MSB 430 Final Study Questions

Managing and cultivating diverse teams is facilitated by first encouraging team members to ________. a) understand each other's culture before dealing with the tasks at hand b) establish strict rules on how the task will be performed c) jump into the task allowing the team members to react and adapt to each other d) deal with fellow team members as they would in their own culture

a) understand each other's culture before dealing with the tasks at hand

The Organization of Petroleum Exporting Countries ________. a) uses quotas to control oil prices b) produces all of the world's oil c) uses import tariffs to control oil prices d) stabilizes prices based on demand

a) uses quotas to control oil prices

A price on goods and services sold by one member of a corporate family to another is known as a(n) ________. a) transfer price b) tax credit price c) active price d) passive price

a) transfer price

________ are the two basic strategies for creating value and attaining a competitive advantage in an industry. a) Cost leadership and differentiation b) Industry leadership and market dominance c) Customer satisfaction and product innovation d) Diversification and niche marketing

a) Cost leadership and differentiation

A multinational enterprise (MNE) is best defined as a firm ________. a) with foreign direct investments b) involved in global franchising c) with foreign business partners d) that is a member of the Fortune 500

a) with foreign direct investments

Which of the following groups of countries is most likely to form a regional trading group? a) Spain, South Africa, Mongolia b) Canada, United States, Mexico c) Brazil, Ukraine, Japan d) India, Argentina, France

b) Canada, United States, Mexico

Which of the following members of the European Union has NOT adopted the euro? a) Greece b) Denmark c) Estonia d) Germany

b) Denmark

Sarah, a manager at Farley Enterprises, an MNE with operations in Asia, Europe, and North America, is using past trends in exchange rate movements to spot future trends. Which type of forecasting approach is Sarah most likely using? a) economic b) technical c) application d) fundamental

b) technical

Which of the following is the MOST accurate statement about culture? a) Cultural variables can easily be isolated from other factors such as economic and political conditions. b) Within a culture, everyone responds to particular cultural variables the same way. c) Although most cultural variables are universal, the forms these variables take differ from culture to culture. d) Most cultural variables are superficial and can easily be influenced by environmental factors.

c) Although most cultural variables are universal, the forms these variables take differ from culture to culture.

German companies like Deutsche Bank and DaimlerChrysler have been relatively optimistic and transparent in their financial reporting compared with many Germanic companies because ________. a) most of their revenues are from the United States and United Kingdom b) they do not have to adopt International Accounting Standards c) they adopted U.S. Generally Accepted Accounting Standards d) German accounting standards have always been optimistic and transparent

c) they adopted U.S. Generally Accepted Accounting Standards

________ is the measuring of performance so that companies can respond appropriately to changing conditions. a) Configuration b) Compatibility c) Coordination d) Control

d) Control

The industrialization argument for trade protection in developing countries is based on the assumption that ________. a) the protected industry will become competitive over time with economies of scale b) subsidizing production is a better means of protection than limiting imports c) it is better to depend on buying agricultural surpluses from developed countries than to produce these agricultural goods d) unemployment and underemployment exist in rural areas, so little agricultural output is lost as people move into industrial jobs

d) unemployment and underemployment exist in rural areas, so little agricultural output is lost as people move into industrial jobs

Based on the hierarchy-of-needs theory, in which of the following would fulfillment of lower-order needs be the best motivator? a) Protestant countries b) wealthy countries c) high femininity countries d) very poor countries

d) very poor countries

Skinner Electronics plans to expand into foreign markets. Top executives want the firm to focus only on locations where the rule of law prevails. Which of the following should most likely be considered by Skinner? a) emerging economies experiencing rapid growth b) developing, non-Western countries c) countries inclined toward totalitarian-style government d) wealthier, westernized countries

d) wealthier, westernized countries

Which of the following was a notable trend in political systems during the second half of the 20th century and beginning of the 21st century? a) A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems. b) A totalitarian revolution swept the world as people looked to strong state leadership in uncertain times. c) Socialistic revolutions swept the world as countries aspired toward greater social justice. d) A wave of theocratic revolutions occurred as people around the world looked to spirituality to guide them.

a) A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems.

Which of the following has MOST influenced consumers to demand access to foreign-made products? a) Consumers have become more efficient in using media and technologies to compare prices worldwide. b) Expectations of rising prices of foreign products have caused consumers to seek foreign products before their prices become prohibitive. c) Declining global affluence has caused consumers to seek out lower-priced products from abroad. d) Fearing that their governments will enact restrictive policies on imports, consumers are stocking up on foreign products before restrictions are put in place.

a) Consumers have become more efficient in using media and technologies to compare prices worldwide.

________ is the most common way of identifying market segments within a country. a) Demographics b) The Internet c) Gap analysis d) Psychographics

a) Demographics

Which EU country has NOT adopted the euro? a) Denmark b) Germany c) France d) Greece

a) Denmark

Giga-Mart has an IT system that links the firm's suppliers, manufacturers, customers, and intermediaries. Giga-Mart most likely has a(n) ________, a) EDI (electronic data interchange) b) JIT (just-in-time) c) ERP (enterprise resource planning) d) TQM (total quality management)

a) EDI (electronic data interchange)

Which of the following BEST describes a company that follows a social marketing orientation? a) It considers political and safety dimensions of its products. b) It is a not-for-profit entity based in a developed country. c) It is a government-owned entity from an emerging economy. d) It generates sales to niche markets using social networking sites.

a) It considers political and safety dimensions of its products.

Why are options most likely so attractive to companies? a) Options provide companies with more flexibility than a forward contract. b) Options are usually cheaper than forward contracts. c) The writer of the option does not charge the company any fee for writing the option. d) Options can be used for only foreign-exchange deals.

a) Options provide companies with more flexibility than a forward contract.

Which of the following statements BEST describes a limitation of the Big Mac Index? a) Profit margins vary by the strength of competition, which affects relative prices. b) Taxes have no effect on Big Mac prices. c) The theory of PPP incorrectly assumes that there are barriers to trade. d) The Big Mac represents all possible commodities and services.

a) Profit margins vary by the strength of competition, which affects relative prices.

Barton Accessories has two retail stores and one production facility where the firm's line of leather belts and purses are assembled. Barton employs 430 people and generates nearly $1 million in revenue each year through domestic and international sales. Which term best describes the status of Barton? a) SME b) MNE c) MNC d) FDI

a) SME

________ is the process of a firm having inputs supplied to it for the production process. a) Sourcing b) External production c) Subcontracting d) Offshoring

a) Sourcing

________ is the framework that managers apply to determine the competitive moves and business approaches that run the company. a) Strategy b) Vision c) Competition d) Growth

a) Strategy

A U.S. firm is acquiring an existing company in Germany rather than starting up a new foreign operation. Which of the following statements best supports this decision? a) The German firm has skilled personnel that the U.S. firm cannot hire at a good price on its own. b) Stock market prices have been very high in Germany. c) The U.S. firm's U.S. facility is working at capacity. d) Because the German firm is performing poorly, there is a good turn-around opportunity.

a) The German firm has skilled personnel that the U.S. firm cannot hire at a good price on its own.

A U.S. firm plans to shift from exporting to production in China to serve the Chinese market. Which of the following statements would best explain this decision? a) The firm is nearing capacity utilization in its U.S. plant. b) Transportation costs have become low relative to production costs. c) China's currency is appreciating relative to the U.S. dollar. d) The company need not alter its products for the Chinese market.

a) The firm is nearing capacity utilization in its U.S. plant.

Which of the following BEST depicts a push strategy for a U.S. company selling in Mexico? a) Tupperware selling through parties in homes b) Gillette selling razor blades through supermarkets c) Google advertising on television d) KFC selling chicken dinners at its franchises

a) Tupperware selling through parties in homes

Kyle, an international manager for Apex Industries, has been given the task of analyzing the economies of three different emerging countries for the firm's potential expansion. Which of the following questions is LEAST relevant to Kyle's assignment? a) What is the likelihood that Apex can fill manufacturing positions with locals? b) What factors in the country drive or hinder economic change? c) How much freedom will Apex have to run its foreign operations? d) What are the current economic policies related to development?

a) What is the likelihood that Apex can fill manufacturing positions with locals?

