Countries most likely establish export restrictions to ________.

raise prices in foreign markets

Such actions will be most effective for Country X if the nation ________.

holds a monopoly on the product or resource

________ are the two basic strategies for creating value and attaining a competitive advantage in an industry.

Cost leadership and differentiation

The recent global financial crisis has led to which of the following?

governments seeking to impose more constraints on capitalism

Since the late 1980s, the growing emergence of freer markets has been powered by the realization that ________.

economic growth is directly related to economic freedom

Unlike the infant-industry argument, the industrialization argument for trade protection ________.

presumes econ growth occur even if dom manuf'd prices not globally comptitv

Which of the following BEST describes the special drawing right?

an int'l reserve asset created to spplemnt members' existing reserve assets

What should the Japanese government do in this scenario?

increase the supply of yen in the market

Country X is in process of transforming from command economy to a market economy. This process most likely involves ____

privatization of many factors of production

Which force in Toyota's immediate environment would most likely have the greatest impact on its strategy?

actions taken by Honda and Mercedes Benz

Governments impose currency restrictions in their countries to ________.

protect currencies from speculators

Which of the following is NOT a characteristic of capitalism?

state control of factors of production

A company's value chain is best described as the ________.

discrete series of steps taken to move product from conception to end-users

The value of the SDR is currently based on the ________.

weighted average of 5 currencies

Which of the following is one of the primary business objectives for pursuing ethical behavior?

developing competitive advantages

An economic system is the set of structures and processes that ________ in a country.

guides the allocation of resources & shapes conduct of business activities

MNEs most likely use offshore debt markets ________.

to take advantage of their ability to access capital in different countries

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HOSP 1505 - Final Exam Review

