International Business Quizes – Flashcards
Unlock all answers in this set
Unlock answersquestion
The term international Business usually refers to... A. the outsourcing of goods and services from lower cost locations to open new markets B. the import of goods from anywhere in the world that crosses the borders of two or more nations C. the export of goods and services sold abroad and sent out of the country D. any commercial transaction that crosses the borders of two or more nations E. the purchase of foreign assets abroad
answer
D. any commercial transaction that crosses the borders of two or more nations
question
Multinational corporations are key players in the international business and can be described as companies that? __________. A. are engaged only in exporting products globally B. employ thousands of workers C. sell traditional products globally D. tend to have innovative cultures E. have direct investments in the form of marketing or manufacturing subsidiaries abroad in multiple countries
answer
E. have direct investments in the form of marketing or manufacturing subsidiaries abroad in multiple countries
question
What is a company that adopts a global perspective and engages in international business from or near its inception known? as? A. A born global firm B. An export management company C. A custom broker D. A multinational corporation E. An international service representative
answer
A. A born global firm
question
?________ is the name we give to the trend toward greater? economic, cultural,? political, and technological interdependence among national institutions and economies. A. Internationalization B. Emerging economies C. ?Cross-cultural communication D. Customization E. Globalization
answer
E. globalization
question
The convergence in buyer preferences in countries around the world is referred to as? ________. A. globalization of production B. diversity C. commercialization D. outsourcing E. globalization of markets
answer
E. globalization of markets
question
Companies that sell global products can standardize certain market activities in order to? ________. A. develop new customers B. design different packaging to meet global? customers' needs C. overcome trade barriers D. reduce marketing costs E. account for the language spoken in each country
answer
D reduce market costs
question
Globalization of markets can benefit companies that sell a global product and creates new market opportunities abroad especially if their home market? _________. A. can sustain higher prices B. is diverse C. is small or becoming saturated D. is large and growing E. offers consistent increase in demand
answer
C. is small or becoming saturated
question
A firm that produces a product with universal but seasonal appeal and is trying to level its income stream and reduce or eliminate wide variations in domestic sales can supplement its domestic sales with? ________. A. international sales B. an introduction of new product lines C. hiring more sales staff D. an increase in its production capacity E. a reduction of overhead costs during the off season
answer
A. international sales
question
Although companies that sell global products can reduce costs by standardizing certain marketing? activities, when might this approach NOT benefit the? company? A. When there is a need to better serve the customer in a small market B. When selling industrial products C. When selling seasonal products D. When the benefit of serving the customers with an adapted product may outweigh the benefit of a standardized product E. When avoiding paying high tariff charges
answer
D. When the benefit of serving the customers with an adapted product may outweigh the benefit of a standardized product
question
Which of the following describes the sourcing of key production? inputs, such as raw materials or? products, for assembly as well as the international outsourcing of? services? A. Globalization of market B. Globalization of production C. Commercialization D. Internationalization of products E. Customization
answer
B. Globalization of production
question
Why do companies produce goods and services? abroad? A. To reduce their overall labor costs B. To promote economic development C. To avoid local environment laws D. To maintain peace and security E. To internationalize their operation
answer
A. To reduce their overall labor costs
question
?Japan's largest paper? company, Nippon? Seishi, has decided to own huge forests and corresponding processing facilities in? Australia, Canada, and the U.S. in order to? ________. A. guarantee a steady flow of its wood pulp B. access? low-cost labor C. access highly skilled work force in? Australia, Canada, and the U.S. D. avoid paying higher Japanese taxes E. avoid trade surplus with these countries
answer
A. guarantee a steady flow of its wood pulp
question
Which are the two main forces that underlie the globalization of markets and? production? A. The North American Free Trade Agreement? (NAFTA) B. Falling barriers to trade and expansion of regional trade agreements C. The WTO role to enforce the rules of international trade D. The leading role that the World Bank plays to provide financing E. Falling barriers to trade and investment and technological innovation
answer
E. Falling barriers to trade and investment and technological innovation
question
The revision in 1994 of the GATT clearly defined intellectual property rights in order to? ________. A. facilitate the sharing of trade secrets B. further reduce average tariffs on merchandise trade C. promote free trade D. lower subsidies for agricultural products E. give more protection to? copyrights, trademarks, and patents
answer
E. give more protection to? copyrights, trademarks, and patents
question
Which is a major flaw of the original? GATT? A. It enforced strict trade rules on participating nations. B. It did not make enough progress to reduce agriculture subsidy. C. It lacked the power to enforce trade rules. D. It led to the increase of nontariff trade barriers. E. It did not reduce trade barriers low enough
answer
C. It lacked the power to enforce trade rules.
question
The power of WTO that sets it apart from GATT is its capability to do which of the? following? A. Lower the trade barriers B. Penalize offending nations and the power to settle trade disputes C. Increase the number of member nations D. Help the free flow of trade among its member states E. Maintain fair trade policies
answer
B. Penalize offending nations and the power to settle trade disputes
question
Which is an agency that was created to regulate fixed exchange rates and to enforce the rules of the international monetary? system? A. NAFTA B. ?Export-Import Bank C. World Bank D. The Central Bank E. International Monetary Fund
answer
E. International Monetary Fund
question
The main purpose for establishing regional trade agreements such as NAFTA and APEC is to? ________. A. foster trade and boost? cross-border investment B. eliminate cultural differences C. promote tourism and travel among neighboring countries D. reform immigration and labor laws E. maintain border peace and security
answer
A. foster trade and boost? cross-border investment
question
Operating across borders and time zones could complicate the job of coordinating and controlling international business activities especially for smaller firms. To operate more? efficiently, international companies tend to? ________. A. travel to the business destination more often than before to ensure personal communication B. send local staff on a? long-term assignment in the field offices to provide immediate solutions for operation problems C. accelerate the use of? technology, email, video? conferencing, the? Internet, and intranets. D. utilize creative travel programs such as frequent flyers to cut cost of travel E. invite the overseas staff to visit the headquarters a lot more often to ensure the smoothness of communication between headquarters and field staff
