Question 1

Which of the following statements is true about the changing demographics of the global economy?  A. The globalization of the world economy has resulted in a relative increase in the dominance of U.S. firms in the global marketplace.  B. The rise in the share of FDI stock accounted for by developing nations reflects a growing trend for firms from these countries to invest outside their borders.  C.The barriers to the free flow of goods, services, and capital have been rapidly increasing, and nations joining the ranks of the developed world have been decreasing.  D. A prominent trend in international business has been the decline of medium-size and small multinationals.  E. The rise of the Internet is increasing the barriers that small firms face in building international sales.

Accepted Answer

B

Question 2

The most global of markets are not typically markets for industrial goods and materials but markets for consumer products. T/F

Accepted Answer

False

Question 3

Which of the following is a disadvantage of globalization?  A. Globalization makes it difficult for poor countries to export more of their agricultural production.  B. As a result of free trade, the wage gap between developing and developed nations is broadening.  C. As the result of globalization, living standards of unskilled workers in developed nations have declined.  D. Globalization results in \"exporting jobs\" to low-wage nations and contributing to higher unemployment in their home nations.  E. Free trade limits countries from specializing in the production of those goods and services that they can produce most efficiently.

Accepted Answer

D

Question 4

Which of the following is most likely to be the reason behind the decline in the U.S. share of world output in 2010?  A. Faster economic growth of developing economies, particularly in Asia  B. Rise in the share of FDI stock accounted for by the U S economy  C. Rising barriers to the free flow of goods, services, and capital throughout the globe  D. Absolute decline in the health of the U.S. economy  E. Increasing share of world output accounted by other developed nations

Accepted Answer

A

Question 5

Which of the following is of equal importance to both international and domestic businesses?  A. Choosing the appropriate mode for entering a particular country for business  B. Dealing with government restrictions on international trade and investment  C. Coordinating and controlling globally dispersed production activities  D. Developing policies for dealing with exchange rate movements  E. Dealing with business attacks from foreign competitors

Accepted Answer

E

Question 6

As a result of a phenomenon known as Moore\'s law, the cost of coordinating and controlling a global organization doubles every five months. T/F

Accepted Answer

FALSE

Question 7

As an economy grows and income levels rise, initially pollution levels decline. T/F

Accepted Answer

FALSE

Question 8

_____ is the most appropriate solution to the problem of slow real income growth among the unskilled workers in the United States.  A. Increasing society\'s investment in education  B. Limiting free trade and globalization  C. Increasing the supply of unskilled workers  D. Restricting exports of jobs  E. Decreasing the wage rates of skilled workers

Accepted Answer

A

Question 9

When IMF grants loans to the nation-states, it requires nation-states to adopt specific economic policies aimed at returning their troubled economies to stability and growth. T/F

Accepted Answer

True

Question 10

The WTO was founded in 1995 to police the world trading system established by the General Agreement on Tariffs and Trade. T/F

Accepted Answer

True

Question 11

The _____ is often seen as the lender of last resort to nation-states whose economies are in turmoil and currencies are losing value against those of other nations.  A. G20  B. World Trade Organization (WTO)  C. United National Development Fund  D. United Nations (UN)  E. International Monetary Fund (IMF)

Accepted Answer

E

Question 12

Which of the following statements is true about globalization?  A. We are moving toward a world in which national economies are becoming self-contained entities.  B. A company does not have to be the size of a multinational giant to facilitate, and benefit from, the globalization of markets.  C. Regulatory and administrative barriers to doing business in foreign nations have been increased.  D. As a result of globalization, people living in developed nations have the playing field tilted in their favor.  E. Globalization has been increasingly helping people protect their jobs from foreign competition.

Accepted Answer

B

Question 13

According to the Moore\'s law:  A. the price of microprocessors continues to fall, while their cost of production increases.  B. the demand for microprocessors continues to rise, while their supply falls.  C. the cost of microprocessors will increase as their power increases.  D. the cost of production of microprocessors continues to fall, while their power increases.  E. the demand for microprocessor technology falls in half every 18 months.

