QUESTION 1
There are three types of economic integration, namely: global, regional, and local.
True
False
QUESTION 2
Purchasing power parity is the price of one currency in terms of another.
True
False
QUESTION 3
When the United States sells products to China, US exporters often demand that they be paid in the Chinese yuan.
True
False
QUESTION 4
Three EU members-Britain, Denmark and Sweden-do not use the euro as their currency.
True
False
QUESTION 5
NAFTA is an example of a common market.
True
False
QUESTION 6
Which of the following is NOT an advantage of a strong US dollar?
US consumers benefit from low prices on imports.
US tourists benefit from lower prices when traveling abroad.
Lower prices on foreign goods help keep US prices level and inflation low.
US firms in import-competing industries face more low-cost imports.
QUESTION 7
Which does "ASEAN" stand for?
Assembly of Southeast Asian Nations
Assembly of South American Nations
Association of Southeast Asian Nations
Association of South American Nations
QUESTION 8
In the trade relationship with China, why is the US dollar in more demand than the Chinese yuan?
More people demand the yuan domestically in China, so it is not used for imports and exports.
The dollar is the common transaction currency between the two countries.
The yuan is pegged to the US dollar.
Formal institutions and regulations demand the trade be conducted in the dollar.
QUESTION 9
Why was the US dollar chosen as the currency to which other currencies would be pegged?
The US had high levels of productivity.
The US was experiencing a large trade surplus.
The US contributed approximately 70% of the global GDP.
All of these answers
QUESTION 10
Non-MNE firms can also do business abroad by:
Licensing and franchising
Outsourcing and engaging in FDI
Exporting and importing
All of these answers
QUESTION 11
The motto of international business is location, location, location.
True
False
QUESTION 12
Owners, managers, and employees at entrepreneurial firms tend to be more innovative and take more risks than those at large firms.
True
False
QUESTION 13
Late movers face greater technological and market uncertainties.
True
False
QUESTION 14
Sometimes foreign firms are discriminated against:
Formally
Informally
Randomly
Both formally and informally
QUESTION 15
First-mover advantages include:
Opportunity to free ride on first-mover investments
Resolution of technological and market uncertainties
Difficulty to adapt to market changes
Avoidance of a clash with dominant firms at home
QUESTION 16
Which item is not a late-mover advantage?
Avoidance of a clash with a dominant firm at home
Opportunity to free ride on first mover investments
Resolution of technological and market uncertainty
First mover's difficulty to adapt to market changes
QUESTION 17
Licensing/franchising agreements refer to:
Outsourcing agreements in R&D firms
A new corporate entity given birth to and jointly owned by two or more companies
Efforts among a number of firms to jointly market their products and services
The licensor/franchiser selling the rights to intellectual property
QUESTION 18
____ perform an important "middleman" function by linking sellers and buyers overseas.
Export intermediaries
Indirect exporters
Sporadic exporters
Alliance partners
QUESTION 19
Foreign firms crack new markets by:
Undertaking actions deemed legitimate and appropriate by governing institutions
Bribing government officials
Hiring locals to manage the new entity
Outsourcing production
QUESTION 20
In a(n) ____, members coordinate and harmonize monetary, fiscal, and taxation policies.
Monetary union
Political union
Economic union
Custom union
QUESTION 21
Non-native employees who work and reside in a foreign country are known as:
Host-country nationals
Expatriates
Multinationals
Repatriates
QUESTION 22
___ is leading the world in managerial compensation.
United States
Britain
Japan
Germany
QUESTION 23
In home replication strategy, knowledge flow is multidirectional, while in transnational strategy, it is one-way.
True
False
QUESTION 24
The phrase "think global, act local" is a winning formula when it comes to leveraging multinational presence.
True
False
QUESTION 25
Which of the following is NOT one of the four strategic choices for MNEs?
Localization
Global standardization
Home replication