"QUESTION 1

1. According to opponents of the globalization of trade and investment

	a.	globalization has contributed to an improvement in environmental and health conditions.
	b.	globalization benefits all nations and workers.
	c.	globalization has produced uneven results across nations and people.
	d.	citizens from more globally integrated countries have lower levels of civil liberties and lower economic prosperity.
	e.	globalization has increased the proportion of children in the labor force worldwide.

0.6 points

QUESTION 2

1. If Ecuador has an absolute advantage in coffee and Argentina in wheat, then, according to trade theory:

	a.	Ecuador should focus production on coffee and trade for other goods.
	b.	Ecuador would do well to produce its own coffee rather than import it from Bolivia
	c.	Argentina should produce as much wheat as possible and trade for coffee.
	d.	All of the above.

0.6 points

QUESTION 3

1. Environmentally sustainable business needs to consider the economic and ecological systems in which they function, but not the social, which is the realm of politics.

True

False

0.6 points

QUESTION 4

1. International strategy:

	a.	needs to be consistent among the various functions, products, and regional units of the company.
	b.	needs to be consistent with the demands of the international competitive environment.
	c.	is concerned with the way firms make fundamental choices about developing and deploying scarce resources internationally.
	d.	has a goal of achieving and maintaining competitive advantage.
	e.	all of the above.

0.6 points

QUESTION 5

1. Two of the concerns that management faces in designing the organizational structure for an international company are (1) finding the most effective way to take advantage of geographic differences, and (2) coordinating the activities of departments to enable the firm to meet its overall objectives.

True

False

0.6 points

QUESTION 6

1. The regionalized organization

	a.	has the advantage that it avoids duplication of product and functional specialists.
	b.	seems to be popular with companies that have diverse products, each with different product requirements, competitive environments, and political risks.
	c.	avoids problems with global product planning.
	d.	has geographic area managers report directly to domestic operating units.

0.6 points

QUESTION 7

1. Companies pursuing a multidomestic strategy

	a.	usually have low operating costs and high efficiency.
	b.	often have centralized decision making and quick response to changes in local competition.
	c.	have tight headquarters control over product strategy.
	d.	have local subsidiaries that leverage home-country capabilities.
	e.	have high levels of local market customization.

0.6 points

QUESTION 8

1. Which of the following statements is not true?

	a.	Some observers have argued that American industry and the American economy as a whole will be strengthened by sending activities to workers in India or other foreign nations that have comparative advantages in areas such as labor costs.
	b.	India, with relatively few resources but a large population, should have a comparative advantage in the production of goods or services that require large amounts of expensive labor.
	c.	India may have a comparative advantage over some other developing countries because about 350 million of its people are able to read English.
	d.	The sophistication and skill levels required for jobs outsourced to India are rising rapidly, driven by the abundance of qualified and low-cost workers in India.

0.6 points

QUESTION 9

1. The use of third-country nationals as international company executives in least developed countries (LDCs) is a growing practice because

	a.	they tend to prefer working in LDCs.
	b.	there is frequently a shortage of skilled host-country nationals.
	c.	they will work for lower wages and benefits than will employees from the home or host country.
	d.	they do not need work permits for the host country and they have knowledge of its language and culture.

0.6 points

QUESTION 10

1. Companies with global structures

	a.	outperform those with international divisions.
	b.	are organized on the basis of geography and not on products or processes.
	c.	are large companies with numerous overseas manufacturing facilities.
	d.	are organized on the basis of products and do not have other organizing dimensions in a pure organization.
	e.	may obtain lower production costs by promoting worldwide product standardization.

0.6 points

QUESTION 11

1. Companies with a transnational strategic orientation follow a global staffing policy, selecting the best person for each job without considering national origin and generally having consistent HRM strategy across all subsidiaries.

True

False

0.6 points

QUESTION 12

1. To be successful in relationships with people in other countries, international business people must:

	a.	be students of culture.
	b.	have factual knowledge.
	c.	be sensitive to cultural differences.
	d.	all of the above.
	e.	A and C.

