Chapter 1 Multinational Management in a Changing World
MULTIPLE CHOICE
1. Businesses of all sizes are increasingly looking for global opportunities because
a. Trade barriers are falling.
b. Money is flowing more freely across countries.
c. The world is becoming one interconnected economy.
d. All of the above.
ANS: D
AACSB Analytic, Strategy
PTS: 1
2. Globalization is
a. The trend of businesses expanding beyond their domestic boundaries.
b. Increasing average temperature over the globe.
c. The increased use of global satellite communication systems.
d. A strategy of developing unique products for each nation in the world.
ANS: A
AACSB Reflective thinking, Environmental influence
PTS: 1
3. Which of the following would not be considered a basic source of globalization?
a. Similar customer needs
b. Falling of trade barriers
c. Advances in communication technology
d. Differentiation among countries
ANS: D
AACSB Reflective Thinking, Environmental influence
PTS: 1
4. Multinational management is
a. A strategy of developing similar strategies for different countries.
b. The trend of business expanding beyond local boundaries.
c. The formulation and design of management systems to successfully take advantage of
international opportunities and respond to international threats.
d. None of the above
ANS: C
AACSB Reflective thinking, Strategy
PTS: 1
5. According to the text, the multinational company
a. Is required to be a public corporation.
b. Is any company that engages in any business function across borders.
c. Must sell overseas to be a true multinational.
d. Must be large.
ANS: B
AACSB Reflective thinking, Strategy
PTS: 1
6. Which of the following is not a classification of economic systems noted in the text?
, a. Domestic economies
b. Transition economies
c. LDCs
d. Emerging markets
ANS: A
AACSB Reflective thinking, Environmental influence
PTS: 1
7. Transition economies are
a. Mature economies with substantial per capita GDP and international trade.
b. Led by Hong Kong, Singapore, South Korea, and Taiwan.
c. Countries changing from government-controlled or communistic economies to a more
free market capitalism.
d. None of the above
ANS: C
AACSB Reflective thinking, Environmental influence
PTS: 1
8. Emerging markets include
a. OECD countries.
b. Brazil, China, Russia, India.
c. Korea, Japan and USA.
d. Hungary, Poland, Slovakia.
ANS: B
AACSB Reflective thinking, Environmental influence
PTS: 1
9. Developing economies are
a. Mature economies with substantial per capita GDP and international trade.
b. Hong Kong, Singapore, and Taiwan.
c. Countries in the process of changing their economies from government-controlled to a
more free market capitalism.
d. None of the above
ANS: B
AACSB Reflective thinking, Environmental influence
PTS: 1
10. Emerging markets are defined as those that are:
a. Growing rapidly.
b. Transitioning from a communist-controlled economy to capitalism.
c. Seen to have impact only sporadically.
d. Enjoying a mature economy.
ANS: A
AACSB Reflective thinking, Environmental influence
PTS: 1
11. Major regional trade agreements include all of the following EXCEPT
a. EU.
b. NAFTA.
c. APEC.
d. PROTEC.
, ANS: D
AACSB Reflective thinking, Legal responsibilities
PTS: 1
12. The economic agreement that links the US, Canada, and Mexico in an economic bloc that
allows freer exchange of goods and services is known as the
a. EU.
b. OPEC.
c. APEC.
d. None of the above
ANS: D
AACSB Reflective thinking, Legal responsibilities
PTS: 1
13. The World Trade Organization:
a. Is a major trading company.
b. Succeeded the GATT agreements.
c. Collects duties for member countries.
d. Is a consulting group for companies who wish to engage in international trade.
ANS: B
AACSB Reflective thinking, Legal responsibilities
PTS: 1
14. Examples of developed economies would include:
a. The U.S. and Japan.
b. Hungary and Poland.
c. Argentina and Brazil.
d. Hong Kong and Singapore.
ANS: A
AACSB Reflective thinking, Creation of value
PTS: 1
15. According to your text, FDI means
a. Foreign development initiatives.
b. Various investment policies of the U.S. government.
c. A foreign company has an ownership position in a company in another country.
d. A type of international negotiation strategy.
