B. a car that has been very successful in international markets, but received poorly in the US

C. a Korean car with an Russian GM nameplate

D. an example of the globalization of marketing

E. car that can be sold in many countries with a standard advertising message and sales program

B. France, Germany, and Great Britain

C. Russia, the US, and Japan

D. South America, the EC, and South East Asia

E. the former communist countries, the industrialized West, and the

B. its joint venture with Nagase Sangyo failed to meet expectations

C. it realized that Fuji was outspending it 3 to 1 in promotion in Japan

D. Agfa's vigorous attacks were severely eroding Kodak and Fuji's profits

E. it realized it faced a global challenge from Fuji

B. still have a some effect on international business

C. can usually be overcome with proper "global" advertising

D. have all but disappeared in the European Community

E. are primarily legal trade matters that can be handled by skilled attorneys and trade consultants
 

B individuals vote directly on most issues that affect them by referendum

C. individual's rights to freedom and expression are repressed

D. the court system is usually under the control of elected representatives

E. the interests of all citizens are represented

B. is equal to total exports minus total imports

C. per head is usually highest in command economies

D. reflects differences in costs of living

E. is higher in Mexico than the U.S.

B. brand name

C. drug

D. animal

E. book

B. steeped in tradition and values.

C. that are codified into the law of a country.

D. that, if violated by a foreigner, are likely to lead to immediate ostracization.

E. that are integrally linked to spoken language.

B. lack of company specific knowledge.

C. loyalty and commitment to a firm.

D. more personal contracts throughout and within a firm.

E. better team building within a firm.

B. Islam

C. Hinduism

D. Buddhism

E. Confucianism

B. Islam

C. Hinduism

D. Buddhism

E. Communism

B. Christianity

C. Protestantism

D. Catholicism

E. Islam

B. have more than one major religion also.

C. should be avoided by international businesses.

D. also have the greatest levels of management/labor conflict.

E. tend to have more than one culture.

B. David Ricardo / Great Advantage

C. Michael Porter / National Competitive Advantage

D. Eli Hecksher & Bertil Ohlin / Product Life Cycle Theory

E. Wassily Leontief / Leontief Paradox

B. Finland has a comparative advantage in paper production.

C. Italy has a comparative advantage in paper production.

D. Both countries can gain from specialization in production and trade.

B. Hecksher-Ohlin

C. Leontief Paradox

D. Old Trade Theory

B. Hecksher-Ohlin theory

C. Mercantilism

D. Comparative advantage

E. Absolute advantage

B. New trade theory

C. Absolute advantage

D. Comparative advantage

B. Pakistan

C. Philippines

D. Albania

E. Singapore
 

B. highlights how significant transportation costs limit the globalization of production.

C. shows how final assembly is done in highly automated high-skilled countries.

D. completely contradicts the theory of comparative advantage.

E. is consistent with the product life cycle theory, since laptop computers are relatively new products.

B. to protect an infant industry

C. for purely economic reasons

D. as a result of political pressure by representatives from textile producing regions

E. to prevent the desecration of the U.S. apparel industry
 

B. peaked in 1987 and is now again close to zero.

C. keeps growing, and growing, and growing.

D. is caused by the fact that U.S. exports are greater than U.S. imports.

E. with Japan is actually close to zero, and much larger with lesser developed countries with low labor costs.
 

B. voluntary import restraints

C. quotas

D. tariffs

E. administrative trade barriers

B. subsidy

C. quota

D. local content requirement

B. VERs

C. subsidies

D. local content requirements

E. import quotas

B. Intervention can invite retaliation and trigger a trade war.

C. The industries targeted for intervention are as likely to be chosen for political rather than economic reasons.

D. Domestic consumers will likely end up paying more for goods.

E. Intervention can help firms establish first mover advantages.

B. Hewlett-Packard buying a German software company from it's Swiss owner.

C. General Electric buying a 25% stake in a Polish appliance maker.

D. Sony's purchase of CBS records and Columbia Pictures from U.S. parents.
 

B. Small and medium sized firms looking to expand actually account for the lion's share of FDI.

C. Almost all FDI is undertaken by large multinationals that haveaccess to international capital markets.

D. Small companies undertake the largest share of FDI, while large companies undertake the smallest share of FDI
 

B. Krugman

C. Knickerbocker

D. Smith

E. Hill

B. Knowhow is amenable to licensing

C. Tight control over foreign operations is not required.

D. Knowhow cannot be protected by a contract.

B. backward vertical FDI

C. horizontal FDI

D. forward vertical FDI

E. licensing

B. Jones

C. Ricardo

D. Marx

E. Vernon

