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QUESTIONS WITH
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Which of the following is NOT a likely reason to study international business?
A) Global events affect almost all companies.
B) Differences among countries in physical, social, and competitive conditions may cause companies to alter their operating methods from country to country.
C) Business conducted outside the confines of any one country is inexplicably on the decline.
D) Firms may be better able to obtain better or less expensive resources by operating internationally.
C
) In terms of international business, it is most accurate to say that ________.
A) there is a universal "best way" to conduct business
B) global competition affects large companies but not small ones
C) most firms depend either on foreign markets and supplies or compete against companies that do
D) government regulation of international business has little effect on a company's profits
C
Devon, an accounts manager at a large electronics firm, has no direct international responsibilities. However, Devon would most likely benefit from studying international business issues so that he can ________.
A) conduct better job interviews
B) better understand how foreign operations affect the company's competitive position
C) supervise and evaluate subordinates who have global assignments
D) understand the legalities of importing and exporting products overseas
B
The shifting of national borders has most likely created which of the following situations for international business?
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A) It has left rural residents more isolated from technology.
B) It has complicated the understanding of behavioral factors affecting business.
C) It has increased physical barriers to exporting.
D) It has slowed communications between a company's headquarters and foreign operations.
C
Which of the following is an indication of the increased globalization of business since the end of World War II?
A) Foreign trade has largely replaced foreign ownership as a means of conducting international business.
B) World trade has grown more rapidly than world production.
C) Globally, consumers now depend on foreign output for more than half their consumption.
D) Countries have increased their import restrictions to counter the rising tide of imports.
B
Most of the world's goods and services are sold ________.
A) in international markets
B) in the countries where they are produced
C) through exports to small countries
D) through exports to large countries
B
According to the A.T. Kearny/Foreign Policy Globalization Index, countries ________.
A) tend to be ranked similarly on all four dimensions
B) are more globalized on the political dimension than on personal contact
C) that are large in land mass and population are less globalized than small countries
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Which of the following best explains why international business has grown rapidly in the past few decades?
A) the end of the political schism between the Communist and non-Communist blocs
B) greater income equality in most countries
C) growing concern about climate change
D) increased concerns about terrorism
A
Advanced communication systems have contributed to growth in international business by ________.
A) enabling better oversight of global operations
B) reducing the effects of global competition
C) decreasing the cost of cargo transportation
D) reducing export regulations
A
Imported flowers are now a stronger competitor to U.S. grown flowers in the U.S. market. Which of the following is likely the MOST important factor for this increase in imports?
A) more effective production techniques
B) advances in communication systems
C) advances in transportation
D) cross-national cooperation
C
Because consumers want a greater variety of goods and services at lower prices, many governments have ________.
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A) reduced their restrictions on the international movement of goods and services
B) acted to tax most imports at a lower rate than domestic products
C) sought to eliminate reciprocal advantages negotiated through international organizations and treaties
D) increased their participation in multinational problem-solving efforts
A
Which of the following best explains recent governmental relaxation of restrictions on cross-border trade or resource movements?
A) Most countries face shortages of workers, so they seek immigrants who can help them produce more.
B) Governments believe that this will decrease the need to make their own companies more innovative.
C) Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary.
D) Governments believe that domestic producers will become more efficient as a result of foreign competition.
D
A company starting out with a global focus, usually because of the international experience of its founders, is called a ________.
A) multinational enterprise
B) transnational company
C) strategically allied company
D) born-global company
D
In a strategy known as ________, many new companies locate themselves near competitors and suppliers.
A) offshoring
B) franchising
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Governments have signed treaties to protect foreign-owned property rights, such as investments and patents. A primary reason for doing so is to ________.
A) gain reciprocal advantages
B) reduce the domestic effects of other countries' economic policies
C) deal with areas of concern outside the territory of any one country
D) reduce national conflicts leading to violent political demonstrations
A
All of the following are areas in which commercial activities take place outside the territory of any nation EXCEPT ________.
A) noncoastal areas of the oceans
B) the Panama and Suez Canals
C) outer space
D) Antarctica
B
What is the most likely reason that governments cooperate with each other through treaties, agreements, and consultations?
A) to gain an advantageous division of labor
B) to be in compliance with United Nations' requirements
C) to attack problems jointly that one country acting alone cannot solve
D) to assure that all countries get an equitable share of taxes from multinational enterprises
C
Which of the following is the LEAST likely reason that small countries worry about overdependence caused by globalization?