ANS: C
AACSB Reflective thinking, Legal responsibilities
PTS: 1
16. The two forms of risk discussed in the text include
a. Exchange rate risk and corruption risk.
b. Business risk and social risk.
c. Sales risk and employment risk.
d. Economic and political risk.
ANS: D
AACSB Reflective thinking, Environmental influence
PTS: 1
17. Economic risks discussed in the text include
a. Anything a government might do or not do that might adversely affect a company.
, b. The likelihood of losing money if one invests in stocks.
c. Exchange and interest rates.
d. Expropriating of foreign firms by the local government without any compensation.
ANS: C
AACSB Reflective thinking, Environmental influence
PTS: 1
18. Anything that a government might do to affect a multinational adversely is known as
a. Exchange rate risk.
b. Business risk.
c. Sales risk.
d. Political risk.
ANS: D
AACSB Reflective thinking, Leadership
PTS: 1
19.. A global product or service is
a. Adapted for each country's unique needs.
b. A similar product or service for all customers throughout the world.
c. A product or service that requires bilingual customers.
d. Products developed for use outside the country.
ANS: B
AACSB Reflective thinking, Creation of value
PTS: 1
20. Which of the following statements about the Internet and Information Technology is true?
a. The Internet is benefiting companies worldwide.
b. Electronic communications does not allow companies to communicate with locations
around the world.
c. Information technology is not encouraging a borderless financial market.
d. Information technology does not allow the sharing of information around the world.
ANS: A
AACSB Technology, Information technology
PTS: 1
21. The free market reforms in emerging countries are creating a potential group of
a. new competitors.
b. old competitors.
c. subsidized firms.
d. government companies.
ANS: A
AACSB Analytic, Environmental influence
PTS: 1
22. Which of the following statements is true about privatization?
a. Developing nations have the highest rate of privatization.
b. The leading privatizers in the world do not face competition.
c. Privatization is the sale of private business to government investors.
d. Privatization is absent in transition economies.
ANS: A
AACSB Analytic, Legal responsibilities
MULTIPLE CHOICE
1. Businesses of all sizes are increasingly looking for global opportunities because
a. Trade barriers are falling.
b. Money is flowing more freely across countries.
c. The world is becoming one interconnected economy.
d. All of the above.
ANS: D
AACSB Analytic, Strategy
PTS: 1
2. Globalization is
a. The trend of businesses expanding beyond their domestic boundaries.
b. Increasing average temperature over the globe.
c. The increased use of global satellite communication systems.
d. A strategy of developing unique products for each nation in the world.
ANS: A
AACSB Reflective thinking, Environmental influence
PTS: 1
3. Which of the following would not be considered a basic source of globalization?
a. Similar customer needs
b. Falling of trade barriers
c. Advances in communication technology
d. Differentiation among countries
ANS: D
AACSB Reflective Thinking, Environmental influence
PTS: 1
4. Multinational management is
a. A strategy of developing similar strategies for different countries.
b. The trend of business expanding beyond local boundaries.
c. The formulation and design of management systems to successfully take advantage of
international opportunities and respond to international threats.
d. None of the above
ANS: C
AACSB Reflective thinking, Strategy
PTS: 1
5. According to the text, the multinational company
a. Is required to be a public corporation.
b. Is any company that engages in any business function across borders.
c. Must sell overseas to be a true multinational.
d. Must be large.
ANS: B
AACSB Reflective thinking, Strategy
PTS: 1
6. Which of the following is not a classification of economic systems noted in the text?
, a. Domestic economies
b. Transition economies
c. LDCs
d. Emerging markets
ANS: A
AACSB Reflective thinking, Environmental influence
PTS: 1
7. Transition economies are
a. Mature economies with substantial per capita GDP and international trade.
b. Led by Hong Kong, Singapore, South Korea, and Taiwan.
c. Countries changing from government-controlled or communistic economies to a more
free market capitalism.
d. None of the above
ANS: C
AACSB Reflective thinking, Environmental influence
PTS: 1
8. Emerging markets include
a. OECD countries.
b. Brazil, China, Russia, India.
c. Korea, Japan and USA.
d. Hungary, Poland, Slovakia.
