CHAPTER 1 NATURE OF INTERNATIONAL MARKETING: CHALLENGES AND OPPORTUNITIES MULTIPLE CHOICE 1.

According to the textbook, international marketing is "the multinational process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives." The definition fails to recognize a) nonprofit marketing b) business-to-business marketing (X) c) consumer marketing d) integration of the 4 Ps 2. According to the textbook, international marketing is "the multinational process of planning and executing the conception, pricing, promotion, and distribution of ideas, good, and services to create exchanges that satisfy individual and organizational objectives." The definition fails to recognize a) product b) place c) promotion d) pricing e) all of the 4 Ps are recognized (X) 3. The marketing mix (the 4 Ps of marketing) does not include a) product b) place c) practicality (X) d) promotion 4. The study of international marketing should focus primarily on a) product b) place c) promotion d) pricing e) all of the above (X) 5. To U.S. students, French marketing is a) domestic marketing b) foreign marketing (X) c) comparative marketing d) international marketing 6. This kind of international marketing study contrasts two or more marketing systems to identify similarities and differences. a) domestic marketing b) foreign marketing c) comparative marketing (X) d) extensive marketing 7. For practical purposes, the difference between the concept of international marketing and the concept of multinational marketing is a) significant b) insignificant (X) c) meaningful d) adequate 8. Marketing is not needed in 1

a) socialist countries b) communist countries c) less developed countries d) developed countries e) marketing is needed in all countries (X) 9. MNCs are often associated with a) exploitation b) ruthlessness c) power d) bigness e) all of the above (X) 10. Midsize German companies' contribution to Germany's export success is a) significant (X) b) minor c) uneven d) unpredictable 11. This definition of MNC focuses on the number of countries in which the firm does business and the citizenship of corporate owners and top management. a) structure (X) b) performance c) behavior 12. This definition of MNC depends on the contribution of foreign operations in terms of earnings, sales, and assets. a) structure b) performance (X) c) behavior 13. A strong orientation toward the home country is an indication of a) ethnocentricity (X) b) polycentricity c) geocentricity 14. This is the feeling within a culture that its values are superior to those of foreign cultures. a) ethnocentricity (X) b) polycentricity c) geocentricity 15. When a firm uses the same marketing strategies abroad as that used at home, it probably is a) ethnocentric (X) b) polycentric c) geocentric d) unicentric 16. When a U.S. firm leaves local managers of its foreign subsidiary alone by assuming that the foreign market is difficult for outsiders to understand, this is a reflection of a) ethnocentricity b) polycentricity (X) c) geocentricity 17. Decentralization is likely in the case of a) ethnocentricity b) polycentricity (X) c) geocentricity 2

18. This kind of orientation often results in duplication of effort among overseas subsidiaries. a) ethnocentricity b) polycentricity (X) c) geocentricity 19. When companies believe that, even though countries may differ, the differences can be understood and managed, such firms are a) ethnocentric b) polycentric c) U.S.-centric d) geocentric (X) 20. These firms allocate corporate resources without regard to national frontiers and do not hesitate making direct investment abroad. a) ethnocentric firms b) polycentric firms c) geocentric firms (X) 21. Beatrice Foods may want to give up its U.S. citizenship because of tax advantages abroad. This kind of thinking is a) ethnocentric b) polycentric c) geocentric (X) 22. This kind of company does not identify itself with a particular country and may even prefer to lose its national identity. a) ethnocentric b) polycentric c) geocentric (X) 23. Firms that combine aspects of centralization and decentralization are a) ethnocentric b) polycentric c) geocentric (X) 24. Because of trade (and imports), inflation a) increases b) decreases c) moderates (X) d) disappears 25. As a result of international trade and global interdependence, countries' inflation rates tend to a) increase b) moderate (X) c) be unpredictable d) be unstable TRUE OR FALSE 1. Marketing is the process that encourages and facilitates an exchange between two parties. (T) 3

The degree of overlap of the countries' sets of uncontrollable variables will dictate the extent to which the 4 Ps must change. Since marketing is a universal activity. any subtle difference between the concept of international marketing and the concept of multinational marketing is insignificant. (F) 20. place (distribution) is thus more important than the other 3 Ps of the marketing mix. Marketing is not needed in less developed countries.. (F) 3. multinational marketing and international marketing are essentially the same thing. (F) 15. Marketing principles are applicable in certain countries only. the marketing mix derived from it that is employed successfully in the United States will also be universally effective when this marketing mix is applied to the non-U. (T) 18. Domestic marketing and international marketing are similar in nature but not in scope. (T) 6. Domestic marketing and international marketing. but marketing strategies (marketing mix) are not. Universal marketing principles imply the applicability of a uniform marketing mix for all markets. (T) 17.S. (F) 19. MNCs are often associated with exploitation and ruthlessness. Marketing principles are likely to be more universal than marketing strategies (i. Marketing principles theories are probably universal. consumers in all parts of the world can be satisfied in exactly the same way. The distinction between international marketing and multinational marketing is insignificant in practice. (F) 21. For practical purposes. (T) 4 . Although marketing principles are generally universal. place (distribution) was and is still the primary focus of the study of international marketing. (T) 16.2. (F) 14. When a certain marketing principle is universal. Marketing is a universal activity. (T) 5. (T) 11. Because of the distance between markets. (F) 4. (T) 7. marketing mix). Because international marketing requires that a product is exported (moved). International marketing is domestic marketing on a larger scale. markets. From business firms¶ perspective. (T) 12. while differing in scope. (F) 10. the marketing strategies derived from such principles are not necessarily so. China and Russia do not need marketing. are similar in nature.e. (F) 9. (F) 8. (F) 13.

