Global Business Fall Finals 2017

An Italian corporation issues a bond denominated in dollars. This is an example of a

Eurobond

A company needs a considerable economy of size to facilitate, and benefit from, the globalization of its markets.

False

A currency swap is the rate at which a foreign exchange dealer converts one currency into another on a particular day.

False

Assistance from the U.S. State Department was virtually non-existent because Billy's crime embarassed the U.S.

False

Billy was arrested in Greece for trying to smuggle hashish out of the country.

False

Concentrated retail systems tend to promote the growth of wholesalers to serve retailers, which lengthens channels.

False

Currencies of countries with currency boards will become uncompetitive and overvalued if local inflation rates are lower than the inflation rate in the country to which the currency is pegged

False

Firms operating in less-developed nations tend to build a lot of extra performance attributes into their products.

False

Governments give banks less freedom when they deal in foreign currencies.

False

Gross national income per-capita data take into account differences in cost of living.

False

ILOG, IBM's subsidiary in France, will prepare its budget in Euros.

False

In 2008 and 2009, the GATT became the forum through which major nations attempted to launch a coordinated policy response to the global financial crisis, which started in the U.S..

False

In countries such as the United States and Britain, firms typically raised capital by obtaining loans from large, central, national banks.

False

In today's world of global communications, rapid transportation, and global markets, cultural differences are less important in international markets than in previous decades.

False

It is uncommon for a parent company to charge its foreign subsidiaries royalties for the technology, patents, or trade names it has transferred to them.

False

One benefit of a shorter channel is that it cuts selling costs when the retail sector is very fragmented.

False

Political systems that emphasize collectivism are often totalitarian, whereas those that place a high value on individualism tend to be democratic, with little gray area in the middle.

False

Social democrats believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.

False

The Cold War was a war between collectivism and individualism.

False

The PPP theory is a strong predictor of short-run movements in exchange rates covering time spans of five years or less.

False

The World Bank's function is policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties.

False

The colors black and white together have probably the most varied interpretation across cultures.

False

The ethical obligations of a multinational corporation toward employment conditions, human rights, environmental pollution, and the use of power are clearly understood around the world.

False

The initial rate, in the Lessard-Lorange Model, refers to the spot exchange rate when the budget is adopted.

False

The nature of the work in the U.S. health care sector prevents it from taking advantage of the benefits of outsourcing to low-cost producers in other nations.

False

The process of identifying distinct groups of consumers whose purchasing behavior differs from others in important ways is known as consumer behavior analysis.

False

When India's government or central bank chooses to have the value of the rupee pegged to the U.S. dollar's value, it is using a dirty float arrangement.

False

Which of the following is a common criticism against IMF?

IMF lacks any real mechanism for accountability

This states that for any two countries, the spot exchange rate should change in an equal amount but in the opposite direction to the difference in nominal interest rates between the two countries.

International Fisher Effect

Thus social scientist argued that it is not right that a few should benefit at the expense of the many, therefore individual freedoms should be restricted...

Karl Marx

In nations such as Iran, where political power is monopolized by a party, group, or individual that governs according to religious principles, the form of government is called .

Theocratic totalitarianism

According to Hofstede, the concept of Confucian dynamism captures attitudes toward time, persistence, protection of face, and respect for tradition.

True

An equity loan is made when a corporation sells stock to investors

True

Billy eventually became fluent in the local language, but was slowly losing his mind and his will to live.

True

Billy was originally given a 3-year prison sentence, which annoyed the state prosecutor who wanted him locked up for life.

True

Both Hindus and Buddhists stress the afterlife and spiritual achievement rather than involvement in this world.

True

Depositors are not protected against bank failures in the Eurocurrency market.

True

Differences in technical standards constrain the globalization of markets.

True

Ethical dilemmas exist because many real-world decisions involve first-, second-, and third-order consequences that are hard to quantify.

True

Eurobonds fall outside of the regulatory domain of any single nation.

True

Even if a country can be characterized as having a single culture, often that national culture is a mosaic of subcultures.

True

Financial performance of international subsidiaries depends on the transfer price set-up by the corporate.

True

If the Japanese government declared the yen to be externally convertible and tightly controlled the ability of its residents to convert yen into US dollars, any US businesses with deposits in Japanese banks could at any time convert all their yen into dollars and take them out of the country.

True

In Bhutan, the Ngultrum is its currency and if it's worth one and a half cents in U.S. currency; that's its exchange rate, 1:0.015.

True

Increasingly, the IMF has been acting as the macroeconomic police of the world economy,

True

Norms refer to the social rules and guidelines that prescribe appropriate behavior in particular situations.

True

People who cannot take food or safety for granted tend to be xenophobic, are wary of political activity, have authoritarian tendencies, and believe that men make better political leaders than women.

True

Plato, who advocated collectivism, did not equate it with total equality, the way some political entities prefer to consider it today.

True

Straw men approaches to business ethics can be characterized as the Friedman doctrine, cultural relativism, the righteous moralist, and the naive immoralist.

True

The IMF made pegging Mexican peso to the dollar, a condition for lending money to the Mexican government in the 1980s.

True

The United States is not a Democracy; it is a Republic.

True

The central principle of Islam is that there is but one true omnipotent God.

