Archives: Quiz

Chapter 14 The Organization of International Business True / False Questions 1. Organizational structure refers to the totality of a firm’s organization. FALSE Organizational architecture refers to the totality of a firm’s organization. Organizational structure refers to three things. First, […]

77. A firm that is pursuing a(n) _____ strategy is simultaneously trying to achieve low costs through location economies, economies of scale, and learning effects, and trying to differentiate its product offering across geographic markets. A. global customization B. international […]

57. When companies disperse different stages of the value chain to those locations around the world where perceived value is maximized or where the costs of value creation are minimized, companies create: A. a differentiated organization. B. a location economy […]

89. What is a core competence? Why is it essential to the success of the firm? The term core competence refers to skills within the firm that competitors cannot easily match or imitate. These skills may exist in any of […]

36. When a firm focuses on increasing profitability by customizing the product or service so that they provide a good match to tastes and preferences in different national markets, the firm is following a transnational strategy. FALSE A localization strategy […]

Chapter 13 The Strategy of International Business True / False Questions 1. A firm’s strategy can be defined as the actions that managers take to attain the goals of the firm. TRUE A firm’s strategy can be defined as the […]

81. What is a capital market? Define market makers. A capital market brings together those who want to invest money and those who want to borrow money. Those who want to invest money include corporations with surplus cash, individuals, and […]

61. A Eurocurrency is any currency _____. A. banked outside of its country of origin B. that is traded in European countries C. that originates in European countries D. used to buy gold and related commodities A Eurocurrency is any […]

Multiple Choice Questions 41. A _____ brings together those who want to invest money and those who want to borrow money. A. consumer market B. value chain C. supply chain D. capital market Capital markets bring together those who want […]

Chapter 12 The Global Capital Market True / False Questions 1. A capital market brings together those who want to invest money and those who want to borrow money. TRUE Capital markets bring together those who want to invest money […]

80. Increasingly the _____ has been acting as macroeconomic police of the world economy, insisting that countries seeking significant borrowings adopt certain macroeconomic policies. A. ECOSOC B. IMF C. UN D. World Bank Increasingly the IMF has been acting as […]

60. _____ exchange rates were declared as acceptable in the Jamaica agreement of IMF. A. Pegged B. Fixed C. Floating D. Gold standard Floating rates were declared acceptable in the Jamaica agreement. IMF members were also permitted to enter the […]

40. Firms should not utilize the forward exchange market when they are faced with uncertainty about the future value of currencies. FALSE Faced with uncertainty about the future value of currencies, firms can utilize the forward exchange market. AACSB: Analytic […]

Chapter 11 The International Monetary System True / False Questions 1. The international monetary system refers to the institutional arrangements that govern exchange rates. TRUE The international monetary system refers to the institutional arrangements that govern exchange rates. AACSB: Analytic […]

79. _____ is the impact of short-run currency exchange rates changes on the reported financial statements of a company. A. Economic exposure B. Financial exposure C. Translation exposure D. Transaction exposure Translation exposure is concerned with the present measurement of […]

61. According to the law of one price, if the exchange rate between the British pound and the dollar is £1 = $1.50, a shirt that retails for $120 in New York should sell for _____ in London. A. £180 […]

Blooms: Understand Difficulty: 2 Medium Learning Objective: 10-06 Compare and contrast the differences between translation; transaction; and economic exposure; and explain what managers can do to manage each type of exposure. Topic: Implications for Managers Multiple Choice Questions 41. Which […]

Chapter 10 The Foreign Exchange Market True / False Questions 1. The foreign exchange market is a market for converting the currency of one country into that of another country. TRUE The foreign exchange market is a market for converting […]

82. What are the five levels of economic integration? Briefly describe each form. There are five levels of economic integration. From least integrated to most integrated, they are a free trade area, a customs union, a common market, an economic […]

61. Which of the following was the outcome of the Treaty of Lisbon signed in 2007? A. It established the European Community. B. It resulted in the adoption of the Euro. C. It changed the name of the European Community […]

Learning Objective: 09-05 Understand the implications for business that are inherent in regional economic integration agreements. Topic: Implications for Managers 40. The emerging role of the European Commission in competition policy suggests the EU is increasingly willing and able to […]

Chapter 09 Regional Economic Integration True / False Questions 1. Regional economic integration involves agreements among countries in a geographic region to reduce, and ultimately remove, tariff and nontariff barriers to the free flow of goods, services, and factors of […]

Multiple Choice Questions 41. FDI occurs when a firm: A. ships its products from one country to another. B. invests directly in facilities to produce a product in a foreign country. C. invests in the shares of another company operating […]

81. Discuss the two main forms of FDI. FDI takes on two main forms. The first is a greenfield investment, which involves the establishment of a new operation in a foreign country. The second involves acquiring or merging with an […]

62. Advantages that arise from using resource endowments or assets that are tied to a particular place and that a firm finds valuable to combine with its own unique assets are known as: A. location-specific advantages. B. capital-specific advantages. C. […]

