IB Test 2

A division in the organization that is at the same level as the domestic division and is responsible for all non-home-country activities is a(n)

international division

Arbitration is often preferred when the contract stipulates U.S. law and one of the litigants is foreign because it

is perceived as fairer, faster, cheaper, and more confidential than are the courts.

Regarding an IC's structure,

it has to evolve overtime. It's essential because it allows the IC to respond to change

Historically, gold has been used as a way for people to store value because of

its purity and scarcity

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.

The Foreign Corrupt Practices Act (FCPA) is U.S. legislation that

prohibits bribery by American companies abroad.

International economic analyses

should provide economic data on actual and prospective markets.

The process by which an organization determines where it is going in the future, how it will get there, and how it will assess whether and to what extent it has achieved its goals is known as

strategic planning

One difference between the U.S. and EU approach to antitrust law is that

the United States follows the per se concept, wherein actions are illegal whether they have done harm.

The three main approaches to exchange rate forecasting are

the efficient market approach, the fundamental approach, and the technical approach.

Generally, we can assume that the higher the GNI/capita value

the more advanced the economy

Intellectual property includes anything that is

the result of things created using someone's intellect.

Anyone studying legal forces affecting international business soon realizes

the variety of these forces complicates the task of understanding the laws.

Regarding the structure of international companies

two of A, B, and C

Most developing nations share the following characteristic(s):

unequal distribution of income, with a very small middle class

When the law of one price is applied to interest rates, it suggests that

varying interest rates take into account anticipated differences in inflation rates.

According to the text, which of the following dimensions provide the basis for organizational subdivisions at the secondary, tertiary, and still lower levels?

All of B, C, and D

Dissatisfaction with both the purchasing power parity (PPP) and conversions using official exchange rates caused the World Bank to adopt what methodology to derive per capita GNI estimates?

Atlas methodology /conversion factor

When measuring the value produced in an economy, most international organizations prefer to use

GNI to GDP for measuring the value produced in an economy because GDP only measures the market value of goods and services produced in a nation in a particular year

___________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 (GDP)

Which of the following is incorrect about scenario analyses?

None of the above are incorrect

Which of the following is correct about scenario analyses?

None of the above is correct

Organizational design

Process involving decisions about six key elements: work specialization, Departmentalization, Chain of Command, Span of Control, Centralization and decentralization, Formalizationn

Lower corporate tax rates are found in

Switzerland, Ireland, Singapore, and Russia

Which of the following is correct regarding the skills or competencies a company must develop in order to achieve a sustainable competitive advantage?

They are difficult to substitute for

Regarding an IC's structures and systems

all are true

International strategy

all of the above

Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because

all of the above

The U.S. antitrust law contains both civil and criminal penalties

and the criminal penalties apply to foreign companies even if the conspiracy took place outside the United States.

The U.S. and the EU both

apply antitrust law extraterritoriality

The main sources of international law are

bilateral and multilateral treaties, along with customary law.

The FCPA has

brought the discussion of bribery into the open, which has, overall, been positive.

Foreign reserves are used to

cover foreign debt, import purchases, and other demands for foreign currency that banks might encounter

Currency exchange controls are found most frequently in

developing countries

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 international Fisher effect says that the interest rate differentials in any two currencies reflect the

expected change in their exchange rates.

Arbitrage functions to

exploit price differences between markets, so as to profit with no risk.

The Alien Tort Statute allows foreigners to

file claims in U.S. courts for violations of international law that may have occurred beyond U.S. borders.

In designing the organizational structure, management know two concerns, __________ and __________, run counter to each other.

finding the most effective way to departmentalize; coordinating activities

The ____________ includes all the uncontrollable forces originating outside the home country that surround and influence the firm.

foreign environment

Bretton Woods led to an exchange rate agreement known as the Bretton Woods System or the

gold exchange standard

Which of the following is not true about China, compared to India?

india's strength so far has been in services whereas china's has been in manufacturing.