________ is an idea perfected by Japanese manufacturers to ensure quality in products. a) Zero defects b) Kaizen c) Total quality management d) Lean manufacturing

a) Zero defects

What is an equity alliance? a) a collaborative arrangement in which at least one collaborating company takes an ownership position in the other b) a collaboration in which partners agree to share technology with each other c) a wholly owned acquisition to prevent appropriation of intellectual property d) a collaboration in which each contributor receives an equitable return based on relative contribution

a) a collaborative arrangement in which at least one collaborating company takes an ownership position in the other

Demographers project that the share (percentage of population) of what we now consider the working-age population in developed countries will decrease up to the year 2050. Which of the following is the most likely result of this trend? a) a higher percentage in per capita GDP in today's developing economies than in today's developed economies b) a higher percentage in per capita GDP in today's developed economies than in today's developing economies c) an increase in FDI provided by developed economies d) an increase in foreign exchange among trading blocs

a) a higher percentage in per capita GDP in today's developing economies than in today's developed economies

The U.S. dollar is most likely traded widely because it is ________. a) a reserve currency held by many central banks b) monitored by the Bank of International Settlements and the U.S. Federal Reserve c) based on prices of the NYSE, which is the world's largest foreign-exchange center d) one of the oldest and most stable currencies in the world

a) a reserve currency held by many central banks

The more closed a society is, the more important ________ group membership is. a) ascribed b) education c) acquired d) age-based

a) ascribed

The interbank market in foreign exchange is where ________. a) banks trade currency with each other b) electronic brokerage systems are required c) remittance payments are made d) reporting dealers set exchange terms

a) banks trade currency with each other

Improving explanatory power of the IO paradigm can be done by considering the potential for ________ to lead to a company's sustained competitive advantage. a) bright, motivated managers b) political trends and events c) cultural institutions d) new markets

a) bright, motivated managers

In societies where trust is high, ________. a) business costs are typically lower b) family businesses are dominant c) people tend to be more future-oriented d) people tend to be more fatalistic

a) business costs are typically lower

Factor mobility refers to the movement of which of the following combinations? a) capital, technology and people b) labor, capital and management c) currency, profits and raw materials d) trade, profits and materials

a) capital, technology and people

A guideline for responsible action by a firm in its operations worldwide is a(n) ________. a) code of conduct b) corporate monitoring policy c) education program d) honor code

a) code of conduct

Which of the following handles the majority of all foreign-exchange activities? a) commercial banks b) commodities exchanges c) multinational enterprises d) regional banks

a) commercial banks

Which of the following is NOT a key stakeholder group that a company must work to satisfy in order to survive in a global environment? a) competitors b) shareholders c) employees d) customers

a) competitors

In which quadrant of a disclosure/assessment matrix for accounting systems would you most likely find less-developed Latin countries? a) conservatism and secrecy b) transparency and conservatism c) secrecy and transparency d) optimism and secrecy

a) conservatism and secrecy

At Cooper Industries, Jake is responsible for evaluating potential acquisitions abroad, managing cash flow, tax planning, and internal auditing. Which of the following is most likely Jake's position at Cooper? a) controller b) regulator c) treasurer d) CEO

a) controller

Which of the following would most likely pressure an MNE to globally integrate its value activities? a) costs of producing in separate facilities exceeding those of producing in a single facility b) market pressures to add new product features continually c) variability in consumers' tastes and preferences shifting across countries d) demands imposed by host country governments

a) costs of producing in separate facilities exceeding those of producing in a single facility

Cultural change imposed by an alien culture is called ________. a) cultural imperialism b) high-context c) multicultural ethnocentrism d) collectivism

a) cultural imperialism

Johnson & Johnson distributes decision-making power among departments and divisions. This policy provides managers with a sense of ownership and control at the company. Johnson & Johnson is best described as a ________ organization. a) decentralized b) vertical c) horizontal d) centralized

a) decentralized

Which of the following has NOT been a major force increasing globalization in recent decades? a) decreasing prices of natural resources b) growing pressure from consumers c) liberalization of cross-border trade d) increase in and expansion of technology

a) decreasing prices of natural resources

Successful implementation of a ________ strategy requires a company to develop unique competencies that rivals find hard, if not impossible, to match or copy. a) differentiation b) marketing c) globalization d) cost leadership

a) differentiation

A company's value chain is best described as the ________. a) discrete series of steps taken to move a product from conception to end-users b) mixture of activities taken to define product value standards and price points c) variable sequence of converting product ideas into value for shareholders d) blueprint that must be followed to leverage the core capabilities of a global firm

a) discrete series of steps taken to move a product from conception to end-users

Advanced communication systems have contributed to growth in international business by ________. a) enabling better oversight of global operations b) reducing the effects of global competition c) decreasing the cost of cargo transportation d) reducing export regulations

a) enabling better oversight of global operations

A(n) ________ is the price of a currency. a) exchange rate b) subsidy c) tariff d) quota

a) exchange rate

Companies most likely use the foreign-exchange market to ________. a) facilitate regular business transactions b) establish a global market presence c) establish fair currency trading policies d) diversify their hedge funds

a) facilitate regular business transactions

failure to conduct internal auditing a) foreign companies managed by U.S. expatriates b) foreign firms quoted on a U.S. stock exchange c) companies registered in the United States d) foreign firms operating in U.S. territory

a) foreign companies managed by U.S. expatriates

If Toranaga-san, who works for a Japanese trading company that operates in Japanese yen, wanted to purchase Spanish castanets from a company in Barcelona and needed euros to complete the transaction, he would use the ________ to gain access to spot euros. a) foreign-exchange market b) stock market c) New York Stock Exchange d) international export market

a) foreign-exchange market

What is the most likely reason that sales to a mass market would be necessary for a company selling internationally? a) gaining economies in production and distribution b) gaining brand recognition c) eliminating excess domestic capacity d) earning initial sales in emerging economies

a) gaining economies in production and distribution

What are the three levels of quality standards? a) general, industry-specific, and company b) company, international, and industry-specific c) employee, company, and customer d) general, international, and domestic

a) general, industry-specific, and company

Which of the following is NOT one of the three personality traits that specifically affect international marketing? a) globalism b) materialism c) cosmopolitanism d) ethnocentrism

a) globalism

Hard currencies are usually ________. a) highly liquid b) not fully convertible c) undesirable assets d) unstable

a) highly liquid

Iverson Products is a U.S. firm that is considering expanding internationally by exporting. Which of the following is the LEAST likely benefit for Iverson? a) improving economies of scale b) boosting marketplace flexibility c) requiring fairly few resources d) facing lower business risk compared to other foreign market entry options

a) improving economies of scale

The probability that a business is engaged in exporting tends to ________. a) increase with the size of the firm b) decrease with the product life cycle c) increase with the product life cycle d) decrease with the size of the firm

a) increase with the size of the firm

A free trade agreement is likely to increase efficiency because of ________. a) increased competition b) decreased trade creation c) decreased competition d) decreased trade diversion

a) increased competition

Which tool is used by most firms to monitor the data linkages among product planning, parts purchasing, and inventory maintenance activities? a) information systems b) clan controls c) reports d) financial metrics

a) information systems

Which of the following problems in China is blamed for the annual loss of $250 billion by American MNEs? a) intellectual property violations b) embezzlement c) child labor violations d) environmental hazards

a) intellectual property violations

Contrary to the product life cycle theory, there has been an increased tendency for companies to ________. a) introduce new products simultaneously in domestic and foreign markets b) produce and sell products in countries where counterfeiting is low c) sell products only in their home markets throughout the cycle d) sell new products in developing countries before expanding into developed countries

a) introduce new products simultaneously in domestic and foreign markets

Which of the following financing tactics would most likely help an MNE avoid bankruptcy? a) keeping the percentage of debt in the capital structure to a level that can be managed even during difficult business conditions b) agreeing to forward contracts with customers and hedging purchases and sales on future currency rates c) integrating e-commerce opportunities with domestic sales in order to maintain a steady balance of income and expenditures d) organizing the capital structure so that the amount of debt financing is twice the level of equity financing

a) keeping the percentage of debt in the capital structure to a level that can be managed even during difficult business conditions

A driving factor for the growth in imports is the impact of ________. a) labor specialization b) government programs c) consumer preferences d) social trends

a) labor specialization

Chrysler granted South East Motor (a company in China) rights to produce its Grand Voyager minivan for sale in China in exchange for a fee. This is an example of a ________. a) licensing agreement b) bargaining school arrangement c) technology appropriation d) turnkey operation

a) licensing agreement

Reebok pays a royalty to the German Soccer League to use the team's logo on t-shirts that it sells. Reebok and the German Soccer League most likely have a ________. a) licensing agreement b) portfolio investment c) turnkey operation contract d) joint venture

a) licensing agreement

The International Fisher Effect ________. a) links interest rates and exchange rates b) implies that the currency of the country with the lower interest rate will weaken in the future c) links interest rates and inflation d) implies that the country with the higher interest rate should have lower inflation

a) links interest rates and exchange rates

Which of the following is NOT a method of capital budgeting in a global context? a) non-discount method b) payback period c) net present value d) internal rate of return

a) non-discount method

In a concentration strategy of international expansion, a company would go to ________. a) one or a few foreign countries and build a strong involvement there before going to other countries b) many countries very rapidly, and then build up slowly in each c) a reporting system that measures performance on a regional rather than a country-by-country basis d) a foreign country with one product and not sell other products in that country until a target market share is reached

a) one or a few foreign countries and build a strong involvement there before going to other countries

