International Business FINAL
A Greenfield investment a) Is a form of FDI that involves the establishment of a new operation in a foreign country b) Involves a 7 percent stock in an acquired foreign business entity c) Involves a merger with a foreign business d) Occurs when a firm acquires another company in a foreign country
a
A ____________ is one in which a gain by one country results in a loss by another. a) zero-sum game b) trade-war game c) positive sum game d) neomercantilism
a
A draft used in international transactions _______. a. is a document requesting payment b. explains the conditions of a contract c. is the same as a letter of credit d. gives bank guarantee to an exporter
a
A firm that depends more on mass media advertising to communicate the marketing message to potential consumers is using a: a. pull strategy b. push strategy c. standardized strategy d. localized strategy
a
A foreign exchange market dealer or trader could make a profit through buying a currency at low price, and selling it at a higher price - what is this transaction called? a) arbitrage b) Purchasing power disparity c) The Law of Different Price d) Exchange rate dipl
a
A hardship allowance is paid: a. when the expatriate is being sent to a location where such basic amenities are grossly deficient by the standards of the expatriate's home country b. to ensure that an expatriate's children receive adequate schooling (by home-country standards) c. to ensure that the expatriate will enjoy the same standard of living in the foreign posting as at home d. to ensure that the expatriate can afford the same quality of housing in the foreign country as at home
a
A strategy that focuses on increasing the attractiveness of a product is referred to as a(n) a. differentiation strategy b. low cost strategy c. effectiveness strategy d. efficiency strategy
a
According to Adam Smith, a country should specialize in the production of a good when it has ___________. a) an absolute advantage in the production of the good b) a strong domestic demand for the good c) the ability to help country increase its national output d) the necessary raw materials for production
a
By lowering production costs, ________ help domestic producers compete against foreign imports. a. subsidies b. duties c. quotas d. tariffs
a
If a ______ change is a price produces a ______ change in demand, then demand is said to be elastic. a. small; large b. small; small c. large; small d. large; large
a
If a company recruits host-country nationals to manage subsidiaries while parent-country nationals occupy key positions at corporate headquarters, the firm is following a(n): a. polycentric staffing policy b. ethnocentric staffing policy c. geocentric staffing policy d. internal staffing policy
a
In a seminal study, RL Tung found that for American multinationals, the biggest impediment to expatriate success was: a. the inability of the spouse to adjust b. the managers inability to adjust c. the managers inability to cope with larger overseas responsibilities d. the lack of adequate technical training
a
Japan's great trading houses are called ________. a. sogo shosha b. kaizen c. MITI d. Samurai
a
Logistics is the activity that controls the ______. a. transmission of physical materials through the value chain b. customer contact points of a business c. activities involved in creating a product d. information exchange between a business and its customers
a
Max Weber theorized that there was a relationship between Protestantism and the emergence of modern capitalism because: a. protestant ethics emphasizes the importance of hard work and wealth creation and frugality b. Protestantism promotes the hierarchical domination of religious and social life c. Protestantism states that spiritual growth is more important than material wealth d. Protestantism promotes blind loyalty to employers
a
Most service firms have found that ______ with local partners work best for controlling subsidiaries. a. joint ventures b. licensing agreements c. greenfield investments d. turnkey projects
a
The _______ dimension of Hofstede's study explores how a society deals with the fact that people are unequal in physical and intellectual capabilities. a. power distance b. individualism versus collectivism c. uncertainty avoidance d. masculinity versus femininity
a
The __________ tracks the export and import of goods and services. A current account deficit or trade deficit as it is often called, arises when a country is importing more good and services than it is exporting. a) Current account b) Debit account c) Surplus account d) Capital account
a
The ___________ states that a country's "nominal" interest rate is the sum of the required "real" rate of interest and the expected rate of inflation over the period for which the funds are lent. a) PPP theory b) efficient market theory c) law of one price d) Fisher Effect
a
The idea that valuable knowledge does not reside just in a firm's domestic operations but can also be found in its foreign subsidiaries is called _______. a. global learning b. global production processes c. global economics d. global factors
a
The identification of distinct groups of consumers whose purchasing behavior differs from others in important ways is known as ________. a. market segmentation b. market penetration c. diversification strategy d. differentiation
a
When a firm has a strategic goal of pursuing a low cost strategy on a worldwide scale, the firm should follow a(n) a. global standardization strategy b. localization strategy c. international strategy d. customization strategy
a
Which of the following observations is true of the Bretton Woods agreement? a) All countries agreed to fix the value of their currency in terms of gold under the agreement. b) The system accepted Pound as the official reference currency against gold. c) The agreement established a floating system of monetary exchange. d) Two multinational institutions, World Economic Forum and WTO, were formed under the agreement.