A) A large country on whom they depend may pressure them on political matters.
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B) A large international firm may dictate its terms of operations in a small country.
C) A large company may exploit legal loopholes to avoid tax payments.
D) A large country may substantially increase its demand for the small country's production.
D
Which of the following statements would most likely be made by a supporter of globalization?
A) Globalization encourages the adoption of uniform and superior standards for combating environmental problems.
B) Economic growth created by globalization is largely in services, which involves the use of few nonrenewable resources.
C) Global competition discourages resource-saving technologies, which are costly.
D) Air pollution and toxic runoff problems increase with global economic growth.
A
Curtailment of logging in the Amazon region is generally viewed as environmentally beneficial for the planet as a whole. However, unemployed Brazilian workers have felt that job creation inside Brazil is more important than climate protection outside Brazil. This example best illustrates which of the following?
A) why smaller countries are concerned that large international companies are powerful enough to dictate operating terms
B) why globalization is needed to foster uniform standards for combating environmental problems
C) how cultural homogeneity threatens the cultural foundation of smaller nations
D) how global interests can conflict with a country's local interests
D
Although globalization may bring economic growth, critics nevertheless contend that ________.
A) the growth is too fast
B) the inequality of gains puts some people in a relatively worse economic situation
C) this growth is mainly for the future, thus ignoring present economic growth needs
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Critics of offshoring claim all EXCEPT which of the following?
A) Cost savings are seldom passed on to final consumers.
B) Offshoring reduces the incomes of people in low-wage countries.
C) Incomes of workers in countries whose companies offshored production have gone down as a percentage of national income.
D) Many workers who have been displaced by offshoring do not have the skills needed for higher-value jobs.
B
Assume that company executives at the firm would like to increase sales by expanding into an international market. Which of the following factors, if true, best supports a decision to expand sales globally?
A) It can offshore most of its production.
B) It can obtain all of its resources for the same price overseas.
C) Its costs of making additional sales would not increase disproportionately.
D) The foreign market has higher real interest rates.
C
Kevin, marketing manager of the North American Bowling League, has decided to televise major bowling competitions to viewers in multiple countries rather than only in Canada and the U.S. Which of the following goals would this most likely help Kevin accomplish?
A) acquiring new resources
B) minimizing corporate risks
C) increasing sales and profits
D) obtaining competitive advantages
C
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A firm is currently seeking resources from foreign countries. Which of the following is the LEAST likely reason for doing so?
A) manufacturing products at a lower cost
B) gaining knowledge about a specific market
C) following a customer into the global market
D) differentiating its products from the competition
C
Which of the following BEST explains how a firm reduces risk by operating internationally?
A) taking advantage of business-cycle differences among countries
B) buying competitive risk insurance unavailable domestically
C) preventing competitors from operating in the countries it has entered
D) operating in less competitive environments than those at home
A
An example of a U.S. merchandise import is an automobile made in ________ and sold ________.
A) the United States by a Japanese company; in the United States
B) the United States by a Japanese company; outside the United States
C) Japan by a Japanese company; in the United States
D) Japan by a U.S. company; outside the United States
C
Visible exports and imports are ________.
A) merchandise imports and exports
B) the sum total of goods and services traded
C) international transactions paid for in money rather than barter
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Which term refers to two or more companies that share ownership of an FDI?
A) turnkey operation
B) transnational firm
C) joint venture
D) franchise
C
A multinational enterprise (MNE) is best defined as a firm ________.
A) that is a member of the Fortune 500
B) with foreign business partners
C) involved in global franchising
D) with foreign direct investments
D
The term used by the United Nations as a synonym for multinational enterprise is ________.
A) multinational corporation
B) transnational company
C) international firm
D) born-global
B
Politics, law, culture, and economy are all examples of ________ factors that can affect the ways in which companies produce and sell their products in foreign markets.
A) social
B) physical
C) competitive
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D) political
A
Managers who are knowledgeable about ________ are better able to identify the location, quantity, quality, and availability of the world's natural resources.
A) political factors
B) geographic factors
C) competitive factors
D) cultural factors
B
Although the U.S. film industry depends heavily on revenue in foreign countries, revenue from international markets is usually low for a sports-themed film. This is most likely due to ________ factors.
