Global Marketing Practice Exam
Course Introduction
Global Marketing explores the strategies and practices businesses use to reach consumers and navigate competitive environments across international borders. This course examines cultural, economic, political, and legal factors that influence marketing decisions in different regions, emphasizing market research, segmentation, product adaptation, pricing strategies, distribution, and promotional tactics on a global scale. Students will analyze real-world case studies, develop international marketing plans, and gain understanding of how multinational corporations respond to the challenges and opportunities within diverse global markets.
Recommended Textbook
International Business Competing in the Global Marketplace 8th Edition by
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Page 2
Charles W. L. Hill
Chapter 1: Globalization
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Sample Questions
Q1) The share of the total FDI stock accounted for by which of the following countries increased markedly from 1980 to 2005?
A)United States
B)France
C)United Kingdom
D)Netherlands
Answer: B
Q2) Today,the risks involved in doing business in countries such as Russia are low,but so are the returns.
A)True
B)False
Answer: False
Q3) If the free market reforms in China continue for two more decades,China may move from Third World status to industrial superpower status even more rapidly than Japan did.
A)True
B)False
Answer: True
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Chapter 2: National Differences in Political Economy
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Sample Questions
Q1) Which of the following statements about political systems and their interrelated dimensions is false?
A)Systems that emphasize collectivism tend toward totalitarianism.
B)Systems that place a high value on individualism tend to be democratic.
C)Democratic societies can emphasize a mix of collectivism and individualism.
D)It is impossible to have totalitarian societies that are not collectivist.
Answer: D
Q2) The law that makes it illegal to bribe a foreign government official in order to maintain business over which that foreign official has authority,and requires all publicly traded companies to keep detailed records that would allow determining whether a violation of the act has occurred is the:
A)CIGS.
B)Foreign Corrupt Practices Act.
C)Economic Cooperation Anti Corruption Act.
D)Convention on Combating Bribery of Foreign Officials in International Transactions.
Answer: B
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Chapter 3: Differences in Culture
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Sample Questions
Q1) According to Islam,those who hold property are regarded as:
A)trustees.
B)owners.
C)tenants.
D)speculators.
Answer: A
Q2) A country is defined as a system of values and norms that are shared among a group of people and that when taken together constitute a design for living.
A)True
B)False
Answer: False
Q3) The _____ dimension of Hofstede's study explores how a society deals with the fact that people are unequal in physical and intellectual capabilities.
A)power distance
B)individualism vs.collectivism
C)uncertainty avoidance
D)masculinity vs.femininity
Answer: A
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5
Chapter 4: Ethics in International Business
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Sample Questions
Q1) Which of the following is not likely to lead to unethical behavior?
A)An organizational culture that deemphasizes business ethics.
B)A process that does not incorporate ethical considerations into business decision making.
C)A strong personal ethical code governing the conduct of an individual.
D)Pressure from the parent company to meet unrealistic performance goals.
Q2) The utilitarian approaches to ethics hold that the moral worth of actions or practices is determined by their consequences.
A)True
B)False
Q3) The Sullivan principles mandated that GM could operate in South Africa as long as the company complied with the apartheid laws.
A)True
B)False
Q4) According to the righteous moralist,if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation,that manager should not either.
A)True
B)False
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Chapter 5: International Trade Theory
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Sample Questions
Q1) The Heckscher-Ohlin theory argues that free trade is not beneficial to most nations.
A)True
B)False
Q2) Porter has stated that a nation's firms gain competitive advantage if their domestic consumers are sophisticated and demanding.Explain this statement.
Q3) According to Heckscher and Ohlin,_____ meant the extent to which a country is provided with such resources as land,labor,and capital.
A)factors of production
B)economic facilitators
C)factor endowments
D)manufacturing factors
Q4) The theories of international trade claim that promoting free trade is generally in the best interest of an individual firm,although it may not always be in the best interests of a country.
A)True
B)False
Q5) Discuss the link between trade and economic growth.