The accounting value that illustrates how companies are more liberal in their recognition of income is ________. a) optimism b) income-based accounting c) transparency d) measurement

a) optimism

When a company successfully responds to foreign production and market opportunities, ________. a) other companies will likely emulate its successful practices b) it will downsize its domestic operations c) its home government likely raises taxes on the company d) it likely has a long-term advantage over competitors

a) other companies will likely emulate its successful practices

The Bretton Woods Agreement established a system of fixed exchange rates under which each IMF member country set a ________. a) par value b) quota c) nominal interest rate d) gold standard

a) par value

Logan Electronics has a production facility in Bolivia. Recently, the firm was taxed at a significantly higher rate than a local electronics company. Which type of political risk is Logan most likely experiencing? a) procedural b) distributive c) systemic d) catastrophic

a) procedural

When a company does business in another country whose official language is the same as its home country's, the company should most likely ________. a) realize that words may have different meanings b) use back-translation on all written documents c) assume that communications will go smoothly d) assume that word meanings are the same despite spelling differences

a) realize that words may have different meanings

The saying "When in Rome, do as the Romans do" applies to the ________ approach. a) relativism b) normativism c) teleological d) deontological

a) relativism

A company's location should be flexible enough to ________. a) respond to new opportunities and withdraw from less profitable ones b) implement concentration strategies instead of diversification strategies c) import from anywhere in the world to a single production location d) export anywhere in the world from a single production location

a) respond to new opportunities and withdraw from less profitable ones

Which of the following is a characteristic of India that discourages MNE investment? a) restrictive labor laws b) poor communication infrastructure c) government controlled market d) slow market growth

a) restrictive labor laws

In comparing international and domestic marketing, it is best to state that ________. a) similar principles are at work b) the differences between them can be studied through gap analysis c) principles differ for product and price, but not for advertising d) mass-market orientations are most effective

a) similar principles are at work

The incremental internationalization view of exporting holds that companies first target countries that are ________ their home market. a) similar to b) smaller than c) different from d) larger than

a) similar to

In a country that practices state capitalism, all of the following are most likely to be handled by the state EXCEPT ________. a) supporting the local activities of foreign competitors b) developing national corporations c) systematically managing trade relations d) leveraging control of the financial system

a) supporting the local activities of foreign competitors

Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as ________. a) sustainability b) externality c) competitive advantage d) the Kyoto Protocol

a) sustainability

The premise that there will be more finely tuned specialization of production among countries is most likely based on the idea that companies will ________. a) take advantage of wage and skill differences among countries b) depend more on production of nontradable goods and services c) establish facilities in dispersed locations to hinder domestic competition d) encourage urbanization in emerging countries that lack infrastructure

a) take advantage of wage and skill differences among countries

In most cases, which type of government protection assistance is most controversial? a) tariffs b) business development services c) trade expositions d) foreign business contacts

a) tariffs

An argument against limiting exports to unfriendly countries is that ________. a) the costs of the sanctions are borne by innocent people rather than by leaders b) markets cannot be regained after the countries become friendly c) one country's essential product is superfluous to another d) the exporting nation's cultural identity is harmed

a) the costs of the sanctions are borne by innocent people rather than by leaders

What is an international joint venture? a) the ownership of a company by two or more companies, of which at least one is a foreign company where the venture is located b) an agreement between two or more organizations to share management expertise c) an international agreement between two or more companies to have access to each other's patents d) an international agreement between two or more firms for the use of a trademark

a) the ownership of a company by two or more companies, of which at least one is a foreign company where the venture is located

Creolization refers to ________. a) the process of mixing elements of an outside culture with those of a national culture b) government efforts to maintain a distinct cultural identity through legislation and language c) changes as cultures evolve over time d) the use of stereotypes to describe a culture

a) the process of mixing elements of an outside culture with those of a national culture

A pull rather than a push strategy is most likely preferable when ________. a) there are few governmental restrictions on advertising b) the price of a product is high relative to incomes c) self-service is not predominant d) there are a large number of languages and a low literacy rate

a) there are few governmental restrictions on advertising

All of the following would be examples of international joint ventures EXCEPT ________. a) two Venezuelan companies sharing ownership of a company in Venezuela b) two Japanese companies sharing ownership of a company in Canada c) a Danish company sharing ownership with a South African company in South Africa d) a government-owned company from China sharing ownership with an Australian company in Panama

a) two Venezuelan companies sharing ownership of a company in Venezuela

Which of the following is most likely a true statement about the relationship between the United Nations and NGOs? a) NGOs typically operate in only one country, whereas UN agencies can operate anywhere in the world. b) A UN committee discusses issues of importance to NGOs but does not regulate their activities. c) The UN determines which NGOs can work on international humanitarian issues and relief efforts. d) The UN must license an NGO for it to be involved in any international relief efforts.

b) A UN committee discusses issues of importance to NGOs but does not regulate their activities.

Which of the following is the LEAST likely reason that small countries worry about overdependence caused by globalization? a) A large company may exploit legal loopholes to avoid tax payments. b) A large country may substantially increase its demand for the small country's production. c) A large international firm may dictate its terms of operations in a small country. d) A large country on which they depend may pressure them on political matters.

b) A large country may substantially increase its demand for the small country's production.

________ refers to a political system in which government is organized by and accountable to the people. a) Fascism b) Democracy c) Socialism d) Totalitarianism

b) Democracy

________ integration is the political and economic agreements among countries that give preference to member countries to the agreement. a) Global b) Economic c) Bilateral d) Regional

b) Economic

Which of the following statements is most likely true about secrecy and transparency in accounting? a) Companies that list on stock exchanges are highly transparent because of stockholder audits. b) German companies tend to be less transparent than British companies. c) Japanese firms are usually as transparent as U.S. firms. d) Secrecy and transparency refer to the degree of caution companies display in valuing assets.

b) German companies tend to be less transparent than British companies.

________ refers to the activities that an organization carries out to put the right person into the right job in the right place at the right time for the right salary. a) Work force analysis b) Human resource management c) Leadership planning d) Staff development

b) Human resource management

If the euro continues to remain strong against the U.S. dollar, which of the following strategies would make the most sense for BMW? a) It might be advantageous for BMW to consider exporting from Germany to the United States to take advantage of cheaper costs. b) It might increase its manufacturing capacity in the United States to take advantage of the cheaper dollar. c) It might consider raising prices in the United States to earn more profits for BMW. d) It really doesn't make any difference to BMW since consumers will buy the cars no matter what they cost.

b) It might increase its manufacturing capacity in the United States to take advantage of the cheaper dollar.

An example of an electronic brokerage system used to trade foreign exchange is ________. a) Bank for International Settlements b) Reuters c) the reporting dealers clearing house c) Interbank Traders Ltd.

b) Reuters

All of the following countries have a totalitarian political system EXCEPT ________. a) China b) South Korea c) Saudi Arabia d) Russia

b) South Korea

Which of the following BEST explains why foreign subsidiary managers are often reluctant to propose divestments in the countries where they are working? a) They are usually poorly trained in how to sell units or how to close them down. b) They are afraid of proposing the elimination of their jobs. c) They are too nationalistic to examine political risk objectively. d) Many are in countries where the cultural attribute of power-distance is very high.

b) They are afraid of proposing the elimination of their jobs.

The primary responsibilities of the ________ are the assessment and collection of all duties, taxes, and fees on imported merchandise, the enforcement of customs and related laws, and the administration of certain navigation laws and treaties. a) U.S. Secret Service b) U.S. Customs and Border Protection c) Food and Drug Administration d) Internal Revenue Service

b) U.S. Customs and Border Protection

Tanya is a manager at a global firm that has operations located in Brazil, India, and Japan. Tanya is in the process of making a fundamental analysis in order to forecast exchange rates in each country. Which of the following is a confidence factor that Tanya should consider in trying to predict exchange rate movements in each country? a) What trends do the charts show? b) What are the expectations of the market with respect to the political environment? c) At what rates do there appear to be buy and sell orders? d) Have there been significant national events that have appeared in the news lately?

b) What are the expectations of the market with respect to the political environment?

Which of the hypothetical new products, if successful, would most likely diffuse its production and sales according to the product life cycle theory? a) a new Diet Coca-Cola soft drink flavored with cranberries b) a Sony television that receives global transmissions without a satellite dish or cable connection, introduced at a high price but targeted eventually for sale to a mass market c) a Kyocera plastic chip carrier, which is expected to be quickly obsolete because of innovations d) a Ferrari sports car selling for $200,000 to a niche, upper-end market

b) a Sony television that receives global transmissions without a satellite dish or cable connection, introduced at a high price but targeted eventually for sale to a mass market

What is a Eurodollar? a) a euro deposited in a U.S. bank b) a U.S. dollar deposited in a European bank c) a euro held by an American d) any currency deposited in a country other than the country of issue

b) a U.S. dollar deposited in a European bank

A foreign direct investment occurs when ________. a) a company owns at least 25% of a foreign firm b) a company has a controlling interest in a foreign company c) foreign ownership is in private rather than government securities d) a foreign firm agrees to a licensing agreement with a large conglomerate

b) a company has a controlling interest in a foreign company

What is a turnkey operation? a) the repatriation of equity b) a contract for a large construction project, often for a government agency c) a contract with a government to service one of its key industries d) the buying of another company

b) a contract for a large construction project, often for a government agency

Export-led development refers to ________. a) a country's efforts to promote its exports in order to reduce its trade deficits b) a program to promote industries with export potential c) a policy to promote domestic production of goods that would otherwise be imported d) decreases in infrastructure development due to the loss of revenue from export tariffs

b) a program to promote industries with export potential

Studies indicate that the main cause of nearly half of failed expatriate assignments is the inability of the expatriate to ________. a) meet performance expectations b) adapt to the host culture c) initiate a fair compensation package d) learn the local language

b) adapt to the host culture

One way that developed countries specialize in order to gain acquired advantages is by ________. a) subsidizing the transport of exports b) allocating research efforts more heavily in specific sectors c) restricting imports to those in the service sector d) emphasizing production in natural resource endowments

b) allocating research efforts more heavily in specific sectors

Most world trade takes place ________. a) among developing countries b) among developed countries c) between developed countries and developing countries d) between raw material exporters and manufacturing exporters

b) among developed countries

A company that makes a foreign investment largely to acquire knowledge is most likely to use ________ as a means of expansion. a) a greenfield investment b) an acquisition c) a licensing agreement d) internalization

b) an acquisition

A go/no-go decision means ________. a) management reviews existing information and decides whether additional individualized feasibility studies are warranted b) an individual project decision is based on whether the project meets threshold criteria c) projects are approved or disapproved based on the potential ease of divestment d) projects are ranked and approved from the top of the list down until available resources are exhausted

b) an individual project decision is based on whether the project meets threshold criteria

