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 Chapter 1 |

  B  |  1.  | The commonly accepted goal of the MNC is to: b. | maximize shareholder wealth. |

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  D  |  2.  | Which of the following is not a form of corporate control that could reduce agency problems for an MNC? a. | stock options. |

b. | hostile takeover threat. |

c. | investor monitoring. |

d. | all of the above are forms of corporate control that could reduce agency problems for an MNC. |

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  C  |  3.  | Which of the following theories suggests that firms seek to penetrate new markets over time? c. | product cycle theory. |

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  A  |  4.  | Licensing is the process by which a firm provides its technology (copyrights, patents, trademarks, or trade names) in exchange for fees or some other specified benefits. a. | true. |

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  A  |  5.  | According to the text, products and services are generally becoming _______ standardized across countries, which tends to _______ the globalization of business. a. | more; encourage |

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  D  |  6.  | The Single European Act of 1987: d. | increased competition in most industries. |

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  A  |  7.  | _____________ are most commonly classified as a direct foreign investment. a. | Foreign acquisitions |

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  A  |  8.  | Which of the following is not mentioned in the text as a constraint interfering with the MNC goal? a. | economic constraints.Regulatory constraintsEnvironmental constraintsEthical constraints |

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  C  |  9.  | Which of the following is not a way in which agency problems can be reduced through corporate control? c. | acquisition of a foreign subsidiary.Executive compensationThreat of hostile takeover monitoring by large shareholders |

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  A  |  10.  | Due to the larger opportunity set of funding sources around the world from which an MNC can choose, an MNC may be able to obtain capital at a lower cost than a purely domestic firm. a. | true. |

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  A  |  11.  | One of the most prevalent factors conflicting with the realization of the goal of an MNC is...