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Q:
A loan in which the borrower promises to repay the borrowed amount plus a predetermined rate of interest is called a(n) ________.
A) equity
B) exchange rate
C) stock
D) debt
Q:
Discuss the standardization versus adaptation decision for managers when considering production facilities, and describe considerations for managers when acquiring fixed assets.
Q:
Company debt normally takes the form of ________.
A) bonds
B) equity
C) stocks
D) bank loans
Q:
Describe the issues involved in the decision of how a company acquires raw materials and fixed assets.
Q:
Which of the following is currently a member of the European Free Trade Association?
A) Slovakia
B) Ireland
C) Norway
D) Italy
Q:
The European Free Trade Association was formed in 1960 to focus on trade in ________.
A) consumer goods
B) agricultural goods
C) industrial goods
D) services
Q:
Describe the production managers' decision regarding whether to centralize or decentralize production facilities, and explain the benefits of vertical integration.
Q:
The Court of Justice is the ________ of the European Union.
A) court of honor
B) court of appeals
C) small-claims court
D) arbitral tribunal
Q:
How is process planning affected by a company's business-level strategy? How can outsourcing lower risk for firms?
Q:
The European Commission is the ________ body of the European Union.
A) legislative
B) executive
C) financial
D) monitoring
Q:
What role does flexibility play in the make-or-buy decision?
Q:
No proposed legislation becomes EU law unless the ________ votes it into law.
A) Council of the European Union
B) European Parliament
C) Court of Auditors
D) European Commission
Q:
Explain the process of facilities location planning. What issues must companies consider while selecting the location for their production facilities?
Q:
Scenario: Verandas InternationalVerandas International is expanding its operations in North America. The Dutch company supplies customized furniture to five-star hotels. Verandas International is a leader in this industry, but the company believes it must increase its geographic reach to maintain that position.If Verandas International chooses to pursue equity financing, but wants to avoid the time and money required to comply with stock exchange regulations, the company would most likely issue ________.A) American Depository ReceiptsB) bills of ladingC) equity sharesD) irrevocable letters of credit
Q:
The Council of the European Union is the ________ body of the European Union.
A) legislative
B) executive
C) judicial
D) monitoring
Q:
The main purpose of the ________ is to debate and amend legislation proposed by the European Commission of the EU.
A) European Parliament
B) Council of the European Union
C) Court of Auditors
D) Court of Justice
Q:
Scenario: Verandas InternationalVerandas International is expanding its operations in North America. The Dutch company supplies customized furniture to five-star hotels. Verandas International is a leader in this industry, but the company believes it must increase its geographic reach to maintain that position.The Verandas U.S. subsidiary was turned down when it tried to borrow from a U.S. bank. The bank manager suggested that the parent firm deposit money with the U.S. bank's Dutch branch, and then the U.S. bank's home office would lend the money to the U.S. subsidiary. This type of arrangement is known as a(n) ________.A) mortgage loanB) title loanC) back-to-back loanD) syndicated loan
Q:
Which of the following institutions is least likely to play an important role in monitoring and enforcing economic and political integration in the European Union?
A) European Parliament
B) Council of the European Union
C) European Court of Human Rights
D) European Commission
Q:
Scenario: Verandas InternationalVerandas International is expanding its operations in North America. The Dutch company supplies customized furniture to five-star hotels. Verandas International is a leader in this industry, but the company believes it must increase its geographic reach to maintain that position.Economic forecasts reveal that the U.S. dollar is expected to decline relative to the Euro. Which of the following is the most advantageous method of obtaining funding for Verandas under these conditions?A) borrowing from U.S. banksB) issuing equity in GermanyC) issuing equity in the U.S.D) borrowing from Dutch banks
Q:
Scenario: Audio Component OutsourcingEcho Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in outsourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that outsourcing would enable the firm to be more competitive without sacrificing quality.Which of the following is most likely a potential benefit for Echo if it outsources some of its manufacturing activities?A) heightened communications awarenessB) increased activity in e-commerce salesC) strong intellectual property protectionD) eliminating the exposure of assets to political risk
Q:
For countries to become members of the European Union, they have to meet certain demands laid down by the EU referred to as the ________.
A) Copenhagen Criteria
B) Closer Economic Relations Agreement
C) Andean Community
D) Euro-Plus Pact
Q:
Which of the following countries has been facing difficulties in negotiations regarding its application for European Union membership?
A) Bulgaria
B) Czech Republic
C) Romania
D) Turkey
Q:
Scenario: Audio Component OutsourcingEcho Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in outsourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that outsourcing would enable the firm to be more competitive without sacrificing quality.Which of the following should most likely be considered in making the decision to outsource some of Echo's manufacturing activities?A) Do purchasing components present the lowest cost option for Echo?B) Would Echo engineers be willing to relocate to a foreign nation?C) Is Echo prepared to cover moving expenses for its managerial talent?D) Can Echo find employees for a customer service center in the U.S.?
