Archives: Quiz

86) It may be more costly to do business in relatively primitive or undeveloped economies because of A) international trade restrictions. B) the lack of governmental support. C) difficulty obtaining workers. D) the lack of infrastructure and supporting businesses. Answer: […]

66) Many states in Asia, Latin America, and Western Europe have shifted away from a mixed economy to a market–based economy. Which of the following measures is most likely to be promoted by such states? A) state-ownership of enterprises B) […]

46) According to Amartya Sen, development should be A) seen as a process of expanding the real freedoms that people experience. B) seen as a nonpolitical concept that focuses on the net income of a country. C) viewed as a […]

26) ________ per person figures can be misleading because they don’t consider differences in the cost of living. A) Gross domestic product (GDP) B) Gross national income (GNI) C) Purchasing power parity (PPP) D) Human Development Index (HDI) Answer: B […]

International Business, 12e (Hill) Chapter 3 National Differences in Economic Development 1) GDP allows a more direct comparison of living standards in different countries than other measures. Answer: FALSE Explanation: The purchasing power parity (PPP) adjustment allows a more direct […]

90) The age of a foreign subsidiary A) has no influence on payment of dividends. B) indicates the number of capital investment needs; older subsidiaries have higher needs. C) influences dividend policy in that younger subsidiaries tend to remit a […]

70) A ________ specifies that parent companies are not taxed on foreign source income until they actually receive a dividend. A) bilateral agreement B) tax credit C) deferral principle D) tax treaty Answer: C Explanation: A deferral principle specifies that […]

50) According to Lessard and Lorange, the ________ rate refers to the spot exchange rate when the budget is adopted. A) ending B) initial C) ideal D) projected Answer: B Explanation: Lessard and Lorange point out three exchange rates that […]

30) In countries such as the United States and Britain, firms typically raised capital by A) obtaining funding from the government. B) borrowing money from national banks. C) issuing stock or bonds to investors. D) borrowing money from international banks. […]

International Business, 12e (Hill) Chapter 20 Accounting and Finance in the International Business 1) Accounting information is the means by which firms communicate their financial position to the providers of capital. Answer: TRUE Explanation: Accounting information is the means by […]

88) Judges in a(n) ________ system have the power to interpret the law so that it applies to the unique circumstances of an individual case. A) civil law B) international law C) common law D) theocratic law Answer: C Explanation: […]

69) Which of the following is the most widely practiced theocratic legal system in the world today? A) Hindu law B) Sikh law C) Islamic law D) Jewish law Answer: C Explanation: A theocratic law system is one in which […]

49) ________ refers to a state where political power is monopolized by a party, group, or individual that governs according to religious principles. A) Representative democracy B) Theocratic totalitarianism C) Tribal anarchism D) Monotheistic communism Answer: B Explanation: Theocratic totalitarianism […]

29) Modern socialists trace their intellectual roots to ________, although socialist thought clearly predates this individual. A) David Hume B) Karl Marx C) Adam Smith D) John Stuart Mill Answer: B Explanation: Modern socialists trace their intellectual roots to Karl […]

International Business, 12e (Hill) Chapter 2 National Differences in Political, Economic, and Legal Systems 1) The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based. Answer: FALSE […]

102) Discuss the reasons expatriate managers fail to complete their foreign assignment. Answer: The question of why expatriates fail to complete their foreign assignments was studied by R.L. Tung, who found that U.S. firms experienced a significantly higher failure rate […]

90) Which of the following is an action taken by organized labor to respond to the increased bargaining power of multinational corporations? A) trying to establish international labor organizations B) increasing competition between national unions C) lobbying the European Union […]

70) Training can help a manager and spouse cope with issues of adjusting to the foreign environment. ________ is aimed at helping the expatriate manager and family ease themselves into day–to-day life in the host country. A) Language training B) […]

50) ________ staffing policy can be expensive to implement because training and relocation costs increase when transferring managers from one country to another. A) A geocentric B) A eurocentric C) A polycentric D) An ethnocentric Answer: A Explanation: A geocentric […]

30) A strong ________, the organization’s norms and value systems, can help a firm to implement its strategy. A) corporate culture B) human resources division C) mission statement D) beliefs systems Answer: A Explanation: Corporate culture refers to the organization’s […]

International Business, 12e (Hill) Chapter 19 Global Human Resource Management 1) An expatriate manager is a citizen of one country who is working abroad in one of the firm’s subsidiaries. Answer: TRUE Explanation: An expatriate manager is a citizen of […]

106) Designing for manufacturing A) decreases product quality. B) increases costs. C) can increase product quality. D) not only increases costs, but also lowers product quality. Answer: C Explanation: Designing for manufacturing can lower costs and increase product quality. Difficulty: […]

90) Drober Consulting is a large software service provider. The company has the largest market share in the industry. In order to restrain the smaller competitors in the market, the company sells some of its products at very low prices. […]

70) Which of the following statements is true? A) Firms in consumer goods industries that are trying to sell to a large segment of the market generally favor a push strategy. B) Mass communication is costlier for firms in consumer […]

50) A ________ retail system is one in which there are many retailers, none of which has a major share of the market. A) concentrated B) consolidated C) focused D) fragmented Answer: D Explanation: A fragmented retail system is one […]