(T) 25. Japanese multinationals have been reluctant to commit their corporate resources to overseas assets. Internationalization is a one-dimensional concept. MNC is a function of size). (F) 5 . (T) 40. (F) 37. MNCs act as an instrument to efficiently utilize the world's resources. (F) 31. its corporate size matters--but only up to a certain extent. Being international (multinational) is a matter of degree. midsize German companies do not contribute significantly to Germany's export success. (T) 36. Polycentricity usually results in uniform marketing. MNCs facilitate economic balance by serving as an efficient instrument of effective production and distribution of goods and services. (F) 28. a company must be big (i.g. Being international is an absolute rather than a matter of degree. In order to be an MNC. (F) 35. (F) 27. Evidence shows that globalization encourages location of polluting industries in coun tries with low environmental regulations. MNCs create social benefits by facilitating economic balance. (F) 34. (T) 38. There is evidence that geocentricity and companies' international practices (e. (T) 33.e. (F) 32. (T) 30. (F) 42. (T) 24. For a firm to operate internationally and successfully. (T) 29. MNC is a one-dimensional concept. The relationship between a firm's degree of multinationality and its market performance is linear and positive. Geocentric firms combine aspects of centralization and decentralization. international trade propensity) are related. (F) 23... A strong orientation to the host country is known as geocentricity. Compared to large German corporations. A geocentric firm does not identify itself with a particular country. Ethnocentricity and centralization tend to be related. (F) 41. (T) 26.22. (T) 39. A company is polycentric when it thinks internationally. The relationship between a firm's degree of multinationality and its market performance is curvilinear.

(T) CHAPTER 2 TRADE THEORIES AND ECONOMIC DEVELOPMENT MULTIPLE CHOICE 1. a commodity that can be produced at a lower cost than can other nations. Import quotas depress price competition and ignite inflation. (T) 49. International trade tends to create inflationary pressures. (F) 44. (T) 46. a country with the absolute disadvantages in all products should specialize in the product that it has a) absolute advantage b) more comparative advantage c) less comparative advantage d) least comparative disadvantage (X) e) greatest comparative disadvantage 8. (T) 47. while Australia produces 10 of A and 20 of B. (T) 45.43. According to the principle of relative advantage... (F) 50. a) least b) greatest (X) c) equal d) somewhat higher 6. Foreign markets allow a firm to diversify its risk posed by cyclical/seasonal factors. comparative advantage. a country should import a commodity that can be only produced at a . A country should export a product that it can produce at a lower cost than other nations can... This is the principle of a) absolute advantage (X) b) comparative advantage c) relative advantage d) factor endowment 3.. a) higher (X) b) lower c) same d) cost is irrelevant 5. The value of international marketing is not so much that it helps us to understand people abroad but rather that it helps us to understand ourselves more. According to the principle of comparative advantage. a) export (X) b) import c) both export and import d) neither export nor import 4. Trade is a a) zero sum game b) positive sum game (X) c) negative sum game d) all of the above 2.. It is reasonably reliable to employ a single-variable measure to characterize the internationalization concept. a country should .. International trade minimizes the problem of inflation.. the United States can produce 20 items of product A and 30 items of product B... (F) 48.. Which product should Australia specialize in? a) A b) B (X) 1 . There is no empirical evidence to support a hypothesis that some firms are ³born global´ in the sense that their mission from the outset is to become multinationals. a country should export a product for which it has the least a) absolute advantage b) absolute disadvantage c) comparative advantage d) comparative disadvantage (X) 7. On any certain day.. According to the principle of absolute advantage. cost than can other nations. According to the principle of absolute advantage. International marketing is a subset or special case of domestic marketing. The principle of relative advantage states that a country should produce a product with the .

a) customs union b) free trade area (X) c) common market d) political union 2 . it is desirable to have economic cooperation on a smaller scale. a) labor b) land c) capital (X) d) technology 13. The evidence that the United States exports labor-intensive goods and imports capitalintensive goods is known as a) principle of absolute advantage b) principle of relative advantage c) Leontief Paradox (X) d) factor endowment 14. a) labor b) land c) capital d) all of them are considered (X) 12. This is the principle of a) absolute advantage (X) b) comparative advantage c) relative advantage d) factor endowment 10. Trade theories assume that trade is a) unilateral b) bilateral (X) c) multilateral 15. This is known as a) theory of the best policy b) factor endowment theory c) theory of the second best (X) d) theory of relative advantage 17. Since worldwide free trade is impossible. This production factor is not China's comparative advantage. Comparative advantage is a) static b) semi-static c) dynamic (X) d) semi-dynamic 11. The theory of factor endowment considers this factor of production.c) none of the above d) A and B equally 9. This kind of economic cooperation requires countries to remove duties among themselves but allows member countries to maintain their own tariffs against outsiders. Classical trade theories assume a) consumer homogeneity across national markets (X) b) product heterogeneity c) existence of trade restrictions d) importance of marketing activities 16. A country should export a product that it can produce at a lower cost than other nations can.

When countries agree to remove restrictions on the movement of factors of production. and irrevocably fixed exchange rates. This type of economic cooperation requires convertible currencies.18. This is not a characteristic of monetary union. An economic union requires a) uniform tariff rates among member countries b) uniform tariffs against outsiders c) removal of restrictions on movement of factors of production d) harmonization of the national economic policies (X) 26. This kind of economic cooperation makes it necessary for a foreign firm to enter a member country with the least nontariff restrictions. NAFTA represents this type of economic cooperation. freedom of capital movements. a) free trade area b) customs union c) common market d) monetary union (X) 24. a) total and irreversible convertibility of currencies b) complete freedom of capital movements c) revocably fixed exchange rates (X) 23. their economic cooperation is known as a) customs union b) free trade area c) common market (X) d) political union 22. except a) complete freedom of capital movements b) total and irreversible convertibility of currencies c) irrevocably fixed exchange rtes with some fluctuation (X) 3 . If a single currency is not possible. Monetary union requires convertibility of currencies to be a) total but reversible b) total and irreversible (X) c) partial and reversible d) partial and irreversible 25. a monetary union must adopt these currency conditions. This kind of economic cooperation requires countries to have identical tariffs against outsiders. a) customs union (X) b) free trade area c) common market d) political union 20. a) free trade area b) customs union c) common market (X) d) political union 21. a) free trade area (X) b) customs union c) common market d) monetary union 19.