answer
C. accelerate the use of? technology, email, video? conferencing, the? Internet, and intranets.
question
Some of the critics of globalization argue that the relentless pursuit of? low-cost goods has led to? ________. A. devaluation of the value of the dollar B. an increase consumer prices C. sending manufacturing jobs abroad D. direct impact on the balance of trade E. stricter regulatory laws
answer
C. sending manufacturing jobs abroad
question
Globalization supporters argue that globalization increases wealth and efficiency in both developed and underdeveloped nations. What is this due? to? A. Reduction in threats between countries B. Openness to international trade increases national production C. Reform of labor laws D. Increased tariffs E. Corporate foreign market entry strategy
answer
B. Openness to international trade increases national production
question
The opponents of globalization argue that the increasing income inequality within nations means companies cut the cost of production and that freer trade and investment allows international companies to? ________. A. eliminate tariff charges on imported goods B. focus their foreign investment only in the highly developed countries C. close factories in? high-wage-area developed nations and move them to? low-wage developing countries D. increase production in their local market to supply the international market E. limit their international market entry strategy to export
answer
C. close factories in? high-wage-area developed nations and move them to? low-wage developing countries
question
The globalization impact on the gap between rich and poor nations varies. One group of? nations, such as in China and? India, is closing the gap with rich economies while a second group of poor countries is falling further? behind, such as most countries in Africa. On closer inspection this is due to which of the? following? A. The level of embracing globalization by developing countries B. A? country's international monetary policy C. Convergence of consumer lifestyle D. Technological advances in communications E. The industrialization and modernization level
answer
A. The level of embracing globalization by developing countries
question
Opponents of globalization claim that globalization empowers organizations such as? WTO, IMF, and the UN undermining the? ________. A. legal system of the country B. a? country's exchange rate system C. local labor laws D. sovereignty of a nation E. spread of democracy
answer
D. sovereignty of a nation
question
Why do most international firms today support reasonable environmental? laws? A. It helps the local economy and their image. B. They want to choose? low-cost resources over environmental concerns. C. They recognize that healthy future markets require a sustainable approach to the business expansion for future local markets for their goods and services. D. They want to introduce a new product line. E. Openness and globalization lessen environmental standards.
answer
C. They recognize that healthy future markets require a sustainable approach to the business expansion for future local markets for their goods and services.
question
The definition of? __________ centers around the set of? values, beliefs, and rules of society. A. community B. culture C. psychology D. society E. social class
answer
B. culture
question
We usually refer to British and Indonesians cultures as if all Britons and Indonesians are culturally identical. This generalization is because we are conditioned to think in terms of? ________. A. a? country's subculture B. globalization C. ethnic groups in the society D. national culture E. bridging the cultural gap
answer
D. national culture
question
French laws limit the use of English in product packaging and store front signs in order to? ________. A. develop strong cultural attraction B. force tourists to learn French C. stem the English invasion and preserve the national culture D. develop a? customer's loyalty E. avoid committing language errors
answer
C. stem the English invasion and preserve the national culture
question
?____________ is a group of people who share a unique way of life within a? larger, dominant culture. A. Class system B. Subculture C. Family D. Social groups E. Community
answer
B. Subculture
question
In order for Frito Lay to increase sales of its products in the? U.S., the company had to appeal to the Latino? market, which is a huge subculture of 46 million people. What did the company? do? A. Introduce new brands from its Mexican subsidiary B. Expand its advertising campaign primarily in rural areas C. Eliminate some of the flavors that did not produce an increase in sales D. Reduce its prices to appeal to? low-income families. E. Increase its retail distribution to an ethnic community
answer
A. Introduce new brands from its Mexican subsidiary
question
The belief that? one's own ethnic group or culture is superior to that of others is referred to as? ________. A. ethnocentricity B. aesthetics C. cultural literacy D. cultural adaptability E. bridging the cultural gap
answer
A. ethnocentricity
question
While managers increasingly treat the world as a? single, intercontinental? marketplace, which one of the following helps managers avoids? failure? A. Ignoring fundamental aspects of local culture B. Viewing the local cultural in terms of their own C. Eliminating the bias inherent in ethnocentric thinking D. Sending headquarters personnel to manage the overseas operation E. Ensuring all key decisions are made in home office
answer
C. Eliminating the bias inherent in ethnocentric thinking
question
Which of the following methods will NOT help managers develop a global? mindset? A. Evaluating an? individual's openness and flexibility B. Focusing on aesthetics C. Bridging the gap between business practices and customs D. Developing cultural literacy E. Being able to alter behavior when working with people from other cultures
answer
B. Focusing on aesthetics
question
Celebrating the Dragon Boat Festival in China and the art of belly dancing in Turkey are examples of? ________. A. popular customs B. attitudes C. manners D. values E. folk customs
answer
E. folk customs
question
Which of the following statements best describe? values? A. Values are the? ideas, beliefs, and customs to which people are emotionally attached. B. Values are positive or negative? evaluations, feelings, and tendencies that individuals harbor toward objects or concepts. C. Values are appropriate ways of? behaving, speaking, and dressing. D. Values are the belief that? one's own ethnic group or culture is superior to that of others. E. Values are a way of behaving in specific circumstances and are passed down through generations.
