Chapter 8 Global Business, international business chapter 7, International Finance 7&8 Q101-150
The three major taxes governments use to generate revenue are: A. VAT, income tax, and withholding tax. B. sales tax, VAT, and income tax. C. property tax, VAT, and sales tax. D. income tax, property tax, and sales tax.
A. VAT, income tax, and withholding tax.
The forward currency market: A. allows purchasers to lock in purchases of currencies at known rates. B. provides governments a way to manage their currency's value. C. makes trading in several currencies more efficient. D. helps managers manage domestic debt.
A. allows purchasers to lock in purchases of currencies at known rates.
Currency exchange controls are found most frequently in: A. developing countries. B. developed countries. C. countries with pegged exchange rates. D. nondemocratic countries.
A. developing countries.
Taxation is a financial force in that: A. if the firm can achieve a lower tax burden than its competitors, it can generate higher revenues and then lower its prices or pay higher wages and dividends. B. governments, which enact taxes, are formal institutions that enforce tax law via force. C. businesses are compelled by foreign governments to pay taxes. D. it is not controlled by the firm.
A. if the firm can achieve a lower tax burden than its competitors, it can generate higher revenues and then lower its prices or pay higher wages and dividends.
Exchange rate forecasting is: A. important because exchange rates influence all aspects of business. B. important because markets depend on solid information. C. unimportant because exchange rate forecasting does not have a theoretical model. D. unimportant because exchange rate movements do not impact international transactions.
A. important because exchange rates influence all aspects of business.
With increasing inflation, borrowing becomes: A. more attractive because repayment can be made with cheaper money. B. less attractive because repayment is made with dearer money. C. impossible because money has lost its value. D. a mute issue because of liquidity issues.
A. more attractive because repayment can be made with cheaper money.
The international Fisher effect says that interest rate differentials: A. predict exchange rate movement. B. can be used to determine purchasing power parity. C. are an example of the law of one price. D. illustrate Pareto optimality.
A. predict exchange rate movement.
Historically, gold has been used as a way for people to store value because of its: A. purity and scarcity. B. high transportation and security costs. C. lack of interest-earning ability. D. all of the above.
A. purity and scarcity.
In general, with regard to exchange controls, developed countries: A. rarely use them. B. use them only to discourage foreign investment. C. use them when needed to implement monetary policy. D. use them secretly.
A. rarely use them
The balance part of the BOP is explained by: A. the accounts being double-entry, so they are always balanced. B. imbalances showing immediately. C. actions governments take to achieve the balance. D. none of the above.
A. the accounts being double-entry, so they are always balanced.
The three main approaches to exchange rate forecasting are: A. the efficient market approach, the fundamental approach, and the technical approach. B. the efficient market approach, the random walk hypothesis, and the pragmatic approach. C. the random walk hypothesis, the pragmatic approach, and the fundamental approach. D. none of the above.
A. the efficient market approach, the fundamental approach, and the technical approach.
Purchasing power parity is a way to compare: A. the purchasing power of several currencies. B. tastes in several different cultures. C. the impact of financial aid in several economies. D. meals in the quick-service restaurant sector—via the Big Mac index.
A. the purchasing power of several currencies.
Fixed-rate relationships among currencies could not stay fixed, according to Obstfeld and Rogoff, because: A. the volume of global transactions started to exceed most countries' foreign exchange reserves, so governments couldn't intervene to sustain the value of their currency. B. the complexity of international trade demanded return of the gold standard. C. Walmart and other leading firms argued successfully at the Federal Reserve that fixed rates were too costly to maintain. D. the EU had decided to float the euro.
A. the volume of global transactions started to exceed most countries' foreign exchange reserves, so governments couldn't intervene to sustain the value of their currency.
The balance-of-payments account is a record of: A. the total tangible trade flows of a country over a five-year period. B. a country's transactions with the rest of the world. C. a country's total debt service payments during a one-year period. D. the outstanding balance of a country's debt payments for the fiscal year.