If one nation has absolute advantage for all products. (F) 3. If the domestic exchange ratio of the United States and that of Canada are identical. (T) 7. Because of trade. a) partial freedom of capital movements (X) b) total and irreversible convertibility of currencies c) irrevocably fixed exchange rates with no fluctuation 28. but they do not determine what items to export or import. one market´ is the description of this type of economic cooperation. According to the principle of relative advantage. ³One money. Trade is a zero sum game. the two different domestic exchange ratios will be replaced by a new ratio called the world market exchange ratio or terms of trade. (F) 2. The principle of absolute advantage states that a country should import a commodity that can be produced at a lower cost than can other nations. The European Union members want to adopt a single currency in order to form this kind of regional cooperation. (F) 4. absolute production costs are irrelevant. a) free trade area b) common market c) economic union (X) d) political union 29. Malaya and Singapore formed a new nation called Malaysia in the 1960s. As long as the domestic exchange ratio of the United States and that of Canada are identical. This type of cooperation is a) common market b) monetary union c) economic union d) political union (X) e) customs union TRUE OR FALSE 1. (F) 8. (F) 5. (T) 6. The principle of relative advantage suggests that a country should produce a product with the least comparative disadvantage. the United States should trade with Canada even though the United States may have absolute advantage in all products. trade will not take place. (T) 9.27. the United States should not trade with Canada even though the United States may have absolute advantage in all products. Relative production costs can determine whether trade should take place. This is not a characteristic of a monetary union. a) free trade area b) customs union c) common market d) economic union (X) 30. (T) 4 .

(F) 25. (T) 16. According to Michael Porter's "diamond. (T) 18. (T) 11. According to the factor endowment theory. A country's labor cost may be absolutely high and yet relatively low. Based on the factor endowment theory. According to Michael Porter's theory of the Competitive Advantage of Nations. (T) 17. (T) 27. According to the theory of factor endowment. (T) 22. (T) 14. The evidence that the United States exports labor-intensive goods and imports capitalintensive goods is known as Leontief Paradox. A country that has absolute advantage in all products has nothing to gain from trading with other nations. (T) 13. Michael Porter's "diamond" advocates that a nation should not cluster the industries. there are four major determinants of international competitiveness. and each determinant has no effect on the other determinants. One basic assumption of the principles of absolute and relative advantage is that the advantage is solely determined by labor. Classical trade theories assume that factors of production are immobile. (T) 5 . (F) 19. Countries can remain competitive in spite of their higher wages. the various regions of the world are equally well endowed with regard to production factors. (T) 28. Comparative advantage is a dynamic concept. Comparative advantage can be determined by abundance of factor endowments. a country¶s comparative advantage is in the production factor that it lacks. (T) 21. Production factors are now considered more mobile than previously assumed." a nation's competitive industries should be clustered. The theory of factor endowment holds that the inequality of relative prices is a function of regional factor endowments. German and Japanese firms are successful in international trade because of their low labor costs. Developed countries tend to trade among themselves rather than with developing countries. (F) 20. Countries have different costs and prices because they differ in the supply of the factors of production.10. (T) 24. International trade is a function of the unequal domestic exchange ratios. (F) 23. developing countries should trade more with developed countries rather than among themselves. (T) 26. (T) 29. (F) 12. (F) 15.

a) single-stage sales tax b) value added tax c) cascade tax (X) d) excise tax 9. (T) 40. (T) 32. (T) 6 CHAPTER 3 TRADE DISTORTIONS AND MARKETING BARRIERS MULTIPLE CHOICE 1. Perhaps. This is not a nontariff barrier. (F) 33. Economic cooperation results in trade creation as well as trade diversion. An economic and monetary union (EMU) envisages total fiscal and monetary integration. (F) 37. Capital. For an economic and monetary union (EMU) to function effectively. as a factor of production. Economic union eliminates foreign exchange transaction costs and risks. This kind of tax is collected at each point in the distribution chain and levied on the total value of a product. a revenue tariff is a) lower (X) b) higher c) about the same 4. Economic integration encourages trade liberalization internally. Monetary union means adoption of multiple currencies. The duties stated as a fixed percentage of the invoice value are a) specific duties b) ad valorem duties (X) c) compound duty d) combined rates 7. It is very unlikely that a political union on a global scale can ever become reality. Compared to a protective tariff. A penalty duty to offset a subsidy is a) protective tariff b) revenue tariff c) tariff surcharge d) countervailing duty (X) e) variable duties 3. member countries should have different economic conditions. the most credible argument for protectionist measures is a) keeping money at home b) reducing unemployment c) enhancing national security d) equalizing cost and price e) protecting infant industry (X) 2. a) documentation b) quota c) product inspection d) countervailing duties (X) 1 .30. while it promotes trade protection externally. "Social dumping" is a movement of business and jobs away from areas with high wages to areas with less organized labor forces and weak social-welfare policies. is mobile. (T) 38. (F) 34. The United States uses a) single-stage sales tax (X) b) value added tax c) cascade tax d) excise tax 8. (T) 31. Classical trade theories ignore the marketing aspect of trade. (T) 39. Compared to tariff surcharge. (T) 36. Countries forming a free trade area must have joint boundaries. countervailing duties are a) temporary b) permanent (X) c) equal in terms of duration 5. (T) 35. A duty of $1/gallon is a) specific duties (X) b) ad valorem duties c) compound duty d) combined rates 6.

These barriers are least transparent. This is not a form of subsidy. this kind of quota is used. South Korea's chaebol and Japan's keiretsu are examples of a) tariffs b) nontariff barriers c) private barriers (X) d) government barriers 18 . a) tariffs b) nontariff barriers c) government barriers d) private barriers (X) 17. This type of trade barriers is easiest to deal with. This OMA is a(n) a) absolute quota b) tariff quota c) voluntary quota (X) 15.68 million units per year. When a country permits an import of limited quantities at low rates of duty but subjects an excess amount to a much higher rate. a) tariffs (X) b) nontariff barriers c) private barriers d) international barriers 16. GATT's Subsidies Code prohibits the use of export subsidies on a) nonprimary products (X) b) primary products c) both primary and nonprimary products d) neither nonprimary nor primary products 12. This world organization monitors trade and resolves disputes. This kind of quota is the most restrictive. a) cash b) interest rate c) tax d) freight and infrastructure e) all of them are subsidies (X) 11. a) WTO (X) b) GSP 2 . a) absolute quota (X) b) tariff quota c) voluntary quota d) VER 13.e) license 10. In the mid-1980s. a) absolute quota b) voluntary quota c) relative quota d) tariff quota (X) 14. Japan signed an orderly marketing agreement (OMA) restricting its auto exports to the United States to 1.