answer
A. Values are the? ideas, beliefs, and customs to which people are emotionally attached.
question
An important aspect of social structure is the way a culture divides its population according to status. Which of the following terms refer to the process of ranking people into social layers or? class? A. Family and genders B. Social stratification C. Socialism D. Social association E. Cost of living
answer
B. Social stratification
question
Which of the following terms describes a system of social stratification in which personal ability and actions determine social status and? mobility? A. Nuclear family B. Class system C. Gender D. Caste system E. Social groups
answer
B. Class system
question
Which of the following describes a system of social stratification in which people are born into a social? ranking, with no opportunity for social mobility and are prejudged by their social ranking in this? system? A. Cost of living B. Class system C. Cross cultural D. Caste system E. Social association
answer
D. Caste system
question
Countries with poorly educated populations attract the lowest paying manufacturing jobs. International companies searching for untapped markets or new factory locations should? consider, among other? factors, the? ________. A. population density B. cultural traits C. illiteracy rates D. cultural diffusion E. purchasing power statistics
answer
C. illiteracy rates
question
From the perspective of international? business, one important aspect of nations with solid basic education systems is that they? ________. A. tend not to invest in workers training B. attract relatively? well-paying industries C. must use symbols and pictures to communicate in these markets D. lack the determination of national competitiveness E. have a tendency to experience decrease in productivity
answer
B. attract relatively? well-paying industries
question
?__________ is the? world's single largest religion. A. Confucianism B. Judaism C. Christianity D. Buddhism E. Islam
answer
C. Christianity
question
Which of the following religions prohibits the consumption of pork and? shellfish? A. Judaism B. Christianity C. Islam D. Hinduism E. Confucianism
answer
A. Judaism
question
Charging interest for money lent violates the law of which? religion? A. Islam B. Christianity C. Judaism D. Hinduism E. Buddhism
answer
A. Islam
question
Which of the following statements is TRUE about? Hinduism? A. Hinduism was formed? 4,000 years ago in Arabia. B. The caste system is integral to the Hindu faith. C. Hinduism recalls its founder and recognizes central authority. D. Hindus do not believe in reincarnation. E. Hindus covet materialism.
answer
B. The caste system is integral to the Hindu faith.
question
?American-born Thomas? Kwan, who works for a health products company in? Shanghai, China, says that a lot of expatriate managers fail in China because? ________. A. the Chinese are very explicit B. they do not greet the people appropriately C. they do not socialize with Chinese workers D. the Chinese? don't tell you what they think E. they do not speak the local language
answer
D. the Chinese? don't tell you what they think
question
You are working as an international manager for a major U.S. hotel chain in Russia. To provide good service for? tourists, the local hotel staff put a sign in the hotel lobby that? reads, "You are welcome to visit the cemetery where famous Russian? composers, artists, and writers are buried daily except? Thursday." What is wrong with this? sign's text? A. Sign should be in Russian B. Translation C. Grammar D. Sign is not big enough E. Spelling
answer
B. Translation
question
The? Kluckhohn-Strodtbeck Framework dimension looks at whether a people are easily controlled and not to be? trusted, or whether they can be trusted to act freely and responsibly. Within the traditional Japanese business model dealings among Japanese? companies, the? Kluckhohn-Strodtbeck defines that they are? ________. A. based heavily on distrust so as not to? "lose face" B. based heavily on trust so as not to? "lose face" C. not interested in forming? long-term relationships to avoid keeping business commitment. D. a reflection of the rising crime rate in Japan is the breakdown of trust within the society. E. flexible in breaking agreements once an agreement has been made
answer
B. based heavily on trust so as not to? "lose face"
question
According to? Hofstede's Index, which country has the highest score on valuing hard work and promoting entrepreneurial risk? taking, meaning that responsibility for poor business decisions is placed primarily on the individual in? charge? A. China B. Australia C. India D. Canada E. United States
answer
E. United States
question
According to? Hofstede, which of the following cultural dimensions conveys the degree to which a culture accepts social inequality among its? people? A. Masculinity versus femininity B. Indulgence versus restraint C. Power distance D. Individualism versus collectivism E. Uncertainty avoidance
answer
C. Power distance
question
Local culture is important for a company exploring the international market for their products. A great example of this is the export of luxury items to wealthy upper? class, such as expensive jewelry and? high-priced cars, which factors significantly in which of the following cultural? dimensions? A. Collectivism B. Low power distance C. High individualism D. Low masculinity verses femininity E. High power distance
answer
E. High power distance
question
Which of the following statements BEST describes political? economy? A. The study of how a country manages its affairs by using? political, economic, and legal systems B. The? structure, process, and activities by which a nation governs itself C. The belief that every aspect of? people's lives must be controlled for a? nation's political system D. Citizens elect individuals from their groups to represent their political view E. A system in which? land, factories, and other economic resources are owned by the private sector and government
answer
A. The study of how a country manages its affairs by using? political, economic, and legal systems
question
In which of the following political systems do individuals govern without the support of the? people, tightly control? people's lives, and do not tolerate opposing? viewpoints? A. Communism B. Collectivism C. Totalitarianism D. Democracy E. Theocratic totalitarian
answer
C. Totalitarianism
question
Which of the following are features of? totalitarianism? A. Freedom to organize political parties B. Lack of? and/or denying citizens constitutional? guarantees; restricts political representations C. Minority? rights; preserves peaceful coexistence among diverse groups D. Election of representatives by the people E. Freedom of expression
answer
B. Lack of? and/or denying citizens constitutional? guarantees; restricts political representations
question
People have a constitutional right to voice opinion freely and without fear would be possible in? (a) ________. A. socialism B. democracy C. totalitarianism D. secular totalitarianism E. communism
answer
B. democracy
question
________ refers to a country where the political system is under the control of totalitarian religious leaders that govern according to religious principles. A. Theocratic totalitarianism B. Communism C. Secular totalitarian D. Democratic E. Totalitarian
answer
A. Theocratic totalitarianism
question
Which form of political system provides full civil and property? rights? A. Socialist B. Communism C. Democratic D. Theocratic totalitarianism E. Totalitarian
answer
C. Democratic
question
Which of the following statements about doing business in totalitarian countries is? FALSE? A. Possible property seizure and policy changes can take place without any prior warning. B. International companies might need to pay bribes to government officials. C. The government has far less direct involvement. D. People in power can interpret laws largely as they please. E. Laws regarding the resolution of contractual disputes are either vague or nonexistence.
