Deck 10: International Product Standardization and Adaptation

Question 1

What represents any location,online or physical,where business or individuals can raise funds?

A) Investment brokerages
B) Financial brokerages
C) Investment houses
D) Capital markets
E) Banks

Answer 1

D

Question 2

The property of divisibility in money means:

A) It is acceptable in a region or area.
B) You can "make change" for it.
C) It is not easily damaged or destroyed.
D) It is scarce.
E) People understand its value.

Answer 2

B

Question 3

The property of durability in money means:

A) It is acceptable in a region or area.
B) It is scarce.
C) It is not easily damaged or destroyed.
D) It is divisible.
E) People understand its value.

Answer 3

C

Question 4

Nongovernmental factors that affect currency movement include all of the following except:

A) Individual and business transactions
B) Inflation
C) Proprietary business plans
D) Interest rates
E) Trade and investment activities

Question 5

A country with more exports than imports experiences which of the following?

A) Trade barrier
B) Trade gap
C) Trade surplus
D) Trade deficit
E) Trade imbalance

Question 6

What states that the nominal or stated interest rate of a country is equal to the actual interest rate plus the rate of inflation?

A) Webber effect
B) Thomson effect
C) Fischer effect
D) Wyndam effect
E) Zagorski effect

Question 7

The Law of One Price means that:

A) Identical products should be priced identically in different markets, once the price is converted to the same currency in each market.
B) Equal prices apply to all products.
C) Pricing differentials disappear across national boundaries, once the price has been converted.
D) The expected value of a product will be equal to its price.
E) Pricing problems occur when a company prices a product differently in other countries.

Question 8

Companies raise two types of funds in global or local capital markets,including:

A) Debt and capital
B) Debt and loans
C) Debt and equity
D) Equity and stocks
E) Equity and loans

Question 9

What involves the study of currency exchange,investments,and how these processes influence business activities?

A) International business
B) International marketing
C) International economics
D) International finance
E) International trade

Question 10

Properties of money include all of the following except:

A) Acceptability
B) Scarcity
C) Durability
D) Divisibility
E) Dependability

Question 11

What occurs when the price of goods and services increase in a country?

A) Inflation
B) Recession
C) Depression
D) Price stabilization
E) Market avoidance

Question 12

The percentage rate paid for the use of money is referred to as which of the following?

A) Call point
B) Interest rate
C) Market value
D) Market return
E) Appreciation effect

Question 13

A regime that predetermines the value of a currency is known as what?

A) Market-based regime
B) Fixed or pegged regime
C) Communist regime
D) Capitalistic regime
E) Preforecast regime

Question 14

What rate is the rate at which one country's currency can be traded for another's?

A) Market rate
B) Soft rate
C) Exchange rate
D) Hard rate
E) International rate

Question 15

When the United States exports $500 billion worth of goods and services but imports $700 billion,it experiences a:

A) Trade barrier
B) Trade gap
C) Trade surplus
D) Net trade differential
E) Trade deficit

Question 16

When Australia exports $300 billion in goods and services and imports $250 billion,it experiences a:

A) Trade barrier
B) Trade gap
C) Trade surplus
D) Trade result
E) Trade deficit

Question 17

What occurs in circumstances in which the value of a currency is allowed to respond freely to market forces?

A) Fixed-rate exchange rate
B) Floating exchange rate
C) Market response rate
D) Market-based exchange rate
E) Market-demand exchange rate

Question 18

Which states that identical products should be priced identically in different markets,once the price is converted to the same currency in each market?

A) The Law of One Price
B) The Law of Price Equalization
C) The Law of Market-Based Pricing
D) The Law of Expected Value
E) The Law of Equal Value

Question 19

What term refers to a government decrease in a par value?

A) Currency establishment
B) Currency reset
C) Market adjustment
D) Devaluation
E) Revaluation

Question 20

If a country imports more than it exports,it experiences which of the following?

A) Trade barrier
B) Trade gap
C) Trade surplus
D) Trade deficit
E) Trade imbalance

Question 21

As a term of payment,"CBD" stands for which of the following?