Protectionism is ineffective in reducing unemployment. This world organization wants to achieve a broad. A cartel is legal in the United States. (T) 3 . It is debatable whether the United States is the most liberal nation in promoting free trade. and its goal is to encourage development in Third World countries and enhance their export positions. This organization does not allow a nation to veto a panel¶s decision a) GATT b) WTO (T) c) UN d) NAFTA 21. (T) 8. and free worldwide system of trading. A nation can never be completely self-sufficient. The mere existence of a government can distort international trade even without tariffs or other trade restrictions. (F) 7. multilateral. (T) 5. a) WTO (X) b) GSP c) UNCTAD d) MFN 20. Countervailing duties are imposed on imported products that are subsidized by foreign governments. This organization is a permanent organ of the United Nations General Assembly. The system which gives LDCs' exports a preferential treatment is called a) GATT b) GSP (X) c) UNCTAD d) MFN 23. cost/price equalization is very unlikely. (T) 4. Without trade. (T) 6. a) GATT b) GSP c) UNCTAD (X) d) IMF 22.c) UNCTAD d) World Bank e) IMF 19. Protectionist policies rarely achieve their objectives. The United States promotes economic development in some 140 poor countries by making it easier for them to export to the United States under a) IMF b) GATT c) GSP (X) d) MFN TRUE OR FALSE 1. (T) 2. (T) 3.

(T) 16. Only a small number of countries use VAT. (T) 11. (T) 25.. Affluent countries have been heavily subsidizing their agricultural businesses. a quota is more desirable than a tariff. (T) 4 . (F) 23. Compared to nontariff barriers.e. (F) 15. (F) 13. manufactures). (F) 12. (F) 28. (T) 24. farm products) but not on nonprimary products (i. A trade barrier should be made transparent. (F) 17. (T) 20. GATT's MFN (most favored nation) principle moves countries away from multilateral bargaining to bilateral bargaining. affluent countries do not significantly subsidize their agricultural businesses. noncumulative tax on consumption. VER and OMA are used to circumvent GATT's market safeguard of the most-favored-nation principle. A value-added tax cannot be rebated on exports. GATT's Subsidies Code prohibits the use of export subsidies on primary products (e. the parent firm should bill its subsidiary for royalties. The MFN (Most Favored Nation) principle and the NTR (Normal Trade Relations) status are the same thing. The most-favored-nation principle allows a country to give preferential treatment to domestic companies while discriminating against foreign companies. and engineering fees. Unlike developing countries. From a policy standpoint. The use of VAT affects only about a quarter of the world's population. (F) 18. The "national treatment" provision of the Government Procurement Code allows the signatory nations to give preferential treatment to their own citizens/suppliers. A value-added tax is a multi-stage. (F) 29. detailed product specifications are necessary to treat all bidders fairly. (F) 14. (F) 10. (F) 21. When a foreign subsidiary is not allowed to freely remit the profit to its parent. Because all parties and suppliers must adhere to the same product specifications. (F) 27. The most-favored-nation principle allows a country to give preferential treatment to the other member nations of the same free trade area or customs union. (F) 26. private barriers are pretty much transparent.9.. Duties "according to value" of the imported goods are specific duties. Manufactured products are not allowed by GATT to be subsidized. management fees. (F) 22. (T) 19. Tariffs are more nontransparent than nontariff barriers.g.

(T) 38. (T) 46. U. trade policy is guided by the crowbar theory which states that foreign markets do not open except under threat. (T) 35. government intervention is appropriate because the development of a certain industry has a positive impact on a broader segment of the economy. (F) CHAPTER 4 POLITICAL ENVIRONMENT MULTIPLE CHOICE 1.S. a) multiplicity of politics b) absolutist system c) capitalism d) dependency (X) 2. North Korea employs this system of government. the WTO has less authority to settle trade disputes. According to the ³positive externalities´ assumption.. selling nations). Positive externalities are usually presumed than documented. (F) 36. (T) 31. a) single-party b) dominated one party (X) . (F) 32. (T) 34. thus leaving them undeveloped. Countries that protect domestic economies against international competition have experienced major economic losses. (F) 42.S. There is no evidence that outward orientation is superior to inward orientation in terms of economic growth. the WTO is more permanent and legally secure. Unlike its predecessor (GATT). the most favored nation principle is weakened because countries are allowed to retaliate against a certain country on an individual basis. government is a) parliamentary (X) b) absolutist c) closed d) constitutional 3. (F) 44. Based on GATT's recent rounds of negotiation. (F) 37. The U. GSP is the tariff preference system employed by less developed countries to give preferential treatment to other less developed countries. This theory states that advanced countries extract surplus value from their less-developed counterparts. The former Soviet Union used to have this system of government. GSP is the U. There is strong evidence that the United States is less unfair in trade than other countries. Countries tend to be protectionist because they are able to shift the costs of protection to the others (i. GATT has been replaced by the World Trade Organization. (T) 47. (T) 33. (F) 45. (T) 48.S. Unlike GATT. Germany and Israel have this system of government.e. system which gives less developed countries' exports a preferential treatment.30. (F) 39. The CBI (Caribbean Basin Initiative) reduces the benefits of GSP to designated countries in the Caribbean Basin region. The Multi-Fiber Arrangement (MFA) removes trade barriers against LDC exporters. a) single-party b) dominated one party (X) c) two-party d) multiparty 5. (F) 41. (T) 43. The Uruguay Round of multilateral trade negotiations was concluded successfully as originally scheduled due to countries' recognition of the importance of free trade. The World Trade Organization allows a nation to veto a decision of the WTO's panel. The quantitative effects of the Uruguay Round should benefit almost all countries in the long run. (F) 40. a) single-party b) dominated one party c) two-party d) multiparty (X) 4. There is no evidence that outward-oriented trade policy produces greater economic success than inward-oriented policy.

" a) a communist philosophy b) an active government role in economic planning c) bureaucratic political/economic systems d) market-oriented economy (X) 9. Sweden has adopted this economic system. 1 . a) capitalism b) socialism c) communism (X) d) modified communism 8. a) majoritarianism (X) b) proportionality c) single-party system d) dominated one-party system 7. This electoral system has lower spending on social security and welfare.c) two-party d) multiparty 6. This is not a characteristic of "centrally planned economies. Government interference or participation in business activities is at the maximum for this economic system.