0.6 points

QUESTION 13

1. The effectiveness of supply chain management efforts is strongly influenced by how a company manages the interface of logistics with sourcing and manufacturing.

True

False

0.6 points

QUESTION 14

1. The major forms of economic integration include

	a.	customs union.
	b.	free trade area.
	c.	common market.
	d.	all of the above.

0.6 points

QUESTION 15

1. A product targeting significant local market penetration will probably have

	a.	considerable adaptation for the local market.
	b.	low pricing and solid distribution.
	c.	a standardized, global marketing mix.
	d.	gold packaging and a low price.

0.6 points

QUESTION 16

1. Generally, it is easier for international firms to standardize the concepts of total quality control and synchronous production in their foreign plants than it is to standardize the actual production facilities.

True

False

0.6 points

QUESTION 17

1. The imposition of standards is a way to establish nontariff barriers, and the following are examples of the imposition of standards, except for:

	a.	Japan's refusal to import light mayonnaise containing potassium sorbate.
	b.	Canada's categorization of orange juice with added calcium as a drug, subject to special requirements.
	c.	the prohibition of imported drugs at the consumer level in the U.S.
	d.	tariffs on certain barbiturate imports into the U.S.

0.6 points

QUESTION 18

1. Internalization theory suggests that what an organization is good at should not be outsourced without very careful consideration.

True

False

0.6 points

QUESTION 19

1. Generally, management prefers global product standardization because

	a.	There are lower costs due to longer production runs, design efficiencies, and marketing-related efficienciesall of which lower costs.
	b.	They have one product for the globe, which creates simplicity of message.
	c.	The creative work can be on a global theme, even when localized.
	d.	Those at headquarters generally like standardization because they can control it.

0.6 points

QUESTION 20

1. The International Technology Life Cycle:

	a.	describes the evolution of new products from developed countries to lower cost nations.
	b.	is often illustrated using examples of the movement of production techniques and equipment from initial development and use in industrially advanced countries to eventual adoption in developing nations.
	c.	explains why technological innovations cannot begin in a developing country market.
	d.	all of the above

0.6 points

QUESTION 21

1. Which of the following is explained by international trade theory?

	a.	differences in production costs.
	b.	differences in levels of technology.
	c.	foreign exchange rates.
	d.	differences in efficiency of factor use.
	e.	all of the above.

0.6 points

QUESTION 22

1. To create a competitive advantage that is sustainable over time, the international company should try to develop competencies that

	a.	create value for customers and for which they are willing to pay.
	b.	are easy to imitate or substitute for.
	c.	are expensive to develop and maintain.
	d.	are not critical to successful penetration of international markets.
	e.	imitate those of market leaders.

0.6 points

QUESTION 23

1. Economies of scale and the experience curve effect are important for international trade because:

	a.	most manufacturing, mining, and transportation industries are subject to economies of scale.
	b.	they explain how a nation's industries can become low-cost producers if the nation has an abundance of a certain class of production factors.
	c.	they justify efforts at being a first-mover in order to become an international leader.
	d.	all of the above

0.6 points

QUESTION 24

1. Transaction exposure

	a.	is a credit type risk.
	b.	is a currency exchange risk that arises when future payment in a foreign currency is involved.
	c.	is a currency exchange risk resulting from translating values in foreign currencies to the home-country currency.
	d.	cannot be protected against.

0.6 points

QUESTION 25

1. If a sale made in a foreign subsidiary is in the local currency, and there is a time lag on payment,

	a.	there is likely to be exchange risk.
	b.	interest may be due.
	c.	there is no transaction risk because the currency is local.
	d.	economic risk may be present.

0.6 points

QUESTION 26

1. 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 the potential for changes in its economic environment.