Q:
Which of the following is true of the euro?
A) It increases exchange-rate risk for business deals between member nations.
B) It increases transaction costs.
C) It makes prices between markets more transparent.
D) It is not accepted among merchants in France, Germany, and Italy.
Q:
Scenario: Audio Component OutsourcingEcho Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in outsourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that outsourcing would enable the firm to be more competitive without sacrificing quality.Which of the following most likely supports the argument of Echo managers to outsource some of the firm's manufacturing activities?A) Echo managers could reduce the wages of U.S. based employees and sub-contractors.B) Echo could save money by reducing the costs incurred in manufacturing the component parts.C) Echo managers could implement a marketing campaign for foreign markets that is identical to the outsourced firm's marketing campaign.D) Echo could merge with one of its U.S.-based competitors to gain a larger market share.
Q:
The common currency of the European Union is known as the ________.
A) European currency unit
B) eurodollar
C) euro
D) European unit of account
Q:
Scenario: Hafstrom MotorsBased in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities.The senior manager argues that Hafstrom could reduce its costs significantly by purchasing parts from companies located overseas rather than producing its own parts. Which of the following is the senior manager advocating?A) outsourcingB) a greenfield investmentC) lean productionD) vertical integration
Q:
The European Union plan that established its own central bank and currency in January 1999 is known as the ________.
A) Single European Act
B) European monetary union
C) Copenhagen Criteria
D) Southern Common Market
Q:
Scenario: Hafstrom MotorsBased in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities.The top management of the company contends that Hafstrom would benefit most from manufacturing its own parts, rather than sourcing it from elsewhere, even if they are made at another location overseas. Which of the following is being recommended in this approach?A) just-in-time manufacturingB) location economiesC) vertical integrationD) outsourcing
Q:
The ________ called for banking in a single common currency, setting up of monetary and fiscal targets, and political union of the European Union members.
A) Maastricht Treaty
B) European monetary union
C) Single European Act
D) Copenhagen Criteria
Q:
Scenario: Hafstrom MotorsBased in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities.The senior manager recommends that Hafstrom obtain auto parts from a country where production activities would generate more value than it would generate elsewhere. He wants to take advantage of ________.A) just-in-time manufacturingB) facilities layout planningC) process planningD) location economies
Q:
Which of the following materialized the EU's goals of removing trade barriers, increasing harmonization, and enhancing the competitiveness of European companies?
A) the Maastricht Treaty
B) the European monetary union
C) the Single European Act
D) the Copenhagen Criteria
Q:
Scenario: Wilson Industries Inc.Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.If the board discusses the spatial arrangement of production processes within Wilson's production facilities, they will be engaging in ________.A) capacity planningB) facilities location planningC) process planningD) facilities layout planning
Q:
Which of the following treaties was signed by the members of the European Coal and Steel Community in 1957 for creating the European Economic Community?
A) the Treaty of Rome
B) the Maastricht Treaty
C) the Treaty of Paris
D) the Treaty of Versailles
Q:
Scenario: Wilson Industries Inc.Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.The board will also examine new production techniques the company could use to create its product. This examination is a part of ________.A) capacity planningB) process planningC) facilities location planningD) centralized production
Q:
In 1951, Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands signed the Treaty of Paris and created the ________.
A) European Union
B) European Economic Community
C) European Coal and Steel Community
D) European Community
Q:
Scenario: Wilson Industries Inc.Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.If Wilson Industries selects a new area for its production units, the company will be implementing ________.A) capacity planningB) process planningC) facilities location planningD) product structure modeling
Q:
Currently the most sophisticated and advanced example of regional integration is occurring in ________.
A) Asia
B) Europe
C) North America
D) Africa
Q:
Scenario: Wilson Industries Inc.Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.The board plans to examine Wilson's ability to produce enough bags to satisfy their customers' demands. This evaluation is known as ________.A) capacity planningB) process planningC) lean productionD) product structure modeling
Q:
Explain the concepts of trade creation and trade diversion. Who are the winners and losers in each scenario?
Q:
________ appeals to companies because it lowers the amount of taxes the companies must pay.A) DebtB) EquityC) Stock valueD) Enterprise value
Q:
Discuss "political union" as a level of economic integration and "political cooperation" as a benefit of economic integration.
Q:
The ________ of a company is the mix of equity, debt, and internally generated funds that it uses to finance its activities.
A) enterprise value
B) stock value
C) capital structure
D) corporate structure
Q:
Discuss free trade areas as a level of regional economic integration. How can regional integration enable employment opportunities?
Q:
Money earned from the sale of goods and services is known as ________.
A) revenue
B) dividend
C) depreciation
D) book value
Q:
Discuss the benefits and drawbacks of regional integration.
Q:
________ refers to the foreign direct investment in factories, equipment, and land that cannot be pulled out of the market quickly.
A) Hot money
B) Patient money
C) Fiat money
D) Key money
Q:
Differentiate among the five levels of economic and political integration.
