Question;Answer each True or False1. Translation risk can be hedged against by using the forward market forcurrency exchange.2. Environmental scanning involves looking for changes in environmental forcesin the global marketplace.3. The Total Product and the Physical Product mean the same thing.4. Transfer pricing is a form of intracorporate pricing that can be used to shift thetax burden from one subsidiary to another.5. A language trap, where a person can speak two languages, occurs because theperson relies on their knowledge of a second language without seeking theassistance of a native speaker.6. Even with the development of the internet and the virtual capabilities it is stillimportant to make a personal visit to a potential market before investing in the market.7. Market segment screening is based on needs across national borders.8. National borders may no longer be the relative unit of analysis for a firm indeveloping a global market plan.9. A disadvantage for companies that insist on less risky transactions, such as aletter of credit, is that they may be losing business to competitors who sell onopen accounts.T F 10. An importer delays payment of the necessary currency exchange when shethinks her currency will devalue in terms of the foreign payment currency.T F 11. When using a money market hedge, the hedger will immediately convert thecurrency borrowed into its own currency.T F 12. JIT systems are more efficient than synchronous manufacturing in all situations.T F 13. The US has adopted the International Financial Reporting Standards and theyare now in effect in the US.T F 14. A broad statement that defines the organization's purpose and scope is avalues statement.T F 15. Most companies can enter a market in stages. The order listed in the textbookis establishment of a foreign sales company, exporting, local assembly, andmanufacturing.II. (78pts) Mark the best answer.1. Terms of Payment found in international business contracts include:a. CFR (cost and freight, foreign port)b. Consignmentc. Documentary Draftsd. all of the abovee. (b) and (c) above2. Joint Ventures have thea. advantage of utilizing the expertise of a local partner.b. disadvantage of not being able to make all the decisions because control isshared.c. advantage of being able to share the profits.d. all of the abovee. (a) and (b) above3. Which of the following is a reason that imports are not a measure of the total marketpotential for a good?a. lack of foreign exchangeb. a competitor decides to produce locallyc. change in a country's political structured. all of the abovee. none of the above4. Businesses are using global or regional brands for the following reason(s):a. private brands do not offer any meaningful competition.b. economies of scale usually result in reduced costs.c. satellite and cable TV are widely available.d. all of the abovee. (b) and (c) above5. The Harmonized Tariff Schedule of the US:a. applies only to goods imported from the EU to the U.S.b. provides for special rates for imports from countries that are not consideredfriends of the US.c. allows an importer to receive an advanced ruling from US Customs which isbinding on all customs inspectors.d. all of the abovee. (b) and (c) above6. E-Commerce Potential isa) is higher for Jamaica than for Argentina.b) is an index based on mobile phones, internet hosts, and number of PCs.c) is a composite ranking of three indices.d) (a) and (b) abovee) (a) and (c) above7. Generally, industrial products require __________ adaptation than consumer productsto meet the demands of the world market.a) greaterb) lessc) the same amount ofd) only slightly lesse) only slightly more8. Nonequity modes of entry includea) Strategic Allianceb) Management contractc) Franchisingd) All of the abovee) (b) and (c) above only9. Management Contracts may be useda) in a joint venture arrangementb) in a wholly owned subsidiary situationc) in a minority ownership situationd) all of the abovee) (a) and (c) above10. Terms of Sale found in international business contracts include:a. CFR (cost and freight, foreign port)b. Consignmentc. Documentary Draftsd. all of the abovee. (b) and (c) above11. The Ex-Im Banka. is a private corporation that supports firms that wish to export.b. makes loans to foreign buyers and foreign governments to assist in financingc. provides export credit insurance against commercial risk but not political risk.d. all of the abovee. (b) and (c) above12. According to Table 15.1a. Google has made the greatest increase and Citi the greatest decrease in ranking.b. IBM, Disney, and McDonalds have all improved their ranking.c. Coca Cola is the only brand whose ranking has not changed.d. (a) and (b) abovee. (a) and (c) aboveUS exports.13. Although global sourcing can be beneficial it may have some disadvantages such asa. added costsb. exchange rate fluctuations affecting pricesc. quality controld. all of the abovee. (b) and (c) above14. In staffinga. an ethnocentric policy is always the most effective if qualified personnel areb. a polycentric policy is always the least effective even when qualified personnelc. using third country personnel would be considered most frequently withd. all of the abovee. (a) and (c) above15. In value chain analysis the firm must answer the following question(s):a. How will customer value be created?b. Will decisions be made at the local or home office level?c. Who are the company's target customers?d. All of the abovee. (a) and (c) above only16. In the most recent 40 years, union membership around the world has been in decline,in part because:a) There are more women in the workforce.b) The unions have been successful and priced themselves out of the market.c) Employers have made efforts to keep business union-free.d) (a) and (c) above onlye) All of the above.17. When a firm has less than a majority interest in a subsidiary it can still have controlby havinga) a management contractb) the right to control the technologyc) the right to vote its sharesd) all of the abovee) (a) and (b) above only18. The Female Wage Gapa. is the percent of Male Wages earned by Female Employees.b. younger females have less of a gap in all countries.c. is the smallest for older females in Korea.d. all of the abovee. (a) and (c) aboveavailable.are available.regiocentric or geocentric policies.19. Income earned abroad by U.S. citizens:a) incurs a tax liability in the US with some adjustments.b) incurs tax liability only on the portions earned in the U.S.c) incurs no tax liability.d) incurs a tax liability in the US on all income earned with no adjustments fore) none of the above20. The international structural stages model suggests that a typical evolutional path foran international company's structure would be:a) from international division to geographical area division to worldwideb) from international division to worldwide product division to geographicalc) from geographical area division to worldwide product division to globald) from functional division to horizontal company to virtual corporation.e) from international division to worldwide product division to globaltaxes paid in other countries.product division.area division.matrix.matrix.21. Competitive advantage is acquired by developing competencies thata. are common to all competitors so the firm can compete.b. create value for customers even if the price is higher than customers want toc. are difficult to imitate.d. all of the abovee. (a) and (c) above only22. In their measurement and disclosure for accounting systems, less developed countries tend toward:A. transparency and conservatism.B. transparency and optimism.C. secrecy and optimism.D. secrecy and conservatism.pay.23.Export marketing plans should be specific about:A. the markets to be developed.B. the marketing strategy for servicing them.C. the tactics required to make the strategy operational.D. cash flow projections.E. A, B, and C.24. Factors that are involved in the operation of a manufacturing system include:A. Plant locationB. Plant layoutC. Material handlingD. Human assetE. all of the above25. Hiring and promoting employees on the basis of the specific local context in which the subsidiaryoperates refers to:A. an ethnocentric orientation.B. a polycentric orientation.C. a regiocentric orientation.D. a geocentric orientation.E. none of the above.26. A middle ground between an ad campaign that is standardized worldwide and anentirely local ad campaign is called a:A. hybrid advertising campaign.B. programmed-management approach.C. computerized-management approach.D. shared-management approach.E. none of the above.
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