ANS: B
AACSB Reflective thinking, Environmental influence
PTS: 1
9. Developing economies are
a. Mature economies with substantial per capita GDP and international trade.
b. Hong Kong, Singapore, and Taiwan.
c. Countries in the process of changing their economies from government-controlled to a
more free market capitalism.
d. None of the above
ANS: B
AACSB Reflective thinking, Environmental influence
PTS: 1
10. Emerging markets are defined as those that are:
a. Growing rapidly.
b. Transitioning from a communist-controlled economy to capitalism.
c. Seen to have impact only sporadically.
d. Enjoying a mature economy.
ANS: A
AACSB Reflective thinking, Environmental influence
PTS: 1
11. Major regional trade agreements include all of the following EXCEPT
a. EU.
b. NAFTA.
c. APEC.
d. PROTEC.
, ANS: D
AACSB Reflective thinking, Legal responsibilities
PTS: 1
12. The economic agreement that links the US, Canada, and Mexico in an economic bloc that
allows freer exchange of goods and services is known as the
a. EU.
b. OPEC.
c. APEC.
d. None of the above
ANS: D
AACSB Reflective thinking, Legal responsibilities
PTS: 1
13. The World Trade Organization:
a. Is a major trading company.
b. Succeeded the GATT agreements.
c. Collects duties for member countries.
d. Is a consulting group for companies who wish to engage in international trade.
ANS: B
AACSB Reflective thinking, Legal responsibilities
PTS: 1
14. Examples of developed economies would include:
a. The U.S. and Japan.
b. Hungary and Poland.
c. Argentina and Brazil.
d. Hong Kong and Singapore.
ANS: A
AACSB Reflective thinking, Creation of value
PTS: 1
15. According to your text, FDI means
a. Foreign development initiatives.
b. Various investment policies of the U.S. government.
c. A foreign company has an ownership position in a company in another country.
d. A type of international negotiation strategy.
ANS: C
AACSB Reflective thinking, Legal responsibilities
PTS: 1
16. The two forms of risk discussed in the text include
a. Exchange rate risk and corruption risk.
b. Business risk and social risk.
c. Sales risk and employment risk.
d. Economic and political risk.
ANS: D
AACSB Reflective thinking, Environmental influence
PTS: 1
17. Economic risks discussed in the text include
a. Anything a government might do or not do that might adversely affect a company.
, b. The likelihood of losing money if one invests in stocks.
c. Exchange and interest rates.
d. Expropriating of foreign firms by the local government without any compensation.
ANS: C
AACSB Reflective thinking, Environmental influence
PTS: 1
18. Anything that a government might do to affect a multinational adversely is known as
a. Exchange rate risk.
b. Business risk.
c. Sales risk.
d. Political risk.
ANS: D
AACSB Reflective thinking, Leadership
PTS: 1
19.. A global product or service is
a. Adapted for each country's unique needs.
b. A similar product or service for all customers throughout the world.
c. A product or service that requires bilingual customers.
d. Products developed for use outside the country.
ANS: B
AACSB Reflective thinking, Creation of value
PTS: 1
20. Which of the following statements about the Internet and Information Technology is true?
a. The Internet is benefiting companies worldwide.
b. Electronic communications does not allow companies to communicate with locations
around the world.
c. Information technology is not encouraging a borderless financial market.
d. Information technology does not allow the sharing of information around the world.
ANS: A
AACSB Technology, Information technology
PTS: 1
21. The free market reforms in emerging countries are creating a potential group of
a. new competitors.
b. old competitors.
c. subsidized firms.
d. government companies.
ANS: A
AACSB Analytic, Environmental influence
PTS: 1
22. Which of the following statements is true about privatization?
a. Developing nations have the highest rate of privatization.
b. The leading privatizers in the world do not face competition.
c. Privatization is the sale of private business to government investors.
d. Privatization is absent in transition economies.
ANS: A
AACSB Analytic, Legal responsibilities