True

The convergence hypothesis states that there is a slow but steady merging occurring across different cultures towards some universally accepted values and norms.

True

The efficient market school of thought argues that investing in exchange rate forecasting services would be a waste of money.

True

The forward exchange market does not provide adequate coverage for long-term borrowings

True

The largest number of global markets currently are markets for industrial goods and materials rather than consumer products.

True

The protection of the right to own private property is embedded within Islam.

True

U.S. businesses cannot gain economic advantages by bribing corrupt government officials outside the U.S.

True

Under the gold standard, the amount of a currency needed to purchase one ounce of gold was referred to as the gold par value.

True

When certain fish populations (such as shrimp or whales) are over-harvested, endangering the next generation the tragedy of the commons can be said to occur.

True

A common law system is different from a civil law system because:

a common law system is very rigid, while a civil law system tends to be more flexible.

A number of econometric studies have found consistent evidence of a hump-shaped relationship between income levels and pollution levels. According to this, as an economy grows and income levels rise:

after a while the pollution levels decrease

Which of the following observations is true of the Bretton Woods agreement?

all countries agreed to fix the value of their currency in terms of gold under the agreement

Cross-cultural literacy refers to:

an understanding of how cultural differences can affect business

Assume that the law of one price holds. A shirt that retails for $120 in New York sells for £60 in London. The exchange rate between the British pound and the dollar is £1 = $1.50. Assuming away transportation costs and trade barriers, this creates a profit-making opportunity called

arbitrage

In most developed countries, the use of children as scouts, runners, and soldiers in some African countries is considered a violation of

basic human rights

The relatively low correlation between the movement of stock markets in different countries indicates that

countries pursue different macroeconomic policies

When Patrice said, "Don't worry about it. Everyone in this country does that, so it can't be wrong," the ethical principle guiding her thinking was

cultural relativism

Which of the following will help a company hedge against currency fluctuations?

dispersing production to different geographic locations

What is the concept that is concerned with the long-run effect of changes in exchange rates on future prices, sales, and costs?

economic exposure

The G20 was originally established to

formulate a coordinated policy response to financial crises in developing nations

In late 2001, the WTO launched a new round of talks in Doha aimed at:

further liberalization of the global trade and investment framework.

When Billy walked the wrong way around the "community circle"

he was warned that bad things would happen

Each time Billy was taken to the courtroom

his locally appointed lawyer told him that everything would be okay.

Which of the following is a consequence of globalization?

increasing outsourcing of services

Which of the following is a reason why the global capital market is increasingly becoming speculative?

investments in the global capital market are faced with a lack of quality information.

This can inject risk into foreign currency borrowing:

issue of domestic bonds

U.S. Foreign Corrupt Practices Act outlawed the practice of paying bribes to foreign government officials in order to gain business, however

it was amended to permit facilitating payments

Globalization of markets results in markets becoming

less diverse

The World Trade Organization promotes

lowering of barriers to cross-border trade and investment

Greece's behavior in recent years can best be explained by

moral hazard

When some 200 U.S. and more than 60 British companies withdrew from South Africa, international lenders cut off Pretoria's access to foreign capital, and the value of the rand, South Africa's currency, dropped dramatically resolve to place moral concerns ahead of other concerns because of apartheid, they were collectively establishing

moral intent

BP, one of the world's largest oil companies, has made it part of the company policy to undertake "social investments" in the countries where it does business. The company believes it is morally obligated to give something back to the societies that have made their success possible. BP's actions are an example of

noblesse oblige

The philanthropic work of people such as Danny Thomas, Paul Newman, and Oprah Winfrey is known as

noblesse oblige

The Research and Development division of a company has recently designed a new coffee vending machine that is likely to sell very well in the market. It is compact, user-friendly, and provides unprecedented efficiency in terms of cost per cup. Consequently, the company fears that its competitors would soon mimic the design of their product and to protect its product, it is now seeking a

patent

Which of the following statements is true of pegged exchange rates?

pegged exchange rates are popular among many of the world's smaller nations.

In several Western democracies, the poor performance of state-owned enterprises, because of protection from competition and guaranteed government financial support, led to

privatization

Billy's appeal

reflected President Nixon's dismal foreign policy record

Ethical systems are:

sets of moral principles, or values, that are used to guide and shape behavior.

This is required for a business environment to be conducive to international innovation and entrepreneurial activity.

strong legal protection of property rights

Which of the following statements is true of foreign bonds?

such bonds are denominated in the issuing country's currency.

The most defensible approach to an ethical decision is

teleological

Justice theories of business ethics focus on:

the attainment of an equitable distribution of goods and services.

Which of the following observations is correct?

the economic principles of Islam prohibit the payment or receipt of interest.

The relative decline of the United States in the share of world output and world exports reflects

the growth in the economic development of the world economy

The utilitarian approach to business ethics suggests that:

the moral worth of actions or practices is determined by their consequences.

Why do governments limit currency convertibility?

to preserve foreign exchange reserves.

Those in favor of floating exchange rate claim that

trade imbalances can be adjusted by using floating exchange rates

Max, one of Billy's prison mates,

was a heroin addict

In the last two decades, Latin American countries like Brazil, Mexico, and Chile have

welcomed foreign investment