What is a consortium? a) an agreement between two or more governments to provide for reciprocal foreign investment protection b) an international joint venture owned by at least three organizations c) the ownership of a company by a government and a foreign company d) an agreement signed by most governments to protect intellectual property rights

b) an international joint venture owned by at least three organizations

Which of the following is most likely a basis for a Jamaican natural advantage in international trade? a) product technology developed by a Jamaican company b) beautiful beaches and climate c) the use of English as the primary language d) high literacy rates among Jamaican citizens

b) beautiful beaches and climate

Melissa, a foreign-exchange trader, wants to buy euros from Stephanie. Which of the following is the price at which Melissa is willing to buy euros? a) spread b) bid c) offer d) cross rate

b) bid

Vandelay Designs is a small firm based in Boston that makes and sells scrapbooking products through its retail store and Web site. Many of Vandelay's first sales were made to customers located in Canada, England, and Japan. Vandelay Designs would best be identified as a(n) ________. a) incremental exporter b) born global c) geo-expo d) occasional exporter

b) born global

In a democracy, ________. a) the rights of the individual are merged with the state b) citizens have the right to participate in the decision-making process c) the opportunity to truly participate in the political process is restricted to a select few d) the court system is directly supervised by the political system

b) citizens have the right to participate in the decision-making process

A manager has the task of collecting and analyzing data that will help the firm decide where to locate its international operations. Which of the following BEST describes how the manager should handle this task? a) conduct extensive research, regardless of the expense, in order to avoid costly mistakes b) compare the costs of data collection with the probable payoff it will generate for the firm c) continue data gathering until all data have been collected, regardless of how long this takes d) focus all data collection on governmental resources because they have the highest reliability

b) compare the costs of data collection with the probable payoff it will generate for the firm

Some key ________ factors in a company's international business external environment are its product strategy and access to resources. a) political b) competitive c) geographic d) behavioral

b) competitive

The degree of caution companies display in valuing assets and recognizing income is known as ________. a) disclosure b) conservatism c) measurement d) transparency

b) conservatism

In a market economy, the patterns of resource allocation are most directly influenced by ________. a) consumer group alliances that negotiate with firms to improve product quality b) consumers who "vote" by their personal decision to buy or not buy products c) industry coalitions that strive to improve the efficiency of production and service d) government administrators who monitor the equilibrium of supply and demand

b) consumers who "vote" by their personal decision to buy or not buy products

Appropriability theory refers to ________. a) predicting the general pattern of direct investment locations b) denying rivals access to competitive resources such as management know-how c) explaining an investing firm's choice of partner in a joint venture d) categorizing the appropriateness of a firm's foreign investments in terms of host country objectives

b) denying rivals access to competitive resources such as management know-how

Exporting below cost or below the home country price is called ________. a) an export-led development policy b) dumping c) a strategic trade policy d) countertrade

b) dumping

A(n) ________ staffing policy framework assumes that the practices and procedures that work at headquarters will work in foreign operations; as such, executive slots are filled by home-country nationals. a) polycentric b) ethnocentric c) geocentric d) intercentric

b) ethnocentric

Uneven income distribution ________. a) is largely a problem for poorer nations b) exists in almost every country c) is limited to a small share of the world population d) primarily affects people in urban settings

b) exists in almost every country

The trade theory that says countries should concentrate production on those products using their most abundant production factors is the ________. a) theory of absolute advantage b) factor proportions theory c) theory of nontradable goods d) theory of comparative advantage

b) factor proportions theory

The goal of a ________ is to abolish all tariffs among member countries. a) common market b) free trade agreement c) common internal tariff d) customs union

b) free trade agreement

Managers who are knowledgeable about ________ are better able to identify the location, quantity, quality, and availability of the world's natural resources. a) cultural factors b) geographic factors c) political factors d) competitive factors

b) geographic factors

International accounting firms, such as Deloitte and KPMG, have the most influence on ________. a) domestic legal systems b) global auditing practices c) public record disclosure rules d) international and domestic tax laws

b) global auditing practices

The term protectionism, when applied to international trade, refers to ________. a) border checks to prevent entry of illegal aliens b) governmental restrictions and competitive support actions to affect trade flows c) methods used to prevent intellectual property theft d) payments to dock workers to prevent pilferage of imported shipments

b) governmental restrictions and competitive support actions to affect trade flows

Between now and 2050, countries undergoing a simultaneous population reduction and an increased percentage of retirees in the population most likely will need more ________. a) domestic products b) immigrants c) favorable balances of trade d) imports

b) immigrants

Which of the following is NOT one of the three main types of importers? a) importers looking to foreign-sourcing to get the highest quality products at the lowest possible price b) importers looking for suppliers abroad to concentrate their operating risks c) importers looking for any product around the world they can deliver to local citizens for a profit d) importers using foreign sourcing to optimize their supply chains

b) importers looking for suppliers abroad to concentrate their operating risks

Firms that pursue a(n) ________ strategy create value by transferring core competencies from the home market to foreign markets in which local rivals lack a competitive alternative. a) localization b) international c) transnational d) global

b) international

The HRM requirements of a(n) ________ strategy are well matched with an ethnocentric staffing policy. a) multidomestic b) international c) transnational d) global

b) international

When the pressure for global integration is high and the pressure for local responsiveness is low, a company is most likely to pursue a(n) ________ strategy. a) transnational b) international c) localization d) global

b) international

Which of the following ideas holds that a government should NOT interfere in business affairs? a) the rule of man b) laissez-faire c) the rule of man d) collectivism

b) laissez-faire

Cultural differences in accounting include all of the following EXCEPT ________. a) optimism b) language c) transparency d) secrecy

b) language

Which of the following BEST explains Blockbuster's failed expansion into Germany? a) lack of public interest in films b) laws limiting hours of operation c) inadequate tax incentives d) communication problems

b) laws limiting hours of operation

Sources of influence on accounting standards and practices include all of the following EXCEPT ________. a) capital markets b) levels of exports c) cultural environment d) regulatory environment

b) levels of exports

In terms of international business, it is most accurate to say that ________. a) government regulation of international business has little effect on a company's profits b) most firms depend either on foreign markets and supplies or compete against companies that do c) there is a universal "best way" to conduct business d) global competition affects large companies but not small ones

b) most firms depend either on foreign markets and supplies or compete against companies that do

Recently, the Economist Intelligence Unit investigated the status of democracies around the globe. Relying on 60 indicators that focus on the performance of free elections, civil liberties, government functioning, political participation, and political culture in a country, the study found that ________. a) most democracies are hybrid political systems that share theocratic and totalitarian characteristics b) nearly half of the world's democracies qualify as "full" or "flawed" democracies c) less than a quarter of the countries studied are outright authoritarian regimes d) almost all of the world's democracies are full democracies

b) nearly half of the world's democracies qualify as "full" or "flawed" democracies

When GM moved some of its manufacturing operations to Mexico to be closer to the American market, they were doing what's known as ________. a) coordination b) nearshoring c) cost-benefit analysis d) offshoring

b) nearshoring

Under NAFTA, rules of origin ensure that ________. a) only American products are shipped to Canada and Mexico duty-free b) only goods produced mostly within the region are eligible for liberal tariff conditions c) all members import products only from member nations d) all members have the same external and internal tariffs

b) only goods produced mostly within the region are eligible for liberal tariff conditions

When a company has improved its operations efficiency so much that it decide to move back to its home country, this is called ________. a) offshoring b) onshoring c) outsourcing d) nearshoring

b) onshoring

The ________ is the number of years it will take a firm to recover from its initial investment. a) remittance period b) payback period c) rate of return d) accumulated translation adjustment

b) payback period

Unlike the infant-industry argument, the industrialization argument for trade protection ________. a) requires independence from other countries b) presumes that economic growth will occur even if domestic manufactured prices are not globally competitive c) emphasizes use of locally available raw materials for manufacturing inputs d) stresses labor-intensive production methods despite high costs

b) presumes that economic growth will occur even if domestic manufactured prices are not globally competitive