a
Which of the following occurs when the quantity of money in circulation in a country rises faster than the country's stock of goods and services - that is, when the money supply increases faster than output increases. a) Inflation b) Credit squeeze c) Deflation d) Production surplus
a
Why do governments limit currency convertibility? a) To preserve foreign exchange reserves. b) To spend foreign exchange reserves. c) To keep domestic companies from investing abroad d) To allow nonresidents to convert money to foreign currencies
a
_______ can be defined as the rate of return that the firm makes on its invested capital, which is calculated by dividing the net profits of the firm by total invested capital. a. profitability b. performance c. cash flow d. efficiency
a
_______ is a reciprocal buying agreement and occurs when a firm agrees to buy a certain amount of material back from a country to which a sale is made. a. counterpurchase b. barter c. lease-and-buyback d. switch trading
a
_______ is pursued primarily by manufacturing firms and _______ is employed primarily by service firms. a. licensing; franchising b. franchising; licensing c. franchising; exporting d. exporting; licensing
a
_______ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product. a. experience curve b. economies of scale c. location economies d. production possibility
a
_______ refers to the number of intermediaries between the producer (or manufacturer) and the consumer. a. channel length b. channel exclusivity c. channel quality d. channel speed
a
______________ occur(s) when a firm exports goods or services to consumers in another country. a) International trade b) Foreign direct investment c) Inward investment d) Merger and Acquisitions
a
______________: an industry composed of a limited number of large firms (e.g. an industry in which four firms control 80% of a domestic market.) a) Oligopoly b) Multinational Enterprise c) Monopoly d) All the above
a
demonstrations against globalization happened in December 1999, when more than 40,000 protesters blocked the streets of a city in order to shut down a World Trade Organization meeting. Which city was that? a) Seattle, Washington b) Millau, France c) New York, New York d) Bangkok, Thailand
a
A caste system differs from a class system because: a. a caste system is an open system of stratification, while a class system is a closed system of stratification b. it is not possible for an individual to change his or her caste, while a class system allows people to change their class through individual achievement c. the social mobility in caste systems varies from society to society, while in a class system there is no social mobility d. a caste system is a less rigid form of social stratification, while a class system is a comparatively more rigid form of social stratification
b
A distinctive aspect of ____________ is the tendency to aggressively court FDI believed to be in the national interest by, for example, offering subsidies to Foreign MNEs in the form of tax breaks or grants. a) The dogmatic view b) Pragmatic nationalism c) The radical view d) The conservative view
b
A firm benefits by basing each value creation activity it performs at that location where economic, political, and cultural conditions, including relative factor costs, are most conducive to the performance of that activity. Firms that pursue such a strategy can realize: a. differentiation b. location economies c. vertical integration d. horizontal integration
b
A foreign service premium is: a. paid when the expatriate is being sent to a difficult location b. the extra pay that an expatriate receives for working outside his or her country of origin c. normally given to ensure that the expatriate can afford the same quality of housing in the foreign country as at home d. paid to ensure that the expatriate enjoys the same standard of living in the foreign posting as at home
b
According to Ricardo's theory of comparative advantage, a country should produce goods ___________. a) for which it has access to raw materials b) that it produces most efficiently c) that have the highest domestic advantage d) for which the location is strategic
b
An exclusive distribution channel is one that is difficult for outsiders to access. Which country's distribution system is often held up as an example? a. Singapore b. Japan c. China d. India
b
As a receipt, the bill of lading indicates that the carrier ________. a. provides a written promise of payment before releasing the merchandise b. has obtained the merchandise described on the face of the document c. receives payment from a third-party such as a bank or trading house d. is obligated to provide a transportation service in return for a certain charge
b
Before a firm is allow access to the European marketplace, the European Union requires that the quality of the firm's manufacturing processes and products be certified under a quality standard known as ______. a. Six Sigma b. ISO 9000 c. Kaizen d. total quality management
b
Central to the concept of economies of scale is the idea that the best way to achieve high efficiency, and hence low unit costs, is through the ______. a. customization of products for each individual market b. mass production of a standardized output c. production of goods that are different from each other d. production of small volumes of high-quality products
b
Firms engaging in a ______ with a local company can benefit from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems. a. turnkey project b. joint venture c. greenfield investment d. licensing arrangement
b