Chapter 08 Foreign Direct Investment True / False Questions 1. A Japanese car manufacturer acquires an Italian producer of car tires. This is an example of a greenfield investment. FALSE This is an example of an acquisition. A greenfield investment […]

79. _____ are the highest rate that can be charged, which is often, but not always, the rate that is charged. A. Ad valorem tariff rates B. Tariff rents C. Specific tariff rates D. Bound tariff rates Bound tariff rates […]

59. Local content regulations: A. protect domestic producers by limiting foreign competition. B. lower the prices of imported components. C. tend to benefit consumers and not producers. D. encourage outsourcing of production units. Local content regulations provide protection for a […]

Learning Objective: 07-04 Describe the development of the world trading system and the current trade issues. Topic: Development of the World Trading System 38. Tariff barriers lower the costs of exporting products to a country. FALSE Trade barriers constrain a […]

Chapter 07 The Political Economy of International Trade True / False Questions 1. Tariffs are unambiguously pro-consumer and anti-producer. FALSE Tariffs are generally pro-producer and anti-consumer. While they protect producers from foreign competitors, this restriction of supply also raises domestic […]

69. Wal-Mart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors. This allows Wal-Mart to offer greater discounts to its customers. In this case, Wal-Mart benefits from _____. A. first mover […]

42. Which of the following is a major benefit of engaging in free trade? A. It helps to reduce the financial volatility in global markets. B. It helps the countries protect the jobs that are available to their citizens. C. […]

Chapter 06 International Trade Theory True / False Questions 1. Free trade refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country. TRUE Free trade refers […]

91. Explain the Friedman doctrine. Who developed the philosophy? How well does this approach hold up ethically? In 1970, Milton Friedman suggested that the only social responsibility of business is to increase profits, so long as the company stays within […]

78. _____ means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder. A. Veil of ignorance B. Difference principle C. Moral imagination D. Noblesse oblige Stakeholder analysis involves a certain amount of […]

58. A multinational company is accused of paying bribes to the government of a host country to obtain permission to build a production factory. The public relations manager of the company defends the company’s actions as being ethically sound; he […]

36. Building an organization culture that places a high value on ethical behavior requires incentive and reward systems. TRUE Building an organization culture that places a high value on ethical behavior requires incentive and reward systems, including promotions that reward […]

Chapter 05 Ethics in International Business True / False Questions 1. Ethical strategies are the accepted principles of right or wrong governing the conduct of businesspeople. FALSE An ethical strategy is a strategy, or course of action, that does not […]

93. What is Buddhism? Compare Buddhism with Hinduism. Buddhism was founded in India in the sixth century BC by Siddhartha Gautama, an Indian prince who renounced his wealth to pursue an ascetic lifestyle and spiritual perfection. According to Buddhism, suffering […]

81. According to Geert Hofstede’s study, which of the following cultural dimensions would be characterized by a greater readiness to take risks and less emotional resistance to change? A. High power distance cultures B. Low uncertainty avoidance C. High collectivism […]

61. A _____ is a less rigid form of social stratification in which social mobility is possible. A. caste system B. normative system C. religious system D. class system A class system is a less rigid form of social stratification […]

Difficulty: 1 Easy Learning Objective: 04-05 Demonstrate an appreciation for the economic and business implications of cultural change. Topic: Implications for Managers 39. The value systems and norms of a country are unrelated to the costs of doing business in […]

Chapter 04 Differences in Culture True / False Questions 1. In today’s world of global communications, rapid transportation, and global markets, cultural differences have ceased to exist. FALSE In these days of global communications, rapid transportation, worldwide markets, and global […]

81. What is gross national income? Is it related to purchasing power parity? A common measure of economic development is a country’s gross national income (GNI) per head of population. GNI is regarded as a yardstick for the economic activity […]

Chapter 03 Political Economy and Economic Development 1. GNI per capita can be adjusted by purchasing power to account for differences in the cost of living. TRUE To account for differences in the cost of living, one can adjust GNI […]

60. Since the late 1980s, there has been a spread of democracy. This is because _____. A. a state’s ability to control access to uncensored information has increased B. the socialist model failed to deliver economic progress to the vast […]

36. By identifying and investing early in a potential future economic star, international firms can build brand loyalty and gain experience in that country’s business practices. TRUE By identifying and investing early in a potential future economic star, international firms […]

60. Which of the following statements about the legal systems of countries is NOT true? A. They can affect the attractiveness of a country as an investment site or market. B. They are influenced by the prevailing political system of […]

Topic: Legal Systems 38. Product liability can be much lower if a product does not conform to required safety standards. FALSE Product liability involves holding a firm and its officers responsible when a product causes injury, death, or damage. Product […]

79. Discuss collectivism. What ideals does the philosophy support? Where did the philosophy start? How does collectivism exist in the modern world? A collectivist political system is one that stresses the primacy of collective goals over individual goals. In that […]