Avery Designs is an MNE with a diverse portfolio of products including cookware and clothing. Both the foreign and domestic operations for the firm's cookware products report to the same manager. Which structure is most likely used by Avery? a) geographic division b) product division c) international division d) matrix division

b) product division

Eileen, a manager at an international restaurant chain, wants to know if it will be most cost effective to buy 1,000 pounds of sugar in Country X or in Country Y using U.S. dollars. Which of the following is Eileen most likely trying to determine? a) gross domestic income b) purchasing power parity c) economic growth rate d) gross national product

b) purchasing power parity

Countries most likely establish export restrictions to ________. a) reduce domestic production b) raise prices in foreign markets c) ensure their population obtains the goods first d) encourage substitute products

b) raise prices in foreign markets

According to the text, what is the most common concern that expatriates have before they move overseas? a) learning a foreign language b) reestablishing a social life c) missing friends and family d) adapting to the culture

b) reestablishing a social life

Terrell, a manager with Qualsys Technologies, has been on an expatriate assignment in Russia for the last three years. Terrell's foreign assignment has ended, and he is working with HR to return to the United States and begin a new job at the firm's headquarters in Philadelphia. In which activity is Terrell most likely involved? a) expatriation b) repatriation c) demotion d) promotion

b) repatriation

A major benefit of the international division structure is ________. a) outsourcing distribution and shipping tasks b) responding quickly to foreign events c) hiring low-cost, local workers d) diversifying most product groups

b) responding quickly to foreign events

Which stakeholder group primarily wants additional sales and increased productivity? a) society at large b) shareholders c) customers d) government

b) shareholders

The global capital market offers all of the following advantages to firms EXCEPT ________. a) wide array of financing sources b) short-term financing options c) financing at reduced cost d) numerous investment opportunities

b) short-term financing options

Dixon Electronics recently introduced a new computer with features unavailable from other products on the market. Dixon is charging a very high price for the computer and has plans to progressively lower the price over the next year. Dixon is most likely using a ________ strategy. a) penetration b) skimming c) diversification d) cost-plus

b) skimming

Pulte Homes adapts its marketing to foreign differences by making minor changes to bathrooms and outdoor patios. However, Pulte Homes uses the same floor plans and exterior attributes in all countries to gain economies of standardization. Pulte Homes most likely follows a ________. a) sales orientation b) strategic marketing orientation c) production orientation d) social marketing orientation

b) strategic marketing orientation

The Integration-Responsiveness (IR) Grid expresses how a company's ________ is a function of the relationship between its value chain and the prevailing pressures for global integration or local responsiveness in its industry. a) value proposition b) strategy c) target market d) mission

b) strategy

Historically, the most important criterion in selecting individuals for posting to an expatriate slot has been ________. a) foreign language abilities b) technical competence c) flexibility d) leadership skills

b) technical competence

A global strategy tends to be more successful when ________. a) buyers are looking for customized products at bargain prices b) the industry's product is a commodity c) suppliers have little bargaining power d) entry barriers are low for new firms

b) the industry's product is a commodity

A company's operations are most likely to be taken over by a host government when ________. a) the operations are relatively small and, thus, unlikely to incur the wrath of the company's home government b) the operations are substantial and have a widespread effect on the country because of the company's size c) the host country becomes involved in a regional war d) the firm produces discretionary rather than essential products

b) the operations are substantial and have a widespread effect on the country because of the company's size

It is most accurate to say that within most nations' borders, people largely share such essential attributes as ________ and ________. a) work attitudes; occupations b) values; language c) education level; ethnicity d) lifestyles; education level

b) values; language

Commodity agreements ________. a) are effective in regulating the price of grains but not minerals b) were initially established to attempt to stabilize commodity prices c) were disbanded by the United Nations for being non-competitive d) are effective in regulating the prices of both grains and minerals

b) were initially established to attempt to stabilize commodity prices

The ________ view calls for companies to develop low-cost, high-powered, resource-minimizing innovations that can be marketed to the billions of people living on less than a few dollars a day. a) Hierarchy of Needs b) Happy Planet Index c) Base of the Pyramid d) Gini coefficient

c) Base of the Pyramid

Which of the following is an example of cryptocurrency? a) Japanese yen b) U.S. dollar c) Bitcoin d) Euro

c) Bitcoin

According to Transparency International, companies from which of the following countries are more likely to pay bribes? a) Belgium b) Singapore c) China d) Japan

c) China

________ is a form of locking the value of a country's currency onto another currency. a) Managed floating b) Monetarization c) Dollarization d) Floating

c) Dollarization

What term refers to a currency on deposit outside its country of issue? a) Euroyen b) Europound c) Eurocurrency d) Eurodollar

c) Eurocurrency

The market for shares sold outside the boundaries of the issuing company's home country is the ________. a) international bond market b) Eurocurrency market c) Euroequity market d) international equity market

c) Euroequity market

Why are offsets considered protectionist measures? a) Companies must submit samples to government authorities before receiving export permission. b) Trading companies must incur additional inventory carrying charges and pay significantly higher tariffs. c) Exporters must often find markets for goods outside their lines of expertise. d) Exports must be sold at a certain percentage price below the price of domestic producers.

c) Exporters must often find markets for goods outside their lines of expertise.

________ are among the fastest-growing economic activities in the world. a) Accounting and taxation b) Finance and human resources c) Exporting and importing d) Global manufacturing and supply-chain management

c) Exporting and importing

________ refer(s) to the creative ideas, innovative expertise, or intangible insights that give an individual, company, or country a competitive advantage. a) Exclusive ownership b) Proprietary goods c) Intellectual property d) Restrictive goods

c) Intellectual property

Which of the following is typically true of an export management company? a) It is usually a division of a manufacturing company. b) It usually takes title to products rather than acting as an agent. c) It operates on a contractual basis for a manufacturer by helping obtain orders for its clients' products. d) Most EMCs in the United States are large, representing a wide range of products and large number of companies.

c) It operates on a contractual basis for a manufacturer by helping obtain orders for its clients' products.

Why is the argument that "anything legal is ethical" most likely insufficient? a) Everything that is unethical is also illegal. b) Laws can never be changed; thus, rules for all possible ethical dilemmas are found in the law. c) Laws are frequently based on imprecisely defined moral concepts. d) The law is an extremely efficient way to solve ethical dilemmas.

c) Laws are frequently based on imprecisely defined moral concepts.

Which of the following best supports the idea that MNEs should remain in countries that allow child labor? a) MNEs are required to pay child workers more than local companies. b) Most MNEs employ local managers to handle cultural differences. c) Many MNEs have substantially improved the working conditions of their foreign plants. d) MNEs have a positive influence on government employment policies in most foreign countries.

c) Many MNEs have substantially improved the working conditions of their foreign plants.

The major trade group in South America involving Brazil, Paraguay, Uruguay, and Argentina is ________. a) CAN b) APEC c) Mercosur d) UNASUR

c) Mercosur

Which of the following statements is most likely true regarding vertical differentiation? a) MNEs with decentralized structures are more appealing to foreign workers. b) MNEs with many organizational levels are less likely to perform well in emerging markets. c) Most MNEs balance authority between headquarters and subsidiaries because of globality. d) Most MNEs implement centralized authority structures due to the complexity of globalization.

c) Most MNEs balance authority between headquarters and subsidiaries because of globality.

________ focus on offering banking and other financial services to nonresident customers. a) Branch banks b) Subsidiary banks c) Offshore financial centers d) Affiliated banks

c) Offshore financial centers

What is the primary difficulty associated with dismantling developed countries' agricultural subsidies? a) Developing countries put pressure on developed countries to maintain the subsidies so that they receive food products at a lower price. b) The subsidies are used to counter the commodity agreements set up mainly by developing countries. c) Rural areas in the United States, the European Union, and Japan are disproportionately represented in their governments. d) The subsidies are at the consumer, rather than producer, level, and everyone benefits from the lower prices.

c) Rural areas in the United States, the European Union, and Japan are disproportionately represented in their governments.

In which of the following countries would there be the highest likelihood of encountering a bribery situation? a) United States b) Germany c) Russia d) South Korea

c) Russia

If the real interest rate is 5%, the rate of inflation in the United States is 6%, and the rate of inflation in the United Kingdom is 3%, which of the following statements would NOT be true? a) The nominal rate of interest in the United States would be greater than the nominal interest rate in the United Kingdom. b) Investors would get a higher return on their money in the United States. c) The nominal rate of interest in the United States and the United Kingdom would be the same because of purchasing power parity. d) The difference between the U.K. and U.S. interest rates is a function of the difference between their inflation rates.

c) The nominal rate of interest in the United States and the United Kingdom would be the same because of purchasing power parity.

You are the manager of an SME in the United States, and your firm wants to begin exporting. Since you have never been involved with exporting, there are many compelling reasons that encourage contacting the ________ to obtain expert counseling on exporting. a) U.S. Treasury Department b) Small Business Administration c) U.S. Commerce Department d) Federal Credit Insurance Association

c) U.S. Commerce Department

Which of the following is NOT an example of a service export? a) an investment bank arranging financing for a foreign firm b) an engineering firm building roads in a foreign country c) a coffee chain opening a new store in a foreign country d) a management firm providing advice to a foreign client

c) a coffee chain opening a new store in a foreign country

All of the following are examples of international labor mobility EXCEPT ________. a) an illegal immigrant working in another country b) a manager assigned by an MNE to work short-term abroad c) a college student on a study abroad program d) a refugee who takes up employment in another country

c) a college student on a study abroad program

Companies are more likely to gain advantages by locating near competitors for all the following reasons EXCEPT to ________. a) take advantage of competitors' research to pick an ideal location b) attract multiple suppliers and personnel with specialized skills c) agree with competitors on production limitations d) attract buyers who want to compare suppliers

c) agree with competitors on production limitations

Cost-of-living allowances given to an expatriate during his or her foreign assignment ________. a) usually involve a compensation reduction because of lower costs abroad b) increase the longer the individual is overseas c) are due to the difficulty of duplicating a particular way of living abroad d) are usually eliminated over time