answer
C. The government has far less direct involvement.
question
In which of the following economic systems does the government own a? nation's land,? factories, and other economic? resources? A. Liberalism B. Market economy C. Centrally planned economy D. Mixed economy E. ?Laissez-faire economics
answer
C. Centrally planned economy
question
In which type of economy is the majority of a? nation's land,? factories, and other economic resources privately? owned, either by businesses or by? individuals? A. Mixed economy B. Centrally planned economy C. ?Laissez-faire economics D. Market economy E. Liberalism
answer
D. Market economy
question
There are far fewer communist nations than there were two decades ago. According to your? textbook, which two countries remain? hard-liner communist? nations? A. Cuba and North Korea B. Greece and Bulgaria C. Poland and Romania D. Germany and the UK E. Hungary and Czech Republic
answer
A. Cuba and North Korea
question
According to your? textbook, economists,? historians, and political scientists all of the following factors contributed to the decline of centrally planned economies EXCEPT? ________. A. failure to achieve rapid growth B. failure of governments to slow down the creation of new technologies C. failure to provide incentives D. failure to create economic value E. failure to satisfy consumer needs
answer
B. failure of governments to slow down the creation of new technologies
question
In which of the following economies are? resources, such as? land, factories, and other economic? resources, equally split between private and government? ownership? A. Mixed economies B. ?Laissez-faire economies C. Market economies D. Socialism economies E. Centrally planned economies
answer
A. Mixed economies
question
Which one of the following statements about a market economy is? FALSE? A. The interaction of supply and demand determines the quantity in which goods and services are produced. B. All productive activities are owned by the state. C. The majority of a? nation's land,? factories, and other economic resources are privately owned. D. When supply and demand change for a good or? service, so does its selling price. E. There is less government intervention.
answer
B. All productive activities are owned by the state.
question
Which legal system reflects interpretation of the law with reference to these three? characteristics: tradition,? precedent, and? usage? A. Common law B. Theocratic law C. Civil law D. Traditional law E. Contractual law
answer
A. Common law
question
Which of the following statements BEST describes the theocratic legal? system? A. Each law may be interpreted somewhat differently in each case to which it is applied. B. It is a legal system that is based on a detailed set of written rules and statutes that constitute the legal code. C. It is a legal tradition based on religious teachings. D. It is the? world's oldest and most common legal tradition. E. The justice system decides cases by interpreting the law on the basis of? tradition, precedent, and usage.
answer
C. It is a legal tradition based on religious teachings.
question
Which of the following is NOT an example of intellectual? property? A. A? machine-tool manufacturer B. Secret formula for making? Coca-Cola C. Computer software D. A video game E. Novels
answer
A. A? machine-tool manufacturer
question
According to an annual study made by Business Software Alliance of software? piracy, business software piracy averages around 42 percent globally and costs business software makers nearly? $59 billion annually. Which country has the highest rate of pirated software in the? world? A. China B. Russia C. Republic of Georgia D. Nigeria E. India
answer
C. Republic of Georgia
question
Which of the following is a right granted to the inventor of a product or process that excludes others from? making, using, or selling the? invention? A. Patent B. Copyright C. Trademark D. ?Contract: E. Licensing
answer
A. Patent
question
The Nike? "swoosh" and the name? "Lexus" are protected by? ________. A. copyright B. contract C. license D. trademark E. patent
answer
D. trademark
question
Industrial property is protected internationally under the? ________ for the Protection of Industrial Property to which nearly 100 countries are signatories. A. Paris Convention B. General Agreement on Tariffs and Trade? (GATT) C. International Monetary Fund? (IMF) D. World Trade Organization E. Berne Convention
answer
A. Paris Convention
question
Which of the following statements BEST describes antitrust? regulations? A. They allow companies to fix prices in order to increase profits. B. They are laws designed to prevent companies from fixing? prices, sharing? markets, and gaining unfair monopoly advantages. C. They provide consumers with a wide variety of products at high prices. D. They promote monopolies. E. They eliminate competition among companies.
answer
B. They are laws designed to prevent companies from fixing? prices, sharing? markets, and gaining unfair monopoly advantages.
