International Marketing Exam Bank
Course Introduction
International Marketing explores the strategies and practices involved in marketing products and services across national boundaries. This course covers the complexities of entering foreign markets, including cultural, legal, and economic considerations, and addresses how global firms adapt their marketing mix product, price, promotion, and distribution to suit diverse international environments. Students will analyze global market research, segmentation, and positioning, examine case studies of multinational companies, and develop marketing plans that account for global competition, digital trends, and ethical issues in international business.
Recommended Textbook
International Business 9th Edition by Charles W. L. Hill
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Page 2
Chapter 1: Globalization
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Q1) Globalization reduces the risks of global financial contagion.
A)True
B)False
Answer: False
Q2) The World Trade Organization promotes _____.
A) lowering of barriers to cross-border trade and investment
B) infrastructural development in poor nations through low-interest loans
C) state ownership of major enterprises
D) regulation of national economies
Answer: A
Q3) The General Agreement on Tariffs and Trade (GATT)was responsible for _____.
A) protecting government owned enterprises
B) policing the global marketplace
C) limiting nuclear testing
D) promoting environment friendly technology
Answer: B
Q4) The most global markets currently are markets for consumer products.
A)True
B)False
Answer: False
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Chapter 2: National Differences in Political Economy, and Legal Systems
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Q1) Many of the world's larger trading nations,including Japan and the United Kingdom,have not ratified the United Nations Convention on Contracts for the International Sale of Goods (CIGS).
A)True
B)False
Answer: True
Q2) In practical terms,individualism translates into an advocacy for democratic political systems and market economics.
A)True
B)False
Answer: True
Q3) A nation's legal system is usually of very little interest to international business managers,because international businesses are headquartered in different countries.
A)True
B)False
Answer: False
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Chapter 3: National Differences in Economic Development
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Sample Questions
Q1) Which of the following is an example of deregulation?
A) A country that implements a simplified income tax filing system
B) A country that takes over a leading private bank to prevent it from filing for bankruptcy
C) A country that provides agricultural subsidies to farmers
D) A country that encourages foreign direct investment
Answer: D
Q2) A market with a large number of consumers,with low living standards will have a relatively large market when measured in economic terms.
A)True
B)False
Answer: False
Q3) Which of the following helps in adjusting GNI such that it accounts for the differences in the cost of living?
A) Purchasing power parity (PPP) adjustment
B) Human Development Index
C) Debt to GNI ratio
D) Consumer Price Index
Answer: A
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Page 5
Chapter 4: Differences in Culture
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Q1) Consider the importance of unspoken language.Why is it important to be familiar with the unspoken language of another culture?
Q2) What are the economic implications of the caste system supported by Hinduism?
Q3) Max Weber theorized that there was a relationship between Protestantism and the emergence of modern capitalism because:
A) Protestant ethics emphasize the importance of hard work and wealth creation and frugality.
B) Protestantism promotes the hierarchical domination of religious and social life.
C) Protestantism states that spiritual growth is more important than material wealth.
D) Protestantism promotes blind loyalty to employers.
Q4) A major difference between Buddhism and Hinduism is that unlike Hinduism,Buddhism:
A) does not support the cast system.
B) emphasizes wealth creation.
C) promotes blind loyalty to employers.
D) supports extreme ascetic behavior.
Q5) Why is the role of education in a culture important to international companies?
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Page 6
Chapter 5: Ethics, corporate Social Responsibility, and Sustainability
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Q1) Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable.
A)True
B)False
Q2) The utilitarian approach to ethics is a straw men approach to business ethics that has some inherent value,but is unsatisfactory in important ways.
A)True
B)False
Q3) The Kantian approach to ethics suggests that:
A) human beings have fundamental rights and privileges that transcend national boundaries.
B) the moral worth of actions or practices is determined by their consequences.
C) people should be treated as ends and never purely as means to the ends of others.