c) are due to the difficulty of duplicating a particular way of living abroad

Hoffman Electronics is a U.S. company. Which balance sheet format is most likely used by Hoffman? a) current assets - current liabilities = fixed assets - noncurrent liabilities = capital and reserves b) assets + liabilities = reserves c) assets = liabilities + shareholders' equity d) noncurrent assets + current assets - current liabilities - noncurrent liabilities = shareholders' equity

c) assets = liabilities + shareholders' equity

Anderson Enterprises is a U.S. firm that manufactures light fixtures for commercial and residential consumers. Anderson is looking to expand internationally, so the firm should most likely ________. a) look to expand beyond the triad regions currently controlled by the top 500 MNEs b) disregard changes in trading groups because they have little effect on a company c) change their organizational structure to fit the norms of the foreign country d) focus on developing new recruitment strategies and selection tests

c) change their organizational structure to fit the norms of the foreign country

Proponents of ________ argue that individual interests are not as important as the welfare of the group. a) individualism b) pluralism c) collectivism d) capitalism

c) collectivism

Why is China most likely considering a greater reliance on the SDR? a) requirements by the IMF to make China's currency more flexible b) demands to replace the dollar with the euro for reserves c) concerns about the value of the U.S. dollar d) gains in the foreign-exchange market

c) concerns about the value of the U.S. dollar

Dispersing value activities where and in how many places in the world is the issue of ________. a) clustering b) coordination c) configuration d) logistics

c) configuration

Formal reports, management performance evaluations, and financial metrics are three examples of ________. a) coordinating tools b) control systems c) control mechanisms d) coordinating systems

c) control mechanisms

Which of the following begins with a company defining critical success factors and specifying objective targets and hard deadlines? a) coordination by consensus b) coordination by standardization c) coordination by plan d) coordination by intervention

c) coordination by plan

Which of the following refers to the means by which management applies the systems that link a company's value activities, whether those activities are performed in one or in many countries? a) logistics b) coordination c) core competency d) configuration

c) core competency

A major benefit of the international division structure is ________. a) the elimination of conflicts of interest among domestic and foreign operations b) the integration of domestic and foreign operations c) cost effectiveness d) de-emphasis of economies of scale

c) cost effectiveness

The term "cultural distance" refers to the ________. a) time it takes people to adjust to the language, traditions, and norms of a foreign culture b) physical space between people during communication c) degree to which countries differ on cultural dimensions d) preferred relationship between superiors and subordinates in a given culture

c) degree to which countries differ on cultural dimensions

Country X wants to eliminate its balance of trade deficit while simultaneously keeping prices low for imported essentials. Which of the following methods would most likely achieve these dual objectives? a) devaluing its currency b) using tight monetary policies to deflate price levels c) enacting selective import restrictions d) spurring productivity increases through general tax breaks for industry

c) enacting selective import restrictions

Outright forward transactions involve the exchange of currency on a future date beyond two business days at a fixed exchange rate, known as the ________. a) reverse transaction rate b) option rate c) forward rate d) spot rate

c) forward rate

Communism primarily relies on a system of ________. a) competitive pricing and marketing b) market-generated supply and demand c) government-controlled economic activity d) private business ownership

c) government-controlled economic activity

A physician, who is a citizen of and licensed in Country A, meets the professional licensing requirements of Country B. The physician will most likely ________. a) have to work in the not-for-profit sector in Country B for a period of time before being permitted to work for a profit-seeking organization b) not be allowed to work in the not-for-profit sector in Country A or Country B for a set period c) have to get a work permit from Country B's immigration authorities to work in Country B d) have to pass a language proficiency exam before being allowed to work in Country B

c) have to get a work permit from Country B's immigration authorities to work in Country B

Which of the following is NOT one of the issues surrounding high levels of bribery and corruption? a) high poverty rates b) regional conflict c) high per capita income d) political unrest

c) high per capita income

The major use of the matrix as a tool in international location strategy is to ________. a) pinpoint acceptable and unacceptable characteristics of countries b) rank countries on the basis of expected investment return c) indicate the relative placement of countries in terms of attributes d) show the degree of certainty for projected returns

c) indicate the relative placement of countries in terms of attributes

ACE Computers established an assembly operation in Malaysia so that it would be close to its key suppliers. ACE is most likely engaging in ________. a) zero sourcing b) horizontal sourcing c) industrial clustering d) offshoring

c) industrial clustering

Encouraging ethical behavior for the purpose of developing competitive advantages will most likely result in all of the following for a firm EXCEPT ________. a) strategic accomplishment b) financial success c) industry resolutions d) consumer commitment

c) industry resolutions

Shelly, a manager at a global firm, is studying the foreign currency intervention practices of Indonesia. Shelly is most likely examining ________ factors. a) confidence b) circumstantial c) institutional setting d) fundamental analysis

c) institutional setting

Coordination refers to ________. a) portioning the performance of specific tasks b) assigning tasks to qualified managers c) linking various value activities within an organization d) identifying the span of control within an organization

c) linking various value activities within an organization

Preston Electronics is an MNE with facilities located in Taiwan, Singapore, and Germany. Preston gives its local operations the authority to adapt value activities to prevailing local economic, political, legal, and cultural conditions. Preston is most likely using a(n) ________ strategy. a) continental b) international c) localization d) global

c) localization

Which of the following elements is often overlooked when firms estimate the costs of outsourcing to low-wage countries? a) language barriers b) overabundance of skilled and educated workers c) long distances d) lack of inventory

c) long distances

According to purchasing power parity, if the domestic inflation rate is ________ than that in the foreign country, the domestic currency should be ________ than that of the foreign country. a) higher; higher b) higher; stronger c) lower; stronger d) lower; weaker

c) lower; stronger

Deciding whether to establish production facilities in many different countries or in one centralized location is part of the ________. a) innovation matrix b) Six Sigma process c) manufacturing configuration d) cultural matrix

c) manufacturing configuration

The trade theory that says a country should export more than it imports is known as ________. a) import substitution b) comparative advantage c) mercantilism d) absolute advantage

c) mercantilism

Traditionally, expatriates were ________; today, HRM increasingly considers ________. a) women; men b) older employees and younger employees; mid-level and mid-career executives c) mid-level and mid-career executives; older employees and younger employees d) men; women

c) mid-level and mid-career executives; older employees and younger employees

In a ________ economy, certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant state ownership and government planning. a) state-directed b) command c) mixed d) market

c) mixed

Risks to companies from natural disasters and communicable diseases are ________. a) more complicated today because of publicity b) evenly distributed around the world c) most prevalent in the poorest countries of the world d) a minor issue to global firms because of insurance

c) most prevalent in the poorest countries of the world

Which of the following BEST describes the purpose of using of an opportunity-risk matrix for comparing countries? a) determine whether to use a concentration versus diversification strategy for international expansion b) estimate where competitors are most likely to globalize c) narrow alternatives so decision makers can make a detailed analysis of the strongest candidates d) eliminate countries that have specific unacceptable conditions

c) narrow alternatives so decision makers can make a detailed analysis of the strongest candidates

Business people seeking to understand more about another culture in order to successfully conduct business within that culture would be best advised to do which of the following? a) avoid cultural research studies because they perpetuate unjustified stereotypes and behaviors b) memorize the cultural variations that are typically encountered in a specific cultural environment c) observe the behavior of people who have gained respect within that cultural environment d) rely on stereotypes, which are based on averages, to gain an understanding of the culture

c) observe the behavior of people who have gained respect within that cultural environment

A city or country that provides large amounts of funds in currencies other than its own is a(n) ________. a) ADR facilitator b) interbank market c) offshore financial center d) currency regulator

c) offshore financial center

A(n) ________ is the right but not the obligation to buy or sell a foreign currency within a certain time period or on a specific date at a specific exchange rate. a) offer b) forward rate c) option d) bid

c) option

A firm that concentrates on national cultural differences in terms of averages is more likely to ________. a) increase political risks b) seek cultural collision c) overlook outliers d) underestimate market demands

c) overlook outliers

Subpart F income is ________. a) not eligible for the tax credit b) not taxed to the parent unless a dividend is remitted c) passive and usually derived from operations in a tax-haven country d) usually earned by a branch rather than a corporation

c) passive and usually derived from operations in a tax-haven country

For the provider, management contracts offer the advantage of ________. a) reducing their global taxes b) increasing their merchandise exports c) receiving income without making a capital outlay d) better access to raw materials

c) receiving income without making a capital outlay

What is the LEAST likely reason that international companies are concerned about the gray market? a) undermining the long-term viability of the distributorship system b) preventing companies from charging what the market will bear in each country c) requiring companies to make frequent price adjustments to capture the market d) causing a firm's operations in different countries to compete against each other

c) requiring companies to make frequent price adjustments to capture the market

Which of the following is NOT a characteristic of capitalism? a) private ownership of assets b) right to profit from individual effort c) state control of factors of production d) private control of investment

c) state control of factors of production

Comparative advantage differs from absolute advantage in that the former ________, whereas the latter ________. a) bases trade on natural advantages; bases trade on acquired advantage b) holds that countries should specialize their production; does not c) states that there is a basis of trade even if one country can produce everything more efficiently than another country; does not deal with this issue d) holds that trade should be kept as nearly in balance as possible; says countries should seek a favorable balance of trade

c) states that there is a basis of trade even if one country can produce everything more efficiently than another country; does not deal with this issue