question
Which of the following philosophies of business ethics and social responsibility support the view that a? company's sole responsibility is to maximize profits for its owners? (or shareholders) while operating within the? law? A. Cultural relativist view B. Civil law view C. Righteous moralist view D. Freidman view E. Utilitarian view
answer
D. Freidman view
question
Which of the following multinational companies? (cited by the? text) had a case publicized by human rights and labor groups investigating charges of worker? abuse? A. Nike B. Enron C. Marriott International D. Starbucks E. ?Levi-Strauss
answer
A. Nike
question
Which of the following multinational companies? (cited by the? text) works hard to operate in a socially responsible manner by trying to ease the plight of citizens in countries where their product is produced and sells fair trade? products? A. ?Levi-Strauss B. Timberland C. Enron D. Boisset Family Estates E. Starbucks
answer
E. Starbucks
question
The? well-publicized Enron corporation case is an example of? ________. A. environmental hazard B. human rights violation C. product safety violation D. corruption E. antitrust violation
answer
D. corruption
question
Which of the following is the pattern of imports and exports that occurs in the absence of trade? barriers? A. Trade balance B. Free trade C. Trade surplus D. Normal trade relations E. Most favored nation status
answer
B. Free trade
question
For which of the following political motives do governments intervene in trade in order to ban certain? defense-related goods from export to other? nations? A. Protect its infant defense industries B. Preserve national security C. Protect national identity D. Protect jobs E. Respond to unfair trade practice
answer
B. Preserve national security
question
According to the infant industry? argument, a? country's emerging industries need protection from international competition during their development phase until they become sufficiently competitive internationally. Which of the following represents a major consequence to this? argument? A. Complacency toward innovation B. Increase consumer choices C. Increase of? country's export D. Increase? country's reliance on imported goods E. Preserve national security
answer
A. Complacency toward innovation
question
Consumers often end up paying more for products because of a lack of competition. Which of the following is a type of government intervention that leads to this? problem? A. Protection of infant industries B. Job protection C. Protection of national security D. Protection of national identity E. Cultural motives
answer
A. Protection of infant industries
question
All of the following are political motives behind government intervention in trade EXCEPT? ________. A. Responding to unfair trade practices B. Protecting jobs C. Pursuing strategic trade policy D. Preserving national security E. Gaining influence
answer
C. Pursuing strategic trade policy
question
You are a manager of a U.S. firm that plans on exporting a product that is designated as a dual use product and you need to have a U.S. government approval before export can take place. What is the political motive behind this? intervention? A. To protection national identity B. To ensure that other nations allow free trade C. To preserve national security D. To protect jobs from going to China E. To gain and maintain control over events in the Western Hemisphere
answer
C. To preserve national security
question
The United States has banned all trade and investment with Cuba since 1962. This is an example of which type of government political? intervention? A. National security protection B. Trade retaliation C. Protection from import competition D. Exposing Cuba to new ways of life E. Gaining influence
answer
E. Gaining influence
question
Which of the following is considered government? subsidy? A. Offering credit insurance B. Advertising in other countries to promote the? nation's export C. Helping companies finance their export activities D. Providing working capital guarantee program E. Providing tax breaks and product price support
answer
E. Providing tax breaks and product price support
question
Governments often promote exports by helping companies finance their export activities. Which U.S. financing entity finances the export activities of companies in the United States and offers insurance on foreign accounts? receivable? A. World Trade Organization B. International Monetary Fund C. World Bank D. Overseas Private Investment Corporation E. ?Ex-Im Bank
answer
E. ?Ex-Im Bank
question
Which of the following is a restriction on the amount? (measured in units or? weight) of a good that can enter or leave a country during a certain period of? time? A. Quota B. Local content requirement C. Administrative delay D. Tariff E. Compound tariff
answer
A. Quota
question
One of the most common instruments that government uses to promote trade with other nations is the establishment of a foreign trade zone. Which of the following is not an advantage of a free trade? zone? A. Increase government revenue by applying additional import tariff. B. Allow companies to conduct manufacturing operations free from taxes. C. Increase employment. D. Establish a facility inside a free trade zone to reduce costs and time. E. Merchandise is allowed to pass with lower customs duties.
answer
A. Increase government revenue by applying additional import tariff.
question
Governments of most nations have special agencies responsible for promoting exports. Which of the following is NOT a type of export? promotion? A. Advertising in foreign countries trade magazines B. Arranging meetings with suitable distributors and partners C. Organizing trade missions D. Paying import duties E. Opening trade offices in other countries
answer
D. Paying import duties
question
Export tariff is levied mostly by the government of a country that is? ________. A. exporting to wealthy nations B. exporting to? non-WTO member countries C. exporting products that consist mostly of? low-priced natural resources D. exporting agriculture products E. exporting highly advanced technological products
answer
C. exporting products that consist mostly of? low-priced natural resources
question
?A(n) ________ is levied as a percentage of the stated price of an imported product. A. compound tariff B. specific tariff C. transit tariff D. ad valorem tariff E. import quota
answer
D. ad valorem tariff
question
A government may impose an import quota to protect its domestic producers by placing a limit on the amount of goods allowed to enter the country. Who are the winners of imposing such? quotas? A. Domestic producers B. Exporters C. Companies relying on the importation of? so-called intermediate goods D. Domestic producers that rely on the import of product subject to quotas E. Consumers
answer
A. Domestic producers
question
In? 1980, the closing of U.S.? carmakers' production facilities in the United States was creating a volatile? anti-Japan sentiment among the population and the U.S. Congress. Fearing punitive? legislation, the Japanese government and its carmakers decide to limit its automobile exports to the United States. Which of the following is this an example? of? A. Voluntary export restraint? (VER) B. Specific tariff C. ?Tariff-quota D. Compound tariff E. Ad valorem tariff
answer
A. Voluntary export restraint? (VER)
question
What method of trade restriction is the U.S. using with? Cuba? A. Voluntary export restraint? (VER) B. Export tariff C. Import tariff D. Embargo E. Currency controls
answer
D. Embargo
question
When a certain portion of the end product must consist of domestically produced goods or that a certain portion of the final cost of a product must come from domestic? sources, this is the result of? _________. A. a compound tariff B. quota C. a tariff D. local content requirements E. administrative delay
answer
D. local content requirements
question
Which of the following describes administrative? delays? A. Compound tariffs levied on an imported product B. A complete ban on trade in one or more products with a particular country C. Regulatory controls or bureaucratic rules designed to impair the flow of imports into a country D. Restrictions on the amount? (measured in units or? weight) of a good that can enter or leave a country E. Restrictions on the convertibility of a currency into other currencies
answer
C. Regulatory controls or bureaucratic rules designed to impair the flow of imports into a country
question
Which of the following has eliminated all tariffs and nontariff trade barriers on goods originating within North? America? A. International Monetary Fund B. World Bank C. Overseas Private Investment Corporation D. NAFTA E. World Trade Organization
answer
D. NAFTA
question
Tariffs that are called specific tariffs are levied based on? ________. A. a specific fee for each unit? (measured by? number, weight,? etc.) of an imported product B. the government of a country that a product is passing through C. the amount? (measured in units or? weight) of a good that can enter a country during a certain period of time D. a percentage of the stated price of an imported product E. a percentage of its stated price and a specific fee for each unit.