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Questions 85

Answers

1
Resource constraints require managers prioritize options, targeting markets that offer greatest return with highest risk
False
True
2
In a country like Russia, where there is corruption, an MNE would most likely use ________ to fund corporate activities
debt
cash
countertrade
equities
3
________ can occur when a firm sells its goods in a foreign market at a price below what it charges in its home market.
Predatory pricing
Subsidies
Foreign trade duties
Dumping
4
A strategy that focuses on lowering operating costs is referred to as a ________ strategy.
niche market
cost leadership
diversification
differentiation
5
Countries most likely establish export restrictions to ________.
reduce domestic production
ensure their population obtains the goods first
raise prices in foreign markets
encourage substitute products
6
Such actions will be most effective for Country X if the nation ________.
supports the development of substitutions
receives low-interest loans from foreign banks
holds a monopoly on the product or resource
provides domestic industries with tax breaks
7
________ typically results when demand decreases and supply increases.
Inflation
Chronic inflation
Reflation
Deflation
8
The long-term financing dimension of fin. mgmt deals with the selection, issuance, and mngnt of long-term debt & equity
False
True
9
Dollarization, can occur when a country does not have its own currency but has adopted the U.S. dollar as its currency
True
False
10
Excessive reliance on long-term debt reduces financial risk and thus requires a higher return for investors
True
False
11
Protectionism will most likely affect which aspect of a company's operations?
acquiring foreign supplies
relocating personnel overseas
investing short-term capital
selecting employees
12
A(n) ________ is a large, liquid financial asset that can be traded anywhere at any time.
global bond
global equity
international stock
Eurodollar
13
Which of the following most likely complicates ethical behavior for firms that expand overseas?
expatriate management
local laws and values
unstable financial settings
international codes of conduct
14
When different companies produce the same commodity, their costs are essentially the same.
False
True
15
Inflation in the United States would cause China's massive dollar reserves to increase in value.
True
False
16
There is a positive correlation between economic freedom and economic grow
True
False
17
________ are the two basic strategies for creating value and attaining a competitive advantage in an industry.
Diversification and niche marketing
Cost leadership and differentiation
Customer satisfaction and product innovation
Industry leadership and market dominance
18
Stockholders are typically more interested in corporate social responsibility than in earning profits.
True
False
19
In order to join the IMF, a country must contribute a certain sum of money, called a ________.
trade balance
monetary reserve
special drawing right
quota
20
Unemployed workers are most apt to form a pressure group to support ________.
import restrictions
import subsidies
price limitations
export restrictions
21
Which term = restricting imports in order to boost dom production & consmptin of goods that would otherwise be imported?
most-favored nation
terms-of-trade
in-sourcing
import substitution
22
The recent global financial crisis has led to which of the following?
governments seeking to increase the interdependence of developing economies
governments seeking to impose more constraints on capitalism
gvernments seeking to eliminate the interdependence of developing economies
governments seeking to eliminate constraints on capitalism
23
Since the late 1980s, the growing emergence of freer markets has been powered by the realization that ________.
economic growth is directly related to economic freedom
centrally planned economies are best designed to deliver progress
adoption of free market principles contributes to social injustices
economic growth has a limited effect on the standard of living
24
The financial management activity that determines the proper mix of debt and equity is ________.
long-term financing
working capital management
capital budgeting
capital structure
25
Which of the following is considered a primary activity in a company's value chain?
systems and solutions
product design
shipping
materials and equipment
26
Unlike the infant-industry argument, the industrialization argument for trade protection ________.
stresses labor-intensive production methods despite high costs
emphasizes use of locally available raw materials for manufacturing inputs
requires independence from other countries
presumes econ growth occur even if dom manuf'd prices not globally comptitv
27
Which of the following BEST describes the special drawing right?
a contribution made by countries to join the IMF
an int'l reserve asset created to spplemnt members' existing reserve assets
the official currency for international trade established by the World Bank
a substitute for the fixed value of gold as determined by currency rates
28
What should the Japanese government do in this scenario?
allow its currency to fall against the dollar
decrease the supply of yen in the market
allow its currency to rise against the dollar
increase the supply of yen in the market
29
The collapse of communism in late 1980s & early 1990s led to a more widespread adoption of the principles of capitalism
True
False
30
Country X is in process of transforming from command economy to a market economy. This process most likely involves ____
violent political and legal upheaval
standardized procedures implemented by the state
high economic growth rates for the long term
privatization of many factors of production
31
Which force in Toyota's immediate environment would most likely have the greatest impact on its strategy?
interest rate trends
shifts in U.S. political attitudes
technological developments
actions taken by Honda and Mercedes Benz
32
In most cases, trade protectionism makes it easier for a company to buy what it needs & to sell products in global mrkts
False
True
33
Governments impose currency restrictions in their countries to ________.
protect currencies from speculators
encourage future investment outflows
indirectly reduce imports and exports
exhaust their reserve of hard currencies
34
In the long run, MNEs must adequately meet the needs of all stakeholders in order to prosper and survive.
False
True
35
Which of the following is NOT a characteristic of capitalism?
state control of factors of production
private control of investment
private ownership of assets
right to profit from individual effort
36
The global capital market offers all of the following advantages to firms EXCEPT ________.
short-term financing options
numerous investment opportunities
financing at a reduced cost
wide array of financing sources
37
Dispersed value chains make sense when costs vary across countries.
True
False
38
Imports can stimulate exports by ________.
curtailing domestic competition
generating more tax revenue
redistributing the work force
increasing foreign income
39
Import restrictions lead to foreign investment inflows, which provide jobs in manufacturing
False
True
40
A company's value chain is best described as the ________.
discrete series of steps taken to move product from conception to end-users
variable sequence of converting product ideas into value for shareholders
blueprint must be followed to leverage the capabilities of a global firm
mixture of activities taken to define product value standards & price point
41
A car manufactured in the United States by Toyota would be included in the calculation of the GDP for the United States.
False
True
42
A country can attract foreign investment by keeping its interest rates high.
False
True
43
The value of the SDR is currently based on the ________.
Euro
weighted average of 6 currencies
U.S. Dollar
weighted average of 5 currencies
44
Which of the following is one of the primary business objectives for pursuing ethical behavior?
discouraging false commitments to the firm
avoiding industrial sanctions
developing competitive advantages
developing creative advertisements
45
