Inb Bus Mid Ch. 3, I.B. test 2, INTB CH 14 (MC), international business chapter 7, International Finance 7&8 Q101-150
-The Internet provides access to an affluent, reachable audience. - Internet communications can be interactive. -The Internet can be particularly important for reaching teenagers (All of A, B, and C)
) According to the text, among the appealing factors of online advertising in the international sphere is the following
NONE OF THE ABOVE
) Honda's "You meet the nicest people on a Honda" campaign appealed to Americans who used their motorcycles as pleasure vehicles, but in Brazil Honda stressed the use of the same motorcycles as basic transportation. This is an example of which promotional strategy?
What are the 12 mistakes made by new exporters?
1. Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 2.Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 3.Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 4.Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 5.Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 6.Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 7.Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 8.Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 9. Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 10. Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 11. Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form 12. Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form
4 elements that need to be considered when designing the structure of an IC
1. product and technical expertise 2. geographic expertise 3. customer expertise 4. functional expertise
The EMU (European Monetary Union or Economic and Monetary Union) has established the euro, a currency that is used in:
16 of the EU member-countries.
How many countries in the EU use the euro as their currency?
17
Collection documents vary from country to country. The most common types of collection documents that the seller provides to the buyer include all of the following except A income statements. B commercial invoices. C certificates of origin. D consular invoices.
A
Local laws in these areas limit the marketer's ability to standardize the product A pollution, operator safety, and consumer protection. B labor, advertising, and promotion. C finance, such as SOX. D import restrictions such as quotas and additional tariffs.
A
Which is the principal government agency responsible for aiding the export of American goods and services through a variety of loan, guarantee, and insurance programs? A U.S. Export-Import Bank (Ex-Im Bank) B Overseas Private Investment Corporation (OPIC) C Major League Baseball (MLB) D Foreign Sales Corporation (FSC)
A
With Internet domain names, the U.S. follows A a first to file approach. B a first to invent approach, as with brand names. C a reason to register approach, with names approved by a board. D international law, which stipulates first to invent.
A
In developing economies, informal institutions tend to play a greater role than in developed economies, possibly because:
A and C A. the developing economies have more ambiguity and lack formal institutions by definition, so informal institutions step into the breach. C. informal institutions emerge to give order to the unstructured, chaotic environment.
air waybill
A bill of landing issued by an air carrier
developed economies
A classification for high-income industrialized nations, which have high living standards and the most technically developed infrastructure
confirmed L/C
A confirmation made by a correspondent bank in the seller's country by which it agrees to honor the issuing bank's letter of credit
licensing
A contractual arrangement in which one firm grants access to its patents, trade secrets, or technology to another for a fee
joint venture
A cooperative effort among two or more organizations that share a common interest in a business undertaking
vehicle currency
A currency used as a vehicle for international trade or investment
A currency used as a vehicle for international trade or investment
A currency used by a country to intervene in the foreign currency exchange markets
international division
A division in the organization that is at the same level as the domestic division and is responsible for all non-home-country activities
corporate visual identity (CVI)
A firm's name, logo, slogan, graphics, color, and typeface that help identify the firm to consumers and other interested constituents
franchising
A form of licensing in which one firm contracts with another to operate a business under an established name according to specific rules
horizontal corporation
A form of organization characterized by lateral decision processes, horizontal networks, and a strong corporate-wide business philosophy
NAFTA maintains restrictions on the movement of labor, a limitation that suggests it is:
A free trade area
Overseas Private Investment Corporation (OPIC)
A government corporation that offers U.S. investors in developing countries insurance against expropriation, currency inconvertibility, and damages from wars and revolutions
trade fair
A large exhibition at which companies promote the sale of their products
trade mission
A market visit by business people and/or government officials (state or federal) in search of business opportunities
population distribution
A measure of how the inhabitants are distributed over a nation's area
population density
A measure of the number of inhabitants per area unit (inhabitants per square kilometer or square mile)
. programmed-management approach
A middle ground between an ad campaign that is standardized worldwide and an entirely local ad campaign is called a:
programmed-management approach
A middle-ground advertising strategy between globally standardized and entirely local programs
market screening
A modified version of environmental scanning in which the firm identifies desirable markets by eliminating the less desirable ones
A monetary system that defines the value of its currency in terms of a fixed amount of gold
A monetary system that defines the value of its currency in terms of a fixed amount of gold
gold standard
A monetary system that defines the value of its currency in terms of a fixed amount of gold
Triffin paradox
A problem in which a national currency that is also a reserve currency will eventually run a deficit, leading to lack of confidence in the reserve currency and a financial crisis
environmental scanning
A procedure in which the firm scans the world for changes in the environmental forces that might affect it
organizational design
A process that determines how a company should be organized to ensure its worldwide business activities are integrated in an efficient and effective manner
country screening
A screening that uses countries as the basis for market selection
segment screening
A screening that uses market segments, a within-country analysis of groups of consumers, as the basis for market selection
strategic business unit (SBU)
A self-contained business entity with a clearly defined market, specific competitors, the ability to carry out its business mission, and a size appropriate for control by a single manager
marketing mix
A set of strategy decisions made about the product and its promotion, pricing, and distribution in order to satisfy the needs and desires of customers in a target market
irrevocable L/C
A stipulation that the L/C cannot be cancelled without the seller's consent
hybrid organization
A structure organized by more than one dimension at the top level
banker's acceptance
A time draft with a maturity of less than 270 days that has been accepted by the bank on which the draft was drawn, thus becoming the accepting bank's obligation
industrial products
According to the text, __________ are the most insensitive to the foreign environment.
when it is registered by someone who hopes to profit by selling the name back to the originating firm.