This country is an example of frontier capitalism. Personal capitalism is most common in a) the United States b) Germany c) the United Kingdom (X) d) Japan 17. Germany is an example of this type of capitalism. a) China b) Russia c) Cambodia d) all of the above (X) 18. a) frontier b) personal c) cooperative (X) d) managerial 15.a) capitalism b) socialism (X) c) communism d) modified communism 10. a) China (X) b) Japan c) Canada d) Mexico 19. The kind of capitalism that took place in the United States is known as a) cooperative capitalism b) personal capitalism c) managerial capitalism (X) d) active capitalism 13. The market-oriented system is called a) capitalism (X) b) socialism c) communism d) modified communism 11. 2 . a) frontier b) personal c) communitarian/cooperative d) managerial 16. The United Kingdom practices a) cooperative capitalism b) personal capitalism (X) c) managerial capitalism d) modified capitalism 14. Countries all over the world have been moving in the direction of this economic system. This type of capitalism requires companies to have a social purpose and consider interests of all stakeholders. This form of capitalism is practiced when communist or socialist countries experiment with capitalism or when their government agencies engage in production for profit. a) capitalism (X) b) socialism c) communism d) modified communism 12. This country is an example of frontier capitalism.

g. The Chinese government's seizure is known as a) confiscation (X) b) expropriation c) domestication d) creeping expropriation 24. the action is known as a) predomestication b) country risk c) creeping expropriation (X) d) nationalization 28. When a government forces foreign-held companies to partially or totally sell ownership to local citizens.S. This economy bears a great resemblance to laissez faire which is the purest form of capitalism. profit).. a) Hong Kong (X) b) Japan c) the United States d) Germany 21. it uses a) confiscation b) nationalization c) expropriation d) domestication (X) 23. a) general instability risk b) ownership/control risk c) operation risk d) transfer risk (X) 26. When the government changes investment laws and the changes adversely affect foreign investors' investment rights (e. The U. Expropriation is an example of a) general instability risk b) ownership/control risk (X) c) operation risk d) transfer risk 25. This concept emphasizes cooperation.a) managerial b) personal c) cooperative d) frontier (X) 20. A government's taking ownership of a property with some compensation is a) confiscation b) expropriation (X) c) nationalization d) domestication 22. A set of actions whose cumulative effect is to deprive investors of their fundamental rights in the investment is a) predomestication b) country risk c) creeping expropriation (X) d) nationalization 27. The claims stemmed from the Chinese government's seizure of American property after the communists took over in 1949. This kind of risk applies to a host government's future acts that might restrict a subsidiary's payment to the parent firm. 3 . ownership. Congress approved the normalization of economic relations with China only after a satisfactory claims settlement.

Constitutional hereditary monarchy is a form of a parliamentary government. The urge to stand alone is a) monostasy (X) b) systasy c) monopoly d) oligopoly 30. (T) 4. a) currency inconvertibility b) expropriation c) war.S. Political stability is a function of economic development. (T) 8. OPIC does not insure U. (F) 3. Because the former Soviet Union had elections and mandatory voting. (F) 6. a) AID b) IMF c) WTO d) MIGA (X) 32. Democracy is not necessarily a prerequisite for political stability. a) WTO b) MIGA (X) c) IMF d) GATT TRUE OF FALSE 1. investments against this type of political risk. Political stability is not necessarily a function of economic development.. Latin American countries) are not willing to embrace MNCs.. There is a direct relationship between democracy and economic progress. 5.e. This agency helps its more than 100 member states by promoting private investment in developing countries through insuring investment against political risk. revolution. Political stability is not possible without democracy. and civil strife d) all of the above can be insured (X) 31. (F) 4 . The mission of this organization is to promote private investment in developing countries through insuring investment against political risk.a) monostasy b) systasy (X) c) democracy d) pluralism 29.g. (T) 9. Research shows that spending on social security and welfare is lower under majoritarian systems (i. it was considered to have the parliamentary form of government. (T) 7. (T) 2. Dependency theory explains why LDCs (e. when compared to a system of proportionality).

(F) 15. The premium over the LIBOR rate indicates the extent of the political risk involved. Privatization is more a political process than an economic process. One way for a U. There is no working model that supports a ³functioning market economy with a massive state enterprise sector. (F) 18. Domestication means preventing a foreign company from entering a country for the purpose of marketing its goods. (T) 29. (T) 26. Capitalism is a market-oriented system. Euromoney¶s and Institutional Investor¶s country risk ratings are highly correlated and strongly agree on the creditworthiness of the assessed countries. The political threats to MNCs¶ foreign investments are more likely to be ³creeping expropriation´ than conventional expropriation. Monostasy encourages competition at the expense of cooperation. Capitalism is the best economic system to serve the nation¶s best interests in terms of social need. (T) 30. (F) 13. MNCs should expect a trend toward government ownership in the near future. Capitalism is the ideal system for all countries. (T) 12. (T) 27. The world has been witnessing a trend toward private ownership and away from government ownership. (F) 19. (F) 14. (F) 23. (T) 21. Euromoney¶s and Institutional Investor¶s country risk ratings can be replicated with a few economic variables.S. Expropriation/confiscation is unlikely to resurface in the near future. It is very unlikely for a country to adopt a system of either 100-percent capitalism or 100percent communism.´ (T) 25. (F) 5 . company to reduce political risk is to "Americanize" its customers abroad. (T) 28. Political risk cannot be insured. (F) 17. Sweden's socialism offers employees generous benefits and is responsible for the country's rapid economic growth. (T) 22. (T) 11. (T) 20.10. Capitalism should be used to lessen the existence of social class conflicts. The risk of nationalization will likely be more in the future. Centrally planned economies tend to have a nonmarket and weak economy. (F) 31. (T) 24. (T) 16. The breakup of the Soviet Union can be attributed to the shift toward monostasy to encourage modernization and competition.

protects an invention of a scientific or technical nature. a) patent (X) b) trademark c) copyright d) registration 1 .S. A European PLC is similar to a U. this type of payment is illegal. MIGA insures investment against both commercial and noncommercial (i. According to the Foreign Corrupt Practices Act.. a) common law b) code law (X) c) Muslim law d) civil law 2. This law system spells out the law on all legal questions and does not rely on previous court decisions. a) statute law b) code law c) civil law d) common law (X) 4..e. (F) CHAPTER 5 LEGAL ENVIRONMENT MULTIPLE CHOICE 1. A . This legal system relies on precedent and conventions.. The United States uses this legal system. OPIC assists economic development through investment insurance. This legal form of organization offers a limited liability advantage. (T) 33. The Foreign Corrupt Practices Act prohibits payments to officials who perform a) ministerial functions b) clerical functions c) discretionary functions (X) d) routine government functions 7. a) branch b) subsidiary (X) c) partnership d) sole proprietorship 6. a) branch b) sole proprietorship c) partnership d) corporation (X) 5. political) risk in developing countries.. a) statute law b) code law c) civil law d) common law (X) 3.. A symbol or name used to identify a product made or marketed by a particular firm is a) patent b) trademark (X) c) copyright d) registration 9. a) expediting payment b) payment to those who perform clerical functions c) payment to those who have discretionary authority (X) 8.32.