B. Pragmatic Nationalism

C. Dogmatic Realism

D. Restrictive Protectionism

E. Free Market

B. balance of payments effects

C. resource transfer effects

D. market imperfections effects

E. spurious effects
 

B. credit on the U.S. current account.

C. debit on the U.S. capital account.

D. credit on the U.S. capital account.

E. credit on the U.S. current account and a debit on the U.S. capital account.
 

B. specify the maximum ownership allowed by the MNE.

C. place controls over the operations of a local subsidiary.

D. are less common in less developed countries than in industrialized countries.

E. were not used by Mexico in the IBM case, since other requirements were deemed to be more important.
 

B. very strong

C. moderate

D. weak

B. regarded whether he should relocate manufacturing to Mexico.

C. was how he would pay the high union wages his employees were demanding.

D. how to deal with the strengthening U.S. dollar, which made foreign products less expensive.

E. whether he should promote Mary Morgan, a 30 year employee, to head his new Mexican plant?
 

B. Britain

C. Poland

D. Greece

E. Denmark
 

B. economic union

C. free trade area

D. common market

B. USA

C. USSR

D. EEA

E. India

B. is a member of EFTA.

C. is not a member of any regional economic integration.

D. joined EC in 1986

E. was refused membership in the EEA.

B. Mexico generally has more lax environmental regulations than the U.S. or Canada.

C. The GDP/person is higher in Canada than the U.S.

D. Wages in most industries are higher in Canada than Mexico.

E. Canada's exports are more than four times larger than Mexico's, even though its population is only a third the size Mexico's.

B. financial management

C. currency trading

D. food products

E. chemicals

B. 1,440,000

C. 120,000

D. 100

E. none of the above

B. forward transaction

C. spot against forward swap

D. arbitrage

E. triage transaction

B. British Pound

C. German Mark

D. U.S. Dollar

B. The evidence supporting PPP theory is not as strong as that supporting the law of one price.

C. While PPP theory makes sense in theory, in the real world of trade barriers and transportation costs, it not a good predictor of exchange rate changes in the short or the long run.

D. While PPP theory does seem to yield relatively accurate predictions in the long run, it does not hold up in the short run.

B. the exchange rate should be 3Francs = 1 Schilling

C. arbitrage possibilities would be available to people to export turnips from Belgium to Austria

D. the exchange rate should be 1 Franc = 3 Schilling
 

B. occur on spot markets

C. take place via swaps

D. involve forward market purchases

E. are cleared on the Zurich International Exchange
 

B. allowed Caterpillar to price its machines 40% below Komatsu's

C. has long been advocated by Caterpillar in order to improve its international position.

D. helped Caterpillar become the low bidder for many third world orders

E. significantly hurt Caterpillar's cost structure vis-a-vis Komatsu's

B. the IBRD

C. the ERM

D. the World Bank

E. a fixed exchange rate system

B. Turkey

C. Mexico

D. Liberia

E. Pakistan

B. Dollar

C. Mark

D. Franc

E. Yen

B. the same rate as a domestic market

C. a lower rate than the domestic market

D. a lower rate than the domestic market for short term, but not long term lending.

E. a higher rate than a domestic market for short term, but not long term lending

B. regulation

C. spread of interest rates

D. disclosure requirements

B. having a few foreign stocks included in their diversified domestic portfolio

C. a few foreign stocks rather than a large number of domestic stocks

D. having a diversified mix of domestic and foreign equities

E. investing in European denominated Eurocurrencies

B. the London exchange has already closed

C. both the London and Tokyo exchanges have closed.

D. the London exchange has already been open for 6 hours

E. the Bahrain exchange has closed.

B. Britain

C. Japan

D. France

E. U.S.

B. global

C. multidomestic

D. international

B. global

C. multidomestic

D. international
 

B. global

C. multidomestic

D. international

B. world wide product divisions

C. an international division along side product divisions

D. functional

E. matrix

B. facilitates coordination

C. can lead to duplication of similar activities

D. increases motivation at lower levels in an organization

E. typically allows managers with better information to make decisions
 

B. facilitates the utilization of management networks

C. are great in theory, but are usually not working and thus ineffectual

D. are more important than management development programs for establishing managerial contacts

E. are more important in multidomestic than transnational firms
 

B. bureaucratic

C. mercurial

D. output

E. cultural

B. entered into an alliance with Mazda initially to help it set up operations Mexico

C. first made an equity investment in Mazda in 1971

D. holds a 40% equity stake in Mazda

E. canceled it joint venture with Mazda after the "Hofu incident" when Mazda engineers were caught coping blueprints for a new Ford auto