According to the text, a brand name has been pirated
For some groups, the Internet may be among the best media choices
According to the text, among the appealing factors of online advertising in the international sphere is the following
-. industrial products. -. consumer products, especially in developing countries (two of A,B and C)
According to the text, manufacturers of ____ rely more on personal selling than on advertising to communicate with their overseas markets.
-of the stigma attached to selling that exists in some areas -of the need to hire people who are culturally acceptable to customers and channel members. (two of A, B and C)
According to the text, recruitment of salespeople in foreign countries is at times more difficult than recruiting them at home because:
. promotion
All forms of communication between a firm and its publics are _________.
IMF quotas are determined by the relative size of a nation in the global economy and:
All of the Above A. determine the weight of the nation's voting in the IMF. B. determine how much a nation can borrow from the IMF. C. are the nation's "dues" to the IMF.
foreign environment
All the uncontrollable forces originating outside the home country that surround and influence the firm
technical analysis
An approach that analyzes data for trends and then projects these trends forward
bonded warehouse
An area authorized by customs authorities for storage of goods on which payment of import duties is deferred until their removal
free trade zone
An area designated by a government as outside its customs territory
management contract
An arrangement by which one firm provides management to another firm
contracted manufacturing
An arrangement in which one firm contracts with another to produce products to its specifications
turnkey project
An export of technology, management expertise, and possibly capital equipment where a contractor agrees to design and erect a plant, supply the process technology, provide the production inputs, train the operating personnel, and, after a trial run, turn the facility over to the purchaser
special drawing rights (SDR)
An international reserve asset established by the IMF; the unit of account for the IMF and other international organizations
matrix overlay
An organization in which top-level divisions are required to heed input from a staff composed of experts of another organizational dimension in an attempt to avoid the double-reporting difficulty of a matrix organization but still mesh two or more dimensions
virtual corporation
An organization that coordinates economic activity to deliver value to customers using resources outside the traditional boundaries of the organization
matrix organization
An organizational structure composed of one or more superimposed organizational structures in an attempt to mesh product, regional, functional, and other expertise
export draft
An unconditional order drawn by the seller that instructs the buyer to pay the draft on presentation (sight draft) or at an agreed future date (time draft) and that must be paid before the buyer receives shipping documents
promotion
Any form of communication between a firm and its publics, including advertising, public relations, sales promotions such as rebates and "buy one get one," and events and experiences, such as sponsoring events to both yield purchases in the short term and confidence in the firm in the long run
sales promotion
Any of the various activities, such as preparation of point-of-purchase displays, contests, premiums, trade show exhibits, celebrity-embraced promotion, money-off offers, and coupons
efficient market approach
Assumption that current market prices fully reflect all available relevant information
random walk hypothesis
Assumption that the unpredictability of factors suggests that the best predictor of tomorrow's prices is today's prices
A product targeting significant local market penetration will probably have A a standardized, global marketing mix. B considerable adaptation for the local market. C gold packaging and a low price. D low pricing and solid distribution.
B
Examples of goods that can be sold worldwide without adaptation include A packaged cake mixes. B memory chips. C clothing. D cars and trucks.
B
Independent businesses that handle import shipments for compensation are A importing agents. B customhouse brokers. C freight forwarders. D bonded warehouses.
B
To be successful in international markets, one has to A sell what is most fashionable in the home market. B adapt to local culture and commit to a long-term presence. C avoid employing locals. D avoid joint ventures and alliances.
B
ALL OF THE ABOVE -marketing the same physical product everywhere. -adapting the physical product for foreign markets. -developing a different brand
Because promotion both influences and is influenced by the other marketing variables, it is possible to formulate promotional strategies by
industrial products
Buyers of __________ usually act on the same motives worldwide.
A definable segment is one that A has a clear reason and purpose. B relies on lifestyle differences. C can be identified and measured. D is understood by the client.
C
A trade fair is A a way for specific governments (France, Germany) to claim leadership in a sector. B an event for the exchange of marketing materials and approaches among members of an industry. C a more promotion-focused activity than a trade mission, that often results in sales. D an industry-wide holiday.
C
All the reasons for making decisions at IC headquarters, at subsidiary headquarters, or cooperatively: A apply only to a corporate entity between two or more companies that are foreign to the area where the joint venture is located. B apply only to a corporate entity between an IC and local owners. C apply equally in joint venture situations. D do not apply in joint venture situations.
C
An actionable segment is one that A perceives that the product line is useful. B has resources to purchase the product. C allows the marketing mix to operate. D can be moved through advertising.
C
Which of the following is not true about horizontal corporations? A they have a strong corporate-wide business philosophy. B they are characterized by lateral decision processes. C they rely extensively on the use of vertical networks. D they often draw teams from different departments to solve a problem or deliver a product.
