International Management Test Questions
Course Introduction
International Management explores the complexities and challenges faced by organizations operating in the global marketplace. The course examines cross-cultural management practices, international strategy development, global organizational structures, and the impact of political, economic, and legal environments on business decisions. Students analyze real-world case studies to understand issues such as global leadership, international negotiations, managing diverse workforces, and ethical considerations across cultures. The course equips students with skills to adapt management practices to different cultural contexts and prepares them to lead effectively in a dynamic and interconnected global business landscape.
Recommended Textbook
International Business Competing in the Global Marketplace 12th Edition by Charles
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Page 2
W. L. Hill
Chapter 1: Globalization
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Sample Questions
Q1) The downside of increased globalization is
A) global financial contagions are less likely.
B) a severe crisis in one region can affect the entire globe.
C) one nation may become too powerful.
D) the potential for increased exploitation of undeveloped nations by developed nations.
Answer: B
Q2) A current trend in international business is the decline of medium-sized and small multinationals, known as mini-multinationals.
A)True
B)False
Answer: False
Q3) One of the UN's central mandates is the promotion of higher standards of living, full employment, and conditions of economic and social progress and development. A)True
B)False
Answer: True
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Chapter 2: National Differences in Political, Economic, and Legal Systems
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Sample Questions
Q1) The term ________ stresses that the political, economic, and legal systems of a country are interdependent.
A) political economy
B) common law
C) socialism
D) collectivism
Answer: A
Q2) ________ are established through patents, copyrights, and trademarks.
A) Digital signatures
B) Ownership rights over private property
C) Origination fees and tributes
D) Ownership rights over intellectual property
Answer: D
Q3) Which of the following is a feature of a democracy?
A) exercise of absolute control by one person or political party
B) governance by people or elected representatives
C) prohibition of entry to opposing political parties
D) complete restriction of individual political freedom
Answer: B
Page 4
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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) an increase in trade barriers and tariffs.
B) an increase in government subsidies.
C) stronger barriers to foreign competition.
D) a general deregulation of the economy.
Answer: D
Q2) Since the 1980s, there has been a transformation from ________ economies to ________ economies.
A) mixed; market-based
B) centrally planned command; market-based
C) centrally planned command; mixed
D) market-based; centrally planned command
Answer: B
Q3) Economic growth appears to be a function of a country's capacity for growth and its A) previous economic success.
B) political environment.
C) free market system.
D) mixed economy.
Answer: C
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Page 5
Chapter 4: Differences in Culture
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Sample Questions
Q1) When Jana visits her mother, she takes great pains to watch her language and use good manners because that is what her mother expects of her. This demonstrates the concept of A) folkways.
B) mores.
C) rites.
D) beliefs.
Q2) Both Hindus and Buddhists stress the afterlife and spiritual achievement rather than involvement in this world.
A)True
B)False
Q3) Hinduism and Buddhism both stress the importance of A) the caste system.
B) the afterlife.
C) Confucian ethics.
D) life on earth.
Q4) Consider the importance of unspoken language. Why is it important to be familiar with the unspoken language of another culture?
Q5) Discuss the limitations of Hofstede's research.
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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Sample Questions
Q1) According to John Rawls's difference principle,
A) certain people or institutions are obligated to provide benefits or services that secure the rights of others.
B) fundamental human rights should transcend national borders and cultures.
C) the best decisions are those that produce the greatest good for the greatest number of people.
D) inequalities are justified if they benefit the position of the least-advantaged person.
Q2) What is the term for a company's formal statement of the ethical priorities it expects all of its employees to follow?
A) code of ethics
B) stakeholders pledge
C) moral courage
D) difference principle
Q3) Societal business ethics are divorced from personal ethics.
A)True
B)False
Q4) Describe the five-step process that businesses can use to think through ethical problems.
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Chapter 6: International Trade Theory
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Sample Questions
Q1) Which of the following is a statement that supports the theory of comparative advantage?
A) International trade is a zero-sum gain where one nation's gain is another's loss.
B) Domestic industries are at risk when a country engages in free trade.
C) A country should maintain a trade surplus to succeed in global trade.
D) Global production is greater with free trade than it is with restricted trade.
Q2) Diminishing returns show that it is feasible for a country to specialize to the degree suggested by the simple Ricardian model.
A)True
B)False
Q3) The ________ theory argues that the pattern of international trade is determined by differences in factor endowments.
A) comparative advantage
B) Leontief Paradox
C) Heckscher-Ohlin
D) absolute advantage
Q4) Explain how the rivalry within an industry affects international competence.
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8
Chapter 7: Government Policy and International Trade
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Sample Questions
Q1) Local content regulations
A) protect domestic producers by limiting foreign competition.
B) lower the prices of imported components.
C) tend to benefit consumers and not producers.
D) encourage outsourcing of production units.
Q2) Describe the Buy America Act. What is its connection with local content requirements?
Q3) A key issue in the "millennium round" of the WTO was to
A) increase barriers to cross-border trade in agricultural products.