30) According to Levitt, which of the following statements is true? A) Technology drives the world toward a converging commonalty. B) There are accustomed differences in national preferences. C) The multinational corporation operates in a number of countries at low […]

International Business, 12e (Hill) Chapter 18 Global Marketing and R&D 1) The set of choices the firm offers to its targeted markets is known as the marketing mix. Answer: TRUE Explanation: The marketing mix is the set of choices the […]

88) Which of the following statements is true of cloud–based EDI systems? A) Cloud-based EDI systems are more expensive than proprietary solutions. B) Small firms will not be able to make use of cloud-based EDI systems. C) Cloud-based systems are […]

70) An advantage of engaging in in–house production of products and components is that A) the firm will have fewer subunits to control by making products in-house. B) it will help the firm capture more orders from other countries. C) […]

50) The level of output at which most plant–level scale economies are exhausted is referred to as the A) minimum efficient scale of output. B) downstream supply chain. C) flexible machine. D) upstream supply chain. Answer: A Explanation: The level […]

30) Before a firm is allowed access to the European marketplace, the European Union requires that the quality of the firm’s manufacturing processes and products be certified under a quality standard known as A) Six Sigma. B) ISO 9000. C) […]

International Business, 12e (Hill) Chapter 17 Global Production and Supply Chain Management 1) Production is also sometimes referred to as operations as part of a global supply chain. Answer: TRUE Explanation: Production is sometimes also referred to as manufacturing or […]

90) The main attraction of ________ is that it can give a firm a way to finance an export deal when other means are not available. A) switch trading B) counterpurchase C) offsets D) countertrade Answer: D Explanation: The main […]

70) Countertrade emerged in the 1960s as a way for the ________ to purchase imports. A) United States B) European Union C) ASEAN countries D) Soviet Union and the then-communist states of Eastern Europe Answer: D Explanation: Countertrade emerged in […]

50) Which of the following is a major advantage of using a letter of credit? A) It gives the importer time to resell the merchandise before payment. B) It guarantees the exporter preexport financing. C) It helps international traders engage […]

30) What is true of reactive firms? A) Reactive firms consider a variety of markets for selling their products and services. B) They consider exporting only after their domestic market is saturated. C) They systematically scan foreign markets for profitable […]

International Business, 12e (Hill) Chapter 16 Exporting, Importing, and Countertrade 1) Proactive firms do not consider exporting until their domestic market is saturated. Answer: FALSE Explanation: Proactive firms continually seek opportunities for profitable exporting and systematically scan foreign markets to […]

100) Explain the idea of a turnkey project. Why should a firm use this arrangement to expand internationally? In what industries are turnkey arrangements most common? Answer: In a turnkey project, the contractor agrees to handle every detail of the […]

86) The main advantage of ________ is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants. A) an acquisition B) strategic alliances C) greenfield investment D) franchising Answer: C Explanation: […]

66) Which of the following is an advantage of franchising? A) A firm takes profits out of one country to support competitive attacks in another. B) A firm is relieved of many of the costs and risks of opening a […]

46) There are several disadvantages of franchising as an entry mode. Which of the following is one of them? A) There is little incentive for the franchisee to build a profitable operation as quickly as possible. B) The firm incurs […]

28) Costs that an early entrant has to bear that a later entrant can avoid are known as A) first-mover costs. B) late-mover disadvantages. C) pioneering costs. D) licensing fees. Answer: C Explanation: Pioneering costs are costs that an early […]

International Business, 12e (Hill) Chapter 15 Entry Strategy and Strategic Alliances 1) The choice of which international markets to enter should be driven by an assessment of absolute short-run growth and profit potential. Answer: FALSE Explanation: The choice of which […]

89) Firms pursuing a transnational strategy A) have a low need for coordination. B) require very few integrating mechanisms. C) cultivate a strong culture. D) operate with a worldwide product division structure. Answer: C Explanation: In addition to output and […]

69) The need for coordination between subunits is greatest in firms pursuing A) a localization strategy. B) an international strategy. C) a global strategy. D) a transnational strategy. Answer: D Explanation: The need for coordination is greatest in transnational firms, […]

49) Which of the following is one of the four main arguments favoring centralization? A) It permits greater flexibility. B) Motivational research favors it. C) It can avoid the duplication of activities. D) It gives top management time to focus […]

29) ________ are the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits. A) Cultural controls B) Control systems C) Output controls D) Incentives Answer: B Explanation: The relationships between […]

International Business, 12e (Hill) Chapter 14 The Organization of International Business 1) Organizational structure refers to the totality of a firm’s organization. Answer: FALSE Explanation: Organizational architecture refers to the totality of a firm’s organization. Organizational structure refers to three […]

85) A firm facing low pressures for cost reductions and low pressures for local responsiveness is most likely to follow ________ strategy. A) a global standardization B) a localization C) an international D) a transnational Answer: C Explanation: There are […]

67) A multinational firm may need to delegate marketing functions to national subsidiaries to A) fully implement the firm’s localization strategy. B) employ economies of scale. C) meet the requirements for a global standardization strategy. D) be responsive to local […]