This country has adopted the first-to-invent system. Intellectual property does not include a) patent b) trademark c) copyright d) trade secret e) all of the above are intellectual property (X) 11. A common law country determines patent ownership by a) priority in use (X) b) priority in registration c) priority in foreign markets d) none of the above 16.10. the revocation of a patent in the country of original filing has no impact on its validity in other countries. a) France b) Japan c) the United States (X) d) Germany 18. (F) 2 . a) priority right b) national treatment c) independence of patents (X) d) centralized protection 15. An owner of a unique cooking recipe should treat it as a a) patent b) trademark c) copyright d) trade secret (X) 13. According to this rule of the Paris Union. A firm is likely to treat its list of customers as a a) patent b) trademark c) copyright d) trade secret 14. The life of a patent is a) 20 years from the filing date (X) b) 20 years after granting c) 20 years after invention TRUE OR FALSE 1. The "first to file" or priority in registration system is used in a) common law countries b) statute law countries (X) c) commonwealth law countries d) spoken law countries 17. A common law system uses a strict and literal interpretation of the law. a) patent b) trademark c) copyright d) trade secret (X) 12. This type of intellectual property refers to know-how.

Common law is based on tradition. Bribery is a matter of degree rather than an absolute. virtually all cultures condemn bribery as being unethical. arbitration saves time. (F) 9. Corruption opportunities increase when a government reduces its role in the economy. (T) 3 . (F) 19.S. While the legality of bribery is country-specific. Countries are bound by the international law which prescribes acceptable and legal behavior of international business enterprises. (F) 7. (T) 17. (F) 16. Perceptions of ethical issues vary by country. citizens working abroad for American firms. Surprisingly. (F) 20. (T) 3. If a company wants to limit its potential liability which may derive from its foreign operations. (F) 22. The United States is a code law country. The extraterritorial application of the law involves a nation applying its laws to activities outside its own territory. The 1988 trade act does not consider a payment for a routine governmental action to be an illegal bribe.2.S. (T) 14. (F) 5.S. (T) 21. According to the extraterritorial-application-of-the-law concept. it is easy to determine whether something is a bribe. (T) 10. The U. Since bribery is an absolute. OECD countries have adopted anti-bribery codes. (T) 8.and middle-level officials for tasks routinely performed by them are not illegal. (F) 6. it should form a foreign subsidiary rather than a foreign branch. expenses. the morality of the act is not. Regardless of cultural values. Unlike litigation. The Calvo Doctrine encourages international arbitration. past practices and rulings. firms to make expediting payments for routine government action. (T) 11. government takes the position that payments made to low. (T) 15. (F) 12. and legal precedent. (F) 4. (F) 18. One effective method to deal with foreign bribery is to convert a private bribe into a public donation. (T) 13. nations cannot apply their laws to companies' business activities outside their borders. a bribe is immoral. The 1964 Civil Rights Act barring employment bias protects U. and relationships. The Foreign Corrupt Practices Act does not allow U.

. (F) 38. (T) 40. industrial products do not have counterfeiting problems. dramatic. (T) 41. courts are prohibited from applying the Foreign Corrupt Practices Act extraterritorially. This is not a characteristic of culture.. In this type of society. Computer software cannot be copyrighted. (F) 29. A statute law country determines patent ownership based on the "first to file" rather than "the first to invent. (F) 31. (F) 32. (F) 27. As in the case of the Madrid Arrangement. the Trademark Registration Treaty requires a prior home registration. (T) 33. Unlike consumer products. Based on a GATT provision. (F) 30. The Foreign Corrupt Practices Act specifically prohibits U. the life a patent is 20 years after granting. (F) 39. This is not a characteristic of culture. Based on a GATT provision. Patents granted by one country for chemicals and pharmaceuticals are automatically recognized by other countries. (F) 37. The U. a) prescriptive b) socially shared c) learned d) objective (X) 2." (T) 35. A copyright cannot exist without registration.S.23. high-profit venture. A patent offers protection against copying by others to an author or artist for his literary. a) high context b) medium context c) low context (X) d) all of the above 5. the life a patent is 20 years from the filing date. Affixing a copyright notice is mandatory in order to obtain copyright protection. OECD codes) w hich multinational firms can refer to so as to determine whether a certain business activity is a bribe. (F) 28. The tendency of an individual to be bound by one's own assumptions is the effect of a) self perception b) cultural assumptions c) self reference criterion (X) d) cultural norms 4. (T) 36. Counterfeiting may actually benefit a trademark/patent owner in terms of product diffusion. (F) 34. (T) CHAPTER 6 CULTURE MULTIPLE CHOICE 1. Counterfeiting benefits a patent owner by speeding up product diffusion and adoption.S. with words conveying the main part of information in communication.S.g. Manufacturers of low unit-value products do not have to contend with counterfeiting problems. messages are explicit and clear. (F) 25. There are internationally recognized standards of behavior (e. culture is a) high context b) medium context c) low context (X) d) all of the above 6. Centralized protection of trademarks is easier to accomplish than centralized protection of patents. a) being enduring b) being cumulative c) being static (X) d) communication facilitation 3. U. this advertising approach should be used. and artistic works. musical. The Foreign Corrupt Practices Act cannot be applied in an extraterritorial manner. (F) 26. For such high-context cultures as Japan. firms from making expediting payments for routine government action. Counterfeiting is a low-risk. (T) 24.

The cultures which handle information in a direct. This is the easiest language to learn. linear fashion are a) monochronic (X) b) polychronic c) multichronic d) all of the above 8. Germany's culture is a) monochronic and low-context (X) b) monochronic and high-context c) polychronic and low-context d) polychronic and high-context 9.a) lecture b) drama (X) c) natural 7. a) English b) Spanish c) esperanto (X) d) Chinese 1 .