B) extend GATT to cover trade in commodities.
C) further reduce barriers to cross-border trade and investment.
D) extend GATT rules to cover trade in services.
Q4) One of the successful outcomes of the Doha Round negotiations has been that many nations have proceeded with bilateral free trade agreements.
A)True B)False
Q5) The World Trade Organization was created as part of the Uruguay Round. A)True
B)False
Q6) Compare and contrast import quotas and voluntary export restraints.
Page 9
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Chapter 8: Foreign Direct Investment
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108 Flashcards
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Sample Questions
Q1) ________ occurs when a firm legally allows the right to produce its product, to use its production processes, or to use its brand name or trademark to another firm.
A) Licensing
B) Acquisition
C) Internalization
D) Merger
Q2) Advantages that arise from using resource endowments or assets that are tied to a particular place and that a firm finds valuable to combine with its own unique assets are known as
A) location-specific advantages.
B) capital-specific advantages.
C) absolute advantages.
D) production factor advantages.
Q3) What are the ways in which host governments restrict inward FDI?
Q4) Why do many economists favor internalization theory as an explanation for FDI compared to Knickerbocker's theory?
Q5) Rivals rarely imitate what a firm does in an oligopoly.
A)True
B)False
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Chapter 9: Regional Economic Integration
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Sample Questions
Q1) Which is the most enduring free trade area in the world?
A) Central America Free Trade Association (CAFTA)
B) European Free Trade Association (EFTA)
C) Association of Southeast Asian Nations (ASEAN)
D) North American Free Trade Association (NAFTA)
Q2) The ________ is responsible for proposing EU legislation, implementing it, and monitoring compliance with EU laws by member states.
A) European Parliament
B) European Commission
C) Council of the European Union
D) Court of Justice
Q3) ________ has no barriers to trade between member countries, includes a common external trade policy, and allows factors of production to move freely between members.
A) An economic union
B) A common market
C) A customs union
D) A full political union
Q4) Explain how Mercosur has changed over time. What are the implications of these changes?
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Chapter 10: The Foreign Exchange Market
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Sample Questions
Q1) When two parties agree to exchange currency and execute the deal at some specific time in the future, a ________ occurs.
A) currency swap
B) forward exchange
C) hedging
D) spot exchange
Q2) The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is known as ________ exposure.
A) economic
B) financial
C) translation
D) transaction
Q3) Currency ________ typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.
A) hedging
B) risk mitigation
C) speculation
D) arbitrage
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Chapter 11: The International Monetary System
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Sample Questions
Q1) Which of the following statements is true of pegged exchange rates?
A) A pegged exchange rate allows a country's currency to be determined by market forces.
B) A pegged exchange rate weakens the monetary discipline of a country.
C) Pegged exchange rates are popular among many of the world's smaller nations.
D) Adopting a pegged exchange rate regime increases inflationary pressures in a country.
Q2) A currency crisis occurs due to
A) the loss of confidence in a country's banking system.
B) heavy foreign debt obligations.
C) high levels of trade deficit.
D) a speculative attack on the exchange value.
Q3) The current system of foreign exchange is a mixed system of government intervention and speculative activity.
A)True
B)False
Q4) How can international companies reduce their economic exposure in a world of constantly fluctuating exchange rates?
Q5) Describe the different exchange rate policies that are in practice today.
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Chapter 12: The Global Capital Market
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Sample Questions
Q1) The globalization of capital has been universally seen as a positive development.
A)True
B)False
Q2) Investors can reduce the level of risk by diversifying a portfolio internationally.
A)True
B)False
Q3) ________ are international bonds, normally underwritten by an international syndicate of banks and placed in countries other than the one in whose currency the bond is denominated.
A) Micro bonds
B) Foreign bonds
C) Eurobonds
D) Regulatory bonds
Q4) The cost of capital is the difference between cost of inputs and outputs.
A)True
B)False
Q5) What are the drawbacks of the Eurocurrency market?
Q6) Explain Eurobonds with an example.
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Chapter 13: The Strategy of International Business
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Sample Questions
Q1) How can firms successfully leverage the skills developed at the subsidiary level?
Q2) Economies of scale arise from which of the following sources?
A) increasing fixed costs by limiting them to small volumes
B) serving domestic and international markets from the same production facilities
C) serving only domestic markets
D) bargaining with distributors to drive up the product costs
Q3) How can a firm increase its profitability?
Q4) Universal needs exist when
A) the tastes and preferences of consumers in different nations are similar if not identical.
B) conventional commodity products requested in one country are different than those requested in another country.
C) the tastes and preferences of consumers in the same nation are similar if not identical.
D) consumers are willing to pay a high price for a product regardless of what country they reside in.
Q5) What are learning effects? When are learning effects most significant?
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Chapter 14: The Organization of International Business
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Sample Questions
Q1) A ________ encourages fragmentation of the organization into highly autonomous entities.