B. a country's transactions with the rest of the world.
In order to strengthen the U.S. dollar, the Federal Reserve might sell yen and buy dollars, in which case the yen functions as: A. a stronger currency than the dollar. B. an intervention currency. C. an arbitrage currency. D. none of the above.
B. an intervention currency.
A purchase of foreign goods from the United States (requiring importing) will: A. be recorded in the BOP as an asset in the current account. B. be recorded in the BOP as a debit in the current account. C. have no record in the BOP because the purchase is made in the United States. D. be recorded in the BOP as a liability in the foreign transfer account.
B. be recorded in the BOP as a debit in the current account.
The Triffin paradox suggests that: A. reserve currencies can never run deficits. B. eventually, reserve currencies will run deficits, which will lead to lack of confidence in the currency. C. the more a currency is held in reserves, the stronger it is. D. the U.S. dollar could never be a reserve currency.
B. eventually, reserve currencies will run deficits, which will lead to lack of confidence in the currency.
Arbitrage functions to: A. provide French markets access to other EU markets. B. exploit price differences between markets, so as to profit with no risk. C. create wealth through interest rate swaps. D. create increased trading in commodity markets.
B. exploit price differences between markets, so as to profit with no risk.
One attribute of the U.S. tariff schedule is: A. that it is printed in both Arabic and Hebrew. B. how specific it is. C. that its categories are quite general and easy to apply. D. that its harmonized version can be accessed via cell phone and iPad.
B. how specific it is.
Monetary and fiscal policies: A. have nothing to do with exchange rate movement. B. influence interest rates and taxation, and so may influence exchange rates. C. have no predictable influence on inflation. D. have no influence on trade patterns.
B. influence interest rates and taxation, and so may influence exchange rates.
What is appealing about the gold standard is: A. everyone loves gold. B. its simplicity. C. its transportability. D. its carrying costs.
B. its simplicity.
A value-added tax is actually a sales tax that is: A. paid by the firm rather than the consumer. B. paid in stages along the process from raw materials to consumer and then credited after final sale. C. called value added to create a positive spin on taxation. D. voluntarily paid on exports.
B. paid in stages along the process from raw materials to consumer and then credited after final sale.
The Eonomist's Big Mac index (May 2010) suggests that against the dollar, the Chinese yuan is: A. trading fairly, since the Big Mac prices are similar. B. quite undervalued, since the Chinese Big Mac is almost 50 percent less expensive than the U.S.-dollar Big Mac. C. is overvalued, since the Big Mac sells for almost 50 percent less in Chinese currency than in U.S. dollars. D. trading at a historical premium.
B. quite undervalued, since the Chinese Big Mac is almost 50 percent less expensive than the U.S.-dollar Big Mac.
The SDR is: A. a special deposit for corporate reimbursement. B. special drawing rights, an international reserve asset. C. a special deficit refund, made to compensate for currency devaluation. D. a paper credit issued by the Bank for International Settlements.
B. special drawing rights, an international reserve asset.
The inflation rate determines: A. a currency's strengthening. B. the real price of borrowing in capital markets. C. locations for outsourcing. D. import substitution regimes.
B. the real price of borrowing in capital markets.
Financial forces such as inflation and taxation are considered uncontrollable because: A. there is nothing a manager can do to adjust to them, so the recommended approach is to ignore them. B. they are external forces beyond the influence of the firm, around which a manager can manage. C. they are external to the firm and their influence is to be avoided. D. they are unpredictable.
B. they are external forces beyond the influence of the firm, around which a manager can manage.
World interest rates tend to vary across a small range because: A. the IMF has been successful at promoting responsibility in the monetary sector. B. world financial markets are integrated, so we see the law of one price at work. C. bankers have low market appeal, given the financial crisis. D. the BIS has coordinated monetary policy.
B. world financial markets are integrated, so we see the law of one price at work.
Foreign reserves are used to: A. help foreigners who need additional funds. B. provide military support to foreign operations, for example, the French legion and UN peacekeepers. C. cover foreign debt, import purchases, and other demands for foreign currency that banks might encounter. D. support foreign operations that are branches but not subsidiaries.
