bus5-187 final
Country A can produce product X, but it can also buy it at a cheaper price from Country B. Which course of action is suitable in this situation according to Adam Smith's theory of absolute advantage?
A. Country A should import product X from Country B and it should not attempt to produce it at home.
A newly established U.S-based firm trying to secure business in a foreign country bribes a foreign government official in order to obtain business over which that foreign official has authority. Which statement regarding the Foreign Corrupt Practices Act (FCPA) applies to this scenario?
A. This would be an illegal practice in all respects according to the FCPA.
Which statement is true of countertrade?
Countertrade occurs when goods and services are traded for other goods and services.
Which statement is true of the deregulation of the financial industry?
Deregulation helped the development of an international capital market.
Which facet of information technology refers to the electronic interchange of data between two or more companies?
EDI
Identify the incorrect statement about environmental regulations.
Environmental regulations are similar across developed and developing nations.
Which statement is true of Eurocurrency?
Eurocurrency can be created anywhere in the world
What is a common difficulty that traders face when exporting goods or services to other countries?
Exporters often face voluminous paperwork and complex formalities.
Which observation is consistent with Michael Porter's theory of national competitive advantage?
Factors such as domestic demand and domestic rivalry explain nations' dominance in production.
What is a drawback of the polycentric approach to staffing?
Host-country nationals have limited opportunities for advancement beyond senior positions in their subsidiary.
Identify the correct statement about the rights theories.
Human beings have fundamental rights and privileges that transcend national boundaries.
Increasingly the ________ has been acting as macroeconomic police of the world economy, insisting that countries seeking significant borrowings adopt certain macroeconomic policies.
International Monetary Fund (IMF)
What is an advantage of the geocentric staffing policy?
It enables the firm to build a cadre of international executives who feel at home working in a number of cultures.
________ include the design, creation, and delivery of a product.
Primary activities
Max Weber theorized that there was a relationship between Protestantism and the emergence of modern capitalism because
Protestant ethics emphasize the importance of hard work and wealth creation and frugality.
Which statement is true about a class system?
Social mobility within a class system varies from society to society
For what reason might command economies tend to stagnate?
The abolition of private ownership means there is no incentive for individuals and no competition.
Which observation about the Foreign Corrupt Practices Act is true?
The act originally allowed for "facilitating payments."
Which observation is correct?
The economic principles of Islam prohibit the payment or receipt of interest.
Which argument strengthens the idea of floating exchange rates?
Trade deficits can be corrected through changes in exchange rates
Which country is engaged in deregulation efforts?
a country that encourages competition and attracts foreign direct investment
A polycentric approach may be effective for firms pursuing
a localization strategy.
The downside of increased globalization is
a severe crisis in one region can affect the entire globe.
In ________, the contractor agrees to handle every detail of the project for a foreign client.
a turnkey project
Kyler was managing a factory in Thailand, and had a decision to make. The factory used child labor, which he disapproved of, but he knew the families of these children might starve without their income. This situation, in which none of the available alternatives seems morally acceptable, is called
an ethical dilemma
Systematic risk refers to movements in a stock portfolio's value that are
attributable to macroeconomic forces affecting an economy
In a letter of credit transaction, the importer secures the letter of credit
before product shipment
How is it that spot exchange rates are determined?
by the interaction between the demand and supply of one currency relative to other currencies
The number of intermediaries between the producer and the consumer is known as the
channel length.
When ____ is emphasized, an individuals right to do something may be restricted on the grounds that it runs counter to "the good of society"
collectivism
An advantage of using the gold standard is that the standard
contains a powerful mechanism for achieving balance-of-trade equilibrium by all countries.
The "Swiss Made" label has leveraged several watchmakers (for example, TAG Heuer) for decades now. This is an example of a ________ effect.
country of origin
The continuing persistence of ________ differences between nations acts as a major brake on any trend toward global consumer tastes and preferences.
cultural and economic
According to the ________ point of view, a firm should adopt the ethics of the culture in which it is operating.
cultural relativism
The simultaneous purchase and sale of a given amount of foreign exchange for two different value dates is referred to as
currency swap
One key component of a country's legal system is
defining the rights and obligations of those involved in business transactions
Many states un Asia, Latin America and Western Europe have shifted away from a mixed economy to a market based-economy. Which measure is most likely promoted by such states?
deregulation of the economy
Exchange rates are ________ under a pure "free float" system.
determined by market forces
The means a firm chooses for delivering the product to the consumer is its
distribution strategy.