Q6) Discuss the implications of international trade theory for a firm.
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Chapter 6: The Political Economy of International Trade
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Sample Questions
Q1) Agricultural subsidies have been criticized for all of the following reasons except:
A)they allow inefficient farmers stay in business.
B)they discourage countries to overproduce heavily subsidized agricultural products. C)they encourage countries to produce products that could be grown more cheaply elsewhere and imported.
D)they reduce international trade in agricultural products.
Q2) The Buy America Act specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price disadvantage.
A)True
B)False
Q3) What are the central issues facing the WTO at the present time?
Q4) When governments intervene in international trade,they often do so by restricting domestic production and exports,while adopting policies that promote imports of goods and services into their nation.
A)True
B)False
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8
Chapter 7: Foreign Direct Investment
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Sample Questions
Q1) Jobs created in local suppliers as a result of the MNE's investment and jobs created because of increased local spending by employees of the MNE are examples of direct employment effects of FDI.
A)True
B)False
Q2) A greenfield investment:
A)is a form of FDI that involves the establishment of a new operation in a foreign country.
B)involves a 7 percent stock in an acquired foreign business entity.
C)involves a merger with a foreign business.
D)occurs when a firm acquires another company in a foreign country.
Q3) An oligopoly is an industry composed of a limited number of large firms.
A)True
B)False
Q4) _____ is also known as the market imperfections theory.
A)Internationalization theory
B)Internalization theory
C)Perfect markets theory
D)Small markets theory
Q5) Explain the product life cycle theory and its connection with FDI.
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Chapter 8: Regional Economic Integration
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Sample Questions
Q1) Identify the incorrect statement about a common market.
A)It has no barriers to trade between member countries
B)It includes a common external trade policy
C)It establishes a central political apparatus coordinating the economic,social,and foreign policy of the member states
D)It allows factors of production to move freely between members
Q2) Compare and contrast a free trade area and a common market.Provide an example of each type of integration.
Q3) A benefit to companies of economic integration is the opportunity to centralize their production and reduce costs.
A)True
B)False
Q4) Some economists have expressed concerns that the benefits of regional integration have been touted while the costs have been ignored.Explain the view of these economists.
Q5) The ultimate controlling unit within the EU is the European Council.
A)True
B)False
Q6) What prompted the formation of the European Union?
Page 10
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Chapter 9: The Foreign Exchange Market
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Sample Questions
Q1) Transaction exposure is the extent to which the income from individual transactions is affected by fluctuations in foreign exchange values.
A)True
B)False
Q2) To minimize the risk of an unanticipated change in exchange rates,a company can protect itself by entering into a forward exchange contract.
A)True
B)False
Q3) What is the law of one price?
Q4) The foreign exchange market is a market for converting the currency of one country into that of another country.
A)True
B)False
Q5) How can a firm minimize its foreign exchange exposure?
Q6) Changes in spot exchange rates can be advantageous for an international business.
A)True B)False
Q7) Explain PPP.Use an example to show how PPP can help explain exchange rates.
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Chapter 10: The International Monetary System
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Sample Questions
Q1) The main elements of the 1976 Jamaica agreement include all of the following except:
A)floating rates were declared unacceptable.
B)gold was abandoned as a reserve asset.
C)total annual IMF quotas were increased to $41 billion.
D)IMF members were permitted to sell their own gold reserves at the market price.
Q2) Under a pegged exchange rate regime,a country will peg the value of its currency to _____ so that its own currency rises too.
A)its domestic inflation rate
B)that of a major currency
C)its interest rates
D)its foreign exchange reserves
Q3) What is a pegged exchange rate system? Give example of a country following it.
Q4) Speculative buying and selling of currencies can create very volatile movements in exchange rates.
A)True
B)False
Q5) Explain the notion of a floating exchange rate regime.Give examples.
Q6) How does a fixed exchange rate system work?
