Export-Import Management Solved
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Course Introduction
Export-Import Management is a comprehensive course designed to introduce students to the principles, practices, and procedures involved in international trade. The course covers a range of topics including the regulatory environment, documentation, logistics, financial instruments, risk management, and the roles of various intermediaries in the export and import process. Students will learn how to develop strategies for entering foreign markets, understand the legal and ethical issues in cross-border transactions, and navigate the complexities of customs procedures and trade compliance. By the end of the course, students will be equipped with practical knowledge and skills essential for effective management of export-import operations in a global business environment.
Recommended Textbook
International Business Competing in the Global Marketplace 11th Edition by Charles W. L. Hill
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Chapter 1: Globalization
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Q1) While the hump-shaped relationship between income levels and pollution levels seems to hold across a wide range of pollutants, _____ represent an important exception.
A) sulfur dioxide emissions
B) lead concentrations
C) carbon dioxide emissions
D) water quality standards
Answer: C
Q2) Globalization critics argue that the decline in unskilled wage rates is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers.
A)True
B)False
Answer: True
Q3) After the United States, the second-largest source country of MNEs is:
A) Japan.
B) China.
C) a tie between France and the United Kingdom.
D) a tie between Germany and the United Kingdom.
Answer: C
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Chapter 2: National Differences in Political Economy, and Legal Systems
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Q1) Identify the three types of economic systems. How do these three types of economic systems differ from each other? How are they the same?
Answer: In a pure market economy, all productive activities are privately owned. Production is determined by supply and demand, and signaled to producers through the price system. The role of the government in a pure market economy is to encourage vigorous free and fair competition between private producers. In a command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are all planned by the government. The government's role is to allocate resources for the good of the society. In addition, all businesses are state owned. A mixed economy is a combination of the other economic systems in which certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant state ownership and government planning.
Q2) In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.
A)True
B)False
Answer: True
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Page 4
Chapter 3: National Differences in Economic Development
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Sample Questions
Q1) For privatization to work, it must also be accompanied by a more general deregulation and opening of the economy.
A)True
B)False
Answer: True
Q2) In mixed economies, in certain sectors the state sets prices, owns businesses, limits private enterprise, restricts investment by foreigners, and restricts international trade.
A)True
B)False
Answer: True
Q3) Since the 1980s, there has been a transformation from centrally planned command economies to market-based economies. What is the rationale for this transformation?
Answer: The rationale for economic transformation has been the same the world over. In general, command and mixed economies failed to deliver the kind of sustained economic performance that was achieved by countries adopting market-based systems, such as the United States, Switzerland, Hong Kong, and Taiwan. As a consequence, even more states have gravitated toward the market-based model.
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5
Chapter 4: Differences in Culture
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Q1) Max Weber was a German sociologist who, in 1904, made the connection between _____ and "the spirit of capitalism."
A) Protestant ethics
B) ethnocentrism
C) cross-cultural literacy
D) collectivism
Q2) In countries where the value of group identification is considered to be primary, managers and workers are discouraged from moving from company to company.
A)True
B)False
Q3) In countries where the value of _____ identification is considered to be primary, managers and workers are discouraged from moving from company to company.
A) individual
B) group
C) cultural
D) primary
Q4) Why is the role of education in a culture important to international companies?
Q5) Explain how the Koran views business.
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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Q1) _____ are the accepted principles of right or wrong governing the conduct of businesspeople.
A) Sustainable strategies
B) Business ethics
C) Moral worth of actions
D) Ethical strategies
Q2) Most moral philosophers see value in utilitarian and Kantian approaches to business ethics.
A)True
B)False
Q3) In your opinion, are bribes ever acceptable? Why or why not?
Q4) Which of the following is a reason why managers behave in a manner that is unethical?
A) Psychological and geographical distances of a foreign subsidiary from the home office
B) Pressure from an ethical leader
C) Confusion between personal ethics and business ethics
D) Incorporating ethical issues into strategic and operational decision making
Page 7
Q5) Should a multinational feel free to pollute in a developing nation?
Q6) How can companies strengthen the moral courage of employees?
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Page 8
Chapter 6: International Trade Theory
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Sample Questions
Q1) According to Ricardo's theory of comparative advantage, countries shall not produce a good, even if they have an absolute advantage in its production, if they do not produce it efficiently.
A)True
B)False
Q2) Wal-Mart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors. This allows Wal-Mart to offer greater discounts to its customers. In this case, Wal-Mart benefits from _____.
A) first-mover advantage
B) constant marginal returns
C) economies of scale
D) absolute advantage of production
Q3) _____ supports the idea that countries should export more than what they import.
A) Absolute advantage
B) Mercantilism
C) The world market theory
D) New trade theory
Q4) Explain how the rivalry within an industry affects international competence.
Q5) Explain the concept of free trade.
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Chapter 7: Government Policy and International Trade
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Sample Questions
Q1) Antidumping policies vary drastically from country to country.