Accepted Answer

D

Question 14

Which of the following best exemplifies globalization of a market?  A. Wine manufacturing firm, Violet Wines, procures high-quality grapes from the neighboring countries.  B. Jewelry manufactured in the mineral rich country Cadmium Republic sells extensively in the U.S. due to its high quality and exclusive designs.  C. The accounts of a U.K. based finance company, are maintained and managed by an accounting firm in the Cedia Republic.  D. Iconic Industries Inc., a U.S. energy company, has generated capital from investors all over the world.  E. The clothes of Sea Shell Fashions, a U.S. based company, are hand sewn by workers in Erbium.

Accepted Answer

B

Question 15

In countries with a market economy:  A. production is determined by the interaction of supply and demand.  B. communism and collectivist goals are given priority.  C. all productive activities are state owned.  D. supply of goods and services is highly restricted.  E. governments support restrictive business practices.

Accepted Answer

A

Question 16

The philosophy behind product safety laws is to reward the originator of a new invention, book, musical record, clothes design, restaurant chain, and the like, for his or her idea and effort. T/F

Accepted Answer

FALSE

Question 17

Which of the following is most likely to be the result of a country having lax intellectual property laws?  A. Firms will be reluctant to enter into such a country.  B. It will stimulate innovation and creative work.  C. Imitating a patented product or process will become difficult.  D. Most of the companies in the country will commit themselves to extensive basic research.  E. Inventors and authors will have better opportunities to grow and to be rewarded.

Accepted Answer

A

Question 18

Which of the following political systems is most likely to advocate democratic political systems and free market economics?  A. Socialism  B. Totalitarianism  C. Feudalism  D. Collectivism  E. Individualism

Accepted Answer

E

Question 19

Judges in a civil law system have the power to interpret the law, whereas judges in a common law system have the power only to apply the law. T/F

Accepted Answer

FALSE

Question 20

The product liability laws are established to protect the:  A. domestic producers from the risk of losing market share to foreign competitors.  B. domestic industries from the attack of foreign competition.  C. firm and its officers when a product does not meet the specific safety standards.  D. consumers in case a product causes injury, death, or damage.  E. originator of a new invention by providing patents, copyrights, and trademarks.

Accepted Answer

D

Question 21

In Nerumbia, all businesses are owned by the state. The Nerumbian government plans production, fixes commodity price, and also gives directions on investments to ensure they benefit the nation as a whole and not only a few individuals. Nerumbia has adopted a _____ economy.  A. capitalist  B. mixed  C. market  D. traditional  E. command

Accepted Answer

E

Question 22

Right-wing totalitarianism generally permits some individual economic freedom but restricts individual political freedom. T/F

Accepted Answer

TRUE

Question 23

Which of the following is true about individualism?  A. Individualism creates an unfavorable environment for international businesses.  B. In individualism, one person exercises absolute control over the economy.  C. In individualism, private ownerships are desirable.  D. Individualism translates into an advocacy of command economics.  E. Political systems that emphasize individualism typically tend to adopt totalitarian governments.

Accepted Answer

C

Question 24

A form of government where political power is monopolized by a party, group, or individual that governs according to religious principles is called _____ totalitarianism  A. tribal  B. communist  C. representative  D. theocratic  E. right-wing

Accepted Answer

D

Question 25

The political, economic, and legal systems of a country raise important ethical issues that have implications for the practice of international business. T/F

Accepted Answer

TRUE

Question 26

It is not possible to have democratic societies that emphasize a mix of collectivism and individualism. T/F

Accepted Answer

FALSE

Question 27

In a pure command economy, the prices at which goods and services are sold are planned by the:  A. World Trade Organization.  B. producers.  C. private monopolists.  D. consumers.  E. government.

Accepted Answer

E

Question 28

Which of the following is true about the common law system?  A. A common law system tends to be less adversarial than a civil law system.  B. Contracts drafted under a common law framework tend to be less specific and short.  C. Common laws cannot be altered, clarified, or amended.  D. Judges in a common law system have the power to interpret the common law so that it applies to the unique circumstances of an individual case.  E. Common law is primarily a moral rather than a commercial law.