C
The following country is not a member of ASEAN:
China
Which of the following is not true about China, compared to India?
China attracted five times more foreign direct investment from 2000 to 2013 than did India
strategic alliance
Collaboration with competitors, customers, and/or suppliers that may take nonequity or equity form
subsidiaries
Companies controlled by other companies (known as parent companies) through ownership of enough voting stock to elect a majority of the voting members on the company's board of directors
affiliates
Companies controlled by other companies, but less-than-majority owners may exercise control by a variety of means, both those involving stock ownership and those involving nonownership mechanisms
law of one price
Concept that in an efficient market, like products will have like prices
international Fisher effect
Concept that the interest rate differentials for any two currencies will reflect the expected change in their exchange rates
terms of sale
Conditions of a sale that stipulate the point at which costs and risks are borne by the buyer
A product targeting significant local market penetration will probably have A low pricing and solid distribution. B gold packaging and a low price. C a standardized, global marketing mix. D considerable adaptation for the local market.
D
An export bill of lading serves as all of the following except a A receipt from the carrier for the goods shipped. B certificate of ownership. C contract for carriage between the shipper and the carrier. D receipt for the IRS.
D
Price and profit allocation decisions are usually best made: A at the subsidiary headquarters in the host country with the lowest prices. B at the subsidiary headquarters. C cooperatively by both subsidiary and IC headquarters. D at the IC headquarters.
D
To exert control of brand names, companies are advised to A secure first-rate local legal representation in all of their potential markets. B begin using them everywhere to establish ownership rights. C go after violations with legal threats immediately. D register them quickly in every possible country in which they may do business, now and in the future.
D
With which of the following payment mechanisms is it the case that once the seller has accepted the credit, the customer cannot alter or cancel it without the seller's consent? A Bank collection time draft B Open account C Consignment D Irrevocable letter of credit
D
. consumer goods
Dissimilar cultural patterns generally necessitate changes in food and other __________
letter of credit (L/C)
Document issued by the buyer's bank in which the bank promises to pay the seller a specified amount under specified conditions
export bill of lading (B/L)
Document issued by the carrier that is a contract for the shipment, a receipt for the goods shipped, and a certificate of ownership
Conformité Européene (CE) mark
EU mark that indicates that merchandise conforms to European health, safety, and environmental requirements
market factors
Economic data that correlate highly with market demand for a product
market indicators
Economic data used to measure relative market strength of countries or geographic areas
. The Internet can be an effective tool in personal selling, when used to build trust.
Evidence suggests that
fundamental approach
Exchange rate prediction based on econometric models that attempt to capture the variables and their correct relationships
fixed exchange rate
Exchange rate regime in which the currency's value is tied to the value of another currency or gold
floating exchange rates
Exchange rates determined by supply and demand that allow currency values to float against one another
pro forma invoice
Exporter's formal quotation, containing a description of the merchandise, price, delivery time, method of shipping, terms of sale, and points of exit and entry
Advantages of the virtual corporation concept include that it allows a company to build competence from the ground up and to increase management's control over the corporation's activities. True False
FALSE
By conducting environmental scanning, a firm can monitor the natural resources around the world that may affect it. True False
FALSE
Most international customers will pay cash in advance unless the order is for a custom-made product. True False
FALSE
On an open account, the buyer assumes all of the payment risk. True False
FALSE
Organization by product is most favored by global companies because this type of organization guarantees the firm is a global company. True False
FALSE
The export marketing plan does not include product characteristics, promotional plans, and details on arrangements with foreign representatives. True False
FALSE
The great disparity in income throughout the world permits worldwide product standardization. True False
FALSE
A common basis for assessing economic development is gross domestic income.
False
All EU members use the euro and thus have given up part of their national sovereignty to the EU. T/F
False
Although India is a member of the WTO and has benefited greatly from increased trade as a result of WTO agreements, China is not yet a member. T/F
False
Although the EU can influence the practices of businesses located in non-EU-member countries, Microsoft has been able to maintain business in the EU much as it conducts business in the United States. T/F
False
Among trading blocs, the EU has the largest GDP per capita. T/F
False
An important assumption that the IMF makes is that a strong organization with rules and penalties for their violation is necessary to support trade. T/F
False
Analysts know that a country with a large population is always a better market than a country with fewer people.
False
As discussed in the chapter, institutions are organizations constructed to create jobs for government employment initiatives. T/F
False
Developed is the term given to nations that have achieved high income per capita.
False
Discretionary income is the amount left after paying taxes.
False
Economic cooperation often begins with a common market, as in the case of the EU. T/F
False
Examples of informal, normative institutions would include local town/city governments and the U.S. government. T/F
False
Formal institutions operate through laws and regulations. They require members to make a written commitment. T/F
False
Informal cognitive institutions are not important to international managers because such managers localize their hiring, and so they can draw on local talent. T/F
False
Recently, regional trade agreements have grown, a trend that may be seen to strengthen the WTO, according to the text. T/F
False
The Atlas conversion factor is the arithmetic average of the current exchange rate and the exchange rates in the two previous years. Incomes measured by the Atlas conversion factor are generally more stable over time and changes in income rankings are more likely to be due to relative economic performance than fluctuations in the exchange rate.