The recent global financial crisis has interrupted the trend of national economies ________. a) rapidly adopting the command market model b) turning away from the mixed model c) steadily adopting the free market model d) moving from the mixed to the command model

c) steadily adopting the free market model

Which of the following should an MNE most likely consider in a make-or-buy decision? a) niche markets b) employee morale c) supplier capabilities d) organizational hierarchy

c) supplier capabilities

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________. a) leverage equity financing b) short-term Eurocurrency financing c) syndication d) credit collaboration

c) syndication

Harmon Clothing has a production facility located in Venezuela. Recently, Harmon has been unable to arrange for overseas loans due to the burdensome regulatory policies of the Venezuelan government. Which type of political risk is Harmon most likely experiencing? a) distributive b) procedural c) systemic d) catastrophic

c) systemic

Jeanette Thompson, a native Texan, is being sent by her company, Samsung of South Korea, to head up a new facility in Hong Kong. Jeanette would be considered a(n) ________. a) local executive b) inpatriate c) third-country national d) host-country citizen

c) third-country national

Since production has shifted to more efficient producers due to comparative advantage, consumers in Country X have had access to more goods at lower prices. Which of the following most likely exists? a) trade specialization b) trade internalization c) trade creation d) trade diversion

c) trade creation

The HRM requirements of a(n) ________ strategy are well matched with a geocentric staffing policy. a) international b) multidomestic c) transnational d) domestic

c) transnational

Coca-Cola has collaborative arrangements whereby it produces concentrate that it sells to other companies to bottle its drinks. Which of the following terms best describes this type of arrangement? a) link alliance b) horizontal alliance c) vertical alliance d) scale alliance

c) vertical alliance

In which of the following situations would a company most likely benefit from using the international division structure? a) when the company relies on local managers in foreign operations to make strategic decisions b) when the company's different foreign markets pose significantly different opportunities and threats c) when the company's domestic market activity is much more important than its international business activity d) when the company's domestic business activity has reached its full market potential

c) when the company's domestic market activity is much more important than its international business activity

Which of the following is NOT an example of normativism? a) An MNE manager who, after working in the host country, tries to implement foreign practices in the home-country office b) A U.S. subsidiary operating in China that is forced to follow some U.S. laws, even though China has no comparable laws c) A British subsidiary operating in Indonesia that maintains the same health and safety standards for its foreign factories that are required in Great Britain, even though the British government does not require it to use those standards d) A U.S. sweatshop operating in Thailand that does not follow U.S. labor laws but allows children to work 60 hours a week

d) A U.S. sweatshop operating in Thailand that does not follow U.S. labor laws but allows children to work 60 hours a week

The three major responsibilities of the ________ are legislative power, control over the budget, and supervision of executive decisions. a) European Court of Justice b) European Commission c) European Council d) European Parliament

d) European Parliament

In which of the following situations would Company X most likely seek a collaborative arrangement with Company Z in which Company Z would handle work for Company X? a) Company X has excess capacity. b) Company X is inexperienced in outsourcing work. c) Fixed costs for the work are high, and Company X has large volumes of work. d) Fixed costs for the work are high, and Company X has small volumes of work.

d) Fixed costs for the work are high, and Company X has small volumes of work.

Which of the following is a problem with the infant-industry argument for protection? a) Consumer groups become very active in protesting the higher prices that result during infancy. b) Other countries retaliate by limiting exports of technology needed by the infant industry producers. c) Most developed countries increasingly have a larger portion of retirees than youth. d) If the industry does not lower costs sufficiently to be competitive, it becomes a formidable pressure group for continued protection.

d) If the industry does not lower costs sufficiently to be competitive, it becomes a formidable pressure group for continued protection.

What is the most likely reason that companies such as Gillette (razor blades) and 3M (scouring pads) sell products in smaller package sizes in some developing countries? a) Some governments require the smaller sizes. b) Family size is small in those countries. c) These are products for which the cost of altering package size is negligible. d) In those countries, many consumers lack sufficient cash to buy larger quantities.

d) In those countries, many consumers lack sufficient cash to buy larger quantities.

Which of the following assumptions was made in the original theories of absolute and comparative advantage? a) Countries pursue objectives other than economic efficiency. b) Production networks enable countries to concentrate on particular functions. c) Specialized labor seeks efficiency. d) Labor resources are fully employed.

d) Labor resources are fully employed.

Which of the following is the LEAST likely result of outward migration? a) Nations lose highly educated and productive workers. b) Emigrants remit capital used to start businesses in their home countries. c) Countries receive remittances from emigrants. d) Nations receive more foreign aid.

d) Nations receive more foreign aid.

________ is a system of shared values about what is important and beliefs about how the world works among the employees of an organization. a) Organizational vision b) Organizational system c) Organizational structure d) Organizational culture

d) Organizational culture

Which of the following is NOT a potential problem of using export controls? a) There is an incentive for other countries to develop production of their own. b) Domestic producers may have less incentive to increase output. c) There is more incentive for smuggling. d) Prices go up in the country imposing the controls.

d) Prices go up in the country imposing the controls.

MedCo uses an IT system that labels a product with an electronic tag to provide real-time information. Which of the following does MedCo most likely use? a) ERP (enterprise resource planning) b) EDI (electronic data interchange) c) PTX (private technology exchange) d) RFID (radio frequency ID)

d) RFID (radio frequency ID)

Elite Manufacturing seeks a foreign location with a highly favorable business environment and a comprehensive legal code. Which of the following countries would be most suitable for Elite? a) United Kingdom b) Canada c) Japan d) Singapore

d) Singapore

Fortis Manufacturing Systems uses a highly focused system of quality control that takes a statistical approach and scrutinizes the firm's entire production system. Fortis most likely uses ________. a) total quality management b) just-in-time processes c) acceptable quality levels d) Six Sigma processes

d) Six Sigma processes

Which of the following is NOT a common argument for the slowing of future globalization? a) Major countries have either ignored certain international treaties or have refused to sign them. b) Antiglobalization interests have been successful in electing parties that oppose freer movement of trade or people. c) The growing split between those who succeed in a global environment and those who do not will foster greater antiglobalization sentiments. d) Technological, transportation, and communication advances will decline in the near future.

d) Technological, transportation, and communication advances will decline in the near future.

Which of the following is an indication of the increased globalization of business since the end of World War II? a) Foreign trade has largely replaced foreign ownership as a means of conducting international business. b) Countries have increased their import restrictions to counter the rising tide of imports. c) Globally, consumers now depend on foreign output for more than half their consumption. d) World trade has grown more rapidly than world production.

d) World trade has grown more rapidly than world production.

Financial statements typically include ________. a) different currency results to reflect the different countries where the company has investments or generates revenues b) different reports detailing the differences in generally accepted accounting principles used by the company in different countries c) translations into the languages of every country where the company lists shares d) accompanying footnotes, a balance sheet, and a cash-flow statement

d) accompanying footnotes, a balance sheet, and a cash-flow statement

Transfer pricing is a strategy that may be used by MNEs to ________. a) reduce consolidated corporate income taxes b) partially finance a subsidiary in another country c) transfer funds from a subsidiary to the parent corporation d) all of the above

d) all of the above

Which of the following BEST describes the special drawing right? a) a contribution made by countries to join the IMF b) the official currency for international trade established by the World Bank c) a substitute for the fixed value of gold as determined by currency rates d) an international reserve asset created to supplement members' existing reserve assets

d) an international reserve asset created to supplement members' existing reserve assets

In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would ________. a) not be added to the GNI of the United States but would be added to the GNI of Mexico b) only affect the computation of GDP and have no bearing on GNI c) be added to the GNI of the United States as well as to the GNI and GDP of Mexico d) be added to the GNI of the United States but not the GNI of Mexico

d) be added to the GNI of the United States but not the GNI of Mexico

The 27 member EU negotiates trade agreements as one. The EU and Brazil have negotiated a strategic trade alliance which is an example of a ________. a) global free trade agreement b) customs union c) multilateral agreement d) bilateral agreement

d) bilateral agreement

The financial management activity that determines the proper mix of debt and equity is ________. a) long-term financing b) capital budgeting c) working capital management d) capital structure

d) capital structure

Johnson & Johnson embodies its organizational culture in "The Credo," which is the firm's ________. a) vision statement b) mission statement c) strategic plan d) code of conduct

d) code of conduct

Safe work environments motivate ________; challenges motivate ________. a) non-fatalists; fatalists b) materialists; non-materialists c) individualists; collectivists d) collectivists; individualists

d) collectivists; individualists

All of the following are true about passive exports EXCEPT that ________. a) companies adapt their products very little to foreign consumer preferences b) companies frequently export only if they have excess capacity c) they refer to the filling of unsolicited requests from abroad d) companies generally quote higher prices on exports than on domestic sales

d) companies generally quote higher prices on exports than on domestic sales

The MNE that applies a global strategy aims to ________. a) customize its business practices to consumer expectations b) empower local operations to make decisions about value activities c) adapt activities to the industry standards in critical markets d) compete essentially the same way wherever the company does business

d) compete essentially the same way wherever the company does business

A system of ________ law sets the framework for the system of government and defines the authority and procedure of political bodies to establish laws and regulations. a) criminal b) commercial c) civil d) constitutional

d) constitutional

Stella, who works and lives in San Diego, wants to send money to her mother who lives in a small village south of Puerto Vallarta, Mexico. Stella typically uses Western Union to handle the transaction. Which of the following is the most likely reason that Stella uses Western Union? a) low exchange rates b) cross rate capability c) no fees d) convenience

d) convenience

Companies most likely use the foreign-exchange market to ________. a) acquire currency from emerging markets b) diversify their expenses from other sources c) increase their presence on the black market d) convert money for use in financial transactions

d) convert money for use in financial transactions

In deciding whether to make or buy, MNEs should focus on those parts that are ________ to the product and that they are ________ at making. a) critical; marginally good b) incremental; distinctively good c) incremental; marginally good d) critical; distinctively good

d) critical; distinctively good

The long-term financing dimension of cash management ________. a) is unaffected by currency changes because everyone borrows in U.S. dollars b) focuses on the analysis of investment opportunities c) is independent of the capital structure of an MNE d) deals with the selection, issuance, and management of long-term debt and equity

d) deals with the selection, issuance, and management of long-term debt and equity

