Q&A Hero

Q: Food and utilities are examples of income-inelastic products.

Q: The measures of a nation's well-being other than the financial wealth accumulated through exports are irrelevant according to ________. A) mercantilism B) absolute advantage theory C) factor proportions theory D) new trade theory

Q: ________ says that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports. A) Absolute advantage theory B) Factor proportions theory C) Mercantilism D) Communism

Q: A product for which demand increases more relative to an increase in income has an income-elasticity coefficient less than 1.

Q: Discuss the volume of international trade, and explain the role government and chance play in the growth of international trade.

Q: A product's income-elasticity refers to the sensitivity of the price of a product relative to changes in the income of consumer population.

Q: Companies usually create a single marketing plan to be used in all markets in which they sell their products.

Q: Describe the potential benefits of international trade. Why would a nation trading with a neomercantilist country be at a disadvantage?

Q: Discuss the dangers of trade dependency.

Q: Products made in emerging countries tend to be evaluated more positively than those from relatively more developed countries.

Q: According to Adam Smith, international trade should be restricted by tariffs and quotas in order to give a country an absolute advantage.

Q: Volatile currency values make it easier for firms to predict future earnings accurately in terms of the home-country currency.

Q: Trade deficit occurs when the value of a country's imports is greater than the value of its exports.

Q: Regulations for the purpose of environmental protection generally increase short-term production costs.

Q: When a country's currency is weak relative to other nations, domestic products are more expensive than imports.

Q: Governments bar international companies from entering economic sectors like energy exploration for security reasons.

Q: Trade in services tends to be relatively more important for the world's richest countries.

Q: Consumer products such as toothpaste and soft drinks undergo extensive adaptation to suit local preferences.

Q: Most of the world's merchandise trade is composed of trade in agricultural products.

Q: Cultural elements can influence what kinds of products are sold and how they are sold in a country.

Q: The value of trade passing through the borders of all countries exceeds the amount of goods and services they produce.

Q: International trade is the purchase, sale, or exchange of goods and services across national borders.

Q: A country's climate plays an important role in determining the basic demand for a company's product.

Q: In reviewing his fulfillment process, Jack realizes that different customers opt for different types of shipping based on their preferences. Which of the following would most likely help Jack provide better shipping service to his customers? A) introduce overnight delivery but at a very high cost B) reduce costs by implementing a cheaper but slower delivery method C) implement a universal delivery method to capitalize on efficiency gains D) offer customers a choice of delivery methods with different speeds and costs

Q: The first step in the identification of potential markets is an assessment of the basic demand for a product.

Q: The condition that results when the value of a country's imports is greater than the value of its exports is called ________.A) a trade deficitB) economies of scaleC) a break-even pointD) absolute advantage

Q: The first step in the screening of potential markets is an assessment of the national business environment.

Q: A(n) ________ strategy deals with the primary and support activities in an organization that create value for customers. A) business-level B) department-level C) corporate-level D) international

Q: The condition that results when the value of a nation's exports is greater than the value of its imports is called ________. A) a trade deficit B) a trade surplus C) mercantilism D) dumping

Q: A ________ strategy often means designing products and promotions aimed at consumers who are either dissatisfied with existing choices or who want something distinctive. A) global B) stability C) low-cost leadership D) focus

Q: The danger of trade dependency is that ________. A) it often leads to the exploitation of developed countries B) political turmoils in a country might affect all dependent countries C) the countries involved in trade often get into rivalry over trade tariff issues D) it is difficult to end trade activities with current trade partners and find new trade partners

Q: The smallest portion of the total world trade comprises trade between ________. A) high-income and middle-income nations B) low-income and middle-income nations C) developed countries D) First World member countries

Q: A ________ strategy is one in which a company emphasizes on serving the needs of a narrowly defined market segment by being the low-cost leader, differentiating its product, or both. A) global B) focus C) stability D) retrenchment

Q: A majority of the total world merchandise trade occurs among ________. A) middle-income and low-income economies B) high-income economies C) newly industrialized countries D) emerging markets

Q: Which of the following is a characteristic based on which products are typically differentiated? A) brand loyalty B) brand equity C) product design D) product cost

Q: Most of the world merchandise trade is composed of trade in ________. A) minerals B) services C) manufactured goods D) agricultural products

Q: Which of the following business-level strategies should a company follow in order to charge a higher price for its products and enjoy greater customer loyalty? A) differentiation strategy B) stability strategy C) mass customization strategy D) retrenchment strategy

Q: The importance of trade for a nation can be measured by ________. A) examining the amount of wealth acquired by the national government through restrictive trade policies B) the living standards of people involved in only trade activities C) the number of acquired territories the nation has that serves as sources of inexpensive raw materials D) examining the volume of its trade relative to its total output

Q: A ________ strategy is one in which a company designs its products to be perceived by buyers as unique throughout its industry. A) differentiation B) stability C) low-cost leadership D) retrenchment

Q: Decreasing levels of customer loyalty to an organization's products is a major disadvantage of the ________ strategy. A) blue ocean B) stability C) low-cost leadership D) growth

Q: ________ refers to the purchase, sale, or exchange of goods and services across national borders. A) Domestic trade B) Foreign direct investment C) International trade D) Mercantilism

Q: Compare and contrast the business environments in China and Russia.

Q: A business-level strategy in which a company exploits economies of scale is called a ________. A) differentiation strategy B) stability strategy C) low-cost leadership strategy D) retrenchment strategy

Q: Why are many mixed economies converting to market-based systems? How does the role of government change when a mixed economy transitions to a market economy?