D) ethics are nothing more than the reflection of culture.
Q4) Societal business ethics are divorced from personal ethics.
A)True
B)False
Q5) What are ethical dilemmas? Why do they exist?
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Chapter 6: International Trade Theory
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Q1) Explain Ricardo's theory of comparative advantage.
Q2) New trade theory suggests that nations cannot benefit from trade when they do not differ in resource endowments or technology.
A)True
B)False
Q3) Which of the following factors,according to Porter's national Diamond,is most likely to give a country competitive advantage over another country?
A) Natural resources
B) Climate
C) Skilled labor
D) Demographics
Q4) 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 trade surplus to succeed in global trade.
D) Global production is greater with free trade than it is with restricted trade.
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Chapter 7: Government Policy and International Trade
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Q1) Krugman has suggested that trade policy designed to retaliate against another country's trade policy would hurt the citizens of both countries.
A)True
B)False
Q2) Specific tariffs are:
A) levied as a proportion of the value of the imported good.
B) government payment to domestic producers.
C) in the form of manufacturing or production requirements of goods.
D) levied as a fixed charge for each unit of a good imported.
Q3) What happened to GATT during the 1980s and early 1990s?
Q4) A subsidy helps domestic producers to compete against foreign imports.
A)True
B)False
Q5) What is strategic trade policy? Provide an example.
Q6) During the 1980s and early 1990s,the world trading system erected by the GATT gained momentum as protectionist demands generally decreased across the world.
A)True
B)False
Q7) Explain the notion of predatory behavior with regard to dumping.
Page 9
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Chapter 8: Foreign Direct Investment
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Q1) In which of the following situations would FDI improve the current account of the host country's balance of payments?
A) If the foreign subsidiary imports a substantial number of its inputs from abroad
B) If the FDI reduces existing employment opportunities
C) If the FDI is a substitute for imports of goods or services
D) If the FDI results in substitution of products produced domestically
Q2) What is double taxation in the context of FDI?
A) Taxation at twice the normal rate for foreign companies
B) Taxing the producers as well as suppliers
C) Taxation of income in both home and host country
D) Taxation of both income as well as dividends paid
Q3) Recent years have seen a marked increase in the number of countries that adhere to a radical ideology regarding FDI.
A)True
B)False
Q4) Discuss the trends in FDI over the last 30 years.Be sure to differentiate between the stock of FDI and the flow if FDI.
Q5) What is multipoint competition? How do firms respond to multipoint competition?
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Page 10
Chapter 9: Regional Trade Pacts Give the Mexican Auto
Industry an Edge
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Q1) A common market entails even closer economic integration and cooperation than an economic union.
A)True
B)False
Q2) Which of the following was the outcome of the Treaty of Lisbon signed in 2007?
A) It established the European Community.
B) It resulted in the adoption of the Euro.
C) It changed the name of the European Community to the European Union.
D) It increased the power of the European Parliament.
Q3) Three countries agree to remove barriers to trade between member countries and adopt a common external trade policy toward nonmembers.They also agree to allow people and other factors of production to move freely across their borders.Which level of economic integration is this an example of?
A) Bonded market
B) Customs union
C) Free trade area
D) Common market
Q4) Explain how MERCOSUR has changed over time.What are the implications of these changes?
Q5) Debate the ratification of the North American Free Trade Agreement.
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Chapter 10: The Foreign Exchange Market
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Q1) Where is the foreign exchange market located? What is the nature of the market? Is the market growing or shrinking on a global basis?
Q2) When a tourist goes to a bank in a foreign country to convert money into the local currency,the exchange rate used is the forward rate.
A)True
B)False
Q3) What are the main uses of foreign exchange markets for international business?
Q4) Which of the following refers to the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates?
A) Currency pairing
B) Carry trade
C) Currency exchange
D) Currency swap
Q5) What is the law of one price?
Q6) Compare and contrast the Fisher Effect and the International Fisher Effect.