Hindus believe: a. that there is but the one true omnipotent God b. in reincarnation, or rebirth into a different body, after death c. in the importance of individual religious freedom d. that material quest is more than spiritual quest
b
Increasingly the ___________ has been acting as macroeconomic police of the world economy, insisting that countries seeking significant borrowings adopt certain macroeconomic policies. a) United Nations (UN) b) International Monetary Fund (IMF) c) World Trade Organization (WTO) d) World Bank
b
Tariff rate quotas are common in agriculture, where their goal is to: a. reduce the use of synthetic fertilizers b. limit imports over quota c. increase agricultural imports d. increase foreign competition
b
The Export-Import Bank _______. a. is an international financial institution that provides loans for capital programs b. provides finance to facilitate trade between US and other countries c. is an independent agency of the United Nations d. focuses on the policies that have an impact on the exchange rate and the balance of payments
b
The __________ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states. a) World Bank b) World Trade Organization c) United Nations Organization d) International Monetary Fund
b
The _____________ of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace. a) diversity b) globalization c) information-technology infrastructure d) e-commerce
b
The extent to which the place of manufacturing influences product evaluations is known as _______. a. source effects b. country of origin effects c. noise effects d. location effects
b
This theory contends that the degree to which a nation is likely to achieve international success in a certain industry is a function of the combined impact of factor endowments, domestic demand conditions, related and supporting industries, and domestic rivalry. a) Zero-Sum Theory b) Porter's Theory c) Product Life-Cycle Theory d) Leontief Paradox Theory
b
Three values central to the Confucian system of ethics have very important economic implications. Which of the following is NOT one among them? a. loyalty b. rule based law c. reciprocal obligations d. honesty in dealings with others
b
Under a _________ exchange rate regime, a country will attach the value of its currency to that of a major currency. a) managed float b) pegged c) free float d) currency board
b
Which of the following is a disadvantage of licensing? a. it does not help firms that lack capital to develop operations overseas. b. it does not give a firm the tight control over strategy that is required for realizing experience curve and location economies c. it cannot be used when a firm possesses some intangible property that might have business applications d. the firm has to bear the development costs and risks associated with opening a foreign market
b
Which of the following is the reason why the current foreign-exchange system is sometimes thought of as a managed-float system? a) The exchange rates of a currency are determined by market forces. b) Governments intervene frequently in the foreign exchange market. c) Major currencies are allowed to float freely against each other. d) Countries use a reference currency to estimate the value of their currencies.
b
Which of the following observations is correct? a. the economic principles established in the Koran are against free enterprise b. the economic principles of Islam prohibit the payment or receipt of interest c. the Koran speaks disapprovingly of earning legitimate profit through trade and commerce d. protection of the right to private property is not embedded within Islam
b
Which of the following occurs when traders start moving as a herd in the same direction at the same time? a) Fisher effect b) Bandwagon effect c) Arbitrage d) Decoupling of markets
b
Which of the following terms refers to the extent to which a country is gifted with such sources as land, labor, and capital? a) Current accounts b) Factor endowments c) National balance d) National accounts
b
Which of the following terms refers to the unit cost reductions associated with large sized outputs? a) Absolute advantage of production b) Economies of scale c) Constant marginal returns d) Diminishing marginal returns
b
_______ imply that when a firm already has significant value built into its product offering, increasing value by a relatively small amount requires significant additional costs. a. efficiency matrixes b. diminishing returns c. cost plus curve d. strategy convex curves
b
_______ is the direct exchange of goods and/or services between two parties without a cash transaction and is the simplest arrangement. a. counterpurchase b. barter c. offset d. switch trading
b
________ is a direct restriction on the quantity of some good that may be imported into a country. a. import tariff b. import quota c. import subsidy d. ad valorem tariff
b
__________ are exchange rates governing some specific future date foreign exchange transactions. a) Spot exchange rates b) Forward exchange rates c) Future exchange rates d) Currency swaps
b
___________ involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit sold. a) Horizontal FDI b) Licensing c) Vertical FDI d) Greenfield investment
b
A _______ is payable on presentation to the drawee. a. bill of lading b. time draft c. sight draft d. letter of credit
c
A firm facing low pressures for cost reductions and low pressures for local responsiveness, is most likely to follow a(n) _______ strategy. a. global standardization b. localization c. international d. transactional
c