0.6 points

QUESTION 27

1. Many of the same Asian countries that are major exporters to the United States are also significant importers of American goods because:

	a.	their rising standards of living enable their people to afford more imported products.
	b.	they are purchasing large amounts of capital goods to further their industrial expansion.
	c.	they are importing raw materials and components that will be assembled and subsequently be exported, often to the U.S.
	d.	All of the above.
	e.	A and B

0.6 points

QUESTION 28

1. Regional trade agreements such as NAFTA impact the WTO

	a.	negatively, because they undercut the nondiscrimination principle of the WTO.
	b.	positively, because they extend most-favored-nation status to more nations.
	c.	negatively, because they compete with the WTO for membership, given that nations can belong to only one trade group.
	d.	negatively, because the U.S. and the EU do not have a regional trade agreement between them.

0.6 points

QUESTION 29

1. According to the theory of comparative advantage,

	a.	a nation should produce the goods at which it is most efficient.
	b.	a nation can gain from trade if it is equally inefficient in producing two goods.
	c.	a nation must have an absolute advantage in at least one good to gain from trade.
	d.	All of the above.

0.6 points

QUESTION 30

1. In situations where international companies (ICs) are setting transfer prices:

	a.	host governments are generally unaware of the actions by ICs operating within their borders.
	b.	management must demonstrate they are not making profits on the sales.
	c.	the IC should show that other companies are charging comparable prices for the same or similar products.
	d.	the home country is usually more concerned than the host country, especially if the home country's tax rates are lower.

0.6 points

QUESTION 31

1. Total quality management

	a.	is the control of quality in all areas of the organization, not just production.
	b.	refers to quality control in not only the production of the firm's products, but also to quality control of all suppliers.
	c.	refers to the control of quality in all functional areas of the firm.
	d.	requires adoption of concurrent engineering principles in product design.

0.6 points

QUESTION 32

1. Which of the following is not true about the global standardization of a firm's manufacturing operations?

	a.	Worldwide uniformity or standardization in manufacturing methods increases headquarters' effectiveness in keeping the production specifications current.
	b.	If all plants worldwide have the same equipment, notice of a change in specifications can be given with one indiscriminate notification.
	c.	Greater profits may be obtained by organizing all of its companies' production facilities into one logistical supply system.
	d.	Standardization of machinery guarantee that parts will be interchangeable, regardless of where they are produced.

0.6 points

QUESTION 33

1. 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

False

0.6 points

QUESTION 34

1. By means of a licensing agreement,

	a.	an international firm receives permission from a foreign government to set up a subsidiary in that country.
	b.	one firm grants to another the right to use stipulated parts of its expertise
	c.	a foreign company receives products made for it by another company.
	d.	one firm grants to another the right to use all of its expertise.

0.6 points

QUESTION 35

1. The manager with a global mind-set is open to understanding others from different backgrounds, is more judgmental about people from other cultures, and is eager to approach issues from multiple perspectives.

True

False

0.6 points

QUESTION 36

1. Translation exposure or risk occurs because the currency in which business is conducted may lose or gain value in terms of the company's home currency when financial statements are consolidated.

True

False

0.6 points

QUESTION 37

1. Companies pursuing a global strategy

	a.	usually have low operating costs and high efficiency.
	b.	often have decentralized decision making and quick response to changes in local competition.
	c.	have loose headquarters control over product strategy.
	d.	have low levels of transportation and tariff costs.
	e.	have high levels of local market customization.

0.6 points

QUESTION 38

1. The form of countertrade called compensation calls:

	a.	for the trade of one item for another.
	b.	for production in an least developing country (LDC) of an end product made of goods or ingredients supplied by the developing country (DC) party.
	c.	for payment by the LDC party in products produced by DC supplied equipment and technology.
	d.	for the exporter to procure parts or services used in producing an end product in the importing country.

0.6 points

QUESTION 39

1. International companies' choices of locations for their plants and other operations are influenced by the fact that members of trade groups are increasingly selling more to each other.