C. cover foreign debt, import purchases, and other demands for foreign currency that banks might encounter.
Sir Isaac Newton put England on the gold standard when he: A. declared, as master of the English mint, that he would sell gold for 1 pound, 1 shilling, 1 pence, under the law of one price. B. set a market price for gold, the British pound and the U.S. dollar. C. established a fixed equivalency between gold and the British currency. D. brought the matter to Queen Anne, who declared Britain would follow the gold standard.
C. established a fixed equivalency between gold and the British currency.
The law of one price is that: A. only one price can be charged for an item in a contract deal. B. in an efficient market, one price only is the permissible price. C. in an efficient market, like goods will have like prices. D. even in international markets, bait and switch is illegal.
C. in an efficient market, like goods will have like prices
Market forces that set the relative prices of currencies are: A. not influenced by government policies. B. not influenced by world events. C. influenced by many forces including forces external to business, such as world events. D. A and B.
C. influenced by many forces including forces external to business, such as world events.
The Fisher effect states that the real interest rate: A. is the nominal rate plus the recorded inflation rate. B. is the only measure to use in calculating PPP. C. is the nominal rate minus the expected inflation rate. D. is the difference between the nominal rate and the inflation rate.
C. is the nominal rate minus the expected inflation rate.
Balance-of-payments data: A. reveal a country's assets. B. suggest areas of concern in monetary and fiscal policy. C. reveal demand for a country's currency. D. show how the country's currency arrangement (fixed, pegged, floating) is valued.
C. reveal demand for a country's currency.
If the Japanese yen is strengthening against the U.S. dollar, and the Japanese government wanted to boost exports, the central bank of Japan might well: A. sell U.S. dollars in large amounts in the currency markets. B. buy massive amounts of Japanese yen in the FX markets. C. sell massive amounts of Japanese yen in the FX markets. D. buy massive amounts of other hard currencies, such as the British pound sterling and the euro, to deflect the focus on dollars.
C. sell massive amounts of Japanese yen in the FX markets.
The present floating exchange rate system is not a totally free float because: A. there is an exchange fee of 1.5 to 1.75 percent. B. some governments refuse to allow foreign traders to trade their currency. C. some central banks from time to time intervene in the market to buy or sell large amounts of currency to affect the supply and demand of a particular currency. D. A and B.
C. some central banks from time to time intervene in the market to buy or sell large amounts of currency to affect the supply and demand of a particular currency.
Bretton Woods led to an exchange rate agreement known as the Bretton Woods System or: A. the floating-rate system. B. the India Accord system. C. the gold exchange standard. D. the French rate system.
C. the gold exchange standard.
In 1717, Sir Isaac Newton took Britain from the silver standard (pounds sterling) to: A. floating exchange rates. B. fixed exchange rates, using silver. C. the gold standard, with fixed rates. D. pegged rates.
C. the gold standard, with fixed rates.
The inflation rate determines: A. the capital structure of the firm. B. the growth rate of sales. C. the real cost of borrowing in capital markets. D. the equilibrium point.
C. the real cost of borrowing in capital markets.
Countries put limitations on the convertibility of their currency when they are concerned that: A. there is too much domestic spending. B. foreigners will hold control of their monetary policy. C. their foreign reserves could be depleted. D. there is not enough domestic spending.
C. their foreign reserves could be depleted.
Which of the following is not true about China, compared to India?
China attracted five times more foreign direct investment from 2000 to 2013 than did India
Hawalas make currency exchange and: A. avoid the international currency exchange markets. B. offer their clients nearly untraceable transactions. C. transfer funds through the established banking system. D. A and B.
D. A and B.
The U.S. current account deficit can be explained by: A. citizens of other nations wanting to hold dollars because the dollar is a stable currency. B. foreigners wanting to invest in the United States. C. U.S. citizens importing more than they are exporting. D. B and C.
D. B and C.
The largest international reserve accounts are held by: A. Hong Kong and Singapore. B. the United States, Mexico, and Canada (NAFTA). C. the EU. D. China and Japan.