answer
A. a specific fee for each unit? (measured by? number, weight,? etc.) of an imported product
question
Western European plastic producers considered retaliating against Asian competitors whose prices were substantially lower in European markets than at home. Which of the following is this an example? of? A. Compound tariff B. Cross border supply C. Subsidy D. Dumping E. Import quota
answer
D. Dumping
question
The General Agreement on Trade in Services? (GATS) created during the Uruguay Round identifies four different forms that international trade in services can take. Which of the following is NOT one of those? forms? A. Consumption abroad B. Agriculture subsidy C. ?Cross-border supply D. Commercial? presence: E. Presence of natural resources
answer
B. Agriculture subsidy
question
The creation of the? ________ was perhaps the greatest achievement of the 1986 Uruguay Round. A. World Health Organization B. International Monetary Fund C. Overseas Private Investment Corporation D. World Bank E. World Trade Organization
answer
E. World Trade Organization
question
Which of the following is an additional tariff placed on an imported product that a nation believes is receiving an unfair? subsidy? A. Tariff quota B. Compound tariff C. Countervailing duty D. Antidumping duty E. Ad valorem tariff
answer
C. Countervailing duty
question
Which of the following is the purchase of physical assets or a significant amount of the ownership? (stock) of a company in another country in order to gain a measure of management? control? A. Privatization B. Portfolio investment C. Countertrade D. Foreign direct investment E. Outsourcing
answer
D. Foreign direct investment
question
According to the U.S.? ________, foreign direct investment? (FDI) occurs when purchase of physical assets or a significant amount of the ownership? (stock) of a company at least 10 percent of stock ownership in a company abroad. A. Department of Commerce B. Small Business Administration C. Small Business Development Center D. Treasury Department E. Credit Bureau
answer
A. Department of Commerce
question
?Acer, headquartered in Singapore but founded in? Taiwan, manufactures personal computers and computer components. Just 20 years after it opened for? business, Acer had spawned 10 subsidiaries worldwide and had become the dominant industry player in many emerging markets. What is this an example? of? A. Portfolio investment B. Global financial system C. Outsourcing D. Exporting E. Foreign direct investment
answer
E. Foreign direct investment
question
Historically, firms from? ________ nations are accounting for an ever greater share of global merger and acquisition activity. A. developing B. developed C. industrialized D. emerging E. underdeveloped
answer
B. developed
question
Which of the following is NOT a driver of? cross-border merger and acquisition? deals? A. Filling gaps in a? company's product lines in a global industry B. The company wishing to ease its entry into the market in phases C. Getting a foothold in a new geographic market D. Increasing a? firm's global competitiveness E. Reducing costs of research and? development, production,? distribution, and so forth
answer
B. The company wishing to ease its entry into the market in phases
question
According to the? textbook, the number of? cross-border investment activities and their rising values over time underlie? long-term growth in foreign direct investment. Which form of investments is the majority of these? activities? A. Mergers and acquisitions B. Outsourcing C. Greenfield D. Portfolio investment E. Exporting
answer
A. Mergers and acquisitions
question
Which of the following is limited in its power to explain why companies choose foreign direct investment over other forms of market? entry? A. Specialized knowledge B. Market imperfections? (internalization) C. International product life cycle theory D. Eclectic theory E. Market power
answer
C. International product life cycle theory
question
According to your? textbook, which of the following is one of the reasons that a large number of Korean manufacturers invested in production facilities in? Tijuana, Mexico, just south of? Mexico's border with? California? A. Lack of an import tariff B. Local government intervention C. Local content requirements D. Low shipping costs E. The economic system is more of a centrally planned economy.
answer
A. Lack of an import tariff
question
When a? company's specialized knowledge is embodied in its? employees, which of the following options would you recommend the company to take to exploit a market? opportunity? A. Licensing B. Foreign direct investment C. Charging professional fees D. Portfolio investment E. Export
answer
B. Foreign direct investment
question
An oil company is seeking market opportunity in the Middle East. Which of the following options is a compelling reason for the company to favor foreign direct investment over other? options? A. Vertical integration B. Location advantage C. Avoidance of trade barriers D. Ability to establish dominant market presence E. Exporting
answer
B. Location advantage
question
Which of the following theories stipulate tight control when the? firm's concern is controlling the? company's activities? A. Absolute advantage B. International product life cycle theory C. Market imperfections? (internalization) D. Eclectic theory E. Market power
answer
C. Market imperfections? (internalization)
question
Which one of the following factors should managers consider when deciding to build or purchase? operations? A. Obsolete equipment B. Exchange of stock ownership C. Unknown brand name D. An unsuitable location E. Poor relations with workers
answer
B. Exchange of stock ownership
question
Which of the following BEST describes building a new subsidiary abroad from the ground? up? A. Acquisition B. Portfolio investment C. Merger D. Partnership E. Greenfield investment
answer
E. Greenfield investment
question
Which of the following is NOT an advantage of merger and? acquisitions? A. The acquiring firm may benefit from the goodwill the existing company has built up over the years. B. There is an opportunity to build a new manufacture from the ground up. C. The purchase of an existing business may allow for alternative methods of financing the purchase. D. An acquisition generally provides the investor with an existing? plant, equipment, and personnel. E. There is brand recognition of the existing firm.