Q7) Discuss the two schools of thought on exchange rate forecasting.
Q8) How can a firm minimize its foreign exchange exposure?
Page 12
Q9) What is transaction exposure? How can transaction exposure be minimized?
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Chapter 11: The International Monetary System
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Q1) A currency board system limits the ability of the government to print money and,thereby,create inflationary pressures.
A)True
B)False
Q2) Moral hazard arises when people behave recklessly because they know they will be saved if things go wrong.
A)True
B)False
Q3) Compare and contrast a pegged exchange system with a dirty float system of exchange rates.
Q4) IDA loans receive direct funding from the World Bank.
A)True
B)False
Q5) What is a currency board? Why do countries choose this type of system? What are the disadvantages of this type of arrangement?
Q6) Discuss the criticism that IMF is exacerbating a problem called moral hazard.
Q7) Interest rates adjust automatically under a strict currency board system.
A)True
B)False
Page 13
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Chapter 12: The Global Capital Market
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Q1) Government limitations are more severe for securities denominated in foreign currencies than for domestic securities.
A)True
B)False
Q2) How does a global capital market,as compared to a purely domestic market,benefit investors?
Q3) A Eurocurrency is any currency _____.
A) banked outside of its country of origin
B) that is traded in European countries
C) that originates in European countries
D) used to buy gold and related commodities
Q4) Market makers are _____.
A) financial service companies that connect investors and borrowers
B) nonbank financial institutions who want to invest money
C) high net worth individuals with surplus cash to reinvest
D) those who want to borrow money including individuals, companies, and governments
Q5) Explain the changes observed in the risk of investments when an investor increases the number of stocks in her portfolio.
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Chapter 13: The Strategy of International Business
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Sample Questions
Q1) Consider a transnational strategy.Why would a firm choose this strategic alternative? What are the disadvantages of this strategy?
Q2) Which of the following is NOT associated with firms following the global standardization strategy?
A) Low pressures for local responsiveness
B) Use cost advantage to support aggressive pricing in world markets
C) High pressures for cost reductions
D) Customize product offering and marketing strategy to local conditions
Q3) A consumer surplus can be best described as:
A) what the consumer has "left-over" after a purchase.
B) how much extra a consumer has to pay for a product.
C) value for the money.
D) the premium charged for a quality product.
Q4) A firm facing low pressures for cost reductions and low pressures for local responsiveness,is most likely to follow a(n)_____ strategy.
A) global standardization
B) localization
C) international
D) transnational
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Chapter 14: The Organization of International Business
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Sample Questions
Q1) Describe the situation where an international division makes sense.How common is this structure? What are the disadvantages of the structure?
Q2) Which of the following terms refers to the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits?
A) Key processes
B) Control systems
C) Knowledge networks
D) Job assignments
Q3) What are the basic principles for successful organizational change?
Q4) Control through a system of rules and procedures that directs the actions of subunits is:
A) personal control.
B) bureaucratic control.
C) output control.
D) cultural control.
Q5) An organizational culture can be strong but bad.
A)True
B)False
Q6) What is a knowledge network? What is the advantage of such a system?
Page 16
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Chapter 15: Entry Strategy and Strategic Alliances
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Q1) Define licensing agreements.What are the advantages of this mode of international expansion?
Q2) First-mover advantages are the advantages associated with entering a market early.
A)True
B)False
Q3) Educating customers is a part of pioneering costs.
A)True
B)False
Q4) 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
Q5) Discuss the advantages of using a joint venture to enter foreign markets.
Q6) How can a firm increase the probability of selecting a good partner?
Q7) Compare and contrast licensing agreements and franchising agreements.
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Q8) How can a firm protect its proprietary information in a joint venture arrangement?
Chapter 16: Exporting, importing, and Countertrade
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Q1) The term switch trading refers to the use of a specialized third-party trading house in a countertrade arrangement.