A) Call before delivery
B) Close before delivery
C) Credit before delivery
D) Cash before delivery
E) Cancel before delivery

Question 22

The four major types of countertrade that are discussed in the text include all of the following except:

A) Barter
B) Buy-back
C) Compensation deals
D) Counterpurchases
E) Call back agreements

Question 23

The primary authority for global currency stabilization is which of the following?

A) International Monetary Fund
B) International Currency Authority
C) International Currency Alliance
D) International Monetary Market
E) International Currency Administration

Question 24

What kind of bond is issued outside of a country that is denominated in a currency that is different from the country in which it is purchased?

A) Host bond
B) Home bond
C) Eurobond
D) Foreign bond
E) Call bond

Question 25

Sovereign debt ratings:

A) Measure the total amount of debt in a country
B) Represent the chance that a country will default on governmental debt
C) Measure a company's total asset-to-debt ratio
D) Measure the GDP of a company in relation to its trade deficit
E) Represent the value of a nation's total debt

Question 26

As a term of payment,"COD" stands for which of the following?

A) Call out delivery
B) Close on delivery
C) Credit on delivery
D) Cash on delivery
E) Call on delivery

Question 27

A forward rate that is larger than a spot rate is which of the following?

A) Premium
B) Spot
C) Call
D) Future
E) Market

Question 28

What rates are exchange rates for the delivery of a currency at a specific point in the future?

A) Closed
B) Spot
C) Call
D) Future
E) Forward

Question 29

What kind of arrangements are agreements to sell one set of goods and services used in the production of products for another set of goods and services?

A) Barter
B) Buy-back
C) Compensation deals
D) Counterpurchases
E) Call back agreements

Question 30

Which of the following include both cash payments and exchanges of materials?

A) Barter
B) Buy-back
C) Compensation deals
D) Counterpurchases
E) Call back agreements

Question 31

A bond that is sold outside of a home country and that is denominated in the currency of the country of issue is which kind of bond?

A) Host
B) Home
C) Currency
D) Foreign
E) Call

Question 32

Which of the following is not a regional development or national bank that is presented in the text?

A) U.S. Agency for International Development
B) Asian Development Bank
C) Global Commerce Bank
D) U.S. Export-Import Bank
E) European Investment Bank

Question 33

Two companies or countries engage in what kind of trade when goods are traded or exchanged without the use of hard currency?

A) Bilateral trade
B) Fulfillment trade
C) Counterbalanced trade
D) Reciprocal trade
E) Countertrade

Question 34

Which theory posits that in cases of complete openness and knowledge,speculation will not lead to profit?

A) Efficient Currency Theory
B) Efficient Exchange Theory
C) Efficient Market Theory
D) Efficient Economic Theory
E) Efficient Transaction Theory

Question 35

Currency rates affect all of the following except:

A) Market share
B) Valuations assigned to inventories
C) Sales prices
D) Costs of marketing activities
E) Bottom-line profits

Question 36

In the context of currency risk,which of the following involves purchasing various financial instruments?

A) Bonding
B) Hedging
C) Calling
D) Closing
E) Market skimming

Question 37

What instrument allows a company to sell or buy a certain amount of a foreign currency at a set exchange rate on a specific date?

A) Close contracts
B) Call contracts
C) Pull contracts
D) Rescind contracts
E) Futures contracts

Question 38

What involves the direct exchange of goods between two companies?

A) Barter
B) Buy-back
C) Compensation deals
D) Counterpurchases
E) Call back agreements

Question 39

Which ratings represent the chance that a country will default on governmental debt?

A) Sovereign trade ratings
B) Sovereign economic ratings
C) Sovereign government ratings
D) Sovereign debt ratings
E) Sovereign currency ratings

Question 40

The International Monetary Fund is:

A) An organization that oversees the law of one price
B) A wing of the European Union
C) A for-profit financing company
D) The primary authority for global currency
E) An Asian organization that regulates trade in the Pacific Rim

Question 41

Price escalations are a particularly serious issue when attempting to reach which of the following groups?

A) Bottom-of-the-pyramid consumers
B) New market segments
C) Free-trade zones
D) High-tariff regions
E) None of the above

Question 42

Which term represents increases in price as a product moves from one country to another?

