INTB 200 Exam 2 Questions with
Complete Solutions16
1. According to Mendenhall and Oddou, which of the following dimensions that predicts success
in a foreign posting strengthens an expatriate's self-esteem, self-confidence, and mental well-
being?
a. others-orientation
b. empathy
c. cultural toughness
d. self-orientation
e. perceptual ability - ANSWERS-e. perceptual ability
2. Which of the following is a disadvantage of an ethnocentric staffing policy?
a. It does not allow transfer of core competencies.
b. It leads to resentment in the host country.
c. It leads to a dearth of qualified managers in the host nation.
d. It diversifies corporate culture.
e. It isolates the headquarters from foreign subsidiaries. - ANSWERS-b. It leads to resentment in
the host country.
3. Which of the following is a factor that resulted in the establishment of the European Union
(EU)?
a. spectacular success of the North American Free Trade Agreement (NAFTA)
,b. rise of communism in Europe
c. trade impasse following the oil crisis in the 1970s that occurred due to collusion among oil
producing nations
d. emergence of Japan as an economic and industrial superpower despite the nuclear holocaust
e. devastation of Western Europe during two world wars and the desire for a lasting peace -
ANSWERS-e. devastation of Western Europe during two world wars and the desire for a lasting
peace
4. A regional free trade agreement will benefit the world only if:
a. the currencies of the nations involved appreciate.
b. it raises the standard of living in one of the member countries.
c. it creates trade surplus for one of the countries involved.
d. the balance-of-trade situation remains stable in the region.
e. the amount of trade it creates exceeds the amount it diverts. - ANSWERS-e. the amount of
trade it creates exceeds the amount it diverts.
5. Where has the movement toward regional economic integration been most successful?
a. North America
b. Asia
c. South America
d. Africa
e. Europe - ANSWERS-e. europe
6. Assume that the interest rate on borrowings in India is 1 percent while the interest rate on
bank deposits in a U.S. bank is 6 percent. John, an active currency trader, borrows in Japanese
yen, converts the money into U.S. dollars and deposits it in a U.S. bank. John is engaging in:
, a. currency swap.
b. currency speculation.
c. hedging.
d. carry trade.
e. arbitrage. - ANSWERS-d. Carry Trade
7. The ________ is an attempt to establish a free trade area between Brunei, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
a. South Asian Association for Regional Cooperation
b. Asia-Pacific Economic Cooperation
c. Asian Clearing Union
d. Maastricht Treaty
e. Association of Southeast Asian Nations - ANSWERS-e. Association of Southeast Asian Nations
8. ________ is a trade pact among Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua,
which began in the early 1960s but collapsed in 1969 due to war.
a. Free Trade Area of the Americas
b. Caribbean Single Market and Economy
c. Mercosur
d. Central American Common Market
e. CARICOM - ANSWERS-d. Central American Common Market
9. ________ is a pact that originated in 1988 to establish a free trade area now including
Argentina, Brazil, Paraguay, and Uruguay.
Complete Solutions16
1. According to Mendenhall and Oddou, which of the following dimensions that predicts success
in a foreign posting strengthens an expatriate's self-esteem, self-confidence, and mental well-
being?
a. others-orientation
b. empathy
c. cultural toughness
d. self-orientation
e. perceptual ability - ANSWERS-e. perceptual ability
2. Which of the following is a disadvantage of an ethnocentric staffing policy?
a. It does not allow transfer of core competencies.
b. It leads to resentment in the host country.
c. It leads to a dearth of qualified managers in the host nation.
d. It diversifies corporate culture.
e. It isolates the headquarters from foreign subsidiaries. - ANSWERS-b. It leads to resentment in
the host country.
3. Which of the following is a factor that resulted in the establishment of the European Union
(EU)?
a. spectacular success of the North American Free Trade Agreement (NAFTA)
,b. rise of communism in Europe
c. trade impasse following the oil crisis in the 1970s that occurred due to collusion among oil
producing nations
d. emergence of Japan as an economic and industrial superpower despite the nuclear holocaust
e. devastation of Western Europe during two world wars and the desire for a lasting peace -
ANSWERS-e. devastation of Western Europe during two world wars and the desire for a lasting
peace
4. A regional free trade agreement will benefit the world only if:
a. the currencies of the nations involved appreciate.
b. it raises the standard of living in one of the member countries.
c. it creates trade surplus for one of the countries involved.
d. the balance-of-trade situation remains stable in the region.
e. the amount of trade it creates exceeds the amount it diverts. - ANSWERS-e. the amount of
trade it creates exceeds the amount it diverts.
5. Where has the movement toward regional economic integration been most successful?
a. North America
b. Asia
c. South America
d. Africa
e. Europe - ANSWERS-e. europe
6. Assume that the interest rate on borrowings in India is 1 percent while the interest rate on
bank deposits in a U.S. bank is 6 percent. John, an active currency trader, borrows in Japanese
yen, converts the money into U.S. dollars and deposits it in a U.S. bank. John is engaging in:
, a. currency swap.
b. currency speculation.
c. hedging.
d. carry trade.
e. arbitrage. - ANSWERS-d. Carry Trade
7. The ________ is an attempt to establish a free trade area between Brunei, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
a. South Asian Association for Regional Cooperation
b. Asia-Pacific Economic Cooperation
c. Asian Clearing Union
d. Maastricht Treaty
e. Association of Southeast Asian Nations - ANSWERS-e. Association of Southeast Asian Nations
8. ________ is a trade pact among Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua,
which began in the early 1960s but collapsed in 1969 due to war.
a. Free Trade Area of the Americas
b. Caribbean Single Market and Economy
c. Mercosur
d. Central American Common Market
e. CARICOM - ANSWERS-d. Central American Common Market
9. ________ is a pact that originated in 1988 to establish a free trade area now including
Argentina, Brazil, Paraguay, and Uruguay.