False
The Bretton Woods Conference established the European Union currency, the euro. T/F
False
The Doha Development Agenda is an extended development plan for Doha, Qatar. T/F
False
The EU has been unsuccessful at harmonizing customs and tax formalities within member nations' borders. T/F
False
The EU is administered by the European Commission, a group composed of 27 commissioners elected at the EU level. T/F
False
The WTO supports trade with discrimination as a basic right of trading nations. T/F
False
The World Bank funds infrastructure projects in developed countries. T/F
False
The World Bank is made up of one large institution, IBRD. T/F
False
The international environment includes all the uncontrollable forces originating outside the home country that surround and influence the firm.
False
The rural-to-urban shift is occurring primarily in the developed countries.
False
The view that defines economic development as a reduction of poverty and employment as well as an increase in income is called the human development approach.
False
Wages tend to vary more widely than hourly compensation because of the differences in the size of fringe benefits.
False
When measuring the value produced in an economy, most international organizations prefer to use
GNI.
consumer
Generally, __________ products require greater modification to meet local market requirements worldwide
dissimilarities among countries with respect to social and cultural values
Generally, as marketers go down the economic and social strata in each country, they will tend to find
greater
Generally, consumer products require __________ adaptation than/as industrial products to meet the demands of the world market
-There can be longer production runs, which lowers costs. -A standardized corporate visual identity can help project a consistent image. -The creative work needed for promotion doesn't need to be done for each market (All of A, B, and C)
Generally, management prefers global product standardization because
U.S. Export-Import Bank (Ex-Im Bank)
Government agency that provides loans, guarantees, and insurance programs to support American exporters
monetary policies
Government policies that control the amount of money in circulation and its growth rate
_______ refers to the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad.
Gross national income
bid price
Highest-priced buy order currently in the market
reciprocal currency
In FX, using the dollar as the base currency, a currency that is quoted as dollars per unit of currency instead of in units of currency per dollar
person registering it first
In a code law country, a brand name belongs to the
the greater the product must be modified
In general, the deeper the desired immediate market penetration is
modify the present mix or develop a new one for overseas markets.
In spite of the advantages of global standardization, many firms find it necessary to:
customhouse brokers
Independent businesses that handle import shipments for compensation
Which of the following is not true about India, according to the text?
India has a total population of 1.27 billion people, the third largest in the world.
Bank for International Settlements (BIS)
Institution for central bankers; operates to build cooperation in order to foster monetary and financial stability
International Environment
Interaction between domestic and foreign environmental forces or between sets of foreign environmental forces
The World Bank's two major institutions are the International Development Association and the:
International Bank for Reconstruction and Development (IBRD).
for cost savings.
Management would prefer global standardization of the marketing mix:
-know the market. -satisfy customers' needs. -inform potential customers
Marketers everywhere must
-price the products or services so they are acceptable -inform potential customers (TWO OF THE ABOVE)
Marketers everywhere must
. total, physical product, brand name
Much of the confusion in the ongoing discussion about whether a global firm can have global products results from the discussants not clarifying whether they are referring to the ____, ____ or ____.
Is the WTO's idea of "fair competition" really a code phrase for free trade?
Not really. Trade relationships among nations can be exceedingly complex, and the WTO supports fair competition, which may mean freer trade rather than free trade.
advertising
Of all the promotional mix elements, __________ is the one with the greatest similarities worldwide
advertising
Paid, nonpersonal presentation of ideas, goods, or services by an identified sponsor
fiscal policies
Policies that address the collecting and spending of money by the government
foreign national pricing
Policy that sets local pricing based on market forces in another country
international pricing
Policy that sets prices of goods produced in one country and sold in another
Incoterms
Predefined commercial terms established by the International Chamber of Commerce
transfer pricing
Pricing established for transactions between members of the enterprise
customs drawbacks
Rebates on customs duties
balance of payments (BOP)
Record of a country's transactions with the rest of the world
reengineering
Redesigning organizational structure, hierarchy, business systems, and processes in order to improve organizational efficiency
6 types of promotion
Same product-same message Same product-different message. Product adaptation-same message Product adaptation-message adaptation Different product-same message Different product for the same use-different message
. consumer products
Services are generally less complex to market globally than
. international pricing
Setting prices of goods for export for both unrelated and related firms is known as:
par value
Stated value
cluster analysis
Statistical technique that divides objects into groups based on similarity
trend analysis
Statistical technique used to estimate future values by successive observations of a variable at regular time intervals that suggest patterns
A company's organizational structure helps to determine where formal power and authority will be located within the organization. True False
TRUE
CIBERs are international business research and education efforts located at U.S. universities. True False
TRUE
Direct exporting is an excellent means of getting a feel for international business without committing a great amount of human or financial resources. True False
TRUE
During the second screening, analysts are highly concerned with inflation trends, exchange rates, and interest rates. True False
TRUE
Few international companies are organized by function at the top level. True False
TRUE
Important differences between the domestic and foreign environments may make a wholesale overseas transfer of the successful domestic marketing mix impossible. True False
TRUE
In FAS (free alongside ship, named loading port), the seller pays all the transportation and delivery expense up to the ship's side and clears the goods for export. True False
TRUE
In a typical matrix organization based on area and product dimensions, country managers will be responsible to both the area managers and the product line managers. True False
TRUE
In general, when the basic need for a product is absent, no reasonable expenditure of effort is likely to enable a firm to market its goods or services. True False
TRUE
Incoterms are 11 trade terms that describe the responsibilities of the buyer and seller in international trade. True False
TRUE
Licensing refers to a contractual agreement in which the licensor grants access to its patents, trade secrets, or technology for a fee paid by the licensee. True False
TRUE
The first step in finding a foreign market for a product is to determine whether a market exists for a firm's products. True False
TRUE
The horizontal organization has been characterized as antiorganization because its designers try to remove the constraints imposed by the conventional organizational structure. True False
TRUE
Trade flows are good indicators of the magnitude of present sales. True False
TRUE
Jamaica Agreement
The 1976 IMF agreement establishing flexible exchange rates among IMF members
ALL OF THE ABOVE -A high number of users of the Internet read English or other common languages well. - Internet communications are two-way, rather than one-way like newspaper ads. -. It is possible to tailor messages to the customer, based on answers to prior questions.