D. China and Japan.
Who took the United States off the gold system? A. President Eisenhower B. President Kennedy C. the Supreme Court D. President Nixon
D. President Nixon
The lowest corporate tax rates are found in: A. the United States, Brazil, India, and France. B. Brazil, China, Australia, and Japan. C. Peru, Australia, Italy, and Luxembourg. D. Switzerland, Ireland, Singapore, and Russia.
D. Switzerland, Ireland, Singapore, and Russia.
In an inflationary economy the following conditions may be present: A. demand exceeds supply. B. money supply is increasing. C. prices are rising. D. all of the above.
D. all of the above.
Withholding tax is: A. an indirect tax paid by employers before employees receive salaries. B. a direct tax levied on earned income. C. a 30 percent tax levied on foreign residents. D. an indirect tax levied on passive income.
D. an indirect tax levied on passive income.
When a government requires a permit to purchase foreign currency, the exchange rates: A. are market-driven. B. can be negotiated by the firm. C. are unpredictable. D. are set by the government, often above the free market rate.
D. are set by the government, often above the free market rate.
The balance-of-payments account is divided into the following three major subaccounts: A. trade, capital, and debt. B. cash flow, assets, and reserves. C. services, cash flow, and debt. D. current, capital, and reserves.
D. current, capital, and reserves.
Most significantly for the international manager, the balance of payments reveals: A. demand for a firm's products. B. a firm's financial position. C. a country's export patterns. D. demand for a country's currency and potential changes in its economic environment.
D. demand for a country's currency and potential changes in its economic environment.
The present floating exchange rate system was: A. designed by the IMF and implemented flawlessly in 1973. B. established by the major trading nations in 19721 after Nixon closed the gold window. C. implemented in tandem with a reintroduction of the gold standard. D. established after several trials in which central bankers set rates incorrectly and speculators corrected them in the markets, and it was formalized after the fact in the IMF's Jamaica Agreement.
D. established after several trials in which central bankers set rates incorrectly and speculators corrected them in the markets, and it was formalized after the fact in the IMF's Jamaica Agreement.
The current account on the BOP has three subaccounts: A. export, import, and capital. B. tangible exports, tariff revenues, and capital. C. fixed assets, current liabilities, and long-term debt. D. merchandise, services, and unilateral transfers.
D. merchandise, services, and unilateral transfers.
The international Fisher effect says that the interest rate differentials in any two currencies reflect: A. the ratio of their inflation rates minus COL B. arbitrary differences in the two economies. C. PPP differences in the two economies. D. the expected change in their exchange rates.
D. the expected change in their exchange rates.
The price of gold since about 1200 A.D. has been: A. trending downward. B. flat, keeping its value. C. wildly fluctuating. D. trending upward.
D. trending upward.
A vehicle currency is a currency: A. used to trade in the transportation sector and is usually the dollar, euro, or yen. B. whose value lies in its function in transfer pricing. C. specifically used in arbitrage deals as a trading medium only. D. used for international trade or investment.
D. used for international trade or investment.
When the law of one price is applied to interest rates, it suggests that: A. interest rates do not differ much across national borders. B. inflation is not affected by interest rates. C. inflation and interest rates do not follow the law of one price. D. varying interest rates take into account anticipated differences in inflation rates.
D. varying interest rates take into account anticipated differences in inflation rates.
A common basis for assessing economic development is gross domestic income.
False
Analysts know that a country with a large population is always a better market than a country with fewer people.
False
Developed is the term given to nations that have achieved high income per capita.
False
Discretionary income is the amount left after paying taxes.
False
The Atlas conversion factor is the arithmetic average of the current exchange rate and the exchange rates in the two previous years. Incomes measured by the Atlas conversion factor are generally more stable over time and changes in income rankings are more likely to be due to relative economic performance than fluctuations in the exchange rate.
False
The international environment includes all the uncontrollable forces originating outside the home country that surround and influence the firm.
False
The rural-to-urban shift is occurring primarily in the developed countries.