A)True
B)False
Q2) The Japanese government was pressurized by the U.S. government to place limits on the number of vehicles exported to the United States by Japanese automobile producers in 1981. This is an example of:
A) tariff rate quota.
B) specific tariffs.
C) voluntary export restraint.
D) ad valorem tariff.
Q3) To conform to local content regulations, a firm may have to locate more production activities in a given market than it would otherwise.
A)True
B)False
Q4) Compare and contrast import quotas and voluntary export restraints.
Q5) Local content regulations provide protection for a domestic producer of parts by limiting foreign competition.
A)True
B)False
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Chapter 8: Foreign Direct Investment
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Sample Questions
Q1) Which of the following is a home-country policy aimed at limiting outward FDI flow?
A) Taxing domestic companies' foreign earnings at a higher rate than their domestic earnings
B) Implementation of government-backed insurance programs to cover major types of foreign investment risk
C) Eliminating double taxation of foreign income
D) Persuading host countries to relax their restrictions on inbound FDI
Q2) Which of the following best describes an industry composed of a limited number of large firms?
A) An oligopoly
B) A monopoly
C) An oligarchy
D) A perfectly competitive market
Q3) What are the ways in which host governments restrict inward FDI?
Q4) Other things being equal, the greater the capital investment in an economy, the more favorable its future growth prospects are likely to be.
A)True
B)False
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Chapter 9: Regional Trade Pacts Give the Mexican Auto
Industry an Edge
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Q1) A major impediment to economic integration is the loss of sovereignty it entails.
A)True
B)False
Q2) A benefit to companies of economic integration is the opportunity to centralize their production and reduce costs.
A)True
B)False
Q3) Describe the state of economic integration in Africa. What factors have hindered the process?
Q4) United States, Canada, and Mexico are member nations of _____.
A) CAFTA
B) Mercosur
C) the Andean Pact
D) NAFTA
Q5) Which feature of a customs union differentiates it from a free trade area?
A) Harmonization of members' tax rates
B) A common currency
C) A common external trade policy toward nonmembers
D) Ability of factors of production to move freely between members
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Chapter 10: The Foreign Exchange Market
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Q1) The _____ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.
A) law of one price
B) principle of consistent pricing
C) model of fair pricing
D) rational price theory
Q2) A currency is said to be freely convertible when:
A) its exchange rate with respect to other currencies is decided by the central bank of the country.
B) residents alone are allowed to convert it into a foreign currency without any limitations.
C) neither residents nor nonresidents are allowed to convert it into a foreign currency.
D) both residents and nonresidents are allowed to purchase unlimited amounts of a foreign currency with it.
Q3) Governments allow convertibility to preserve their foreign exchange reserves.
A)True
B)False
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13
Chapter 11: The International Monetary System
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Sample Questions
Q1) A _____ is a situation in which a country cannot service its foreign debt obligations.
A) currency crisis
B) banking crisis
C) foreign debt crisis
D) moral crisis
Q2) Which of the following is a common criticism against the International Monetary Fund?
A) IMF lacks any real mechanism for accountability.
B) It is hesitant to help banks when they are in crisis.
C) IMF has not intervened to resolve the Asian crisis.
D) It did not try to resolve the Mexican currency crisis.
Q3) The quality of investments declined significantly in the Asian countries during the 1990s.
A)True
B)False
Q4) The gold standard called for fixed exchange rates against the U.S. dollar.
A)True
B)False
Q5) Explain the events that led to the failure of the Bretton Woods system.
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Chapter 12: The Global Capital Market
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Sample Questions
Q1) Describe a fixed-rate bond.
Q2) _____ are normally underwritten by an international syndicate of banks.
A) Samurai bonds
B) Eurobonds
C) Yankee bonds
D) Foreign bonds
Q3) Eurobonds are:
A) denominated in the currency of the country in which they are issued.
B) normally underwritten by an international syndicate of banks.
C) denominated in a currency that is accepted by the European Union.
D) sold outside the borrower's county with reference to the originating currency.
Q4) When using the Euromarkets, companies:
A) have funds that lack liquidity.
B) pay less for the loans.
C) attract low interest rates.
D) are secured from foreign exchange risks.
Q5) Explain the two basic factors reflected by the relatively low correlation between the movements of stock markets in different countries.
Q6) How does the growth in the global capital markets affect investing firms?
Page 15
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Chapter 13: The Strategy of International Business
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Sample Questions
Q1) The amount of value a firm creates is measured by the:
A) economies of scale they are able to achieve.
B) difference between its costs of production and the value that consumers perceive in its products.
C) profitability the firm achieves.
D) difference between its costs of production and the price that it charges for its products.
Q2) When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow a(n) _____ strategy.
A) global standardization
B) localization
C) international
D) customization
Q3) The skills within the firm that a competitor cannot easily match or imitate are known as core competence.
A)True
B)False
Q4) Discuss the evolution of strategy. How does cost become important in the long term?
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Chapter 14: The Organization of International Business
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Q1) A firm pursuing a(n) _____ will have a strong incentive to decentralize decision-making.