Page 12
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Chapter 11: The Global Capital Market
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Sample Questions
Q1) By using the global capital market,investors can diversify their portfolios internationally,thereby reducing their risk to below what could be achieved in a purely domestic capital market.
A)True
B)False
Q2) An equity loan:
A)does not give its holder a claim to a firm's profit stream.
B)is made when a corporation sells stock to investors.
C)includes cash loans from banks and funds raised from the sale of corporate bonds to investors.
D)requires the corporation to repay a predetermined portion of the loan amount at regular intervals regardless of how much profit it is making.
Q3) The international capital market boom in the 1980s,1990s,and 2000s can be attributed to the
A)advances in information technology.
B)increased regulations by governments.
C)increase in real cost of recording,transmitting,and processing information.
D)decreased acceptance of the free market ideology.
Q4) Write a brief note on foreign exchange risks and the cost of capital.
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Chapter 12: The Strategy of International Business
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Sample Questions
Q1) The value of a product to an average consumer is V; and the average price that the firm can charge a consumer for that product is P.Here,V - P can be termed as:
A)consumer surplus per unit.
B)producer surplus per unit.
C)profit growth.
D)profit per unit sold.
Q2) For a firm,all positions on the efficiency frontier are viable.
A)True
B)False
Q3) Which strategy makes most sense when there are strong pressures for cost reductions and minimal demands for local responsiveness?
A)Global standardization strategy
B)Transnational strategy
C)Localization strategy
D)International strategy
Q4) Describe localization strategy.What type of firm is likely to follow a localization strategy?
Q5) Explain the concept of location economies.
Q6) Explain why a firm would choose a global standardization strategy.
Page 14
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Chapter 13: The Organization of International Business
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Sample Questions
Q1) In a company using cultural controls,employees tend to control their own behavior.
A)True
B)False
Q2) What is a knowledge network? What is the advantage of such a system?
Q3) Behavioral scientists have long argued that people are willing to give more to their jobs when they have a greater degree of individual freedom and control over their work.This suggests that:
A)motivational research favors decentralization.
B)centralization can facilitate coordination.
C)centralization can ensure that decisions are consistent with organizational objectives.
D)decentralization permits total flexibility with no control.
Q4) The bonus a manager might receive if her subsidiary performance exceeds its performance target is an example of an incentive.
A)True
B)False
Q5) Discuss the location of decision-making in a firm that is following a transnational strategy.
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15
Chapter 14: Entry Strategy and Strategic Alliances
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Sample Questions
Q1) Which of the following is not important in the acquisition process?
A)Firms should strive to limit unwanted management attrition after acquisition.
B)An integration plan should quickly be implemented.
C)Proper screening of the company to be acquired should take place.
D)The hubris hypothesis should be maintained.
Q2) What are the two methods of entering foreign marketing using a wholly owned subsidiary?
Q3) Switching costs:
A)drive early entrants out of the market.
B)make it easy for later entrants to win business.
C)make it difficult for later entrants to win business.
D)give later entrants a cost advantage over early entrants.
Q4) What are the three basic decisions a firm contemplating foreign expansion must make?
Q5) Relational capital refers to the building of interpersonal relationships between the firms' managers in a strategic alliance.
A)True
B)False
Q6) Discuss the trade-offs associated with large-scale entry versus small-scale entry.
Page 16
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Chapter 15: Exporting,Importing,and Countertrade
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Sample Questions
Q1) Because of the lack of trust in international transactions,payment or a formal promise to pay is required before the buyer can obtain the merchandise.
A)True
B)False
Q2) One of the reasons for the lack of trust between firms engaged in international trade is due to the problems of using an underdeveloped international legal system to enforce contractual obligations.
A)True
B)False
Q3) Which of the following is true of reactive firms?
A)They may not even consider exporting until their domestic market is saturated B)They create excess productive capacity and actively hunt for opportunities in foreign markets
C)Almost all large firms fall under this category
D)They systematically scan foreign markets for profitable export opportunities
Q4) Discuss the idea of compensation or buybacks as they relate to countertrade.Provide an example of a buyback arrangement.