Accepted Answer

D

Question 29

Contracts for International Sale of Goods (CIGS) was introduced to:  A. resolve disputes that arise in international trade regarding which country\'s laws to apply.  B. make it illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority.  C. specify the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.  D. allow establishing ownership over intellectual property such as a computer software or a new drug.  E. set up a legal mechanism that will help protect a firm when its product causes injury, death, or damage.

Accepted Answer

A

Question 30

Simply selling state-owned assets to private investors is not enough to guarantee economic growth. T/F

Accepted Answer

True

Question 31

Which of the following factors is most likely to contribute toward lowering the risk of doing business in a country?  A. Presence of a large number of nonperforming loans on the books of the banks in the country  B. A high rate of inflation in the country  C. Presence of a strong legal system in the country  D. Presence of more than one ethnic nationality in the country  E. Low standard of living in the country

Accepted Answer

C

Question 32

Which of the following is a measure of economic development that allows for a direct comparison of living standards in different countries?  A. Gross domestic product  B. Gross national income  C. Purchasing power parity  D. Return on investment  E. Cash reserve ratio

Accepted Answer

C

Question 33

Which of the following factors is most likely to make a country unattractive for international business?  A. Market-based economic policies  B. Presence of business contract law  C. Strong protection of property rights  D. A large market size in terms of population  E. Closed totalitarian dictatorship

Accepted Answer

E

Question 34

Which of the following has been losing importance globally from the early 1980s?  A. Deregulation of economies  B. Privatization of state property  C. Free markets and democracy  D. Centrally planned command economies  E. Legal systems to safeguard property rights

Accepted Answer

D

Question 35

Gross national income per person figures can be misleading because they don\'t consider differences in the cost of living. T/F

Accepted Answer

TRUE

Question 36

The present base for the adjustment of purchasing power parity is the cost of living in:  A. United Kingdom.  B. United States.  C. China.  D. Russia.  E. Brazil.

Accepted Answer

B

Question 37

Economic risks are independent of political risk. T/F

Accepted Answer

FALSE

Question 38

There is no guarantee that democracy will thrive in many of the world\'s newer democratic states. T/F

Accepted Answer

TRUE

Question 39

Which of the following is most likely to be associated with a representative democracy by the people in the West?  A. A command economic system  B. Low level of life expectancy at birth  C. A theocratic regime  D. A market economic system  E. Weak property rights protection

Accepted Answer

D

Question 40

Which of the following indices is developed by the UN to measure the quality of human life in different nations?  A. Wholesale price index  B. Cost of Living Index  C. Productivity Index  D. Human Development Index  E. Consumer Price Index

Accepted Answer

D

Question 41

Which of the following factors is one of the three measures used to determine the human development index (HDI) of a country?  A. Balance of payment  B. Gender ratio  C. Life expectancy at birth  D. Wholesale price index  E. Carbon footprint of the country

Accepted Answer

C

Question 42

_____ typically involves removing price controls; abolishing laws regulating the establishment and operation of private enterprises; and relaxing or removing restrictions on direct investment by foreign enterprises and international trade.  A. Disinvestment  B. Deregulation  C. Divestiture  D. Diversification  E. Debasement

Accepted Answer

B

Question 43

According to Freedom House, all democracies are free countries with no restrictions on political and civil liberties. T/F

Accepted Answer

False

Question 44

The spread of democracy among countries is most likely to lead to:  A. a decline in privatization.  B. the promotion of greater competition.  C. a decrease in innovation and entrepreneurship.  D. a strong shift toward a mixed economy.  E. the widespread use of centrally planned command economies.

Accepted Answer

B

Question 45

Which of the following best increases a country\'s competitive advantage and its attractiveness as a location for international business?  A. presence of class or caste differences  B. prevalence of communist ideals  C. belief in monotheism  D. presence of more than one language or culture  E. an education system that is well developed

Accepted Answer

E

Question 46

According to Geert Hofstede, high power distance cultures were found in countries that let inequalities grow over time into inequalities of power and wealth. T/F

Accepted Answer

True

Question 47

The emphasis on individualism leads to a:  A. high degree of cooperation between individuals.  B. low degree of competition between individuals.  C. low degree of entrepreneurship.  D. high degree of social stratification.  E. high degree of managerial mobility between companies.

