Question 1

Which of the following means of adaptation to political risk requires that a firm actively involve nationals in the management of its subsidiary?

Accepted Answer

A)   equity sharing
B)   participative management
C)   localization of the operation
D)   development assistance B

Question 2

Experts suggest that firms wanting to globalize through e-commerce must first localize,which means firms need to ________.

Accepted Answer

A)   use local suppliers, vendors, and distributors to manufacture products for the local market
B)   modify their products and services to meet the needs and interests of local cultures
C)   sell their products in a brick-and-mortar store before selling them through an e-market
D)   test their products and services in local markets before selling them over the Internet B

Question 3

________ results from the lessening of trade barriers and the increased flow of goods and services,capital,labor,and technology around the world.

Accepted Answer

A)   Economic integration
B)   Nationalization
C)   Protectionism
D)   Mercantilism A

Question 4

Privatization refers to the forced sale of an MNC's assets to local buyers with some compensation to the firm,perhaps leaving a minority ownership with the MNC.

Accepted Answer

A) True 
 B)False

Question 5

If a foreign-based firm borrows money from a host country bank as a hedge against being forced out of operation without adequate compensation,the firm is managing political risk with ________.

Accepted Answer

A)   local debt financing
B)   position control.
C)   development assistance
D)   adaptation

Question 6

SAARC is an agreement that came into force to bring faster growth,more jobs,better working conditions,and a cleaner environment for all as a result of increased exports and trade.

Accepted Answer

A) True 
 B)False

Question 7

What is the European Union (EU)? Discuss how the EU affects both Europe and international managers working in Europe.

Accepted Answer

The answer of What is the European Union (EU)? Discuss...

Question 8

Which two factors are primarily assessed when using the qualitative approach to measure a country's economic risk?

Accepted Answer

A)   the country's natural resources and its long-term national debt
B)   the competence of the country's leader and the economic policy direction
C)   the probability of terrorism and the likelihood that the country's debts will be repaid
D)   the country's purchasing power overseas and the consistency of the country's leadership

Question 9

Expropriation occurs when a local government seizes and does not provide any compensation for the foreign-owned assets of an MNC.

Accepted Answer

A) True 
 B)False

Question 10

Robert is a technology officer in an Umerian firm and he manages the firm's operations at its facility in Elador.Robert is considering the idea of installing new technology in the facility that would significantly improve productivity and reduce labor costs.Which of the following undermines the argument that Robert should install the new technology?

Accepted Answer

A)   Elador's government leaders encourage firms to install the most modern machinery available.
B)   The high school graduation rate in Elador is higher than in neighboring countries.
C)   Elador is currently experiencing a very high rate of unemployment.
D)   The firm's competitors recently installed the same technology.

Question 11

Which of the following best describes nationalization?

Accepted Answer

A)   outsourcing of governmental functions to private entities
B)   hiring preferences given to locals rather than expatriates
C)   government's gradual and subtle actions against a firm
D)   forced sale of an MNC's assets to local buyers

Question 12

Which of the following means of political risk reduction is best suited for firms that decide a high-risk environment is worth the potential returns?

Accepted Answer

A)   avoidance
B)   adaptation
C)   hedging
D)   dependency

Question 13

What methods are used by MNCs to protect intellectual property rights?

Accepted Answer

The answer of What methods are used by MNCs to...

Question 14

Which of the following terms refers to the integration of systems,processes,organizations,value chains,and entire markets using Internet-based technologies?

Accepted Answer

A)   horizontal integration
B)   e-business
C)   vertical integration
D)   technological leapfrogging

Question 15

Internet is a completely open platform and it does not have to abide by any laws.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a form of protectionist policies?

Accepted Answer

A)   patents
B)   tariffs
C)   foreign direct investment
D)   bribes

Question 17

Which type of country is most likely to use its investment laws to acquire appropriate technology?

Accepted Answer

A)   post-industrial country
B)   newly industrializing country
C)   less-developed country
D)   highly developed country

Question 18

Emerson is a global manufacturing company headquartered in St.Louis,Missouri.The company employs almost 130,000 workers at its 250 manufacturing facilities located on five different continents.Emerson manufactures a wide range of products including air-conditioning compressors,garbage disposers,and automotive parts.Emerson's Asian operations employ over 50,000 people at manufacturing facilities in Asia.Emerson needs to build a new manufacturing facility to produce automotive parts for cars manufactured in Detroit.Emerson executives are considering whether to build the new facility in China or in the U.S. Which of the following questions is LEAST relevant to Emerson's decision regarding where to build a new facility?

Accepted Answer

A)   How will China's underdeveloped infrastructure affect Emerson's ability to manufacture and ship products?
B)   How is China's political and economic agenda likely to affect Emerson's investment?
C)   What is the likelihood of expropriation occurring to Emerson if it builds in China?
D)   How will e-commerce affect Emerson's ability to export products from China?

Question 19

Which of the following best explains China's success in exporting?

Accepted Answer

A)   low costs and steady stream of capital
B)   geographic location in the world
C)   high educational standards
D)   close ties with Japan

Question 20

What is currency translation exposure? Provide an example to illustrate your answer.

Accepted Answer

The answer of What is currency translation exposure? Provide an...

Exam 1: Assessing the Environment: Political, Economic, Legal, Technological

Which of the following means of adaptation to political risk requires that a firm actively involve nationals in the management of its subsidiary?

Experts suggest that firms wanting to globalize through e-commerce must first localize,which means firms need to ________.

________ results from the lessening of trade barriers and the increased flow of goods and services,capital,labor,and technology around the world.

Privatization refers to the forced sale of an MNC's assets to local buyers with some compensation to the firm,perhaps leaving a minority ownership with the MNC.

If a foreign-based firm borrows money from a host country bank as a hedge against being forced out of operation without adequate compensation,the firm is managing political risk with ________.

SAARC is an agreement that came into force to bring faster growth,more jobs,better working conditions,and a cleaner environment for all as a result of increased exports and trade.

What is the European Union (EU)? Discuss how the EU affects both Europe and international managers working in Europe.

Which two factors are primarily assessed when using the qualitative approach to measure a country's economic risk?

Expropriation occurs when a local government seizes and does not provide any compensation for the foreign-owned assets of an MNC.

Which of the following best describes nationalization?

Which of the following means of political risk reduction is best suited for firms that decide a high-risk environment is worth the potential returns?

What methods are used by MNCs to protect intellectual property rights?

Which of the following terms refers to the integration of systems,processes,organizations,value chains,and entire markets using Internet-based technologies?

Internet is a completely open platform and it does not have to abide by any laws.

Which of the following is a form of protectionist policies?

Which type of country is most likely to use its investment laws to acquire appropriate technology?

Which of the following best explains China's success in exporting?

What is currency translation exposure? Provide an example to illustrate your answer.