The attractions of using the Internet as an international advertising medium include
. industrial products, high style and faddish consumer products.
The continuum from insensitive to sensitive to foreign environment begins with __________ and ends with __________
forward rate
The exchange rate between two currencies for delivery in the future, usually 30, 60, 90, or 180 days
spot rate
The exchange rate between two currencies for delivery within two business days
. like the market for luxury goods
The experience of suppliers to the youth market indicates that this is an international market segment:
ALL OF THE ABOVE -the type of product sold. -media availability. -availability of funds
The importance of personnel selling compared with advertising depends to a great extent on:
-marketing strategies must be developed by assessing potential markets and analyzing alternate marketing mixes. - it is not possible to have a single, standardized worldwide strategy for the overall marketing mix. - the uncontrollable environment forces vary widely among markets. (all of A, B, and C)
The international marketing manager's task is more complex than that of the domestic marketing manager because:
rural-to-urban shift,
The movement of a nation's population from rural areas to cities
cultural differences
The need to change the color of packages when selling a product in a new market is generally a result of the influence of:
arbitrage
The process of buying and selling instantaneously to make profit with no risk
- the central focus of the marketing mix. -more than a physical object. (2 of the above)
The product is
. personal selling.
The promotional mix includes
ALL OF THE ABOVE -advertising. -sales promotion. -publicity.
The promotional mix includes
Fisher effect
The relationship between real and nominal interest rates: The real interest rate will be the nominal interest rate minus the expected rate of inflation
social desirability bias
The respondent's desire to please that leads to answers designed to please the interviewer rather than reflect the respondent's true beliefs or feelings
forfaiting
The sale of an exporter's accounts receivable on capital goods, commodities, and other high-value goods, with the payment due at least 180 days out
factoring
The sale of an exporter's accounts receivable on ordinary goods, with the balance of the payment due upon delivery or soon after
- includes the accessories, and after sales service. - includes after sales service. - includes warranty and instructions for use (all of B,C, and D)
The total product
- is what the customer buys. - includes the physical product and brand name. - includes the package. (all of B,C, and D)
The total product
Gross National Income (GNI)
The total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad
disintermediation
The unraveling of traditional distribution structures, popularly called "cutting out the middlemen"
. public relations
The various methods of communicating with the firm's publics to secure a favorable impression is:
organizational structure
The way an organization formally arranges its domestic and international units and activities, and the relationships among these components
According to the book, what is the purpose of economic analyses?
To assess the overall outlook for the economy and the impact of economic changes on the firm
-plenty of illustrations with short copy -. back translation (two of A,B, and C)
To avoid translation errors, the experienced advertising manager will use:
forward currency market
Trading market for currency contracts deliverable 30, 60, 90, or 180 days in the future
A more even distribution of income and increased urbanization are among the factors acting to reduce the traditional family size.
True
A problem with gross national income estimates that, to compare them, the GNIs in local currency must be converted to a common currency by using an official exchange rate, and that may not accurately reflect domestic purchasing powers of currencies.
True
A simple calculation based on GDP, total population, and income distribution may indicate that a country is not an adequate market.
True
An example of an informal, cognitive institution would be the celebration of Halloween. T/F
True
Countries with slower-rising unit labor costs are investment prospects for companies striving to lower production costs.
True
Differences in GNI/capita tell us something about the relative wealth of a nation's inhabitants, but we also need to know how the GNI is distributed.
True
Economies with per capita incomes in the low to middle range that are in a transition toward developed status are referred to as emerging market economies.
True
Generally, it can be assumed, the higher the GNI/capita value, the more advanced the nation's economy.
True
If a major part of the foreign exchange a nation earns cannot be used to import components used in local products, then either local industries must manufacture them or the companies that import them must stop production.
True
In terms of economic development and competencies, India's strength so far has been in services whereas China's has been in manufacturing.
True
Income distribution studies confirm the belief that income is more evenly distributed in the richer nations.
True
India's average manufacturing labor cost per hour in 2014 was about one-quarter as high as China's.