A) Price escalations
B) Price chain
C) Distribution escalations
D) Marketing channel costs
E) Price redundancy

Question 43

Managing the exchange of currency and gaining access to funds are necessary for all international business.

Question 44

The ability to change the local currency for a foreign currency is referred to as what?

A) Currency acceptance
B) Currency exchangeability
C) Currency convertibility
D) Currency transferability
E) Currency transference

Question 45

All of the following cause price escalations except:

A) Transportation costs
B) Tariffs
C) Importer margins
D) Wholesaler margins
E) Advertising costs

Question 46

A core component of business activity,which can be drastically impacted by international finance issues including currency movements,is which of the following?

A) Market exchanges
B) Marketing channels
C) Tariffs
D) Costs
E) Profits

Question 47

Sustainability advocates increasingly push for which kind of pricing for internal financing?

A) Transfer
B) Shadow
C) Explicit
D) Implicit
E) Sustained

Question 48

A capital market must be a physical place or location.

Question 49

When a commodity is sold by one subsidiary of a company to another in a second country,what kind of price is set in order to by-pass taxes and tariffs by shifting funds internally?

A) Market based
B) Market shirk
C) Internal
D) Transfer
E) Market delayed

Question 50

A soft currency can be exchanged for other currencies worldwide.

Question 51

Durability is one of the five characteristics of a currency.

Question 52

A hard currency cannot be exchanged for other currencies worldwide.

Question 53

Currency represents the form of money used by a specific country or region.

Question 54

Consumers in international markets are using physical currency less frequently.

Question 55

Five characteristics determine the acceptability of money as a means of exchange.

Question 56

Countries that have low,or no,taxes are referred to which of the following?

A) Tax-friendly regions
B) Tax havens
C) Tax states
D) Tax-free nations
E) Tax-free regions

Question 57

Which of the following international finance factors influence pricing decisions?

A) Exchange rate fluctuations, price escalations, and administered prices
B) Exchange rate fluctuations, price escalations, and global regime costs
C) Administered prices, global regime costs, and political risk
D) Administered prices, political risk, and product risk
E) Administered prices, political risk, and economic instability

Question 58

What kinds of prices are set by individual governments,often in an attempt to weaken competition?

A) Fixed
B) Market based
C) Tariff control
D) Administered
E) Free market

Question 59

Spendability is one of the five characteristics of a currency.

Question 60

Many items have been used as money,including salt,rocks,seashells,and beads.

Question 61

Transaction demand reflects the demand for nondurable goods,such as appliances.

Question 62

Direct rates are calculated using the value of a foreign currency.

Question 63

The Organization for Economic Cooperation and Development creates a measure of purchasing power.

Question 64

Understanding currency movements represents a fundamental part of international marketing.

Question 65

A floating exchange rate occurs when the value of a currency is allowed to respond freely to market forces.

Question 66

The Law of One Price states that identical products should be priced identically in different markets,once the price is converted to the same currency in each market.

Question 67

Spot rates are a set rate of exchange for a delivery of currency within two days of the agreement to exchange currencies.

Question 68

A trade surplus results when a country exports more than it imports.

Question 69

A trade deficit occurs when a country imports more than it exports.

Question 70

Trade consists of the exchange of goods and services across borders.

Question 71

A fixed or pegged regime sets a predetermined band or par value for a currency.

Question 72

Inflation is independent of interest rates and does not affect interest rates.

Question 73

Indirect rates are calculated using the home currency price per unit against that of the foreign currency.

Question 74

Revaluation refers to a government increase in the par value of a currency under a fixed-rate regime.

Question 75

Inflation is a nongovernmental factor that affects currency movement.

Question 76

In international marketing,exchange rates affect prices of goods.

Question 77

A currency's exchange rate is the rate at which one country's currency can be traded for another country's currency.

Question 78

International marketers carefully consider the percentage change in a currency's value over time.

Question 79

Inflation is not affected by demand for a currency.

Question 80

The primary responsibility of the International Monetary Fund is currency stabilization.