11.Cultural relativism is used by some firms to justify actions in a foreign country that might not be acceptable in the U.S.

True or false

12.ccording to our class lecture, firms base FDI decisions on:

a.

Location factors.

B.

Internalization considerations.

C.

Home country cultural attitudes.

D.

Ownership specific advantages.

E.

Answers a, b and d.

13.The following is/are true regarding the foreign-currency exchange rate:

a.

It is the price of one currency in terms of another.

B

Buying power is accurately reflected by it.

C

It should have minimal influence on company sales and profits.

D

Rising inflation in a country should increase the value of its currency in terms of other currencies.

E.

All the answers are correct.

14.First mover advantages such as creating switching costs for customers and establishing social ties ahead of competitors always outweigh the disadvantages of being a first mover.true or false

15.During the Bretton Woods period, the US dollar declined in value versus other currencies.

True or false

16.The main advantage(s) of ethnocentric staffing include:

a.

Tighter control over foreign subsidiaries.

B

Avoiding relocation of managers from the home country.

C

Costs are lower than other staffing approaches.

D

Creating a foreign image for the local subsidiary.

E

All the answers, a, b, c, d, are correct.

17.Foreign direct investment often allows firms to avoid trade restrictions including quotas and tariffs. True or false

19.Countertrade:

a.

Means paying for goods or services with other goods or services.

B

Is an important part of international business because many countries lack sufficient hard currency.

C

May give the selling company the problem of disposing of goods they are not familiar with.

D

May be the only way into a market.

E

All the answers, a, b, c and d are true.

20.In export alternatives, merchants are differentiated from agents because merchants take title (own) goods they offer to the market.

True or false