Which of the following was NOT a contributing factor to the turmoil in the global stock market in the last few years?
a decline in oil prices
the revaluation of the euro
a rise in interest rates in the United States
emerging markets lowering interest rates
46
The quest to maximize individual purchasing power compels local responsiveness.
False
True
47
The CFO's function in a company focuses on ________.
acquiring financial resources
creating financial statements
improving distributor relationships
handling accounting issues
48
All of the following are generally true about trade-displaced workers EXCEPT that they ________.
move abroad to take new jobs
have difficulty finding new work because of educational deficiencies
spend their unemployment benefits on living rather than retraining
earn less in their new jobs than they earned in their old ones
49
An economic system is the set of structures and processes that ________ in a country.
sets the standards of competitive success for companies in the economy
directs the movement of specific products to specific consumers
stipulates the roles and responsibilities of consumers
guides the allocation of resources & shapes conduct of business activities
50
value of the currency in Country A in relation to Country B would ________.
weaken
remain the same
strengthen
drop in relation to the currency of all other countries
51
MNEs most likely use offshore debt markets ________.
to take advantage of their ability to access capital in different countries
invstors don't like to invest in comp's that only raise in their home mrkts
since debt in foreign countries is always cheaper than in the home-country
to hide their cash from tax authorities
52
Which type of exchange rate arrangement is based on supply and demand?
Soft peg
Hard peg
Crawling
Floating
53
Ethical behavior typically conforms to accepted social norms.
True
False
54
Why is the argument that "anything legal is ethical" most likely insufficient?
Laws never change; rules for all possible ethical dilemmas are found in law
The law is an extremely efficient way to solve ethical dilemmas.
Everything that is unethical is also illegal.
Laws are frequently based on imprecisely defined moral concepts.
55
Which of the following is the BEST example of a product disruption driving industry change?
iPhone production
Merger of United and Continental
redesign of Toyota's Prius
AT&T's purchase of T-Mobile
56
History suggests that if the economic crisis worsens, we are likely to see more people question the ________.
fall of communism
practicality of mixed market economies
correlation between economic freedom and prosperity
legitimacy of capitalism
57
A firm would decide to delist its stock from a foreign stock exchange for all of the following reasons EXCEPT ________.
there is increased regulation in that particular foreign market
there are high trading volumes on the stock
the best price for the stock is in the home market
there are weak market returns on the stock
58
Which of the following has the greatest potential to transform an industry's structure?
a change in a competitor's pricing structure
a change in a competitor's management
the expansion of a distribution channel
the exit of a competitor from the industry
59
The teleological approach asserts that individuals that decisions are made on the consequences of action.
False
True
60
Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes
Society
Customers
Employees
Shareholders
61
Which of the following is true regarding the protection of infant industries from international competition?
Protection leads to more economic good than harm.
Protection of infant industries helps domestic companies become innovative.
Mgrs may be deterred from adopting the cost & quality measures needed
Protection from competition leads to improved quality and lower prices.
62
The potential of new entrants is one characteristic of industry structure.
False
True
63
ANSWER: from previous slide - Relativism
False
True
64
Political, legal, economic, monetary, & institutional forces comprise the ________ of IB and influence managers' actions
Environment
Competition
Threat
Culture
65
The primary objective of the International Monetary Fund is to ________.
establish a unilateral system of payments
promote exchange rate stability
encourage euro adoption
foster the power of the foreign-exchange market
66
Which of the following problems with the euro most likely worsened the financial crisis in Greece?
cultural disagreements on labor reform
excessive flexibility with interest rates
large sovereign debt and weak economic growth
unclear policies of the European Central Bank
67
The term ________ refers to those people and org's that are directly affected by practices & performance of an orgztion
Community Stockholders
Corporate customers
Permanent employees
Stakeholders
68
Which of the following is most typical of a command economy?
Many products are usually in short supply
The prices of goods and services frequently change
Consumers have choices of many substitutes for any given product
Quality of products and services tends to be consistent
69
When using equity financing, firms run the risk of ________.
losing a controlling interest to shareholders
falling victim to currency exchange rates
acquiring capital through the sale of shares
incurring an unmanageable amount of debt
70
Uneven income distribution exists in almost every country
False
True
71
A country's central bank is responsible for ________.
the policies affecting the value of its country's currency
distributing money to foreign countries that are in a debt crisis
establishing foreign-exchange markets
encouraging disorderly conditions in foreign-exchange markets
72
________ is a general, sustained rise in prices measured against a standard level of purchasing power.
Reflation
Inflation
Deflation
Expansion
73
_____ is the framework that managers apply to determine the competitive moves & business approaches that run the company
Competition
Strategy
Growth
Vision
74
On average, workers displaced by imports earn higher wages in the new jobs they accept.
True
False
75
Which of the following is NOT a key stakeholder group that a company must work to satisfy in order to survive globally?
Employees
Customers
Competitors
Shareholders
76
________ is one of the primary business objectives for pursuing ethical behavior.
Avoiding being perceived as a socially irresponsible firm
Replacing home-country technology with host-country technology
Imposing home-country behavior on the host country
Minimizing federal investigations into corporate finances
77
In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would ____
be added to the GNI of the United States but not the GNI of Mexico
not be added to the GNI of the USA but would be added to the GNI of Mexico
only affect the computation of GDP and have no bearing on GNI
be added to the GNI of the USA as well as to the GNI & GDP of Mexico
78
Which stakeholder group primarily wants additional sales and increased productivity?
Government
Society at large
Shareholders
Customers
79
The role of the chief financial officer CFO is to create and maintain economic value by maximizing shareholder wealth.
False
True
80
When analyzing the key elements of a country's economic environment, it is best to apply a systems perspective
False
True
81
Terms of traderefers to ________.
specific requirements placed on imports & exports at port of entry or exit
the quantity of imports that a given quantity of country's exports can buy
requirements agreed upon by two countries to regulate bilateral trade
an account statement showing a country's annual imports and exports
82
Which of the following is a special ability of a company that competitors find extremely difficult to equal?
comparative advantage
core competency
absolute advantage
economy of scale
83
Standards of ethical behavior are uniform worldwide.
False
True
84
________ is a form of locking the value of a country's currency onto another currency.
Dollarization
Floating
Monetarization
Managed floating
85
The Bretton Woods Agreement established a system of fixed exchange rates under which each IMF member country set a ____.
gold standard
par value
nominal interest rate
quota

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