B. licensing

C. wholly owned subsidiary

D. joint venture

E. turnkey project

B. licensing

C. wholly owned subsidiary

D. joint venture

E. turnkey project
 

B. writing contractual safeguards into agreements

C. agreeing to engage in reciprocal swaps of technological know-how

D. threaten to end the alliance if it finds that the partner has learned all its critical know-how

E. seeking credible commitments from partners

B. Japan

C. Alabama

D. Britain

E. Germany
 

B. weak currency trading

C. countertrade

D. deferred remuneration exporting

E. counter culture
 

B. exporter draft

C. bank draft

D. letter of credit

E. bill of lading

B. floating exchange rates

C. excess foreign reserves being held by socialistic countries

D. the growth of trading blocks

E. the nonconvertibility of some currencies

B. reduce the need for in-house trading departments

C. reduce the need for in-house flexible manufacturing systems

D. frequently reduce the opportunities a firm has to do business in developing countries

E. may result in a firm receiving unusable or poor quality goods that cannot be easily disposed of profitably

B. Britain

C. Canada

D. Germany

E. Mexico

B. time based competition

C. material management competition

D. flexibility competitiveness

E. rapidity competitiveness

B. the product's value to weight ratio

C. product quality

D. both the product's value to weight ratio and whether or not the product serves universal needs
 

B. contract out component parts to independent firms

C. increase the width of their value chain

D. reduce their forward and backward integration

E. reduce only their backward integration
 

B. enter into a strategic alliance with that supplier

C. integrate forward in the supply chain

D. integrate backward in the supply chain

E. emphasize legal compliance with international suppliers
 
 

B. decreased pressures for firms to enter into long term relations with suppliers

C. decreased the need for credible commitments between a firm and its suppliers

D. increased competitive pressures for internal customers to sell to both internal and external customers

E. resulted in standardization of firm and supplier relations
 

B. decreasing cost of goods sold

C. increasing work in process inventory

D. increasing inventory turnover

E. decreasing inventory turnover
 

B. incorporate it into the manufacturing department

C. incorporate it into the marketing department

D. separate it out by giving both the manufacturing and marketing departments separate materials control to foster integration with their other internal processes

E. separate it out as a function within the firm and give it equal weight in comparison with other more traditional functional areas

B. the product caused dandruff and hair loss due to an unusual chemical reaction with Polish water

C. it caused ecological damage

D. P&G used a push strategy and did not appeal directly to customers

E. the advertising was poorly targeted, as it showed someone taking a shower in the morning and going off to work, while most Poles prefer to take a bath in the evening before going to bed
 
 

B. Germany

C. U.S.A.

D. Japan

E. Holland

B. Japan

C. Germany

D. Albania

E. Britain

B. manager who has worked in several different foreign subsidiaries

C. manager hired by a transnational firm

D. manager hired by a multidomestic firm

E. citizen of one country who has been transferred abroad to work in a subsidiary in a different country
 

B. ethnocentric approach to staffing

C. geocentric approach to staffing

D. holiocentric approach to staffing

E. concentric approach to staffing

B. language and practical training

C. cultural, language, and practical training

D. cultural and practical training

E. cultural training only
 

B. U.S.A.

C. Japan

D. Sweden

E. Britain

B. similarities in accounting systems

C. dissimilar accounting systems

D. support for harmonized worldwide accounting systems

B. define rules for auditing but not preparing financial statements

C. help define what is reliable and useful accounting information

D. are not subject to national differences

E. result in comparability of financial reports from different countries

B. S purchases supplies from P

C. S incurs interest expenses on funds borrowed from a bank

D. P makes royalty payments to an unrelated entity

E. The same unrelated company to whom P makes royalty payments purchases goods from S

B. is unique to individual corporations

C. normally the home currency of the parent company

D. may make comparison between subsidiaries difficult

B. imposition of exchange controls

C. expropriation of assets

D. imposition of price controls

E. government interference with existing assets

B. the cost

C. the location of the source

D. expectations of foreign exchange rates

E. government restrictions on sources of financing available to foreign investors
 

B. facilitation of funds transfers out of a country in anticipation of a significant currency devaluation

C. circumvention of government restrictions on capital flows

D. lack of regulation of transfer prices

E. reduction of import duties

B. simplifies payment schedules between related entities at the cost of increased transfer fees

C. may result in a net increase in the amount of funds transferred between subsidiaries

D. may increase foreign exchange commissions

E. is less effective for firms that have a globally dispersed web of interdependent value creation activities