A(n) ________ seeks the best people for key jobs throughout the organization, regardless of nationality. a. polycentric staffing policy b. ethnocentric staffing policy c. geocentric staffing policy d. uniform staffing policy
c
According to the _________ argument, governments should temporarily support new industries until they have grown strong enough to meet international competition. a. retaliatory action b. human rights c. infant industry d. antidumping
c
An advantage of engaging in in-house production of products and components is that _______. a. the firm will have fewer subunits to control by making products in-house b. it will help the firm capture more orders from other countries c. it enables a firm to protect the proprietary technologies that it has d. firms can make better use of the location advantages of certain countries
c
An ethnocentric staffing policy is one in which: a. all key management positions are filled by host-country nationals b. host-country nationals are recruited to manage subsidiaries c. all key management positions are filled by parent-country nationals d. the best people are recruited for key jobs throughout the organization, regardless of nationality
c
An exchange rate of E1 = $1.30 indicates that: a) $1 is worth 1.30 euros. b) one could get 1.30 euros for $1. c) one euro buys 1.30 dollars. d) one euro buys 0.77 dollars.
c
At Six Sigma, a production process would be highly accurate and create just _______. a. 3.4 defects per hundred thousand units b. 6.8 defects per million units c. 3.4 defects per million units d. 6.8 defects per hundred thousand units
c
Cultural myopia refers to a firm's failure to: a. adapt to certain ethnocentric cultures b. act confidently in host-countries c. understand host-country cultural differences d. prevent gender discrimination within the firm
c
Expatriate failure refers to: a. expatriates who follow host-country norms instead of their come-country norms b. the inability of expatriate managers to treat foreign nationals as if they were home-country nationals c. the premature return of an expatriate manager to his or her home-country d. the ethical drawbacks of the ethnocentric staffing approach
c
In 1997, two South Korean manufacturers of semiconductors, LG Semicon and Hyundai Electronics, were accused of selling dynamic random access memory chips (DRAMs) in the U.S. market at below their costs of production. It was alleged that the firms were trying to unload their excess production in the United States. This is an example of: a. ad valorem tariff b. subsidy c. dumping d. import quota
c
Managing an international business differs from that of managing a purely domestic business in many ways. At the most fundamental level, the differences arise from the simple fact that countries are ____________. a) remote b) too distant c) different d) all the above
c
Moral hazard arises when people behave recklessly because ___________. a) of the restrictions that exist in a country's monetary policy b) of the restrictions that IMF has imposed on them c) they know they will be saved if things go wrong d) they face financial difficulties arising out of external factors
c
Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of ______. a. licensing agreements b. franchising agreements c. intangible property d. tangible property
c
Since World War II, the _______________ has consistently been the largest source country for FDI. a) United Kingdom b) Germany c) United States d) Japan
c
The Japanese government was pressurized by the U.S. government to place limits on the number of vehicles exported to the United States by Japanese automobile producers in 1981. This is an example of: a. tariff rate quota b. specific tariffs c. voluntary export restraint d. ad valorem tariff
c
The costs of promoting and establishing a product offering when a firm enters a foreign market prior to its rivals are known as ____. a. switching costs b. market development costs c. pioneering costs d. promotional development costs
c
The major cost saving associate with JIT systems comes from ______. a. early delivery of raw materials to production b. decentralization of manufacturing c. speeding up inventory turnover d. reduced spending on CRM activities
c
The social organization of Western society tends to emphasize on: a. a group orientation b. collectivist values c. individual achievement d. work groups
c
When two parties agree to exchange currency and execute the deal immediately, the transactions is a; a) futures exchange b) carry trade c) spot exchange d) forward exchange
c
Which of the following is a function of World Bank? a) Implementing a rigid fixed exchange rate regime b) Promoting gold standard across the world c) Lending money to governments for development d) Implementing a flexible fixed exchange rate regime
c
Which of the following is a major advantage of using a letter of credit? a. it gives the importer time to resell the merchandise before payment b. it guarantees the exporter pre-export financing c. it helps international traders engage in trade with trust d. it guarantees the importer extra funds for other purposes
c
Which of the following is an advantage of establishing a joint venture? a. joint ventures with local partners do not face any risk of being subject to nationalization or other forms of adverse government interference b. joint ventures give a firm a tight control over subsidiaries that it might need to realize experience curve or location economies c. when the development costs and/or risks of opening a foreign market are high, a firm might gain by sharing these costs and/or risks with a local partner d. the firm is deprived of the knowledge of the host country's competitive conditions, culture, language, etc.