True
Institutions are constructed to provide meaning and stability to social life, regulate the relations of individuals to each other, and limit behavior of individuals and firms. T/F
True
International economic analyses should provide economic data on both actual and prospective markets.
True
New institutional theory suggests that institutions be understood as collections of rules and codes of conduct that limit behavior. T/F
True
One of the significant differences between formal and informal institutions is how they gain compliance. T/F
True
Purchasing power parity refers to the number of units of a currency required to buy the same amounts of goods and services in the domestic market that one dollar would buy in the United States.
True
Some think that renewed focus on exchange rates would be a good path forward for the IMF, which is struggling with core issues related to its purpose. T/F
True
The EU is a supranational body that has become, essentially, a regional government. T/F
True
The WTO has negotiated a TRIPS agreement whereby property rights do not take precedence over public health.
True
The increase in the number of working women is significant because it may result in a greater market for convenience goods.
True
The percentage of household expenditures spent on consumer durables by households in developing nations is half the percentage spent by consumers in developed nations.
True
The purpose of economic analysis is to assess the overall outlook of the economy and the impact of economic changes on the firm.
True
The quantity and mix of energy consumed per capita constitutes a rough indicator of a country's level of development.
True
To compare the purchasing power of nations, managers need to know how many people gross national income (GNI) is divided among.
True
To estimate market potential, managers require data on the size and the rates of change of economic and socioeconomic factors.
True
When an international manager is considering where to do business, one of the first considerations is the size of the economy.
True
shipper's export declaration (SED)
U.S. Department of Commerce form used to control export shipments and record export statistics
Harmonized Tariff Schedule of the United States (HTSA or HTSUS)
U.S. version of the Harmonized System, the global tariff code, used worldwide
public relations
Various methods of communicating with the firm's publics to secure a favorable impression, rather than immediate sales
total product
What the customer buys, including the physical product, brand name, accessories, after-sales service, warranty, instructions for use, company image, and package
-a total product
When formulating product strategies, international marketing managers must remember that they are selling:
-the product type. - the target market (two of A,B, and C)
Whether to position a product as foreign or local is a basic cultural decision for the marketer, and it seems to depend on:
The Doha Development Agenda is:
a WTO conference on trade.
The rate of growth of GNI/capita may be more important to marketers than just GNI/capita because
a high rate indicates a fast-growing market.
Most developed nations share the following characteristic(s):
a large base of productive capital.
EU rulings:
affect all businesses within the EU and those that trade within the EU.
disposable income
after-tax personal income
Trade without discrimination" in the WTO means that
all trading partners must be treated the same.
The WTO has made progress on trade-related intellectual property rights (TRIPS). An example of this progress is:
an agreement that property rights should not take precedence over public health.
The Doha Development Agenda is:
an extended conference of the WTO initially convened in Doha.
The FX markets in the U.S. are
controlled by the state banking commissions.
A segment must be what 5 things:
definable large accessible actionable capturable
The UN is important to international business for many reasons, including that it:
develops standards and norms in technical areas.
The first principle of the WTO's five basic principles is trade without:
discrimination
discretionary income
disposable income less essential purchases and taxes
international economic analysis
economic analysis for multinationals are more complex than those for a purely domestic firm because there are many economies to consider instead of just one, there are interactions between them, and values are highly divergent -management requires economic data and socioeconomic data -purpose of economic analysis is to assess overall outlook for economy and impact of economic changes on firm -analyst use data from governmental and international organizations and industry associations
emerging market economies
economies that are between developing and developed economies
Economies with per capita incomes in the low to middle range that are in a transition toward developed status are known as
emerging market economies.
The WTO exists to:
establish and help implement rules of trade among nations in order to increase trade flows.
"Developing" is the term given to the world's lowest-income nations, which are technically undeveloped.
false
A benefit of global strategies is their ability to adjust quickly and effectively to changes in customer needs across national or regional markets.
false
A central reserve asset is a holding that has value and is liquid that is held by private banks in case of a liquidity crisis.
false
A global mind-set is built on a thorough knowledge of geography.
false
After setting corporate objectives, the company management must define the company's vision and mission.
false
Allied and Axis governments met in Bretton Woods in the final days of WWII.
false
Although strategic planning is not a widely used management tool among global executives, according to a Bain and Company survey there is a high level of satisfaction among those executives who do use strategic planning.
false
An activity chain is a set of interlinked activities that adds value to the final product or service.
false
An analysis of the forces controlled by the firm will include a situational analysis and control analysis.
false
Because of the rapidity of changes in the uncontrollable variables, many managers have turned to contingency plans, which are multiple, plausible stories for probable futures.
false
Benjamin Franklin established the price of gold in 1717, and de facto put the U.S. on the gold standard.
false
Companies need to consider two types of measures when assessing strategic performance: (1) measures of the company's success in obtaining and applying the required resources, such as financial, technological, and human resources, and (2) measures of the effectiveness of the company's personnel, within and across the firm's international network of operations, in performing their assigned jobs.
false
Data such as overall GNI or GNI per capita can provide a snapshot of the size of an economy, but most seasoned managers instead look at economic growth rates.