Q:
Which of the following types of money adds to the volatility of emerging markets because it can be quickly withdrawn from its investment?
A) hot money
B) patient money
C) key money
D) fiat money
Q:
The primary purpose of the Gulf Cooperation Council (GCC) at its formation was to create a political union between Iraq and Iran.
Q:
________ is the financing obtained from investors who believe the borrower will experience rapid growth and who receive equity in return for their investment.
A) Internal funding
B) Venture capital
C) Credit derivative
D) Mortgage loan
Q:
The Single European Act predominantly aimed at establishing common transportation policies among the European Union members.
Q:
Which of the following is true of American Depository Receipts (ADRs)?
A) Investors who buy ADRs have to pay a currency-conversion fee.
B) There is a minimum purchase requirement for ADRs.
C) Companies offer ADRs in the U.S. to appeal to mutual funds.
D) ADRs are listed and traded in London and Luxembourg.
Q:
The least amount of sovereignty that must be surrendered to a trading block occurs in a political union.
Q:
________ are traded in Luxembourg and London and represent a specific number of shares in an outside company.
A) Common stock
B) Bills of lading
C) Revocable letters of credit
D) Global Depository Receipts
Q:
A benefit of regional economic integration is that it always expands employment opportunities in all nations.
Q:
American Depository Receipts (ADRs) are ________.
A) certificates that represent shares of stock in American companies
B) dollar deposits made by foreign firms conducting business in the U.S.
C) certificates that trade in the U.S. and represent shares of stock in a non-U.S. company
D) currency deposits made in the United States by firms based in other countries
Q:
In regional economic integration, industries that require mostly unskilled labor tend to shift production to low-wage nations within a trading bloc.
Q:
A loan in which a parent company deposits money with a host-country bank, which then lends the money to a subsidiary located in the host country is called a ________.
A) syndicated loan
B) back-to-back loan
C) mortgage loan
D) title loan
Q:
When trade diversion occurs, buyers will likely pay less for products.
Q:
When a market is experiencing rapid growth, a company will ________.
A) emphasize on decruitment
B) divest its operations
C) reinvest in its operations
D) implement retrenchment strategies
Q:
Economic integration can unintentionally reward a less efficient producer within a trading bloc.
Q:
Which of the following would companies do in markets that require long payback periods?
A) divest operations
B) implement retrenchment strategies
C) emphasize on decruitment
D) reinvest profits
Q:
The greatest benefit of regional integration is trade diversion.
Q:
A company using just-in-time (JIT) manufacturing involves ________.
A) increased availability of components in large inventories
B) quicker detection of defective materials and components
C) easier training of sales staff regarding product descriptions
D) benefits stemming from combining several Japanese technologies
Q:
A result of trade creation is that buyers pay higher prices for imported goods and services after trade barriers are removed.
Q:
The just-in-time (JIT) manufacturing technique was originally developed in ________.
A) the United States
B) China
C) Japan
D) Germany
Q:
The increase in the level of trade between nations that results from regional economic integration is called trade creation.
Q:
________ is the term used to refer to a production technique in which inventory is kept to a minimum and inputs to the production process arrive exactly when they are needed.
A) Just-in-time manufacturing
B) Lean manufacturing
C) Continuous production
D) Flow production
Q:
A political union makes it mandatory for nations to accept a common stance on all economic and political policies within their territories.
Q:
Which of the following statements is true regarding the ISO 9000 standards?
A) They specify details on how companies should develop its quality processes.
B) The standards are applicable to Asia exclusively.
C) ISO 9000 is a certification that companies get for their environment-friendly initiatives.
D) The standards require each company to define and document its own quality processes.
Q:
A common market requires that member nations create a common currency.
Q:
________ requires each individual to be focused on the quality of his or her own output.
A) Total quality management
B) Quality-of-life index
C) Integrated business planning
D) Organizational restructuring
Q:
Countries belonging to a free trade area must concede a certain amount of their national autonomy to the supranational union of which they are a part.
Q:
Which of the following statements is true regarding total quality management (TQM)?
A) TQM emphasizes on a single effort at the start to improve the quality of its products.
B) TQM largely increases the responsibility on each individual to focus on quality.
C) TQM philosophy initially took hold in the U.S.
D) TQM applies solely to an employee's activities based inside a factory.
Q:
In a free trade area, each country can maintain whatever policy it sees fit against nonmember countries.
Q:
Which of the following is established by a company that builds an entirely new facility?
A) a divestiture
B) a shadow economy
C) a greenfield investment
D) a shell corporation
Q:
A common market area is the greatest extent of national integration.
Q:
Which of the following is a barrier to buying products from international suppliers?
A) extremely low tariffs
B) additional transportation costs
C) lower flexibility to respond to market conditions
D) high political risk
Q:
A group of nations in a geographic region undergoing economic integration is called a regional trading bloc.