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25. The European Union is the world's most advanced and largest regional economic bloc. True False

26. Family conglomerates (FCs) might pose a challenge to firms trying to enter emerging markets because ____. a. FCs have no more knowledge in manufacturing and distribution than other private players b. FCs enjoy substantial competitive advantages that overwhelm late entrants c. the owners of FCs are often overly sympathetic to the bureaucratic state machinery d. FCs are not required to pay taxes Question 27 The _____ is a tax that is assessed as a percentage of the value of the imported product.

Select one: a. specific tariff b. subsidy c. export tariff d. ad valorem tariff Question 28 Which of the following statements is most likely to be TRUE regarding a currency's price if the supply of the currency increases?

Select one: a. The price of the currency decreases. b. The price of the currency increases. c. The price of the currency fluctuates randomly. d. The price of the currency remains constant. Question 29 Advanced economies are characterized by limited industrialization and stagnant economies.

Select one: True False Question 30 Which of the following is an example of a "buy-back agreement"?

Select one: a. Pharmland company sells its pharmaceutical equipment to the government of the United Kingdom and receives half of the payment in cash and the other half in British merchandise. b. The Turkish company Alesta Gida signs a contract to sell pasta to Ukroliya company in Ukraine, on condition that a second contract will be signed in which Alesta Gida agrees to purchase sunflower oil from Ukroliya. c. The French company Belle France buys a machine for biscuit production from the Chinese company Xindu. Xindu is paid by receiving thousands of biscuit boxes from Belle France, which it then sells in world markets. d. Saudi Arabia trades its oil for airplanes and military weapons from the United States. Question 31

Financing or other resources that a government grants to a firm or group of firms, to ensure their survival or success is referred to as a ____.

Select one: a. Subsidy b. Premium c. Grant d. Quota Question 32 Which of the following situations often results in a banking crisis?

Select one: a. when people withdraw their money from the banks b. when exchange rates fluctuate dramatically c. when governments borrow excessively from banks d. when a nation's currency rapidly depreciates Question 33 Which of the following is a benefit of global sourcing?

Select one: a. Access to qualified personnel abroad b. Bridging of the rich-poor divide c. Elimination of competitors d. Minimal reliance on suppliers Which of the following is an advantage of exporting?

Select one: a. It is a high-control strategy that requires substantial resource commitment when compared to equity joint ventures. b. It allows focal firms to attain maximum control by establishing ownership of key assets in the foreign market. c. It minimizes exposure to tariffs and other trade barriers, as well as fluctuations in exchange rates. d. It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing and can potentially generate profit margins that are often more favorable than in the domestic market. Question 35 Which of the following is an effect caused by capital flight?

Select one: a. It increases the need for domestic investment holdings. b. It decreases the ability of the nation to service debt and pay for imports. c. It decreases the nation's supply of hard currencies. d. It reduces harmful currency restrictions. Question 36 The most distinguishing characteristic of _____ is rapidly improving living standards and a growing middle class with rising economic aspirations.

Select one: a. new global challengers b. emerging economies c. advanced economies d. developing economies Question 37 Which of the following is TRUE with regard to strategies for minimizing the risks of global sourcing?

Select one: a. Because production quality in an emerging market rarely varies over time, managers at the focal firm are not obliged to closely monitor manufacturing processes. b. To maximize returns and minimize risks, management should outsource core business operations. c. Firms must avoid maintaining their own sourcing operations abroad in order to cut costs and minimize risks stemming from frequent currency fluctuations. d. To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources. 38 Which of the following activities is applicable to the final stage of exporting?

Select one: a. The firm makes decisions about which foreign intermediaries to hire. b. The firm needs to modify the product to fit the needs and tastes of the buyers in the foreign market. c. The firm engages appropriate bankers and international trade attorneys. d. The firm searches for the most attractive export markets. Question 39 The purpose of the Bretton Woods Agreement was to govern the exchange rates of major international currencies.

Select one: True False Question 40 Which of the following countries has weak intellectual property protection?

Select one: a. China b. France c. Australia d. United States Question 41 Which of the following is an example of export control?

Select one: a. France does not allow significant foreign ownership of its TV stations because of concerns about foreign influence on French culture. b. The United States generally blocks exports of nuclear and military technology to countries it deems state sponsors of terrorism, such as Iran and Syria. c. The U.S. government imposed duties of about $50 per ton on the import of Mexican cement after U.S. cement makers lobbied Congress. d. India's tariffs are relatively high, especially in agriculture, where the average rate is 33.5%. Question 42 Which of the following, originally known as the International Bank for Reconstruction and Development, was founded to fund construction of Japan and Europe after World War II?

Select one: a. The International Monetary Fund b. Bank for International Settlements c. The World Bank d. The Central Bank Which of the following does not refer to a market economy system? Select one: a. Government intervention in the marketplace is limited. b. Economic decisions are left to individuals and firms. c. The state is a dominant force in the production and distribution of goods and services. d. The interaction of supply and demand determine prices. Question 44 The level of integration of a customs union is lower than that of a free trade area.

Select one: True False Question 45 If last year one dollar equaled one euro, and then the exchange rate shifted so that today one dollar equals two euros, which of the following would most likely NOT occur?

Select one: a. U.S. exports to Europe would increase. b. European firms would pay more for raw materials imported from the United States. c. European consumers would purchase fewer U.S. products and services. d. Fewer Europeans would travel to the United States or study at U.S. universities. Question 46 ____ refers to sourcing from the firm's own production facilities abroad.

Select one: a. Outsourcing b. Externalization c. Contract manufacturing d. Captive sourcing Question 47 Which of the following is an example of a currency risk?

Select one: a. Selling products to a customer in a country that has the same currency value as the exporter's b. Selling products to a customer in a country with appreciating currency c. Purchasing products from a supplier in a country whose currency is appreciating against yours d. Purchasing products from a supplier in a country with depreciating currency Question 48 Which of the following is NOT an example of a firm's strategy in its response to government intervention?

Select one: a. The leading Japanese firm Toyota often lobby the Japanese government and foreign governments to lower their trade and investment barriers. b. Foxconn Technology Group, a Taiwanese contract manufacturer for Apple and other electronics firms, built a factory in Brazil partly to avoid the country's high tariffs on imported goods. c. South Korea faced a quota on the export of non-rubber footwear to the United States. By shifting manufacturing to rubber-soled shoes, South Korean firms increased footwear exports. d. The German company Siemens avoided to obtain an investment incentive from the Portuguese government, as this would increase the cost of trade and investment barriers. Question 49 Market forces and free trade are encouraged in totalitarian countries.

Select one: True False Question 50 Which of the following does the central bank perform in order to accommodate a nation's economic growth?

Select one: a. Enforce strict regulations on foreign direct investment b. Establish a voluntary export restraint c. Increase the nation's money supply d. Restrict innovation and entrepreneurship