A)True
B)False
Q2) Exporters usually issue a letter of credit to importers in international transactions.
A)True
B)False
Q3) The bill of lading can function as collateral against which funds may be advanced to the exporter by its local bank.
A)True
B)False
Q4) Explain the problem of trust that persists in international business.
Q5) _____ is an alternative means of structuring an international sale when conventional means of payment are difficult,costly,or nonexistent.
A) Floating exchange system
B) Countertrade
C) Letter of credit trade
D) Fixed exchange system
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Chapter 17: Global Production and Supply Chain Management
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Q1) Describe the concept of minimum efficient scale.Discuss the implications of minimum efficient scale.
Q2) Discuss the effect of country factors on the decision of where to locate production?
Q3) Which of the following statements is true of Web-based EDI systems?
A) Web-based EDI systems are more expensive than proprietary solutions.
B) Small firms will not be able to make use of Web-based EDI systems
C) Web-based systems are much easier to install compared to proprietary solutions.
D) Most Web-based systems are implemented to support proprietary solutions.
Q4) Explain how the strategic role of foreign factories evolves over time.
Q5) The minimum efficient scale of production is high when fixed costs are low.
A)True
B)False
Q6) A specialized asset is an asset that is used to perform day-to-day activities.
A)True
B)False
Q7) Explain specialized assets with an example.
Q9) Briefly describe the Six Sigma methodology. Page 19
Q8) Describe global learning with reference to foreign subsidiaries of a firm.
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Page 20
Chapter 18: Global Marketing and Rd
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Q1) Explain the concept of price elasticity of demand.What are its determining factors?
Q2) When a channel is exclusive:
A) the firm sells and distributes only high-end products.
B) it is controlled by market leaders or by firms who have a niche market.
C) the firm's products are focused only on the elite, upper class customers.
D) it is often difficult for a new firm to get access to shelf space in supermarkets.
Q3) The goal of market segmentation is to optimize the fit between the purchasing behavior of consumers in a given segment and the marketing mix,thereby maximizing sales to that segment.
A)True
B)False
Q4) The means a firm chooses for delivering the product to the consumer is its ____.
A) communication strategy
B) segmentation strategy
C) product attributes
D) distribution strategy
Q5) What are the two main issues that managers must be aware of when considering market segmentation in foreign countries?
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Chapter 19: Global Human Resource Management
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Q1) When evaluating expatriates,home-country managers usually rely on:
A) the manager's ability to develop cross-cultural awareness.
B) hard data such as market share.
C) the ability of the expatriate to work with local managers.
D) a set of subjective criteria such as interpersonal skills
Q2) Which of the following is a drawback of the polycentric approach to staffing?
A) Firms are likely to suffer from cultural myopia.
B) Host-country nationals are vulnerable to cultural misunderstandings.
C) This approach increases the cost of value creation.
D) Host-country nationals have limited opportunities for advancement beyond senior positions in their subsidiary.
Q3) A foreign service premium is:
A) paid when the expatriate is being sent to a difficult location.
B) the extra pay that an expatriate receives for working outside his or her country of origin.
C) normally given to ensure that the expatriate can afford the same quality of housing in the foreign country as at home.
D) paid to ensure that the expatriate enjoys the same standard of living in the foreign posting as at home.
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Page 22
Chapter 20: Accounting and Finance in the International Business
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Q1) A tax credit allows an entity to reduce the taxes paid to the home government by the amount of taxes paid to the foreign government.
A)True
B)False
Q2) 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
Q3) The initial rate,in the Lessard-Lorange Model,refers to the spot exchange rate when the budget is adopted.
A)True
B)False
Q4) Multilateral netting is used majorly to _____.
A) reduce the number of transactions between subsidiaries
B) avail tax credit from governments
C) establish a tax treaty amongst multiple countries
D) to reduce the fixed costs of establishing a subsidiary
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