False
The view that defines economic development as a reduction of poverty and employment as well as an increase in income is called the human development approach.
False
Wages tend to vary more widely than hourly compensation because of the differences in the size of fringe benefits.
False
When measuring the value produced in an economy, most international organizations prefer to use
GNI.
_______ refers to the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad.
Gross national income
Which of the following is not true about India, according to the text?
India has a total population of 1.27 billion people, the third largest in the world.
According to the book, what is the purpose of economic analyses?
To assess the overall outlook for the economy and the impact of economic changes on the firm
A more even distribution of income and increased urbanization are among the factors acting to reduce the traditional family size.
True
A problem with gross national income estimates that, to compare them, the GNIs in local currency must be converted to a common currency by using an official exchange rate, and that may not accurately reflect domestic purchasing powers of currencies.
True
A simple calculation based on GDP, total population, and income distribution may indicate that a country is not an adequate market.
True
Countries with slower-rising unit labor costs are investment prospects for companies striving to lower production costs.
True
Differences in GNI/capita tell us something about the relative wealth of a nation's inhabitants, but we also need to know how the GNI is distributed.
True
Economies with per capita incomes in the low to middle range that are in a transition toward developed status are referred to as emerging market economies.
True
Generally, it can be assumed, the higher the GNI/capita value, the more advanced the nation's economy.
True
If a major part of the foreign exchange a nation earns cannot be used to import components used in local products, then either local industries must manufacture them or the companies that import them must stop production.
True
In terms of economic development and competencies, India's strength so far has been in services whereas China's has been in manufacturing.
True
Income distribution studies confirm the belief that income is more evenly distributed in the richer nations.
True
India's average manufacturing labor cost per hour in 2014 was about one-quarter as high as China's.
True
International economic analyses should provide economic data on both actual and prospective markets.
True
Purchasing power parity refers to the number of units of a currency required to buy the same amounts of goods and services in the domestic market that one dollar would buy in the United States.
True
The increase in the number of working women is significant because it may result in a greater market for convenience goods.
True
The percentage of household expenditures spent on consumer durables by households in developing nations is half the percentage spent by consumers in developed nations.
True
The purpose of economic analysis is to assess the overall outlook of the economy and the impact of economic changes on the firm.
True
The quantity and mix of energy consumed per capita constitutes a rough indicator of a country's level of development.
True
To compare the purchasing power of nations, managers need to know how many people gross national income (GNI) is divided among.
True
To estimate market potential, managers require data on the size and the rates of change of economic and socioeconomic factors.
True
When an international manager is considering where to do business, one of the first considerations is the size of the economy.
True
The rate of growth of GNI/capita may be more important to marketers than just GNI/capita because
a high rate indicates a fast-growing market.
Most developed nations share the following characteristic(s):
a large base of productive capital.
The FX markets in the U.S. are
controlled by the state banking commissions.
international economic analysis
economic analysis for multinationals are more complex than those for a purely domestic firm because there are many economies to consider instead of just one, there are interactions between them, and values are highly divergent -management requires economic data and socioeconomic data -purpose of economic analysis is to assess overall outlook for economy and impact of economic changes on firm -analyst use data from governmental and international organizations and industry associations
Economies with per capita incomes in the low to middle range that are in a transition toward developed status are known as
emerging market economies.
"Developing" is the term given to the world's lowest-income nations, which are technically undeveloped.
false
A benefit of global strategies is their ability to adjust quickly and effectively to changes in customer needs across national or regional markets.
false
A central reserve asset is a holding that has value and is liquid that is held by private banks in case of a liquidity crisis.
false
A global mind-set is built on a thorough knowledge of geography.
false
After setting corporate objectives, the company management must define the company's vision and mission.
false
Allied and Axis governments met in Bretton Woods in the final days of WWII.
false
Although strategic planning is not a widely used management tool among global executives, according to a Bain and Company survey there is a high level of satisfaction among those executives who do use strategic planning.
false
An activity chain is a set of interlinked activities that adds value to the final product or service.
false
An analysis of the forces controlled by the firm will include a situational analysis and control analysis.