Advertising cultures with a nonlinear perception of time provide a) scattered information (X) b) reasoned arguments c) credible source d) explicit conclusion 13. (T) 5. (T) 7. high-context cultures perceive nonverbal communications elements as being more informative. the nonverbal part of the message carries most of the information. Culture is inherited genetically. (F) 2. This kind of time perception is based on the thinking that the future cannot be altered and that there is no need to plan since time is not valuable. (F) 10. people have an innate ability to learn a language in a natural way regardless of how old they are. (T) 2 . (F) 8.10. In high-context cultures. Consumers' shared values mean shared behavior. Language acquisition may have a biological component. (T) 3. (T) 9. Self reference criterion should be eliminated. This kind of time perception implies that time spent in the past will make some contribution to the future. A marketer with a highly developed self reference criterion is able to adapt to a new culture quickly and easily. When people work on several fronts simultaneously instead of pursuing a single task. Compared to a low-context culture. These people prefer substantial conversational distance and no physical contact. the culture is polychronic. According to the "use it or lose it" hypothesis. a) linear-separable time (X) b) circular-traditional time c) procedural-traditional time d) none of the above 11. (F) 4. (T) 6. a) Asians (X) b) Latin Americans c) Americans d) Europeans TRUE OR FALSE 1. Different languages can result in different methods of thinking. a) linear-separable time b) circular-traditional time (X) c) procedural-traditional time d) none of the above 12.

(F) 12. Due to cultural universals. The Chinese language system requires the reader to go from left to right and from bottom to top. and year) used in the United States in terms of sequence or ordering is different from the one used elsewhere. In the United States. Advertising copy should be interpreted rather than translated. (T) 15. (T) 18. and friendship do not vary from country to country. (F) 30. Esperanto is an easy language to learn. month. and friendship tend to be culture free. the meanings of time. (F) 26. (T) 25. the activity is more relevant than the amount of time spent on it. Esperanto is an international language. The meanings of time. day.S. a comfortable distance between parties is relatively constant in all parts of the world. The United States is a very legalistic society. Perceptions of time are culture bound. and Americans are both specific and explicit in terms of agreement. Advertising cultures with a nonlinear perception of time appear to provide reasoned arguments with explicit conclusion. (T) 13. there is a direct relationship between time and the importance of a matter. (F) 23. While making a conversation. space. space. North Americans' straightforward approach in indicating disagreement is inappropriate in most places of the world. In the case of procedural-traditional time.11. (T) 17. are neither unusual nor improper. (T) 21. (T) 16. Cognitive processing of words varies based on whether such words are written in logographic or alphabetic scripts. (T) 3 . The system of dating (i. (F) 27. to non-Americans. (F) 22. (F) 14. The American practice of using first names is admired in most parts of the world.. Long silence and a lack of eye contact. (T) 29. Being analytical helps in learning a foreign language. population has very low foreign-language fluency. (T) 28. (T) 24. People routinely communicate with each other in a nonverbal manner. Americans are unique in the sense that they develop friendship quickly and deeply. The U.e. (T) 20. (T) 19. (F) 31.

The unit of analysis of this discipline is the individual. a) psychology b) social psychology c) sociology (X) d) group 3. This is not a characteristic of attitude. a) the United Kingdom b) the United States c) Japan (X) d) Australia 1 . a) psychology (X) b) sociology c) anthropology d) culture 4. masculinity. (F) CHAPTER 7 CONSUMER BEHAVIOR IN THE INTERNATIONAL CONTEXT: PSYCHOLOGICAL AND SOCIAL DIMENSIONS MULTIPLE CHOICE 1. a) Canada (X) b) Greece c) Mexico d) Taiwan 9. and uncertainty avoidance. This country is low in power distance. The price motive is an example of a(n) a) rational motive (X) b) emotional motive c) subjective motive d) prestige motive 5.32. a) cultural b) psychological c) social d) all of the above (X) 2. A study of consumer behavior should emphasize this particular perspective. masculinity. This country is low in individualism but high in power distance. Which one of the following is a psychological concept? a) personality (X) b) social class c) family d) opinion leadership 7. The unit of analysis of this discipline is the group. and uncertainty avoidance. Which one of the following is not a psychological concept? a) motivation b) learning c) social class (X) d) personality 6. Race (or ethnic origin) is the only valid way to classify subcultures. a) reaction being favorable/unfavorable b) transient (X) c) learned d) enduring 8.

. a) nuclear (X) b) consanguine c) extended d) horizontal 19. construct. These people are probably least group oriented... These people put less emphasis on social hierarchy. Social needs should be stressed when advertising in a country with a .. advertisements should emphasize a) social roles b) group affiliation c) symbolic benefits of products d) functional brand images (X) 11. Attitudes are a) neutral b) innate c) transient d) enduring (X) 16.. a) Asians b) Latin Americans c) Americans (X) d) Europeans 17. a) Japanese b) Hispanic c) Chinese d) American (X) 2 . a) one-dimensional b) multidimensional (X) c) single-cue d) varying-cue 13.. This kind of family is common in the United States.. The effect of country of origin is strongest when it is a) the only cue (X) b) used with a few cues c) used with many cues 14. These people are relatively weak in terms of family orientation.. Country of origin is a . a) Japanese b) Hispanic c) African d) American (X) 18. a) high (X) b) moderate c) low d) ultra low 12. degree of power distance. In low power-distance countries. Which of the following can weaken the effect of "country of origin" on perceived product quality? a) country of product design b) brand name c) retailer name d) all of the above (X) 15.10.

(T) 4. Evidence has shown that rational motives are superior to nonrational motives in explaining consumer behavior. (F) 11. (T) 20. particular personality traits appear dominant in certain countries. Perceptions are formed through a selective and objective process. (F) 2. The effects of country of origin on product perceptions can be moderated by consumer expertise and attribute information. (F) 17. (T) 6. The Japanese and Canadians have been found to exhibit the same cognitive style. The concept of consumer ethnocentrism explains why some consumers feel that it is inappropriate to buy imported products. (F) 18. There is no relationship between cultural power distance and brand image strategies.TRUE OR FALSE 1. Consumer behavior is a study of the explicit act of purchase. (F) 7. There is empirical evidence that shows that countries can be clustered in terms of the various dimensions of national cultures. the unit of analysis is the group rather than the individual. Although personality applies to a person rather than to a group. (F) 14. (T) 15. it is not possible to state that particular personality traits seem dominant in certain countries. (T) 8. The best way to study consumer behavior is to use the cultural approach without focusing on the psychological and social processes. (T) 3 . Consumers have general images about certain countries as well as form specific attitudes about products made there. (T) 10. (F) 5. (F) 16. Highly and lowly ethnocentric consumers do not differ in terms of their preference for imported products. Because personality applies to a person rather than to a group. Motives must be learned. (T) 9. The concept of national character states that the people of each nation have distinctive personality characteristics. In the case of sociology. Consumers have stereotyped opinions about specific products from particular countries. (T) 12. Japanese consumers are so homogeneous that psychographic studies have yielded no unique market segment. (F) 13. (F) 3. Britons and Americans have different personality characteristics. (T) 19. There is no evidence of country-category effect in the sense that consumers use stereotyping in typing product classes and brands.

