1. Which of the following is the main goal of privatization?
Reduce responsibility and accountability
Increase economic efficiency
Increase subsidies to companies
Slow economic growth
2. In most failed centrally planned economies ________.
market conditions helped determine who produced various goods
prices of products were a function of supply and demand
central planning agencies specified production goals and decided prices
central planners paid attention to efficiency improvement
3. The trade theory that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports is called ________.
abolute advantage
mercantilism
comparative advantage
factor proportions theory
4. The theory of absolute advantage measures a nation's wealth by determining the ________.
gold it has on reserve
silver it has on reserve
cash it has on reserve
living standards of its people
5. Which of the following is not a limitation of the absolute and comparative advantage theories?
The theories assume that there are only two countries engaged in the production and consumption of just two goods.
The theories assume that there are no costs for transporting traded goods from one country to another.
The theories consider labor the only resource used in the production process.
The theories assume that specialization in the production of one particular good results in gains in efficiency.
6. Factor proportions theory was developed by ________.
Smith and Ricardo
Ricardo and Ohlin
Hecksher and Ohlin
Hecksher and Smith
7. Which element of national competitive advantage theory divides resources into two groups, basic and advanced?
Demand conditions
Factor conditions
Related and supporting industries
Firm, strategy, structure, and rivalry
8. The ________ argument says that a country's emerging industries need protection from international competition during their development.
national security
infant industry
strategic trade policy
GATT treaty
9. Which of the following is not an example of an instrument that government uses to promote trade?
Tariffs
Subsidies
Export financing
Foreign trade zones
10. Which of the following adds to the cost of an imported product by levying an additional tax upon it?
Tariffs
Quotas
Local content requirements
Embargoes
11. An additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy is called a(n) ________.
countervailing duty
ad valorem duty
dumping duty
compounded tariff
12. Which of the following are main drivers of foreign direct investment?
Diversity and telecommunications
Telecommunications and transportation
Globalization and mergers and acquisitions (M&A)
Diversity and globalization
13. A market that is said to operate at peak efficiency and where goods are readily and easily available is said to be a(n) ________.
perfect market
eclectic market
imperfect market
greenfield market
14. Economic integration whereby countries remove all barriers to trade among themselves, but each country determines its own barriers against nonmembers, is called a(n) ________.
economic union
customs union
common market
free trade area
15. The strategy formulation process involves both ________.
planning and strategy
strategy and structure
planning and marketing
strategy and production
16. Which of these strategies are appropriate for companies in industries where buyer preferences do not converge across national borders?
Retrenchment
Global
Multinational
Stability
17. A ________ strategy can cause a company to overlook important differences in buyer preferences from one market to another.
global
retrenchment
multidomestic
multinational
18. Assessing how culture affects the national business environment is part of the ________ stage of the screening process for potential markets and sites.
first
second
third
fourth
19. Which of the following is not a difficulty associated with conducting international market research?
Availability of data
Comparability of data
Cultural differences
Economic differences
20. Secondary data is ________ because it has already been collected, analyzed, and summarized by another party.
inaccurate
relatively inexpensive
unreliable
very expensive
21. Letters of credit are popular among traders because most of the risks are assumed by ________.
countertraders
importers
exporters
banks
22. Which of the following is not a form of investment entry?
Strategic alliance
Wholly owned subsidiary
Joint venture
Turnkey project
23. Which of the following refers to the name of one or more items in a product line that identifies the source or character of the items?
Product description
Image tag
Brand name
Unique descriptor
24. Which of the following is not an example of a product that is commonly counterfeited?
Perfume
Books
Clothing
Watches
25. A promotion mix is composed of all of the following except ________.
personal selling
advertising
public relations
indirect exporting
26. Examples of pull strategies include each of the following except ________.
mass media advertising
direct marketing techniques
free trial packages
encouraging good retail visibility
27. Companies along a distribution channel that work together in delivering products to customers are called ________.
arbitrageurs
intermediaries
solicitors
reduction planners
28. ________ refers to the process of selecting the location for production facilities.
Capacity planning
Facilities layout planning
Facilities location planning
Production location planning
29. The psychological process of readapting to one's home culture is called ________.
culture shock
reverse recruitment
reverse culture shock
expatriate failure
30. The senior manager recommends that Hafstrom obtain auto parts from a country where production activity generates more value than it could generate elsewhere. He is recommending taking advantage of which of the following?
Just-in-time manufacturing processes
Japanese manufacturing precision
German auto technology
Location economies.