, the Triad refers to developed economies consisting of North America, Western Europe, and Japan. Answer: T 3) Proponents […]

1) A firm’s resources and capabilities are the tangible and intangible assets used to choose and implement its strategies. 2) Trademarks are legal rights awarded by government authorities to inventors of new products or processes. Answer: F 3) A firm […]

1) Social structure is the outcome of a societys formal and informal rules of the game. 2) Every time a WTO country lowers a trade barrier, it has to do the same for all other member countries. Answer: T 3) […]

1) Patents are exclusive rights of firms to use specific names and brands. 2) Strategic trade theory advocates mercantilist policy for all industries. Answer: F 3) According to the pendulum view of globalization, globalization is a relatively new phenomenon triggered […]

1) The refusal of Japan, the EU, and the US to reduce farm subsidies was one of the reasons for the collapse of the Doha Round. 2) According to the VRIO framework, valuable, rare, and hard-to-imitate resources and capabilities will […]

1) Domestic transaction costs tend to be higher than international transaction costs. 2) Classical theories assume no foreign exchange complications. Answer: T 3) In the context of NTBs, VERs are government payments to domestic firms. Answer: F 4) A copyright […]

1) The primary participants of the foreign exchange market are IMF and World Bank. 2) ACFTA is currently the largest Free Trade Area in terms of population. Answer: T 3) Collectivists are more collaborative when dealing with in-group members. Answer: […]

1) A firm manufacturing clocks in its home country and through FDI is an example of downstream vertical FDI. 2) Right-wing totalitarianism refers to the monopolization of power in the hands of a communist party. Answer: F 3) The cultural […]

1) The product life cycle theory is popularly known as the diamond theory. 2) Strategic hedging focuses on using forward contracts and swaps to contain currency risks. Answer: F 3) Forward transactions allow participants to buy and sell currencies now […]

1) Regional integration deals in Africa show the least amount of protectionism in international trade. 2) The theory of purchasing power parity suggests that in the absence of trade barriers, the price for identical products sold in different countries will […]

1) The resource-based view is developed on the insight that competitors do not share certain resources and capabilities specific to one’s firm. 2) Late movers face greater technological and market uncertainties. Answer: F 3) One of the late-mover disadvantages is […]

1) One of the advantages of being a first-mover is the opportunity to free ride on late-mover investments. 2) The VRIO framework differs from SWOT analysis in that the VRIO framework promotes nonoffshoring. Answer: F 3) Proposition 1 of the […]

1) In a pure market economy, the government only performs functions that the private sector cannot do. 2) Economic systems are examples of formal institutions. Answer: T 3) The combination of resources and assets that enable a firm to gain […]

1) An original brand manufacturer includes research and development in its value chain activities. 2) By trying to be self-sufficient and producing a wide range of goods, mercantilist policies help sustain the wealth of a nation in the long run. […]

1) The basic concept of protectionism and mercantilism is the same. 2) Internalization can help reduce opportunistic behavior in international trade. Answer: T 3) Tangible resources differ from intangible resources in that tangible resources are easier to imitate. Answer: T […]

1) Horizontal FDI refers to the amount of FDI moving out of a country in a year. 2) Antidumping duties are a type of tariff barrier. Answer: F 3) GATT 1994 refers to the agreement governing the international trade of […]

1) A country highly productive in manufacturing typically generates a merchandise trade deficit. 2) Subsidies are nontariff barriers. Answer: T 3) A competitive advantage that is sustained implies that it is permanent. Answer: F 4) Liability of foreignness is the […]

1) Members of short-term orientation societies emphasize perseverance and savings for future betterment. 2) In terms of international trade competitiveness, a strong dollar makes it easier for US firms to export and to compete on price when combating imports. Answer: […]

1) On January 1, 2014, Emont Enterprises purchased 35 percent of the outstanding shares of stock of Leshner Corp.for $175,000 cash. The investment will be accounted for by the equity method. On that date, Leshner’s net assets (book and fair […]

1) Aronson, Inc. began business on January 1, 2014, and at December 31, 2014, Aronson had the following investment portfolios of equity securities: None of the declines is judged to be other than temporary. Unrealized losses at December 31, 2014, […]

1) The issuance price of a bond does not depend on the a. face value of the bond b. riskiness of the bond c. method used to amortize the bond discount or premium d. effective interest rate 2) Underwood Company […]

1) For companies with a complex capital structure, a convertible security is potentially dilutive if its incremental EPS is a. greater than basic EPS after considering any stock options, rights, and warrants b. less than basic EPS after considering any […]

1) During 2014, Robby, Inc. incurred the following costs: In its income statement for the year ended December 31, 2014, Robby should report research and development expense of a. $462,500 b. $312,500 c. $150,000 d. $125,000 2) Hosgood Distributing Inc. […]

1) Jacquin Corporation reports its income from investments under the equity method and recognized income of $15,000 from its investment in Trapper Company during the current year. Trapper declared no dividends during the current year. On Jacquins statement of cash […]

1) The following information relates to the Tykex Company for 2014: What is diluted earnings per share? a. $1.00 b. $0.89 c. $0.81 d. $0.76 2) A company made the following cash expenditures on a self-constructed building begun January 1 […]

1) If the cash balance shown in a company’s accounting records is less than the correct cash balance, and neither the company nor the bank has made any errors, there must be a. outstanding checks b. deposits in transit c. […]

1) Which of the following statements regarding assets is NOT true? a. An asset represents a probable future economic benefit b. Assets are obtained or controlled as a result of past or probable future transactions or events c. Assets reported […]

1) Which of the following would be subtracted from net income when using the indirect method to derive net cash flows from operating activities? a. Decrease in net accounts receivable b. Loss on sale of investments c. Decrease in salaries […]

1) The following information appears in Molsone Company’s records for the year ended December 31: On December 31, a physical inventory revealed that the ending inventory was only $210,000. Molsones gross profit on net sales has remained constant at 30 […]

1) When a contractor determines that a contract will result in an overall loss, when should that loss be recognized within the completed-contract and percentage-of-completion methods? Completed-Contract Percentage-of-Completion a. Immediately Over the remainder of the contract b. At the completion […]

1) The calculation of a reportable segments operating income or loss excludes which of the following? a. Corporate costs allocated to the segment on a reasonable basis b. Segment sales c. Segment wage expense d. Segment income tax expense 2) […]