answer
B. There is an opportunity to build a new manufacture from the ground up.
question
The decision of whether to build facilities in a market abroad or to purchase existing operations in the local market can be difficult. Which of the following local issues do managers NOT have to worry? about? A. Human resource policies B. Labor unions C. Preparing the home office travel schedule D. Labor costs E. Mandated benefits
answer
C. Preparing the home office travel schedule
question
Poland is a source of skilled and inexpensive? labor; it is an appealing location for automobile manufacturers. But the country had little in the way of advanced? automobile-production facilities when General Motors considered investing there. What type of investment options did GM decide to take to exploit this market? opportunity? A. Acquisition B. Merger C. Greenfield investment D. Export E. Portfolio investment
answer
C. Greenfield investment
question
Consider the typical stuffed animal made in? China, whose components are almost all imported to China. The stuffed? animal's eyes are molded in Japan. Its outfit is imported from France. The? polyester-fiber stuffing comes from either Germany or the United States. And the? pile-fabric fur is produced in Korea. Only final assembly of these components occurs in China. This is an example of which management issue as it relates to foreign direct? investment? A. Production costs B. Partnership requirements C. Control desired over operation abroad D. Customer knowledge E. Purchase or build decision
answer
A. Production costs
question
When Mercedes opened its first international car plant in Tuscaloosa? County, Alabama,? automobile-parts suppliers also moved to the area from Germanylong dash—bringing with them additional investment in the millions of dollars. What is this an example? of? A. Customer knowledge B. Rationalized production C. Control D. Following rivals E. Following clients
answer
E. Following clients
question
A cologne or perfume producer might want to bottle its fragrance in France and give it a French name. This type of image appeal can be strong enough to encourage foreign direct investment. What is this an example? of? A. Greenfield investment B. Benefits of cooperation C. Following clients D. Customer knowledge E. Rationalized production
answer
D. Customer knowledge
question
Which of the following is a national accounting system that records all receipts coming into the nation and all payments to entities in other? countries? A. Income statement B. Balance of payments C. Balance sheet D. Current account E. National budget
answer
B. Balance of payments
question
Import of goods and? services, income receipts on assets? abroad, and income payments on foreign assets inside the country are tallied under the? ________. A. capital account B. current account deficit C. current account surplus D. current account E. balance of payment
answer
D. current account
question
When a U.S.? company's subsidiary abroad remits profits back to the parent in the United? States, it is recorded as? ________. A. income receipts B. income payment C. current account deficit D. import services E. export of services
answer
A. income receipts
question
Which of the following is NOT a reason why host governments intervene in foreign direct? investment? A. Increase capital outflows. B. Access to technology. C. Attract talented managers. D. Shore up balance of payments. E. Give local companies the chance to become suppliers.
answer
A. Increase capital outflows.
question
Which of the following is considered host country performance? demand? A. Require that certain technologies be transferred to local business B. Require nondomestic investors to hold less than 50 percent stake in local firms C. Prohibit or restrict the nondomestic company from removing profits to its home country D. Require that a portion of the? product's content meets international guidelines for recyclability E. Require that portion of the output must be exported
answer
A. Require that certain technologies be transferred to local business
question
Which of the following that is NOT home country foreign direct investment? (FDI) promotion? A. Offer tax breaks on profits earned abroad or negotiate special tax treaties. B. Offer insurance to cover the risks of investments abroad. C. Apply differential tax rates. D. Apply political pressure on other nations to get them to relax their restrictions on inbound investments. E. Grant loans to firms wishing to increase their investments abroad.
answer
C. Apply differential tax rates.
question
Trade in services accounts for around 20 percent of total world trade. Although the importance of trade in services is growing for many? nations, it tends to be relatively more important for the? world's ___________ countries. A. developing B. poorest C. emerging D. richest E. newly industrialized
answer
D. richest
question
Which? agencies/departments/organizations in most countries record the destination of? exports, the source of? imports, and the physical quantities and values of goods crossing their? borders? A. UN B. World Trade Organization C. Commerce Department D. Customs E. Trade Organizations
answer
D. Customs
question
Which of the following statements BEST explains the benefits of international trade to? nations? A. International trade is an important engine for job creation. B. International trade protects countries increase the demand of its own domestic products. C. International trade helps countries to limit its import in order to protect its infant industries. D. International trade increases tariff charges on imported goods to generate more revenue for the country. E. International trade helps countries limit access to products it cannot produce.
answer
A. International trade is an important engine for job creation.
question
There has been a persistent pattern of merchandise trade among nations. Trade between which economies of the world represents the highest level of total world merchandise? trade? A. Trade between the? world's middle-income economies. B. Trade between the? world's high-income economies C. Trade between? high-income economies nations and? low-income economies nations D. Trade between? low-and middle-income nations E. Trade between the? world's low-income economies
answer
B. Trade between the? world's high-income economies
question
Which major region of the? world's economy represents the highest intraregional? exports? A. Asian region B. Caribbean region C. European region D. North American region E. West African region
answer
C. European region
question
?____________ advocates that nations should accumulate financial? wealth, usually in the form of? gold, by encouraging exports and discouraging imports. A. Absolute advantage theory B. Market economy C. Comparative advantage D. Collectivism E. Mercantilism
answer
E. Mercantilism
question
The main problem with mercantilism is that it views trade as? a(n) ________. A. limit to export B. zero sum game C. increase deficit D. positive sum game E. threat to? nation's wealth
answer
B. zero sum game
question
Which of the following statements BEST expresses the core beliefs of? mercantilism? A. Nations should increase their wealth by increasing their exports and minimizing their imports. B. Governments acquire wealth through unrestrictive trade policies. C. Nations should trade with other nations to obtain the goods they? need, but? don't produce. D. Trade should be allowed to flow as dictated by market? forces, not by government intervention. E. International trade is a? positive-sum game.
answer
A. Nations should increase their wealth by increasing their exports and minimizing their imports.
question
The practice of mercantilism rested on three essential pillars. Which of the following are these three? pillars? A. Free? trade, government? intervention, and colonialism B. Free? trade, colonialism, and strict government intervention C. ?Colonialism, maximize? production, and product standardization D. Trade? surpluses, government? intervention, and colonialism E. Free? trade, subsidizing? export, and banning imports
answer
D. Trade? surpluses, government? intervention, and colonialism
question
Mercantilism advocates that governments should actively intervene in international trade in order to maintain a trade surplus. Which of the following tools have mercantilist nations used to support this? policy? A. Subsidize? export, ban? import, and impose tariff charges and quotas. B. Allow trade to flow as dictated by market forces to ensure trade surplus. C. Adopt the factor proportion theory. D. Liberalize import policies to ensure access to products that mercantilist nations do not produce. E. Concentrate on producing the goods in which it holds an? advantage, then trade with other nations.
