Global Comp final

At six sigma, a production process would be 99.99966 percent accurate, creating just _____.

3.4 defects per million units

According to the law of one price, if the exchange rate between the British pound and the dollar is ≤1 = $1.50, a jacket that retails for $75 in New York should sell for _____ in London.

50

is a time draft that has been drawn on and accepted by a bank.

A banker's acceptance

A(n) _____ brings together those who want to invest money and those who want to borrow money.

Capital Market

A firm can increase the probability of exporting successfully by taking which of these steps?

Entering on a small scale

The gold standard had its origin in the use of _____ as a medium of exchange, unit

Gold coins

Which of the following is a drawback associated with a JIT system?

It leaves a firm without a buffer stock of inventory

Identify the incorrect statement about the PPP theory.

It yields accurate predictions in the short run.

In 1976, the _____ formalized the floating exchange rate system that followed the collapse of fixed exchange rate system.

Jamaica Agreement

According to the _____, in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

Law of one price

Japanese exporters get assistance in identifying export opportunities from:

MITI

Which of the following is true of the international strategy?

The strategy is not viable in the long-run.

The main problem with this structure is the limited voice it gives to area or country managers, since it makes them subservient to product division managers.

Worldwide product divisional structure

In a letter of credit transaction, the exporter ships the product

after the letter of credit is issued.

The short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates is known as:

currency speculation

The simultaneous purchase and sale of a given amount of foreign exchange for two different value dates is referred to as a:

currency swap

A managed-float system is also known as a:

dirty-float exchange rate system.

Which of the following is a drawback of the eurocurrency market?

exposure to foreign exchange risk

Market makers are ____.

financial service companies that connect investors and borrowers

A _____ is a grouping of various types of machinery, a common materials handler, and a centralized cell controller.

flexible machine cell

_____ are exchange rates governing some specific future date foreign exchange transactions.

forward exchange rates

Firms entering markets where there are no incumbent competitors to be acquired should choose:

greenfield investments

The Six Sigma methodology:

is a direct descendant of the total quality management philosophy.

The main factor that makes the eurocurrency market attractive to both depositors and borrowers is that:

it lacks government regulation and banks are given much more freedom in their dealings in foreign currencies.

Firms engaging in _____ with a local company can benefit from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems.

joint ventures

This allows the company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output.

lean production

A(n) _____ strategy makes most sense when demands for local responsiveness are high, but cost pressures are moderate or low.

localization

Most economists trace the breakup of the Bretton Woods fixed exchange rate system, in 1973, to the:

macroeconomic policy package in the U.S. during 1965 to 1968

The person or business initiating a draft is known as the:

maker

The Department of Commerce has a _____ program, in which department representatives accompany groups of U.S. businesspeople abroad to meet with qualified agents, distributors, and customers.

matchmacker

fixed exchange rate regime

modeled along the lines of the Brenton Woods systems will not work

Great trading houses in Japan are called:

sogo shosha.

A pair of shoes costs ≤30 in Britain. The identical pair costs $45 in the United States. The exchange rate is ≤1 = $1.80. In terms of cost of the shoes:

the U.S. offers a better deal.

One drawback of relying on EMCs is that:

the company can fail to develop its own exporting capabilities.

A currency is said to be freely convertible when:

the country's government allows both residents and nonresidents to purchase unlimited amounts of a foreign currency with it.

The price a firm charges for a good or service is typically less than the value placed on that good or service by the customer. This is because:

the customer captures some of that value in the form of a consumer surplus.

In a letter of credit transaction, the exporter receives its payment from

the exporters bank

All of the following are benefits of global capital markets, except:

they have higher cost of capital as compared to purely domestic capital markets.

A firm that is facing both strong cost pressures and strong pressures for local responsiveness should follow a _____ strategy.

transnational

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.

transnational

Is useful where FDI is limited by host-government regulations.

turnkey strategy

A _____ is the most costly method of serving a foreign market from a capital investment standpoint.

wholly owned subsidiary