BUS Quiz 3

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The United Nation of Zorwaya has strict restrictions on direct investment by foreign enterprises, and it opposes the establishment and operation of private enterprises. The highest authority in the country enforces tight control over prices and production output. According to this information, the United Nation of Zorwaya most likely opposes _____.
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deregulation
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In the context of political economy, the past three decades have seen a general move toward:
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adoption of legal systems that better enforce property rights.
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In economic terms, the long-run monetary benefits of doing business in a country are most likely to be a function of the:
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present wealth (purchasing power) of consumers of the country
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Generally, the costs and risks associated with doing business in a foreign country are typically lower in:
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economically advanced countries.
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A well-functioning market economy is most likely to lack:
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state intervention in pricing and production.
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Which of the following statements is true about privatization?
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When newly privatized firms are extensively protected from foreign competition, they have little incentive to restructure their operations to become more efficient.
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Lamboria Republic is facing a high rate of inflation, and the government debt in the country is also high. As a result, the country’s business environment is beginning to deteriorate, and the profits of the business enterprises are hurt. According to this information, Lamboria Republic is facing a(n) _____ risk.
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economic
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Which of the following statements is true about the late influential political scientist Samuel Huntington’s vision of the new world?
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Samuel Huntington theorized that modernization in non-Western societies can result in a retreat toward the traditional.
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To account for differences in the _____, one can adjust GNI per capita by purchasing power.
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cost of living
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Economic advances in many countries have led to the:
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emergence of increasingly prosperous middle and working classes.
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Although China and India are very large markets when measured by number of consumers, their _____ makes them a relatively small market when measured in economic terms.
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limited purchasing power
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Which of the following best supports the economic transformation from a centrally planned command economy to a market-based economy?
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Transferring the ownership of state property into the hands of private individuals
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The government of Ugania had been extending huge amounts of loans to the business enterprises in the country. However, the borrowers failed to generate the profits necessary to repay their debts. As a result, national banks in Ugania had a lot of nonperforming assets on their books, and the Uganian currency was devalued. In this context, the business enterprises in Ugania are most likely to face a(n) _____ risk.
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economic
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Which of the following is most likely to be an advantage that first-movers tend to have relative to last-movers?
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Greater brand loyalty
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The government of Greenland Republic protects its newly privatized firms from foreign competition by imposing stringent barriers to international trade and foreign direct investment. As a result of this, the newly privatized firms will:
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continue acting like state monopolies
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The government of Nerumbia wants to open the country’s economy to international business, and increase its overall attractiveness as a potential market or investment site. Which of the following will facilitate this decision of the Nerumbian government?
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Investing in infrastructure and in the required supporting businesses
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The absence of a legal system that protects property rights and the lack of machinery to enforce that system in a market economy usually results in:
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the lack of incentives to engage in economic activity.
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_____ are primarily the advantages that accrue to early entrants into a market.
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First-mover advantages
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Which of the following statements is true about the changing economic system since the 1980s?
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There has been a shift away from a mixed economy
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How have new information and communication technologies, including the Internet, affected the political economy in general?
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They have reduced a state’s ability to control access to uncensored information
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The United Nation of Amberia, a Western European country, fought on the winning side of the Cold War. Which of the following was most likely being propagated by the country by participating in the Cold War?
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Free markets
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In Samuel Huntington’s thesis, global terrorism is a product of the:
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clash of value systems and ideology between civilizations.
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Countries with _____ are more likely to attain high and sustained economic growth rates and are thus a more attractive location for international business.
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democratic regimes
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“Not all democracies are free, as some still restrict certain political and civil liberties.” Which of the following countries best fits this argument?
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Russia
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Which of the following statements is true about innovations and entrepreneurship?
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Innovations in production and business processes lead to an increase in the productivity of labor and capital.
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_____ first commercialize innovative new products and processes, and help provide much of the dynamism in an economy.
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Entrepreneurs
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The collapse of _____ in eastern Europe was precipitated by the growing gulf between the vibrant and wealthy economies of the West and the stagnant economies of the East.
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communism
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Which of the following is most likely to be true about the overall attractiveness of a country as a potential market or investment site for an international business?
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The costs and risks associated with doing business in a foreign country tend to be greater in politically unstable nations.
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Star Volans Inc. is planning on expanding its business globally. In terms of the costs involved in conducting business in a country, it will be most economical for the company if it chooses a country:
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where politicians are held accountable by the electorate.
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Which of the following is most likely to prove detrimental to democracy and international business?
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Emergence of different civilizations, each of which has its own value systems and ideology
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In the context of cost, which of the following can be considered as the most attractive market or investment site?
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A country that has a well-developed body of business contract law
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In the context of political economy, one notable development of the past 20 years has been the spread of:
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democracy
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The belief that geography can influence economic policy, and hence economic growth rates, goes back to:
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Adam Smith.
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In the context of the changing political economy since the late 1980s, which of the following statements is true?
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Most of the world’s nation-states are providing greater political and civil liberties to their citizens.
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Which of the following creates an environment that is conducive to product and process innovations and to entrepreneurial activity?
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Privatization
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Due to strong legal protection of property rights, businesses and individuals will:
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invest more in innovations.
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Capricorn Creative Inc., a U.S. based advertising firm, was the first in the advertising industry to identify the growth potential of Brazil and to make huge investments in it’s economy. As a result, the firm was able to build brand loyalty and gain experience in that country’s business practices. In the language of business strategy, Capricorn Creative has typically benefited from:
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a first-mover advantage.
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One common measure of economic development is a country’s:
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gross national income.
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Which of the following statements is true about the global changes in political and economic systems?
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Many of the undeveloped and impoverished national markets of eastern Europe, Latin America, Africa, and Asia are potentially enormous for international business.
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_____ is most likely to be the consequence of economic progress.
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Adoption of democracy
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Black economy is most likely to be prevalent when:
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people engage in barter agreements to avoid paying taxes.
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Which of the following is an indicator of low human development in a country?
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A score of 0.3 on the HDI scale
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Which of the following statements is most likely to be true about the economic prospects of a country?
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The economic system and property rights regime are reasonably good predictors of economic prospects of a country.
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Which of the following is most likely to be implemented by a country as a part of deregulation?
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Removal of price controls
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Handicaps experienced by an organization because of entering into a market after several other companies who have already established their brands in the market, are referred to as _____.
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late-mover disadvantages.
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In the context of global economy, which of the following has been widely accepted since the late 1980s?
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Deregulation of economies to promote greater competition
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Which of the following factors in a country is most likely to cause a political risk for an international business?
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The presence of more than one ethnic nationality.
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Which of the following best exemplifies a first-mover advantage?
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Venus Inc. has more than 50 percent market share in the telecom industry, because no other company had invested in this industry before Venus Inc.
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Only a totalitarian regime that is committed to _____ is capable of promoting economic growth.
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a market system and strong protection of property rights
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Which of the following statements is true about gross national income (GNI)?
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Economist Amartya Sen has argued that development should be assessed less by material output measures such as GNI per capita.
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The _____ movement started in Great Britain in the early 1980s when then Prime Minister Margaret Thatcher started to sell state-owned assets such as the British telephone company.
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privatization
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Both China and India have achieved high growth rates despite relatively weak property rights regimes and high levels of corruption, because of:
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the shift toward a market-based economic system.
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The cost of doing business is most likely to be the lowest in:
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open democratic societies.

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