The effect of country of origin is strong when it is the only cue. (T) 24. (T) 37. a) representativeness b) self-contained media c) expanded trading area (X) d) market isolation 6. (T) 28. and the effect becomes even stronger when other product cues are included. One problem of primary data is a) specificity b) relevance c) being up to date d) cost (X) 4. the instrument is a) reliable b) consistent . in virtually all countries. This is not a characteristic of a good test market. Winnipeg (Canada) is a good test market because of its a) representativeness b) self-contained media c) self-contained trading area d) all of the above (X) 7. This kind of information is collected firsthand to answer specific. (F) 34. Country of design may mitigate the effect of country of assembly/manufacturing. Country of origin has the strongest effect on stereotyped image when it is the only cue. but the effect is weakened when multiple cues are used. (F) CHAPTER 8 MARKETING RESEARCH AND INFORMATION SYSTEM MULTIPLE CHOICE 1. even desirable. There is a positive relationship between countries' economic development levels and product evaluations. it is appropriate to use a global standardized campaign to introduce new products in foreign markets. (F) 32. (F) 29. (F) 35. (T) 23. and Americans tend to be less family oriented than others. (T) 31. The effect of country of origin is a function of product-country match rather than a halo effect. In spite of the inequality implied. (T) 33. Because cultural values are not related to innovation resistance. A country's image. has a halo effect. Emphasis on joint. It is appropriate to treat country of origin as a halo effect. a) primary data (X) b) secondary data c) selective data d) relevant data 3. The effect of country of origin is strong when country of origin is the only cue. The criteria used in the United States to assign people into social classes are consistent with those used in other countries. rather than being product-specific. the word family has a narrow meaning. In the United States. (F) 27. social classes are necessary and. When a measuring instrument is able to measure what it purports to. and wife-dominated decisions varies by stage of the decision process as well as by stage-culture interaction. (T) 36. (T) 22. (F) 25. husband-dominated. Country of origin is a multidimensional construct. Information that has already been collected for other purposes is called a) primary data b) principal data c) secondary data (X) 5. Country of design and country of assembly effects are one and the same. Country of origin has a halo effect in the sense that a country¶s positive or negative image affects all products made in that country. The strength of influence of a reference group is constant across product categories. (T) 26. current research questions. (F) 30. The top country in terms of marketing research expenditures is a) the United Kingdom b) the United States (X) c) Germany d) Japan 2.21.

c) stable d) valid (X) 8. A bicycle is a recreation device in some countries and a basic transportation device in others. This research problem is known as a) functional equivalence (X) b) definitional equivalence c) classification equivalence d) instrument equivalence 1 . Dating (between the sexes) is an activity which most non-American people may not understand. a) conceptual (X) b) classificational/definitional c) instrument d) linguistic 9. the measurement of the concept is complicated by the lack of this kind of equivalence.

) research. (T) 4. a) emic (X) b) etic c) dependent d) independent 11. (F) 3. The desirable characteristics of an international marketing information system do not include a) time dependence (X) b) location independence c) linguistic compatibility d) legal compatibility e) multicurrency TRUE OR FALSE 1. (T) 2 . a) back translation b) decentering (X) c) committee approach d) random probe 13. This translation technique uses several individuals to independently translate a question and compares their translated statements.S. Secondary data are less costly than primary data. (T) 5. Secondary data on international marketing (and countries to be compared) are often not comparable.10. The American Marketing Association's definition of marketing research stresses the importance of preresearch analysis. This step of MIS development involves the investigation of all users' needs. (F) 2. International marketing research is less difficult and less complex than domestic (U. These are tests constructed to study a phenomenon within one culture only. a) back translation b) parallel blind (X) c) committee approach d) random probe 12. This translation technique views both the source version and the target version as open to modification. a) system analysis (X) b) system design c) system implementation d) system investigation 15. This is a problem of a) internal validity b) specific validity c) external validity (X) d) predictive validity 14. The results of American consumers' responses may not apply to foreign consumers. The gathering of information can never be a substitute for managerial judgment.

Identical questions used in a cross-national study assure uniformity without guaranteeing content validity and comparable data from different countries. (T) 17. In LDCs. The same instrument can exhibit different reliabilities even when used by the same person in evaluating products from different cultures. (T) 3 . (F) 15. (T) 13. A measuring instrument proven to be reliable in one country should yield basically the same level of reliability elsewhere. (T) 22. (T) 14. (F) 7. (T) 8. the same sampling method for all countries may not assure the comparability of national groups. MIS should be expandable. In cross-national studies. The observation method tends to yield more objective information than the questioning method. (T) 10. (F) 18. (T) 20. Reliability is a necessary condition but not a sufficient condition for validity. (T) 21. Questions with negatives should not be used in a consumer survey abroad. Response styles can affect scale scores. Unlike other kinds of variables. demographic variables are easy to understand and thus have no problem with conceptual equivalence. Reliability is a prerequisite for the existence of validity. It is just as easy to use probability sampling methods abroad as in the United States. The attainment of measure equivalence in cross-national surveys is easier for attitudinal variables than for demographic variables.6. It is advisable to pay appropriate attention to sampling design issues without getting unduly obsessed with them. (T) 16. one of the most frequently used means of communication in surveys is the telephone because of poor transportation and mail delivery. (T) 9. MIS must be automated or computerized. (F) 19. Semantic differential and Likert scales are stable enough that they can be used without adaptation. The same measurement scales may have different reliabilities in different cultures and may even exhibit different reliabilities when used by the same individual in evaluating products from different cultures. (F) 23. (F) 12. (F) 11.

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