c
Which of the following is an example of a support activity in a firm's value chain? a. R&D b. customer service c. human resources d. marketing and sales
c
Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country? a) Economic patriotism b) Protectionism c) Free trade d) Offshoring
c
Which of the following refers to the extent to which individuals can move out of the strata into which they are born? a. caste stratification b. class system c. social mobility d. individual potential
c
_______ is the ability to understand why people of other countries behave the way they do. a. others-orientation b. cultural myopia c. perceptual ability d. cultural toughness
c
_______ refers to the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international businesses. a. channel exclusivity b. channel knowledge c. channel quality d. channel skill
c
________ are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils, neighborly behavior, and the like. a. values b. beliefs c. folkways d. mores
c
____________ exchange rates were declared as acceptable in the Jamaica agreement of IMF. a) Pegged b) Fixed c) Floating d) Gold standard
c
______________ occurs when a firm invests resources in business activities outside its home countries. a) Localization b) International Business c) Foreign Direct Investments (FDI) d) International Trade
c
__________________ has revolutionized the transportation business, significantly lowering the costs of shipping goods over long distances. a) Amazon b) supersonic transportation aircraft c) containerization d) All the above
c
A __________ retail system is one in which there are many retailers, no one of which has a major share of the market. a. concentrated b. consolidated c. focused d. fragmented
d
According to ___________ international production should be distributed among countries according to the theory of comparative advantage. a) The radical view b) The eclectic view c) Pragmatic nationalism d) The free market view
d
According to the Buy America Act, if a company wishes to win a contract from a U.S. government agency to provide some equipment, it must ensure that at least 51 percent of the product by value is manufactured in the United States. This is an example of: a. antidumping duties b. voluntary export restraints c. import quotas d. local content requirements
d
According to the ______, top managers typically overestimate their ability to create value from an acquisition. a. misevaluation theory b. performance extrapolation hypothesis c. market timing theory d. hubris hypothesis
d
According to the ____________ view of FDI, MNE's extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange. a) Imperialist b) Conservative c) Free market d) Radical
d
Bringing managers together in one location for extended periods and rotating them through different jobs in several countries is a part of: a. the ethnocentric approach b. the global standardization strategy c. cultural toughness programs d. management development programs
d
Decentralization of production is appropriate when _______. a. a product's value-to-weight ratio is high b. the product serves universal needs c. barriers to trade are low d. volatility in important exchange rates is expected
d
Diminishing returns to specialization occurs when __________. a) each additional unit is produced with lesser number of laborers b) a nation's gross domestic product declines for a few years c) production possibility is at its maximum d) more units of resources are required to produce each additional unit
d
In a concentrated retail system: a. there are many retailers who have a major share of the market b. there are many retailers, no one of which has a major share of the market c. a few retailers supply a small segment of the market d. a few retailers supply most of the market
d
In his 1776 landmark book The Wealth of Nations, Adam Smith attacked the _____________ assumption that trade is a zero-sum game. a) Heckscher-Ohlin b) Leontief Paradox c) Samuelson d) mercantilist
d
In the _______ program organized by the US Department of Commerce, department representatives accompany groups of US businesspeople abroad to meet with qualified agents, distributors, and customers. a. best prospects b. SCORE c. capital assistance d. matchmaker
d
It is common for governments to offer incentives to foreign firms to invest in their countries. Such incentives take many forms, but the most common is/ are a) tax concessions b) low-interest loans c) grants and subsidies d) all the above
d
Make-or-buy decisions are decisions about ______. a. the components to be used in manufacturing process b. procuring raw materials for a production process c. procuring the capital equipments for production d. whether or not to outsource value creation activities
d
Moore's law predicts that the power of microprocessor technology doubles and its cost of production falls in half every _________ months. a) 9 b) 12 c) 15 d) 18
d
Specific tariffs are: a. levied as a proportion of the value of the imported good b. government payment to domestic producers c. in the form of manufacturing or production requirements of goods d. levied as a fixed charge for each unit of a good imported
d
