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Multiple Choice


1. The European Union currently consists of how many nations?
A) Ten
B) Twenty-five
C) Forty
D) Fifty


2. Korea and its people have undergone great changes, but respect for ________ remains strong.
A) family
B) authority
C) formality
D) all of the above 
3. Enron negotiates a multi-million dollar contract with the government to provide electricity to country A. Soon after the government is voted out of power and the new government does not abide by its predecessor’s contract. This is an example of ________.
A) barriers to repatriation
B) expropriation
C) confiscation
D) micro political risk
4. To analyze their data on potential risks, some companies allocate a minimum and a maximum score for which of the following criteria?
A) the political and economic environment
B) domestic economic conditions
C) external economic relations
D) all of the answers are correct
5. ________ involves the use of lead indicators to predict possible political dangers.
A) Computer modeling system
B) PRISM
C) Composite ranking
D) Early warning system
6. Which of the following risk reduction strategies is not a form of adaptation to the political regulatory environment?
A) equity sharing
B) participative management
C) localization
D) hedging
7. The Overseas Private Investment Corporation is a ________.
A) large overseas bank
B) currency hedging center
C) provider of political risk insurance
D) United Nations subsidiary
8. In 2002, foreign firms operating in Argentina faced problems mainly due to ________.
A) overthrow of previous government
B) expropriation of assets
C) currency devaluation
D) riots in the northern region
9. An international agreement which regulates international business by spelling out the rights and obligations of the seller and buyer is ________.
A) Universal Contract law
B) Universal Civil law
C) Universal Criminal law
D) United Nations Conventions on Contracts for International Sale of Goods
10. The Paris Union deals with ________.
A) software development
B) electronics and other high tech sales
C) protection of patents
D) international cooperation in reducing pollution
11. An international manager should choose technology that is ________.
A) capital intensive
B) labor intensive
C) intermediate
D) such that it suits the level of development in the area
12. Managers today are usually quite sensitive to issues of social responsibility and ethical behavior because of ________.
A) interest groups
B) legal and governmental concerns
C) media coverage
D) all of the above
13. The sales, debts, and resources of the largest multinationals exceed the ________ of some nations.
A) gross national product
B) public and private debt
C) resources
D) all of the above
14. The four international codes of conduct that provide some consistent guidelines for multinational enterprises were developed by all of the following except ________.
A) the European Union
B) the International Chamber of Commerce
C) the Organization for Economic Cooperation and Development
D) the International Labor Organization
15. According to Bruce Smart, the highest ethical standards seem to be practiced by ________.
A) Canadians
B) Americans
C) Japanese
D) Chinese
16. Which of the following statements about ethical standards are true?
A) The upper limits of ethical standards are set by individual standards.
B) The laws of economically developed countries generally define the lowest common denominator of acceptable behavior.
C) The actual degree of enforcement of the law in an underdeveloped country would determine the lower limit of permissible behavior.
D) all of the above
17. “Recruitgate” took place in which nation?
A) China
B) Hong Kong
C) The United States
D) Japan
18. Overall, the most recent results from NAFTA show that ________.
A) total trade among the three nations grew by over 100 percent
B) although many jobs were created in Mexico, illegal immigration has not stopped
C) promises to protect worker’s rights and the environment have not been kept
D) all of the above
19. Maquiladoras are ________.
A) financing institutions in South America
B) Latin American banks
C) trade and investment corporations
D) trade-driven manufacturing assembly lines
20. According to research by Black and Mendenhall, up to ________ of expatriate managers leave their assignments early because of poor performance or poor adjustment in the local environment.
A) 10%
B) 40%
C) 20%
D) 25%
21. When an American-educated Asian presented a business plan to his uncle, what problem emerged?
A) The uncle was insulted because of his nephew’s educational background.
B) Employees felt they should have been included in the decision.
C) An astrologer included in the meeting vetoed the plan.
D) The uncle was insulted that his nephew conducted the meeting in English rather than Japanese.
22. Which category of values is most likely to underlie both moral and economic norms?
A) economic
B) historical
C) religious
D) personal
23. Which of the Hofstede variables would be most closely responsible for the existence of formal rules and procedures within a given culture?
A) individualism
B) uncertainty avoidance
C) masculinity
D) femininity
24. Trompenaars’ four value dimensions are ________.
A) universalistic, particularistic, neutral, and affective
B) obligation, emotional orientation, relationship involvement and legitimization of power
C) obligation, universalistic, particularistic and relationship involvement
D) emotional orientation, relationship involvement, power distance and masculinity
25. Which of the following best describes nationalization?
A) use of locals in management positions
B) giving hiring precedence to locals over employees from the company’s headquarters
C) government’s gradual and subtle actions against a firm
D) forced sale of assets to local buyers