false
Disposable income is the amount of income left after paying taxes and making essential purchases.
false
Due to developments such as a rapid rise in the level of uncertainty in many areas of international business, many firms have moved toward more structured strategic planning formats and longer planning documents.
false
Economic data provide information on the number of people, and the socioeconomic data tell us if they have purchasing power.
false
Effective bridging in a team situation is a substitute for integration.
false
Fringe benefits, productivity, and exchange rates are responsible for relative changes in labor costs.
false
From comparisons of income distribution studies over time, it appears that the top and bottom quintiles are growing at the expense of the middle quintile.
false
Generally as marketers go down the economic and social strata in each country, they tend to find greater similarities among countries on social and cultural values. True False
false
Global foreign currency exchanges transactions total over $52 million daily.
false
Global teams are a decreasing form for international work because transportation cost reductions have been implemented in many corporations.
false
Gross national income (GNI) is the total value of all goods and services produced by a nation's residents from domestic activity.
false
India has more millionaires than does China, despite China's higher savings rate.
false
International strategy involves decisions that deal with a single area, such as marketing or production.
false
It is difficult for American firms to compete in world markets because they have the highest international unit labor costs measured in U.S. dollars.
false
Leadership is synonymous with management.
false
Managers of multinationals are not interested in countries with slow-rising labor costs if other firms in the same industry are already located there.
false
Mapping is figuring out a geographical outline for all team members.
false
Monetary policies control the collecting and spending of money by governments.
false
Of all the promotional mix elements, personal selling has the greatest similarities worldwide. True False
false
Research indicates that global leaders are born, not developed through experience or training.
false
Scenario planning helps to emphasize that the business environment is predictable and helps to emphasize the application of traditional perspectives when solving problems.
false
Tariffs are not a financial force; they are a political force.
false
Team establishment involves weakly linked member identification to ensure enhanced performance.
false
Teams with strong heartbeats may meet less regularly than at their launch and during crisis.
false
The 10 lowest-ranked countries in the Human Development Index devised by the United Nations Development Program are all located in Asia.
false
The GLED model is used to assess cross-cultural management skills.
false
The purpose of having an international strategy is to achieve and maintain a unique and valuable competitive position both within a nation and globally, a position that has been termed comparative advantage.
false
The underground economy is an important element of the economic measures contained in official statistics.
false
Value chain analysis focuses primarily on the question: What value does the company want to deliver to these customers?
false
Virtual team leadership is similar to colocated team leadership.
false
When a firm enters overseas markets, economic analyses become more complex because now managers must operate in two new environments: domestic and international.
false
When conducting international economic analyses, it is usually the responsibility of the local subsidiary to collect data and prepare reports.
false
The ________ includes all the uncontrollable forces originating outside the home country that surround and influence the firm.
foreign environment
international economic analysis
foreign environment international environment
This type of institution operates through laws and regulations, with coercion as the regulative mechanism.
formal
A measure of an economy's size based on the market value of goods and services produced within a nation in a year is
gross domestic product.
At the end of World War II, the UN called for the conference that set up the World Bank and the IMF. This conference was:
held at Bretton Woods, New Hampshire.
The World Bank categories countries based on GNI per capita, using the following categories:
high-income economies, middle-income economies, low-income economies.
Economic integration often progresses:
in stages, from free trade area to customs union to common market.
Income distribution
indicates how a nation's income is apportioned among its people
international environment
interaction between domestic and foreign environment forces or between sets of foreign environmental forces -should provide economic data on both actual prospective markets
The ________ includes the interactions between domestic and foreign environmental forces, or between sets of foreign environmental forces when an affiliate in one country does business with customers in another.
international environment
Purchasing Power Parity
is a means of adjusting the exchange rates for two currencies so the currencies have equivalent purchasing power
International institutions are important to international business managers because, in general, they:
limit choices, thereby providing ways to settle disagreements and resolve conflicts.
Foreign exchange markets are
located in major trading capitals and have a virtual presence.
developing economies
low-income countries characterized by limited industrialization and stagnant economies
ask price
lowest-priced sell order currently in the market
According to the book, economic analyses become more complex when a firm enters overseas markets because, unlike the situation for a company operating domestically
management must operate in two new environments, foreign and international.
Gross domestic product
measures only the market value of goods and services produced within a nation in a particular year
Gini Index
measures the degree to which family income within a country is distributed equally,
The IBRD is a major institution of the World Bank whose function is to loan to:
middle-income and creditworthy poor nations.
Regional trade agreements such as NAFTA can be seen to impact the WTO:
negatively, because they undercut the nondiscrimination principle of the WTO.
The major function of the World Bank is to serve as a:
nonprofit banking cooperative for its members to meet development needs.
Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as:
normative and cognitive
reserves
reserves
The WTO is the only international organization designed to establish and help implement:
rules of trade among nations.
The IMF initially played a central role in:
setting fixed exchange rates among nations' currencies with an established par value based on gold.
International economic analyses
should providing economic data on actual and prospective markets.
The EU's impact on international business is:
substantial, since EU standards, especially in the areas of ecology and sustainability, impact any firm that wants to do business in the EU.
Most developed nations share the following characteristic(s):
technological dualism.