Accepted Answer

E

Question 48

Which of the following is true about Geert Hofstede\'s research on cultural dimensions?  A. Hofstede scored low for high power distance and high uncertainty avoidance,  B. Hofstede\'s work is based on the assumption that many countries have more than one culture.  C. Hofstede subsequently added Confucian dynamism, a fifth dimension, that he argued captured additional cultural differences not brought out in his earlier work.  D. Hofstede\'s informants included employees from multiple companies and industries.  E. Hofstede\'s work proved that culture is the most important determinant that influences the economic success of a nation.

Accepted Answer

C

Question 49

According to Max Weber, Protestant ethics paved the way for the development of capitalism in Western Europe and subsequently in the United States. T/F

Accepted Answer

True

Question 50

Geert Hofstede\'s _____ dimension focused on how a society deals with the fact that people are unequal in physical and intellectual capabilities.  A. masculinity versus femininity  B. class consciousness  C. individualism versus collectivism  D. uncertainty avoidance  E. power distance

Accepted Answer

E

Question 51

According to Geert Hofstede, _____ captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors.  A. Confucian dynamism  B. uncertainty avoidance  C. class consciousness  D. power distance  E. social mobility

Accepted Answer

A

Question 52

A caste system and a class system fundamentally differ from one another in the:  A. amount of social mobility they allow.  B. family patterns they promote.  C. time period to which they belong in history.  D. degree of individualism they permit.  E. nature in which they treat women.

Accepted Answer

A

Question 53

With increased economic progress, cultures across the world seem to be moving towards some universally accepted values and norms. This is known as:  A. Confucian dynamism.  B. cultural convergence.  C. class consciousness.  D. ethnocentrism.  E. power distance.

Accepted Answer

B

Question 54

Which of the following is true of folkways?  A. Folkways are norms that are central to the functioning of a society and to its social life.  B. Violation of folkways invites serious retribution.  C. Folkways are routine conventions of everyday life.  D. Folkways are values that have been enacted into law.  E. Folkways are actions of great moral significance.

Accepted Answer

C

Question 55

_____ is a major exception to the principle that ethical systems are grounded in religion.  A. Buddhism  B. Judaism  C. Islam  D. Confucianism  E. Hinduism

Accepted Answer

D

Question 56

Cultural change is unidirectional. T/F

Accepted Answer

False

Question 57

_____ include a society\'s attitudes toward such concepts as individual freedom, democracy, truth, justice, honesty, loyalty, and social obligations.  A. Values  B. Norms  C. Rituals  D. Customs  E. Traditions

Accepted Answer

A

Question 58

Norms refer to the abstract ideas about what a group believes to be good, right, and desirable. T/F

Accepted Answer

False

Question 59

A class system is a more rigid form of social stratification than a caste system in which social mobility is not possible. T/F

Accepted Answer

False

Question 60

_____ holds that the moral worth of actions or practices is determined by their consequences, and is committed to the maximization of good and the minimization of harm.  A. Righteous moralism  B. Cultural relativism  C. Utilitarianism  D. Friedman doctrine  E. Kantianism

Accepted Answer

C

Question 61

Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable. T/F

Accepted Answer

True

Question 62

Which of the following is considered ethical in international business?  A. Giving expensive gifts to foreign government officials of developing countries to gain business  B. Escaping tight pollution limits in the home country by moving production to a country with lax regulations  C. Adopting a zero-tolerance approach toward facilitating payments even if it is considered legal in both home and the host country  D. Dumping of toxic chemicals in resources as oceans that are held in common by all nations, but owned by no one  E. Moving production activities to developing countries where the employment standards are lower than the home country

Accepted Answer

C

Question 63

According to the Friedman Doctrine:  A. the best business decisions are those that produce the greatest good for the greatest number of people.  B. a multinational\'s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.  C. the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.  D. people should be treated as ends and never purely as means to the ends of others.  E. businesses should undertake social expenditures beyond those that are mandated by the law.

Accepted Answer

C

Question 64

_____ is typically associated with managers from developed nations, and it claims that a multinational\'s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.  A. Righteous moralism  B. Sullivan Principle  C. Naive immoralism  D. Cultural relativism  E. Friedman doctrine

Accepted Answer

A

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