false
Because of the rapidity of changes in the uncontrollable variables, many managers have turned to contingency plans, which are multiple, plausible stories for probable futures.
false
Benjamin Franklin established the price of gold in 1717, and de facto put the U.S. on the gold standard.
false
Companies need to consider two types of measures when assessing strategic performance: (1) measures of the company's success in obtaining and applying the required resources, such as financial, technological, and human resources, and (2) measures of the effectiveness of the company's personnel, within and across the firm's international network of operations, in performing their assigned jobs.
false
Data such as overall GNI or GNI per capita can provide a snapshot of the size of an economy, but most seasoned managers instead look at economic growth rates.
false
Disposable income is the amount of income left after paying taxes and making essential purchases.
false
Due to developments such as a rapid rise in the level of uncertainty in many areas of international business, many firms have moved toward more structured strategic planning formats and longer planning documents.
false
Economic data provide information on the number of people, and the socioeconomic data tell us if they have purchasing power.
false
Effective bridging in a team situation is a substitute for integration.
false
Fringe benefits, productivity, and exchange rates are responsible for relative changes in labor costs.
false
From comparisons of income distribution studies over time, it appears that the top and bottom quintiles are growing at the expense of the middle quintile.
false
Global foreign currency exchanges transactions total over $52 million daily.
false
Global teams are a decreasing form for international work because transportation cost reductions have been implemented in many corporations.
false
Gross national income (GNI) is the total value of all goods and services produced by a nation's residents from domestic activity.
false
India has more millionaires than does China, despite China's higher savings rate.
false
International strategy involves decisions that deal with a single area, such as marketing or production.
false
It is difficult for American firms to compete in world markets because they have the highest international unit labor costs measured in U.S. dollars.
false
Leadership is synonymous with management.
false
Managers of multinationals are not interested in countries with slow-rising labor costs if other firms in the same industry are already located there.
false
Mapping is figuring out a geographical outline for all team members.
false
Monetary policies control the collecting and spending of money by governments.
false
Research indicates that global leaders are born, not developed through experience or training.
false
Scenario planning helps to emphasize that the business environment is predictable and helps to emphasize the application of traditional perspectives when solving problems.
false
Tariffs are not a financial force; they are a political force.
false
Team establishment involves weakly linked member identification to ensure enhanced performance.
false
Teams with strong heartbeats may meet less regularly than at their launch and during crisis.
false
The 10 lowest-ranked countries in the Human Development Index devised by the United Nations Development Program are all located in Asia.
false
The GLED model is used to assess cross-cultural management skills.
false
The purpose of having an international strategy is to achieve and maintain a unique and valuable competitive position both within a nation and globally, a position that has been termed comparative advantage.
false
The underground economy is an important element of the economic measures contained in official statistics.
false
Value chain analysis focuses primarily on the question: What value does the company want to deliver to these customers?
false
Virtual team leadership is similar to colocated team leadership.
false
When a firm enters overseas markets, economic analyses become more complex because now managers must operate in two new environments: domestic and international.
false
When conducting international economic analyses, it is usually the responsibility of the local subsidiary to collect data and prepare reports.
false
The ________ includes all the uncontrollable forces originating outside the home country that surround and influence the firm.
foreign environment
international economic analysis
foreign environment international environment
A measure of an economy's size based on the market value of goods and services produced within a nation in a year is
gross domestic product.
The World Bank categories countries based on GNI per capita, using the following categories:
high-income economies, middle-income economies, low-income economies.
international environment
interaction between domestic and foreign environment forces or between sets of foreign environmental forces -should provide economic data on both actual prospective markets
The ________ includes the interactions between domestic and foreign environmental forces, or between sets of foreign environmental forces when an affiliate in one country does business with customers in another.
international environment
Foreign exchange markets are
located in major trading capitals and have a virtual presence.
According to the book, economic analyses become more complex when a firm enters overseas markets because, unlike the situation for a company operating domestically
management must operate in two new environments, foreign and international.
International economic analyses
should providing economic data on actual and prospective markets.
