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21) The concept of liquidity preference in international operations refers to ________.

A) a company's willingness to accept a lower rate of return on investments in countries where it can more easily sell them and convert the proceeds at a favorable rate

B) a company's willingness to accept lower rates of return in poor countries that really need the investments

C) management's need to maintain sufficient funds, preferably in local currency, in each country of operation to ensure meeting daily cash needs

D) investors' preference for foreign stocks over foreign bonds because of the larger market for them

22) Risks to companies from natural disasters and communicable diseases are ________.

A) evenly distributed around the world

B) more complicated today because of publicity

C) a minor issue to global firms because of insurance

D) most prevalent in the poorest countries of the world

23) U.S. companies generally put earlier and more emphasis on countries ________.

A) with the largest economies

B) with regional trading blocs and high tariffs

C) where governments give operating incentives

D) where operating conditions seem similar to those at home

24) The lower survival rate of foreign companies in comparison to local firms for many years after they begin operations is known as ________.

A) ethnocentric reaction

B) polycentric reaction

C) liability of foreignness

D) most-favored-nation behavior

25) Which of the following best explains why U.S. firms typically place earlier and greater emphasis on expansion into Canada and the U.K.?

A) significant sales opportunities

B) similarities in culture and legal systems

C) availability of necessary natural resources

D) government incentives for allied nations

26) Which of the following best explains Blockbuster's failed expansion into Germany?

A) laws limiting hours of operation

B) lack of public interest in films

C) inadequate tax incentives

D) communication problems

27) The entry into a foreign country to prevent competitors' advantages is known as ________.

A) oligopolistic reaction

B) concentration strategy

C) liability of foreignness

D) a harvesting strategy

28) Companies are more likely to gain advantages by locating near competitors for all the following reasons EXCEPT to ________.

A) take advantage of competitors' research to pick an ideal location

B) attract multiple suppliers and personnel with specialized skills

C) agree with competitors on production limitations

D) attract buyers who want to compare suppliers

29) An example of a first-mover advantage in international operations is ________.

A) implementing economies of scale faster than competitors

B) increasing sales response functions and customer service

C) using a small country for market tests prior to entering a large country

D) lining up the best suppliers and distributors before competitors enter the market

30) Which of the following is used when a company moves first to those countries where local competitors are most likely to catch up to the firm's innovative advantage?

A) lead country strategy

B) imitation lag strategy

C) oligopolistic reaction strategy

D) liability of foreignness strategy

 

 

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