That the common interest of all nations in a workable international exchange rate system transcends their conflicting international interests is the premise of:
the International Monetary Fund (IMF).
The idea that WTO members treat all members equally is known as:
the MFN (most-favored-nation) principle.
The EU began as a common market for:
the coal and steel industries.
The impact of the EU on the WTO could be said to be negative, since:
the favored trade relationships among EU members are not extended to nonmember countries, so the EU undercuts the WTO.
Because of the importance of economic information to the control and planning functions at headquarters the collection of data and preparation of reports is usually the responsibility of
the home office.
The Council of European Union, the primary policy-setting institution of the EU, is composed of:
the member-states' ministers who represent the specific area being discussed.
Generally, we can assume that the higher the GNI/capita value
the more advanced the economy.
vertical integration
the production by a firm of inputs for its own manufacturing processes
The most serious recent challenge to the EU has been:
the recent financial crisis.
When an international manager is considering where to do business, one of the first considerations is
the size of the economy.
The planning process that begins at the highest level in the organization and continues downward is ________ planning.
top-down
unit labor costs
total direct labor costs divided by units produced
A vision statement is a description of the company's desired future position, of what it hopes to accomplish if it can acquire the necessary competencies and successfully implement its strategy.
true
As a result of the dollar's use as a proxy for gold, the U.S. ran up a balance of payments deficit of around $56 billion, which led to the U.S. going off the gold exchange standard in 1971.
true
Change is understood differently in different cultures, which suggests that leading global change is a challenging process.
true
China participates in the management of the international financial environment by managing its own currency.
true
Competitive strategies are action plans to enable organizations to reach their objectives.
true
Creating an environment for team norms to come into play is especially useful in global teams, because they are characterized by high levels of diversity.
true
Cultures with hierarchical values, such as most Asian and Latin American cultures, often have a single leader with decision-making power.
true
Currencies float because they are allowed to make their own adjustments in the marketplace.
true
Densely populated countries tend to make product distribution and communications simpler and less costly.
true
Frequently, given the choice between investing in a nation with a lower GNI/capita but a high growth rate, and a nation in which the conditions are reversed, management will choose the former.
true
Global managers who want to drive change need to be able to communicate across cultural boundaries and build trust.
true
Luxury items such as perfume can often be sold without adaptation in many different foreign markets. True False
true
Multiplicity and interdependence are among the four dimensions of complexity identified by scholars.
true
One exchange arrangement is to have no separate legal tender.
true
One factor that contributes to a favorable investment opportunity is the ability to obtain unit labor costs lower than those currently available to the firm.
true
One possible current currency arrangement is a crawling peg, where the exchange rate of a currency is allowed to move (within a narrow band) with another currency.
true
People from cultures with high power distance will feel most comfortable with top managers who make the decisions and issue directives.
true
Performance appraisal for global teams is influenced by national-level culture.
true
Promotion is all forms of communication between a firm and its public. True False
true
Sales forecasts are both a control and planning technique.
true
Scenario analysis can help managers to break away from their existing view of the world and envision alternatives that might lie outside their traditional frame of reference.
true
Some of the culture dimensions that are involved in change are tolerance of ambiguity and power distance.
true
Strategic plans help ensure that decision makers have a common understanding of the business, the strategy, the assumptions behind the strategy, the external business environment pressures, and their own direction.
true
The 500 largest multinational enterprises are responsible for about half of world trade and 90 percent of the global stock of foreign direct investment.
true
The Bank for International Settlements is like a central bank for central bankers.
true
The Big Mac Index can indicate whether a particular currency is overvalued or undervalued.
true
The Bretton Woods meeting in 1944 established a fixed rate exchange system among Allied governments that was imposed on the Axis governments.
true
The Bretton Woods system led to significant growth in international trade.
true
The Bretton Woods system worked until the early 1970s.
true
The balance of payments (BOP) is a record of a country's transactions with the rest of the world.
true
The controlling mechanism for a gold-based exchange system and a floating rate system are different.
true
The large international debt of numerous developing nations is important not only to international bankers, but also to international firms.
true
The percentage of household expenditures in developed nations for health care, transport and communication, and beverages and tobacco is much higher than for households in developing nations.
true
The random walk hypothesis suggests that the best predictor of tomorrow's currency prices are today's prices.
true
The simplicity of the gold standard was a part of its appeal.
true
The spot rate is the rate for exchange within two days in the currency market.
true
Transformational experiences are a recommended part of preparation for global leadership.
true
With a multidomestic strategy, the cost and complexity of coordinating a range of different strategies and product offerings across national and regional markets can be substantial.
true
international companies need a new kind of leader for the international environment to handle the increased complexity.
true
foreign environment
uncontrollable forces outside home country that surround/influence firm
underground economy
undeclared production of goods and services that are legal and illegal along with their corresponding activities and concealed income in kind.
Most developing nations share the following characteristic(s):
unequal distribution of income, with a very small middle class.
The results of liberalized trade so far have been:
uneven for developing and developed economies.
Informal institutions are composed of sets of:
voluntary agreements.
Atlas conversion factor
was developed to reduce the impact of exchange rate fluctuations. It is an arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, japan, UK, and US.