A) worldwide area structure
B) global matrix structure
C) worldwide product structure
D) global network structure
Q2) A decentralized organization allows managers to respond to environmental changes more quickly than in a centralized organization.
A)True
B)False
Q3) Which control system is most widely used by small firms?
A) personal
B) output
C) bureaucratic
D) cultural
Q4) Discuss the issues involved in unfreezing an organization.
Q5) Explain organizational structure.
Q6) Refreezing an organization should happen quickly.
A)True
B)False
Page 16
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Chapter 15: Entry Strategy and Strategic Alliances
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Sample Questions
Q1) A large-scale entrant is more likely than a small-scale entrant to be able to capture first-mover advantages associated with A) scale economies.
B) diseconomies of scale.
C) pioneering costs.
D) diseconomies of scope.
Q2) Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in
A) politically unstable developing nations that operate with a mixed or command economy.
B) nations where there is a dramatic upsurge in either inflation rates or private-sector debt.
C) politically stable developed and developing nations that have free market systems.
D) developing nations where speculative financial bubbles have led to excess borrowing.
Q3) Educating customers is an element of pioneering costs.
A)True B)False
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Chapter 16: Exporting, Importing, and Countertrade
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Sample Questions
Q1) A ________ allows for a delay in payment-normally 30, 60, 90, or 120 days.
A) bill of lading
B) sight draft
C) bill of exchange
D) time draft
Q2) The bill of lading does not serve as a document of title as such.
A)True
B)False
Q3) Which of the following is a nationwide group of international trade attorneys who provide free initial consultations to miniature businesses on export-related matters?
A) ELAN
B) EMC
C) MITI
D) SCORE
Q4) Which of the following statements is true of export management companies (EMCs)?
A) An EMC is a transportation company that engages in international business.
B) EMCs are export-import banks that manage foreign exchanges.
C) EMCs are export specialists that act on behalf of their client firms.
D) An EMC is an intermediary that facilitates talks between two nations.
Page 18
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Chapter 17: Global Production and Supply Chain Management
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Sample Questions
Q1) When a multinational corporation buys products or services from one of its suppliers that produces them somewhere else, whether domestically or globally, it is referred to as
A) offshoring.
B) insourcing.
C) outsourcing.
D) co-sourcing.
Q2) An advantage of engaging in in-house production of products and components is that
A) the firm will have fewer subunits to control by making products in-house.
B) it will help the firm capture more orders from other countries.
C) it enables a firm to protect the proprietary technologies that it has.
D) firms can make better use of the location advantages of certain countries.
Q3) Cost and ________ are the two main drivers behind make-or-buy choices made by global companies when they engage in global supply chains.
A) production capacity
B) assurance of continual supply
C) quality control
D) control
Q4) Describe the major arguments put forth by Edward Deming.
Page 19
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Chapter 18: Global Marketing and R&D
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Sample Questions
Q1) A measure of the responsiveness of demand for a product to change in price is referred to as
A) arbitrage demand.
B) predatory pricing.
C) price elasticity of demand.
D) experience curve pricing.
Q2) In order for price discrimination to be successful,
A) there must be a strong case for arbitrage.
B) national markets must be kept separate.
C) demand must be very elastic.
D) a large change in demand must be triggered by a small change in price.
Q3) When a company charges whatever the market will bear, the company is using A) strategic pricing.
B) price discrimination.
C) a push strategy.
D) a pull strategy.
Q4) What are the four main differences between distribution systems across countries?
Q5) What factors affect the rate of new-product development in countries?
Q6) Explain briefly the regulatory influences on pricing.
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Chapter 19: Global Human Resource Management
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Sample Questions
Q1) Trade unions around the world
A) developed simultaneously and in coordination with each other.
B) are widely varied in their structure.
C) have virtually the same ideology.
D) employ the same union structure.
Q2) The ability to understand why people of other countries behave the way they do is
A) self-orientation.
B) others-orientation.
C) perceptual ability.
D) cultural toughness.
Q3) From a strategic perspective, the key issue in international labor relations is the degree to which organized labor can
A) improve the profitability of the company.
B) enhance the choices of an international business.
C) increase the integration and consolidation of global operations.
D) limit the choices of an international business.
Q4) A geocentric approach tends to weaken local responsiveness.
A)True
B)False
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Chapter 20: Accounting and Finance in the International Business
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Sample Questions
Q1) According to Lessard and Lorange, the ________ rate refers to the spot exchange rate when the budget is adopted.
A) ending
B) initial
C) ideal
D) projected
Q2) Transnational financing occurs when a firm based in one country enters another country to raise capital
A) by borrowing from financial institutions.
B) from the sale of stocks or bonds.
C) by borrowing from banks.
D) through exchange policies of governments.
Q3) ________ costs are incurred every time a firm changes cash from one currency into another currency.
A) Dividend
B) Capital
C) Fixed
D) Transaction
Q4) What are the shortcomings of IASB?
Q5) Explain the concept of transfer pricing.
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