answer
A. Subsidize? export, ban? import, and impose tariff charges and quotas.
question
According to Adam? Smith, a nation should concentrate on producing the goods in which it? ________. A. can produce and export goods that require resources that are abundant B. can gain strategic advantage by increasing the pace of privatization C. can produce most efficiently D. has an absolute advantage in producing the product E. can protect through government interventions to ensure foreign market accessibility
answer
D. has an absolute advantage in producing the product
question
Which of the following trade theories states occurs when a country is unable to produce a good more efficiently than other? nations, but produces the good more efficiently than it does any other? good? A. Factor proportions theory B. Comparative advantage C. International product life cycle D. Absolute advantage E. Mercantilism
answer
B. Comparative advantage
question
Which of the following does NOT describe the theory of absolute? advantage? A. International trade should not be banned or restricted by tariffs and quotas. B. A nation with an absolute advantage can produce a greater output of a good or service than other nations using the same amount? of, or? fewer, resources. C. ?It's the ability of a nation to produce a good more efficiently than any other nation. D. It allows the flow of trade as dictated by market forces. E. It allows for government intervention in international trade.
answer
E. It allows for government intervention in international trade.
question
Country X specializes in the production of corn more efficiently than any other nation and buys rice which it produces less efficiently than corn from Country? Z, despite the fact that Country Z produces rice less efficiently than Country X. Which of the following international trade theories agree with Country? X's decision to buy rice from Country? Z? A. Mercantilism B. Absolute advantage C. Factor proportions theory D. Comparative advantage E. International product life cycle
answer
D. Comparative advantage
question
Which of the following is TRUE with regard to the factor proportions? theory? A. Trade is still beneficial even if one country is less efficient in the production of two? goods, as long as it is less inefficient in the production of one of the goods. B. A nation has the ability to produce a good more efficiently than any other nation. C. Countries produce and export goods which require resources that are abundant and import goods that require resources in short supply. D. A? nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade. E. Nations should accumulate financial? wealth, usually in the form of? gold, by encouraging exports and discouraging imports.
answer
C. Countries produce and export goods which require resources that are abundant and import goods that require resources in short supply.
question
The difference between the comparative advantage theory and the factor proportions theory is that the factor proportions theory? ________. A. considers labor to be the only resource used in the production process B. believes that nations could increase their wealth by maintaining a trade surplus C. suggests that trade is a? zero-sum game D. states that a country specializes in producing and exporting goods using the factors of production that are most abundant and thus cheapestlong dash—not the goods in which it is most productive E. says that international trade is a? positive-sum game.
answer
D. states that a country specializes in producing and exporting goods using the factors of production that are most abundant and thus cheapestlong dash—not the goods in which it is most productive
question
________ says that a company will begin by exporting its product and later undertake foreign direct investment. The theory also says? that, for a number of? reasons, a? country's export eventually becomes its import. A. The product life cycle theory B. The new trade theory C. Leontief paradox D. First mover advantage E. Absolute advantage
answer
A. The product life cycle theory
question
The international product life cycle theory follows the path of a good through its life cycle in order to determine where it will be produced. Which of the following BEST defines the standardized product? stage? A. The exact level of demand in the domestic market is highly uncertain. B. Both domestic and international markets become fully aware of the product and its benefits. C. Exports begin to account for an increasingly greater share of total product sales. D. Competition pressures companies to lower prices in order to maintain sales levels. E. The product begins generating sales in developing nations.
answer
D. Competition pressures companies to lower prices in order to maintain sales levels.
question
The theory of the product life? cycle's ability to accurately depict the trade flow of nations is being challenged. This is due to the fact that? ________. A. the? products' components are made in the home country and cannot be produced anywhere else B. the U.S. is the sole innovator of products in the world C. more companies are operating in international markets from their inception D. many small companies are unable to team up with companies in other markets to develop new products or production technologies E. companies today design new products and make product modifications at a very slow pace
answer
C. more companies are operating in international markets from their inception
question
Which of the following statements BEST describes the new trade? theory? A. The theory emphasizes productivity rather than a? nation's resources. B. The theory states? that, as specialization and output? increase, companies can increase the unit costs of production. C. The theory does not assume any role of government intervention. D. There are gains to be made from specialization and increasing economies of scale. E. Gains made as a result of increasing economies of scale will increase the cost of production and thus the price to? buyers, which will force the competition to increase their prices as well.
answer
D. There are gains to be made from specialization and increasing economies of scale.
question
Which of the following trade theories indicates that government may play a role in assisting its home companies and that government involvement has always been widely accepted in undertakings such as space exploration for national security? reasons? A. Comparative advantage B. Leontief paradox C. Product life cycle D. Absolute advantage E. New trade
answer
E. New trade
question
Which of the following is NOT a component of? Porter's diamond? A. Demand conditions B. Related and supporting industries C. Firm? strategy, structure, and rivalry D. ?First-mover advantages E. Factor conditions? (basic and? advanced)
answer
D. ?First-mover advantages
question
Which of the following represents the core of the national competitive advantage? theory? A. International trade is a? positive-sum game. B. Countries produce and export goods that require resources that are abundant and import goods that require resources in short supply. C. Trade is still beneficial even if one country is less efficient in the production of two? goods, as long as it is less inefficient in the production of one of the goods. D. A? nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade. E. A country may dominate in the export of a certain product because it has a? home-based firm that has acquired a? first-mover advantage.
answer
D. A? nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade.
question
Which of the following of? Porter's diamond components supports the concept that companies that belong to a? nation's internationally competitive industries do not exist in? isolation, rather, supporting industries spring up to provide the inputs required by the? industry? A. Demand conditions B. Related and supporting industries C. Factor conditions? (basic factors) D. Factors conditions? (advanced factors) E. Firm? strategy, structure, and rivalry
answer
B. Related and supporting industries