Just-in-time inventory systems
economize on inventory holding costs
Investing in ______ is an important determinant of economic development as it leads to higher growth rates and more productive population
education
The rate at which one currency is converted into another is known as the
exchange rate
A company has developed a new, innovative product. If it is quick to enter a new market, it will have the ability to preempt rivals and capture demand by establishing a strong brand name and customer satisfaction. In other words, this company will have captured
first-movers advantage
A Canadian firm prefers expatriate Canadian managers to head its foreign operations because these managers have been socialized into the firm while employed in Canada. This indicates that the firm
follows an ethnocentric staffing policy to maintain a unified corporate culture.
Antonio is an artisan. The country he lives in allows him to sell his goods to people in other countries without any quotas or tariffs. Likewise, he is free to buy materials he needs for his craft from other countries without any restrictions. The country in which Antonio lives practices
free trade
Which factor has contributed to the globalization of markets?
global convergence of consumer tastes and preferences
The cost of capital is
higher in a purely domestic capital market than in a global market.
In a(n) ______ society, the welfare of society is best served by letting people pursue their own economic self-interest.
individualist
a nation wanting to fuel long-term economic growth will focus on which two factors?
innovation and entrepreneurial activity
which statement represents a first-mover advantage?
international firms may gain experience in that country's business practices.
A U.S. company would invest in export credit insurance when it
is exposed to the risk that an importer may default on payment
An advantage of ________ with a local partner is the knowledge of the local environment that the local partner contributes to the venture.
joint ventures
In many countries, political considerations make ________ the only feasible entry mode.
joint ventures
Built Rite Manufacturing is looking to utilize robotic technology in a new plant that it will be building. It decides to build its new plant in the Silicon Valley since this area is known for technological innovation. What type of facility is Built Rite looking to build?
lead factory
Nate works for a major appliance manufacturer. It is his job to plan, implement, and control how the raw materials and component parts flow through the manufacturing process. As it relates to supply chain management, Nate works in
logistics
According to Geert Hofstede's study, which cultural dimension would be characterized by a greater readiness to take risks and less emotional resistance to change?
low uncertainty avoidance
Banks such as JPMorgan Chase and investment firms such as Charles Schwab are referred to as ________ in that they connect investors and borrowers, either directly or indirectly.
market makers
New trade theory suggests that nations
may benefit from trade even when they do not differ in resource endowments or technology.
The currency of Lebanon is fixed relative to the U.S. dollar. This means that the exchange rate between the Lebanese pound and other currencies is determined by the dollar exchange rate. This reflects a
pegged exchange rate
Facilitating payments are
permitted under the amended Foreign Corrupt Practices Act.
The theory of comparative advantage suggests that trade is a ________ game in which all countries that participate realize economic gains.
positive-sum
What is one of the two types of competitive pressure that affects the ability of multinational enterprises to compete in the global marketplace?
pressure for local responsiveness
In a pure market economy,
production is determined by the interaction of market forces of supply and demand.
Economies of scale arise from which source?
serving domestic and international markets from the same production facilities
An advantage of forming a strategic alliance is that it helps firms
share the risks of developing new products or processes.
Currency ________ typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.
speculation
If market segments transcend national borders
the company can view the global market as a single entity and pursue a global strategy.
Capital flight is most likely to occur when
the value of the domestic currency is depreciating rapidly because of hyperinflation
During the 1960s, the old Soviet Union and the then-communist states of eastern Europe used countertrade to purchase imports because
their currencies were generally nonconvertible
GNI per person figures can be misleading because
they don't consider differences in the cost of living
________ are most likely to discourage global expansion of businesses.
trade barriers
When the firm simultaneously faces both strong cost pressures and strong pressures for local responsiveness, the ideal strategy to follow is the ________ strategy.
transnational
What impedes firms from achieving maximum reach of their productive activities to locations around the globe?
transportation costs
Cultural myopia refers to a firm's failure to
understand host-country cultural differences.
According to the concept of economies of scale, as plant output expands
unit costs decrease