A) localization strategy
B) transnational strategy
C) global standardization strategy
D) international strategy
Q2) Which of the following decisions is typically centralized at a firm's headquarters?
A) Production decisions
B) Human resource management
C) Marketing decisions
D) Overall firm strategy
Q3) A firm that needs greater flexibility should choose _____ for its decision-making.
A) horizontal differentiation
B) decentralization
C) localization strategy
D) control systems
Q4) Discuss the sources of inertia in organizations. Is it easy to make organizational changes?
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Page 17
Chapter 15: Entry Strategy and Strategic Alliances
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Sample Questions
Q1) _____ is pursued primarily by manufacturing firms and _____ is employed primarily by service firms.
A) Licensing; franchising
B) Franchising; licensing
C) Franchising; exporting
D) Exporting; licensing
Q2) Costs that an early entrant has to bear that a later entrant can avoid are known as _____.
A) first-mover costs
B) late-mover disadvantages
C) pioneering costs
D) licensing fees
Q3) Explain the relationship between first-mover disadvantages and pioneering costs.
Q4) Overpayment for assets of an acquired firm is one reason acquisitions fail.
A)True
B)False
Q5) Why should a firm be cautious about entering a licensing agreement?
Q6) What is a joint venture? What type of joint venture is most common? Provide an example of a joint venture.
Q7) What are first-mover advantages? Discuss these advantages.
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Chapter 16: Exporting, Importing, and Countertrade
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Sample Questions
Q1) The Foreign Credit Insurance Association provides coverage:
A) to insure products during shipment.
B) against commercial risks and political risks faced by exporters.
C) to insure that products are delivered that have already been paid for.
D) against political risks faced by importers.
Q2) Barter is a reciprocal buying agreement that occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.
A)True
B)False
Q3) _____ is a reciprocal buying agreement and occurs when a firm agrees to buy a certain amount of materials back from a country to which a sale is made.
A) Counterpurchase
B) Barter
C) Offset
D) Switch trading
Q4) Compare and contrast the export assistance provided to German and Japanese companies with that given to American companies. Discuss the implications of the differences between the countries.
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19
Chapter 17: Global Production and Supply Chain Management
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Sample Questions
Q1) Decentralization of production is appropriate when the product does not serve universal needs.
A)True
B)False
Q2) Lowering the costs is one of the objectives of the production and logistics function of an international firm.
A)True
B)False
Q3) Explain why a firm might adopt the just-in-time system. Why might a firm choose a different inventory system?
Q4) When does concentration of production make sense?
Q5) One way to reduce risks associated with a JIT global supply chain is to source inputs from several suppliers located in different countries.
A)True
B)False
Q6) Discuss the strategic objectives of the production and logistics functions of an international firm.
Q8) Explain make-or-buy decisions with an example. Page 20
Q7) Explain how fixed costs impact the decision to locate a plant.
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Page 21
Chapter 18: Global Marketing and RD
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Sample Questions
Q1) The identification of distinct groups of consumers whose purchasing behavior differs from others in important ways is known as _____.
A) market segmentation
B) market penetration
C) diversification strategy
D) differentiation
Q2) A(n) _____ distribution channel is one that is difficult for outsiders to access.
A) selective
B) intensive
C) exclusive
D) multi-channel
Q3) What are the arguments for standardized advertising across international markets?
Q4) A channel is considered to be short if the producer sells:
A) through an import agent.
B) through a wholesaler.
C) through a retailer.
D) directly to the consumer.
Q5) What is Theodore Levitt's contribution to international business?
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Chapter 19: Global Human Resource Management
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Q1) If a company recruits host-country nationals to manage subsidiaries while parent-country nationals occupy key positions at corporate headquarters, the firm is following a(n) _____ staffing policy.
A) polycentric
B) ethnocentric
C) geocentric
D) internal
Q2) Which of the following staffing approaches will be most effective for a firm that is pursuing a transnational strategy?
A) A polycentric staffing policy
B) An ethnocentric staffing policy
C) A geocentric staffing policy
D) An internal staffing policy
Q3) An ethnocentric staffing policy is one in which:
A) all key management positions are filled by host-country nationals.
B) host-country nationals are recruited to manage subsidiaries.
C) all key management positions are filled by parent-country nationals.
D) the best people are recruited for key jobs throughout the organization, regardless of nationality.
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Page 23
Chapter 20: Accounting and Finance in the International Business
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Q1) Part of the benefit that a parent company receives by receiving payment through royalties can be lost if the subsidiary's:
A) combined tax rate is higher than the parent's.
B) local government views royalties as an expense.
C) local tax rates on profits are extremely high.
D) managers are controlled directly by the parent.
Q2) Evaluation of a subsidiary should not be separate from the evaluation of its manager.
A)True
B)False
Q3) Performance of international subsidiaries depends on the transfer price set-up by the corporate.
A)True
B)False
Q4) Capital budgeting is the technique financial managers use to try to quantify the benefits, costs, and risks of an investment.
A)True
B)False
Q5) Explain the concept of transfer pricing.
Page 24
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