A) political
B) geographic
C) behavioral
D) legal
C
In addition to understanding the laws affecting business in countries where their companies operate, it is most important for managers to understand the ________.
A) methods for appointing local judges
B) ethical rationale behind the laws
C) history of the local legal system
D) degree of law enforcement
D
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A) what they learn about each other in one country is useful in predicting the other's strategies and actions elsewhere
B) the market leader is the same everywhere
C) there is less need to understand the physical and societal factors of each country
D) they are less likely to enter joint ventures with other companies
A
The view that globalization is inevitable is most likely based on the belief that ________.
A) international organizations will replace nation-states
B) protesters against globalization will be persuaded to change their views
C) people want more global homogeneity of cultures
D) technical advances in transportation and communications are highly pervasive
D
Critics of the view that regionalization will prevail over globalization most likely base their argument on the belief that ________.
A) regionalization is a transition stage toward globalization
B) neighboring countries are more apt to disagree politically than distant countries
C) neighboring countries are too geographically similar to benefit from trade
D) business in non-territorial areas is not regional
A
Which of the following is NOT a common argument for the slowing of future globalization?
A) Antiglobalization interests have been successful in electing parties that oppose freer movement of trade or people.
B) Technological, transportation, and communication advances will decline in the near future.
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C) Major countries have either ignored certain international treaties or have refused to sign them.
D) The growing split between those who succeed in a global environment and those who do not will foster greater antiglobalization sentiments.
B
Some observers feel that international institutions and the people working in them cannot adequately handle the complexities of an interconnected world. Based on this, these observers believe that ________.
A) globalization will slow in the future
B) globalization is nevertheless inevitable
C) international business will grow primarily on a regional basis
D) private companies will replace international organizations in running the world's economy
A
The owner of a U.S. football team and the owner of a Canadian hockey team purchase a British soccer team. This is an example of a ________.
A) royalty
B) portfolio investment
C) turnkey operation
D) joint venture
D
Carnival Cruise Lines lowers its taxes by all of the following EXCEPT ________.
A) hiring host-country nationals who pay no taxes
B) taking advantage of taxation laws in foreign countries
C) sailing in international waters outside countries' tax jurisdiction
D) paying substantial port fees instead of taxes during stopovers
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A) people live in a state of cultural collision
B) cultural studies fail to understand behaviors
C) identity crises make individual's lives chaotic
D) people have more than one cultural group membership
D
When divergent cultures come in contact, ________ occurs.
A) power distance
B) culture shock
C) cultural collision
D) group membership
C
Which of the following best describes a result of cultural collision in international business?
A) A company implements practices that are less effective than intended.
B) Local employees are overlooked for promotions by home country managers.
C) Expatriate managers rely too heavily on local employees for negotiating business deals.
D) Foreign and domestic companies make adjustments for the local culture and legal environment.
A
Which of the following is the most accurate statement about culture?
A) Cultural variables can easily be isolated from other factors such as economic and political conditions.
B) Although most cultural variables are universal, the forms these variables take differ from culture to culture.
C) Most cultural variables are superficial and can easily be influenced by environmental factors.
D) Within a culture, everyone responds to particular cultural variables the same way.
B
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Businesspeople seeking to understand more about another culture in order to successfully conduct business within that culture would be best advised to do which of the following?
A) observing the behavior of people who have gained respect within that cultural environment
B) relying on stereotypes, which are based on averages, to gain an understanding of the culture
C) avoiding cultural research studies because they perpetuate unjustified stereotypes and behaviors
D) memorizing the cultural variations that are typically encountered in a specific cultural environment
A
Which of the following is a common shortcoming of studies examining culture in different countries and regions?
A) Cultures are static, which leads researchers to draw false conclusions from old data.
B) It is impossible to compare countries because of differences in data.
C) Responses are reported in averages, which can lead to a belief in unrealistic stereotypes.
D) People are reluctant to complain about their own cultures, so they present only positive opinions to researchers.
C
The nation offers a workable reference for studying cultural differences because ________.
A) a nation contains only one distinct culture
B) similarity among people is both a cause and effect of national boundaries
C) the commonality of language within a nation eases the process of conducting surveys
D) different groups within the same country always have more in common with each other than with groups in other countries
B
A problem of using the nation as a reference point for culture is that ________.
