Student: ___________________________________________________________________________
1. Foreign direct investment flows to less developed countries by firms in developed countries is
declining substantially.
True False
2. One of the consequences of an increasingly integrated global economy is that imports are
penetrating deeper into the world's largest economies.
True False
3. Companies both large and small now view the world, rather than a single country, as their
marketplace.
True False
4. Offshoring occurs when an organization contracts with an outside provider to produce one or
more of an organization's products or services.
True False
5. South America is one of the three regions that are most dominant in the global economy.
True False
6. The Maastricht Treaty formally established the trade area in North America.
True False
7. The creation of the European Union has resulted in an economic superpower with a larger GDP
than the United States.
True False
8. Japan is the largest trading partner of the United States based on the value of imports and
exports between the two countries.
True False
9. Members of APEC include South Korea, Taiwan, the United States, Australia, and Russia.
True False
,10. Mexico has quickly emerged as the third-largest trading partner of the United States as a result of
NAFTA.
True False
11. NAFTA had an immediate and negative effect on the U.S. automobile industry.
True False
12. The economy of the Middle East is best known for its exports of oil.
True False
13. The pressure to reduce costs is one of the reasons a firm may prefer a common global strategy
rather than one tailored to individual markets.
True False
14. Universal needs exist when the tastes and preferences of consumers in different countries with
regard to a product are similar.
True False
15. When pressures for local responsiveness are high and pressures for global integration are low,
the global model is appropriate.
True False
16. When there are differences among countries in traditional practices such as driving, pressures for
local responsiveness emerge.
True False
17. In the international model, managers use their organization's existing core capabilities to expand
into foreign markets.
True False
18. A major disadvantage of the multinational model is higher manufacturing costs and duplication of
effort.
True False
19. Companies that adopt the global model tend to base their global competitive strategy on cost
considerations.
True False
,20. The international model is an approach that enables managers to "think globally but act locally."
True False
21. One of the advantages of exporting is that it provides scale economies.
True False
22. High transportation costs associated with exporting can make it uneconomical, particularly in the
case of bulk products.
True False
23. Franchising is utilized primarily by manufacturing industries, whereas licensing is used more often
in service industries.
True False
24. The most significant disadvantage of franchising concerns quality control.
True False
25. When a company's competitive advantage is based on technology and it wishes to enter the
global marketplace, the least preferred strategy is the wholly owned subsidiary.
True False
26. Individuals from the parent country who are sent to work at a foreign subsidiary are known as
expatriates.
True False
27. Using host-country nationals at an overseas subsidiary is generally more expensive than using
expatriates.
True False
28. Cultural shock is an example of an executive coping strategy for international assignments.
True False
29. Family issues are the main reason for expatriates to return home early.
True False
30. One of the ways to prevent failed global assignments is to use effective, validated screening and
selection criteria.
True False
, 31. Ethnocentrism is the tendency to judge others by the standards of one's own culture or group,
which are seen as superior.
True False
32. Culture shock is the disorientation and stress associated with being in a foreign environment.
True False
33. Inpatriates are parent-company nationals who are sent abroad for a short period.
True False
34. Inpatriates are valuable because they bring with them extensive knowledge about how to operate
effectively in their home countries.
True False
35. Ethical behavior and decision making are surprisingly harder in a purely domestic situation than in
the international arena.
True False
36. Which of the following is a consequence of an increasingly integrated global economy?
A. World output and trade have decreased to a dramatically low level.
B. Many companies find their home markets under attack from foreign competition.
C. Companies are making foreign direct investments in home companies.
D. Imports are failing to penetrate deeper into the world's largest economies.
E. There are reduced opportunities for global trade.
37. Collaborating with other countries in trade:
A. leads to increased prices.
B. narrows down the market for managers.
C. raises the standards of living.
D. leads to reduced efficiency.
E. causes conspiracy between cultures.
1. Foreign direct investment flows to less developed countries by firms in developed countries is
declining substantially.
True False
2. One of the consequences of an increasingly integrated global economy is that imports are
penetrating deeper into the world's largest economies.
True False
3. Companies both large and small now view the world, rather than a single country, as their
marketplace.
True False
4. Offshoring occurs when an organization contracts with an outside provider to produce one or
more of an organization's products or services.
True False
5. South America is one of the three regions that are most dominant in the global economy.
True False
6. The Maastricht Treaty formally established the trade area in North America.
True False
7. The creation of the European Union has resulted in an economic superpower with a larger GDP
than the United States.
True False
8. Japan is the largest trading partner of the United States based on the value of imports and
exports between the two countries.
True False
9. Members of APEC include South Korea, Taiwan, the United States, Australia, and Russia.
True False
,10. Mexico has quickly emerged as the third-largest trading partner of the United States as a result of
NAFTA.
True False
11. NAFTA had an immediate and negative effect on the U.S. automobile industry.
True False
12. The economy of the Middle East is best known for its exports of oil.
True False
13. The pressure to reduce costs is one of the reasons a firm may prefer a common global strategy
rather than one tailored to individual markets.
True False
14. Universal needs exist when the tastes and preferences of consumers in different countries with
regard to a product are similar.
True False
15. When pressures for local responsiveness are high and pressures for global integration are low,
the global model is appropriate.
True False
16. When there are differences among countries in traditional practices such as driving, pressures for
local responsiveness emerge.
True False
17. In the international model, managers use their organization's existing core capabilities to expand
into foreign markets.
True False
18. A major disadvantage of the multinational model is higher manufacturing costs and duplication of
effort.
True False
19. Companies that adopt the global model tend to base their global competitive strategy on cost
considerations.
True False
,20. The international model is an approach that enables managers to "think globally but act locally."
True False
21. One of the advantages of exporting is that it provides scale economies.
True False
22. High transportation costs associated with exporting can make it uneconomical, particularly in the
case of bulk products.
True False
23. Franchising is utilized primarily by manufacturing industries, whereas licensing is used more often
in service industries.
True False
24. The most significant disadvantage of franchising concerns quality control.
True False
25. When a company's competitive advantage is based on technology and it wishes to enter the
global marketplace, the least preferred strategy is the wholly owned subsidiary.
True False
26. Individuals from the parent country who are sent to work at a foreign subsidiary are known as
expatriates.
True False
27. Using host-country nationals at an overseas subsidiary is generally more expensive than using
expatriates.
True False
28. Cultural shock is an example of an executive coping strategy for international assignments.
True False
29. Family issues are the main reason for expatriates to return home early.
True False
30. One of the ways to prevent failed global assignments is to use effective, validated screening and
selection criteria.
True False
, 31. Ethnocentrism is the tendency to judge others by the standards of one's own culture or group,
which are seen as superior.
True False
32. Culture shock is the disorientation and stress associated with being in a foreign environment.
True False
33. Inpatriates are parent-company nationals who are sent abroad for a short period.
True False
34. Inpatriates are valuable because they bring with them extensive knowledge about how to operate
effectively in their home countries.
True False
35. Ethical behavior and decision making are surprisingly harder in a purely domestic situation than in
the international arena.
True False
36. Which of the following is a consequence of an increasingly integrated global economy?
A. World output and trade have decreased to a dramatically low level.
B. Many companies find their home markets under attack from foreign competition.
C. Companies are making foreign direct investments in home companies.
D. Imports are failing to penetrate deeper into the world's largest economies.
E. There are reduced opportunities for global trade.
37. Collaborating with other countries in trade:
A. leads to increased prices.
B. narrows down the market for managers.
C. raises the standards of living.
D. leads to reduced efficiency.
E. causes conspiracy between cultures.