Most developed nations share the following characteristic(s):
technological dualism.
Because of the importance of economic information to the control and planning functions at headquarters the collection of data and preparation of reports is usually the responsibility of
the home office.
Generally, we can assume that the higher the GNI/capita value
the more advanced the economy.
When an international manager is considering where to do business, one of the first considerations is
the size of the economy.
The planning process that begins at the highest level in the organization and continues downward is ________ planning.
top-down
A vision statement is a description of the company's desired future position, of what it hopes to accomplish if it can acquire the necessary competencies and successfully implement its strategy.
true
As a result of the dollar's use as a proxy for gold, the U.S. ran up a balance of payments deficit of around $56 billion, which led to the U.S. going off the gold exchange standard in 1971.
true
Change is understood differently in different cultures, which suggests that leading global change is a challenging process.
true
China participates in the management of the international financial environment by managing its own currency.
true
Competitive strategies are action plans to enable organizations to reach their objectives.
true
Creating an environment for team norms to come into play is especially useful in global teams, because they are characterized by high levels of diversity.
true
Cultures with hierarchical values, such as most Asian and Latin American cultures, often have a single leader with decision-making power.
true
Currencies float because they are allowed to make their own adjustments in the marketplace.
true
Densely populated countries tend to make product distribution and communications simpler and less costly.
true
Frequently, given the choice between investing in a nation with a lower GNI/capita but a high growth rate, and a nation in which the conditions are reversed, management will choose the former.
true
Global managers who want to drive change need to be able to communicate across cultural boundaries and build trust.
true
Multiplicity and interdependence are among the four dimensions of complexity identified by scholars.
true
One exchange arrangement is to have no separate legal tender.
true
One factor that contributes to a favorable investment opportunity is the ability to obtain unit labor costs lower than those currently available to the firm.
true
One possible current currency arrangement is a crawling peg, where the exchange rate of a currency is allowed to move (within a narrow band) with another currency.
true
People from cultures with high power distance will feel most comfortable with top managers who make the decisions and issue directives.
true
Performance appraisal for global teams is influenced by national-level culture.
true
Sales forecasts are both a control and planning technique.
true
Scenario analysis can help managers to break away from their existing view of the world and envision alternatives that might lie outside their traditional frame of reference.
true
Some of the culture dimensions that are involved in change are tolerance of ambiguity and power distance.
true
Strategic plans help ensure that decision makers have a common understanding of the business, the strategy, the assumptions behind the strategy, the external business environment pressures, and their own direction.
true
The 500 largest multinational enterprises are responsible for about half of world trade and 90 percent of the global stock of foreign direct investment.
true
The Bank for International Settlements is like a central bank for central bankers.
true
The Big Mac Index can indicate whether a particular currency is overvalued or undervalued.
true
The Bretton Woods meeting in 1944 established a fixed rate exchange system among Allied governments that was imposed on the Axis governments.
true
The Bretton Woods system led to significant growth in international trade.
true
The Bretton Woods system worked until the early 1970s.
true
The balance of payments (BOP) is a record of a country's transactions with the rest of the world.
true
The controlling mechanism for a gold-based exchange system and a floating rate system are different.
true
The large international debt of numerous developing nations is important not only to international bankers, but also to international firms.
true
The percentage of household expenditures in developed nations for health care, transport and communication, and beverages and tobacco is much higher than for households in developing nations.
true
The random walk hypothesis suggests that the best predictor of tomorrow's currency prices are today's prices.
true
The simplicity of the gold standard was a part of its appeal.
true
The spot rate is the rate for exchange within two days in the currency market.
true
Transformational experiences are a recommended part of preparation for global leadership.
true
With a multidomestic strategy, the cost and complexity of coordinating a range of different strategies and product offerings across national and regional markets can be substantial.
true
international companies need a new kind of leader for the international environment to handle the increased complexity.
true
foreign environment
uncontrollable forces outside home country that surround/influence firm
Most developing nations share the following characteristic(s):
unequal distribution of income, with a very small middle class.