Which of the following is the LEAST likely reason that global firms are shifting away from formal organizational structures? a) changes in managerial standards b) opportunities in new markets c) advancements in communication systems d) demands of stockholders

d) demands of stockholders

An exporter that implements a(n) ________ strategy does so with the intent to develop its own international marketing capability. a) indirect selling b) freight forwarding c) export intermediation d) direct exporting

d) direct exporting

According to the concept of green economics, measuring a country's economic performance should also take into account ________. a) market share b) population size c) cost-of-living increases d) ecological costs

d) ecological costs

Because the size of the market increases when trade barriers fall, companies can increase their production, which will result in lower costs per unit. This phenomenon is known as ________. a) increased competition b) diseconomies of scale c) trade creation d) economies of scale

d) economies of scale

A(n) ________ operates on a contractual basis and provides exclusive representation for an exporter's goods and services in a foreign market. a) import broker b) invoice agent c) countertrader d) export management company

d) export management company

Corbin Coffee plans to initiate activities in foreign markets through indirect exporting. The firm is most likely to use ________. a) freight forwarders to act as distributors in foreign markets b) local managers to pay tariffs and duties c) the International Trade Administration to monitor exports d) external specialists to assist in the export process

d) external specialists to assist in the export process

Export restrictions have a tendency to ________. a) encourage the development of substitutes in the restricting country b) lower prices in foreign markets c) protect employment in the export-restricted industries d) favor domestic consumers

d) favor domestic consumers

Judson Baked Goods, a U.S. firm, grants the use of its trademark to a company in Sweden and provides the Swedish company with operational assistance on a continuing basis. Judson is most likely involved in ________. a) a management contract b) offshoring c) appropriability d) franchising

d) franchising

At Tyson Manufacturing, departments and units are organized around discrete business activities, such as finance, production, marketing, and human resources. Tyson most likely has a ________ structure. a) matrix b) network c) divisional d) functional

d) functional

A foreign-exchange contract that is an agreement between two parties to buy or sell a particular currency at a particular price at a particular date as specified in a standardized contract to all participants in the specified market is known as a(n) ________. a) forward contract b) equity currency contract c) spot contract d) futures contract

d) futures contract

A(n) ________ is a large, liquid financial asset that can be traded anywhere at any time. a) international stock b) global equity c) Eurodollar d) global bond

d) global bond

The recent global financial crisis has led to which of the following? a) governments seeking to eliminate the interdependence of developing economies b) governments seeking to eliminate constraints on capitalism c) governments seeking to increase the interdependence of developing economies d) governments seeking to impose more constraints on capitalism

d) governments seeking to impose more constraints on capitalism

In terms of political risk, it is most accurate to state that high risk ________. a) affects all geographic regions of a country equally b) triggers government turnovers c) affects all foreign companies in the same manner d) if avoided, may lead to higher competitive risk

d) if avoided, may lead to higher competitive risk

Escalation of commitment is best described as the ________. a) strategy of first entering a country on a small scale b) process of entering a country because "everyone else is going there" c) expectation of a higher return in more politically risky environments d) increased likelihood of investing in a country because of having spent considerable time and money in examining it

d) increased likelihood of investing in a country because of having spent considerable time and money in examining it

Some critics complain that MNEs introduce and promote superfluous products in developing countries, causing consumers there to buy these products rather than things they need for their health. People answering this criticism have contended that ________. a) these products serve to motivate people in developing countries to work harder b) the amount spent on so-called superfluous products is insignificant c) consumers don't buy things because of promotion d) it is impossible to draw a line between people who can afford and people who can't afford these products

d) it is impossible to draw a line between people who can afford and people who can't afford these products

The lower survival rate of foreign companies in comparison to local firms for many years after they begin operations is known as ________. a) most-favored-nation behavior b) ethnocentric reaction c) polycentric reaction d) liability of foreignness

d) liability of foreignness

Mona, a native of India, is employed by IBM in the firm's facility in New Delhi. Mona is best described as a(n) ________. a) home-country national b) third-country national c) expatriate d) local

d) local

Which term refers to how companies value assets such as inventory? a) conservatism b) optimism c) disclosure d) measurement

d) measurement

Taylor Enterprises wants to expand its operations into Asia. Managers are focusing on countries with high degrees of economic freedom most likely because the firm is interested in a country with ________. a) standardized minimum wages b) state-run corporations c) laws favoring sustainability d) minimal government intervention

d) minimal government intervention

Ethical dilemmas tend to be ________ for MNE managers than for domestic managers. a) less common b) easier to decide c) less controversial d) more complicated

d) more complicated

A black market exists when ________. a) a country closely monitors and adjusts the foreign-exchange rate b) a country is running a budget surplus c) a country is experiencing a recession d) people pay more for hard currency than the official rate

d) people pay more for hard currency than the official rate

In the United States, the unemployment rate indicates the ________. a) number of people who have stopped looking for work because full-time jobs are unavailable b) percentage of the labor force that wants to work full-time but can only find part-time employment c) number of workers eligible for government services and unemployment benefits d) percentage of unemployed workers seeking paid work relative to the total labor force

d) percentage of unemployed workers seeking paid work relative to the total labor force

A(n) ________ ideology is the system of ideas that expresses the goals, theories, and aims of how society should work. a) economic b) legal c) technological d) political

d) political

Which of the following is a characteristic of most offshore financial centers? a) a lack of legal expertise b) services for residents c) accounting scandals d) political stability

d) political stability

Ferguson Manufacturing, an American MNE, has facilities in India and Mexico. Ferguson fills management positions at the facility in India with Indians and management positions in Mexico with Mexicans. Ferguson most likely follows a(n) ________ approach to staffing. a) geocentric b) ethnocentric c) intercentric d) polycentric

d) polycentric

Diversity of international markets and currency instability have the greatest effect on ________. a) branding b) R&D c) promotion d) pricing

d) pricing

GAAP usage differences increase the problems associated with ________. a) trading foreign stock b) identifying emerging markets c) establishing e-commerce d) raising capital in different countries

d) raising capital in different countries

Ellen, a U.S. citizen, worked for a U.S. firm in Germany for four years and was transferred back to the firm's home office in Chicago two months ago. Ellen feels significant dissatisfaction with her job and life in Chicago, which is most likely a result of ________. a) culture shock b) ethnocentrism c) polycentrism d) reverse culture shock

d) reverse culture shock

Raj, an engineer, works long hours and takes full responsibility for both his good and bad work performance. Raj most likely believes in ________. a) collectivism b) low power distance c) fatalism d) self-determination

d) self-determination

What is the gray market? a) selling counterfeit merchandise b) a legal black market run by governments c) sales targeted to elderly consumers d) selling goods through unofficial distributors

d) selling goods through unofficial distributors

Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes? a) customers b) employees c) shareholders d) society

d) society

All of the following are features of the diamond of national advantage theory EXCEPT ________. a) firm strategy, structure, and rivalry b) related and supporting industries c) demand conditions d) strategic trade policy regulations

d) strategic trade policy regulations

Organization ________ refers to the formal arrangement of roles, responsibilities, and relationships within an organization. a) strategy b) systems c) culture d) structure

d) structure

Which term refers to the network that links together the different aspects of the value chain and coordinates materials, information, and funds from the initial raw-material supplier to the ultimate customer? a) logistics strategy information system b) customer service c) materials management device d) supply chain

d) supply chain

Which of the following BEST explains how a firm reduces risk by operating internationally? a) operating in less competitive environments than those at home b) buying competitive risk insurance unavailable domestically c) preventing competitors from operating in the countries it has entered d) taking advantage of business-cycle differences among countries

d) taking advantage of business-cycle differences among countries

Which of the following has the greatest potential to transform an industry's structure? a) a change in a competitor's management b) a change in a competitor's pricing structure c) the expansion of a distribution channel d) the exit of a competitor from the industry

d) the exit of a competitor from the industry

Although globalization may bring economic growth, critics nevertheless contend that ________. a) the cultural foundations of sovereignty are supported by globalization b) this growth is mainly for the future, thus ignoring present economic growth needs c) the growth is too fast d) the inequality of gains puts some people in a relatively worse economic situation

d) the inequality of gains puts some people in a relatively worse economic situation

What is the primary reason for technology licensing to take place while a product is still in the developmental stage? a) to enable the licensor to receive some earnings in case the technology never becomes operative b) to reduce transaction costs c) to gain funds to complete the development d) to ensure that a product launches in various countries at about the same time

d) to ensure that a product launches in various countries at about the same time