The US government has used the threat of punitive trade sanctions to try to get the Chinese government to enforce its intellectual property laws. This is an example of government intervention based on: a. human rights proteciton b. national security c. consumer portection d. relatiation
d
The WTO argues that removing tariff barriers and subsidies in the agricultural sector could: a. protect domestic agriculture in developed nations b. lower the overall level of agricultural trade c. restrict global economic growth d. lower prices to consumers
d
The ______ activities are basically concerned with creating the product, marketing and delivering the product to buyers and providing support and after-sales service. a. support b. subordinate c. ancillary d. primary
d
The _____________ suggests that a firm will establish production facilities where foreign assets or resource endowments that are important to the firm are located. a) Product life cycle b) Strategic behavior theory c) Multipoint competition theory d) Eclectic paradigm
d
The main tenet of ________________ was that it was in a country's best interest to maintain a trade surplus, to export more than it imported. a) International trade theory b) Adam Smith's Theory of Absolute Advantage c) Samuelson Critique d) Mercantilism
d
The rise of the Ecuadorian ____________ industry, profiled i the opening case, is but one small example of the trend towards globalization. a) copper-mining b) coffee-growing c) silver-mining d) rose-growing
d
The system of values and norms that are shared among a group of people and that when taken together constitute a design for living best defines: a. society b. value systems c. principles d. culture
d
Viewed globally, the _____________ has emerged as an equalizer. It rolls back some of the constraints of location, scale, and time zones. a) Multinational enterprise (MNE) b) globalization of markets c) globalization of production d) internet
d
What are the two main functions of the foreign exchange market? a) Trading of equities of foreign companies and currency conversion b) Reducing currency volatility and setting interest rates c) Insuring companies against interest rate risk and enabling imports and exports d) Currency conversion and providing some insurance against foreign exchange risk
d
When a company's product has a low value-to-weight ratio, the company should ______. a. produce the product from two or three optimal locations and ship products from there b. manufacture products from a centralized location c. ignore transportation costs as they would only be a minor part d. produce the product in multiple locations close to major markets
d
When individuals gain knowledge of the most efficient ways to perform particular tasks, they are saving costs through? a. location economies b. value creation effects c. experience curve effects d. learning effects
d
When the foreign exchange market determines the relative value of a currency, we say that the country is adhering to a ________ regime. a) currency board exchange b) pegged exchange rate c) fixed exchange rate d) floating exchange rate
d
Which of the following is a common difficulty that traders face when exporting goods or services to other countries? a. small firms tend to be more aggressive than larger firms in global trade b. governments do not provide much assistance to exporters c. growth opportunities are often limited in global markets d. exporters often face voluminous paperwork and complex formalities
d
Which of the following is a factor that initiated the collapse of the fixed exchange rate system? a) Worsening of Great Britain's balance of trade b) Recession in third world countries c) Price inflation in Europe d) Worsening of U.S. foreign trade position
d
Which of the following is true of acquisitions? a. it is a time-consuming process and takes a lot of time to execute b. they are less risky than greenfield ventures in the sense that there is less potential for unpleasant surprises c. they give the firm a much greater ability to build the kind of subsidiary company that it wants d. in many cases, firms make acquisitions to preempt their competitors
d
Which of the following statements is true of strategic alliances? a. the fixed costs and associated risks of developing new products or precesses are borne by the alliance partner b. they are a way to bring together complementary skills and assets that both companies develop c. they limit the entry of firms into foreign markets d. firm risks giving away technological know-how and market access to its alliance partner
d
Which of the following will help a company hedge against currency fluctuations? a) Finding a large supplier to supply all the raw materials b) In-house manufacturing of raw materials c) Basing business in a single country d) Dispersing production to different geographic locations
d
_______ occurs whenever a firm sells a product for a price that is less than the cost of producing it. a. resale b. plunging c. bootlegging d. dumping
d
____________ is most likely to occur when the value of the domestic currency is depreciating rapidly because of hyperinflation or when a country's economic prospects are shaky in other respects. a) The random walk effect b) The Fisher Effect c) The International Fisher Effect d) Capital flight
d