True

False

0.6 points

QUESTION 40

1. International firms employ contract manufacturing

	a.	as a means of entering a foreign market without investing in plant facilities
	b.	to subcontract assembly work or the production of parts to independent companies overseas.
	c.	as a means of direct foreign investment.
	d.	A and B.

0.6 points

QUESTION 41

1. The monopolistic advantage theory states that

	a.	a firm that has a monopoly has a major advantage in overseas investment.
	b.	FDI is made by firms in oligopolistic industries possessing technical advantages over local companies.
	c.	a firm that has a monopoly domestically will have no competition making overseas investments.
	d.	the firm making the overseas investment first has a monopolistic advantage.
	e.	None of the above.

0.6 points

QUESTION 42

1. Economic integration often progresses

	a.	in stages, from free trade area to customs union to common market.
	b.	in stages, totally dependent on the members' national economic strength.
	c.	as a result of cultural beliefs and economic strength.
	d.	in unpredictable ways due to unintended consequences.

0.6 points

QUESTION 43

1. Companies with a regional strategic approach can use a polycentric staffing policy, employing a variety of host-country nations (HCNs) and third-country nationals (TCNs).

True

False

0.6 points

QUESTION 44

1. The right to receive, or the obligation to pay, a foreign currency up to one year in the future involves a transaction risk.

True

False

0.6 points

QUESTION 45

1. Which of the following is not true?

	a.	A company's competitive strategy is determined by two competing forces. A company's competitive strategy should, in turn, drive the organization's approach to international human resource management.
	b.	Pressure to achieve global integration is a force determining a company's competitive strategy.
	c.	Pressure to achieve reduced costs is a force determining a company's competitive strategy.
	d.	Pressure to achieve local differentiation is a force determining a company's competitive strategy.
	e.	Pressure to achieve low prices is a force determining a company's competitive strategy.

0.6 points

QUESTION 46

1. All of the following are correct about international strategy except:

	a.	International strategy is the basis for establishing a company's mission and vision.
	b.	International strategy needs to be consistent among the various functions, products, and regional units of the company.
	c.	International strategy needs to be consistent with the demands of the international competitive environment.
	d.	International strategy is concerned with the way firms make fundamental choices about developing and deploying scarce resources internationally.
	e.	International strategy has a goal of achieving and maintaining competitive advantage.

0.6 points

QUESTION 47

1. The theory of factor endowment:

	a.	explains why France sends us cosmetics, wine, and clothing.
	b.	states that a nation will trade goods that can be produced with the production factor that is most abundant.
	c.	explains why an automobile can be made either by hand or by a capital-intensive process.
	d.	explains why transportation costs may be ignored when calculating the costs of imports.

0.6 points

QUESTION 48

1. The international product life cycle theory

	a.	may have its greatest usefulness in explaining trade and investment behavior when international firms introduce their new products in foreign markets first.
	b.	may have its greatest usefulness in explaining trade and investment behavior when product life cycles are short.
	c.	may have its greatest usefulness in explaining the emergence of "born global" companies.
	d.	may have its greatest usefulness in explaining trade and investment behavior when international firms first introduce new products in their home markets.
	e.	may have its greatest usefulness in explaining whether companies will innovate or imitate.

0.6 points

QUESTION 49

1. Translation risk:

	a.	is a currency exchange risk resulting from translating values in foreign currencies to the home country currency.
	b.	is a credit type risk.
	c.	is a currency exchange risk that arises when future payment in a foreign currency is involved.
	d.	cannot be protected against.

0.6 points

QUESTION 50

1. According to the text, which of the following is not one of the developments that is encouraging managers to consider organizational designs such as reengineering, virtual corporations, and horizontal corporations?"

	a.	Faster technological change.
	b.	Increased diversity of cultures and countries.
	c.	A growing customer preference for custom-made rather than mass-produced products.
	d.	Pressure to maintain alignment between the organization and its global and hypercompetitive environment.
	e.	The rapidly changing business environment caused by increased global competition.