Q5) Why might a firm avoid countertrade?
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Chapter 16: Global Production, Outsourcing, and Logistics
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Sample Questions
Q1) When political risk is high,sourcing products from independent suppliers can be advantageous.
A)True
B)False
Q2) At six sigma,a production process would be 99.99966 percent accurate,creating just
A)3.4 defects per hundred thousand units
B)3.4 defects per million units
C)34 defects per million units
D)6.8 defects per million units
Q3) A firm will prefer to make the component internally rather than contract it out to a supplier,because of all of the following reasons except:
A)it needs to maintain control over its proprietary technology.
B)substantial investments in specialized assets are required to manufacture a component.
C)the firm completely trusts the independent supplier to play fair.
D)it runs the risk that suppliers will expropriate the technology for their own use.
Q4) What does Six Sigma refer to?
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18
Chapter 17: Global Marketing and RD
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Sample Questions
Q1) The four main differences between distribution systems are retail concentration,channel length,channel exclusivity,and channel quality.
A)True
B)False
Q2) Consumers in the most developed countries are typically willing to sacrifice their preferred product attributes for lower prices.
A)True
B)False
Q3) The set of choices the firm offers to its targeted market is known as the
A)marketing mix.
B)marketing concept.
C)marketing strategy.
D)market promotion.
Q4) When firms in the consumer goods industry are trying to sell to a large segment of the market they favor a:
A)push strategy.
B)pull strategy.
C)standardized strategy.
D)localized strategy.
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Chapter 18: Global Human Resource Management
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Sample Questions
Q1) Which among the following is a concern of organized labor regarding multinational firms?
A)A company can counter a union's bargaining power with the power to move production to another country.
B)An international business will keep low-skilled tasks in its home country and farm out only highly skilled tasks to foreign plants.
C)An international business can attempt to export employment practices and contractual agreements to its home country.
D)A multinational company is more likely to receive government support in the case of hostile labor relations.
Q2) In the case of an ethnocentric approach,it is possible that managers may make decisions that are ethically suspect because they do not understand the culture in which they are managing.
A)True
B)False
Q3) In many cases,firms fail to plan for an expatriate's repatriation.
A)True
B)False
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20
Chapter 19: Accounting in the International Business
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Sample Questions
Q1) A German firm raising capital by selling stock through the London Stock Exchange is an example of:
A)transnational financing.
B)transnational development.
C)transnational sale.
D)transnational investment.
Q2) According to Statement 52,"Foreign Currency Translation," issued by the Financial Accounting Standards Board:
A)the functional currency of a self-sustaining foreign subsidiary is to be the currency of its parent company.
B)the balance sheet of a self-sustaining foreign subsidiary is translated into the local currency using the exchange rate in effect at the end of the firm's financial year.
C)the income statement of a self-sustaining foreign subsidiary is translated using the average exchange rate for the firm's financial year.
D)the functional currency of an integral subsidiary is to be the local currency.
Q3) What is a consolidated financial statement? What type of firms usually makes use of it?
Q4) Describe the current cost accounting system.
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Page 21
Chapter 20: Financial Management in the International Business
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Sample Questions
Q1) What is economic risk? How does it affect international businesses?
Q2) Good financial management can help a firm in all of the following ways,except:
A)reduce the costs of creating value.
B)add value by improving customer service.
C)reduce the firm's cost of capital.
D)totally eliminate the firm's tax burden.
Q3) Cash needs are assumed to be normally distributed in each country and independent of each other.
A)True
B)False
Q4) Identify the main sets of related decisions included within the scope of financial management in the international business.
Q5) Political risk assessment is more art than science.
A)True
B)False
Q6) Many nations follow the worldwide principle that they have the right to tax income earned outside their boundaries by entities based in their country.
A)True
B)False
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