Q: Which of the following strategies works best for an organization that practices mass production and mass-marketing? A) differentiation strategy B) focus strategy C) low-cost leadership strategy D) retrenchment strategy

Q: Which of the following strategies is designed to guard an organization against change? A) stability strategy B) growth strategy C) retrenchment strategy D) differentiation strategy

Q: Given the lack of available hard currency, Russian businesses often use goods and services as payment for other products they buy from abroad. This practice is referred to as ________. A) letter of credit B) fiat money C) barter D) guanxi

Q: Which of the following challenges is Cleanshot most likely to face in Russia? A) organized crime B) too many competitors C) low demand for the products of non-Russian companies D) fading underground economy

Q: A company that is selling unprofitable business units is most likely following a ________ strategy. A) growth B) retrenchment C) stability D) combined

Q: Describe the Foreign Corrupt Practices Act, and explain how it relates to corporate social responsibility.

Q: A company that is closing factories with unused capacity and laying-off workers is most likely following a ________ strategy. A) growth B) retrenchment C) stability D) combined

Q: Explain the risk-management method of "adaptation." Why would it most likely be less costly and time-consuming to pursue this method in a nation that practices civil law rather than in a nation that practices common law?

Q: A retrenchment strategy is designed to ________. A) encourage growth through joint ventures B) reduce the scale or scope of a corporation's operations C) focus exclusively on internally generated growth D) guard against organizational change

Q: Explain each of the four means of incorporating risk into business strategies when companies employ an adaptation strategy.

Q: A strategy designed to reduce the scale or scope of a corporation's business is called a ________ strategy. A) growth B) differentiation C) retrenchment D) stability

Q: Organic growth refers to an organization's corporate strategy that relies on growth ________. A) through mergers and acquisitions B) based on strategic alliances C) generated internally D) achieved from joint ventures

Q: Briefly explain each of the three main methods companies use to manage political risk.

Q: U.S. individuals are exempt from being prosecuted for bribery under the Foreign Corrupt Practices Act.

Q: Which of the following strategies is designed to increase the scale or scope of a corporation's operations? A) differentiation strategy B) growth strategy C) stability strategy D) retrenchment strategy

Q: A growth strategy is designed to ________. A) guard against organizational change B) increase the scale or scope of a corporation's operations C) support the stability strategies of an organization D) support the retrenchment strategies of an organization

Q: Political risk tends to be higher in developing countries compared to industrialized countries.

Q: Companies involved in more than one line of business must first formulate a ________ strategy. A) business-level B) department-level C) corporate-level D) global-level

Q: Political risk insurance is more likely to be purchased by MNEs that apply an active approach to political risk management.

Q: The main benefit of a global strategy is that it allows a company to ________. A) closely monitor buyer preferences in each local market B) save costs due to product and marketing standardization C) customize its products and services D) respond effectively to emerging buyer preferences

Q: Expropriation is the term used to describe a host-country government seizing the assets of a foreign corporation and providing no compensation in return.

Q: A ________ strategy can create cost savings due to product and marketing standardization. A) retrenchment B) multidomestic C) blue ocean D) global

Q: International companies often must customize products to comply with local standards if they are to do business in a particular country.

Q: Managers who take an active approach to political risk management are likely to rely on statistical modeling to quantify the precise degree of political risk.

Q: Global products are most commonly seen in industries where there is ________. A) little convergence of buyer preference across national borders B) low pressure to contain costs C) high demand for customized products D) significant price competition

Q: The Foreign Corrupt Practices Act forbids U.S. companies from bribing government officials or political candidates in other nations.

Q: Companies that typically design promotional campaigns and advertising strategies at their headquarters are most likely to follow a ________ strategy. A) retrenchment B) global C) blue ocean D) multidomestic

Q: Russia is in transition from ________. A) a capitalist economy to a mixed economy B) a centrally planned economy to a free-market economy C) a market economy to a centrally planned economy D) a mixed economy to a centrally planned economy

Q: Companies that produce entire inventories of products or components in one or very few optimal locations are most likely to follow a ________ strategy. A) retrenchment B) global C) blue ocean D) multinational

Q: Guanxi, in the Chinese business context, means ________.A) bribing government officialsB) manufacturing inexpensive productsC) personal relationshipsD) preference for communism

Q: Offering the same products using the same marketing strategy in all national markets of an organization is referred to as a ________ strategy. A) global B) retrenchment C) multinational D) blue ocean

Q: An individual from a country with a low degree of political risk would most likely be from ________. A) Venezuela B) Canada C) Zimbabwe D) Iraq

Q: A ________ strategy typically increases the cost structure for international companies and forces them to charge higher prices to recover such costs. A) retrenchment B) global C) multidomestic D) blue ocean

Q: An individual from a country with a high degree of political risk would most likely be from ________. A) Canada B) Singapore C) Iraq D) Japan

Q: The main drawback of a multinational strategy is that it does not allow a company to ________. A) exploit scale economies in product development or marketing B) closely monitor buyer preferences in each local market C) modify its products except for the most superficial features D) respond quickly and effectively to emerging buyer preferences

Q: The main benefit of a multidomestic strategy is that it ________. A) exploits scale economies in product development and marketing B) is cost-saving due to product and marketing standardization C) takes advantage of location economies D) responds quickly and effectively to emerging buyer preferences