BusM 430 BYU ALL

Which of the following is a true statement regarding the rule of law?

It's a hallmark of democratic govt.

People in ________ have greater economic freedom than those in ________.

North America ;Asia

Critics of offshoring claim all EXCEPT which of the following?

Offshoring reduces the incomes of people in low-wage countries

In a ________, all dimensions of economic activity, including pricing and production decisions, are determined by a central government plan.

command economy

A ________ law system is based on tradition, judge-made precedent, and usage, and assigns a preeminent position to existing case law as a guide to dispute resolution.

common

In a market economy, the patterns of resource allocation are most directly influenced by ________.

consumers who "vote" by their personal decision to buy or not buy products

In societies where trust is high, ________.

cost of doing business tends to be lower

When divergent cultures come in contact, ________ occurs.

cultural collision

Contact among countries brings about cultural change, a process called ________.

cultural diffusion

Cultural change imposed by an alien culture is called ________.

cultural imperialism

The two main categories in the balance of payments are the ________.

current account and capital account

A major legal challenge that companies face in the global environment often involves which of the following?

dealing with product liability issues

Which of the following has not been a major force increasing globalization in recent decades?

decreasing global cometition

The transition to a different economic system follows a(n) ________ process in every country.

different

In a representative democracy, ________.

elected representatives hold ultimate sovereignty

A worrisome outcome of chronic inflation is that it tends to ________.

erode confidence in a nations currency

Uneven income distribution ________.

exists in almost every country

The principle that an individual has the freedom to pursue his or her interests is called ________.

individualism

Which of the following is characterized by low dependence on an organization and a desire for personal time, freedom, and challenges?

individualism

________ is a general, sustained rise in prices measured against a standard level of purchasing power.

inflation

The so-called "misery index" is the sum of a country's ________.

inflation and unemployment rates

The term globalization is sometimes used to mean the ________.

integration of world economies through the reduction of barriers to the movement of trade, capital, technology, and people

A(n) ________ grants the registered owners of a particular invention, literary or artistic work, symbols, names, images, or designs the right to determine the use of their ideas.

intellectual property right

The ________ of a country specifies the rules that regulate political, social, and business activities so a society can pursue economic and social development and resolve disputes without collapsing into anarchy.

legal system

The methods a country uses to regulate business practices, define how companies conduct business transactions, specify the rights and obligations of those engaged in business transactions, and provide legal redress to those who believe they have been wronged in business transactions are aspects of a country's ________.

legal system

History suggests that if the economic crisis worsens, we are likely to see more people question ________.

legitimacy of capitalism

One of the potential problems for an MNE that practices too much polycentrism is ________.

loss of effective and innovative home-country practices in deference to proven host-country practices

According to the theory of success and reward expectation, the greatest enthusiasm for work generally occurs when there is a ________ likelihood of success combined with a ________ reward for success compared to the reward for failure.

low; high

In the Economic Freedom Index, ________ exhibit high economic freedom whereas ________ exhibit little to no economic freedom.

market economies; command economies

A system in which individuals, rather than the government, make the majority of economic decisions is commonly referred to as a ________.

market economy

When a company does business in another country whose official language is the same as that of the company's home country, the company ________.

may encounter differences in meaning of the same words

In a ________ economy, certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant state ownership and government planning.

mixed

Although English is referred to as the "international language of business,"________.

monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis

Because certain cultural attributes can link groups from different nations more closely than groups within a given nation, international businesspeople ________.

must be careful to compare relevant groups when comparing nations

The process of shifting production from a domestic to a foreign location is known as ________.

offshoring

In a totalitarian political system, ________.

one agent monopolizes political power

A business's day-to-day activities are best described as its ________ concerns.

operational

A(n) ________ ideology is the system of ideas that expresses the goals, theories, and aims of how society should work.

political

________ involves the sale and legal transfer of government-owned resources to private interests.

privatization

Critics of the view that regionalization will prevail over globalization base their argument on the belief that ________.

regionalization is a transition stage toward globalization

Most counterfeit goods are made in markets in which ________ is the basis of the legal system.

rule of man

Societies in which people are willing to work hard and to blame and reward themselves for outcomes are most accurately characterized by a belief in ________.

self-determination

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.

social

Gross national income (GNI), the broadest measure of economic activity for a country, is defined as ________.

the income generated by both total domestic production and the international production activities of national companies

Although globalization may bring economic growth, critics nevertheless contend that ________.

the inequality of gains puts some people in a relatively worse economic situation

In the United States, U3 is the official unemployment rate. This rate provides a measure of which of the following?

those who are not working but are willing and able to work for pay, currently available to work, and actively searching for work

Which of the following is a reason that governments cooperate through treaties, agreements, and consultations?

to attack problems jointly that one country acting alone cannot solve

In a(n) ________ system, a single leader advocates a new society where wrongs will be corrected and harmony will prevail.

totalitarian

A problem of using the nation as a reference point for culture is that ________.

variations are great within a country

Presently, managers typically find that the rule of law is prevalent in ________.

wealthier, westernized countries

When companies face the same competitors in almost all countries where they operate, ________.

what they learn about each other in one country is useful in predicting the other's strategies and actions elsewhere

A foreign direct investment occurs ________.

when a company controls a company abroad

Which of the following describes one of the conditions under which the major problems of cultural collision arise in international business?

when a company's employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors

A multinational enterprise (MNE) is one that is ________.

willing to consider market and production locations anywhere in the world

In a practical sense, the term political system is meant to signify the ________.

working government in a country

Communism champions a ________ system built on state ownership of all economic factors of production and control of all economic activity.

centrally planned

In a democracy, ________.

citizens have the right to participate in the decision-making process

Select the correct order, going from low to high total impact on an MNE, of the following types of political risk: (1) procedural political risks, (2) systemic political risks, (3) distributive political risks, (4) catastrophic political risks.

2,1,3,4

Political systems based on the ________ paradigm, such as those of Japan and China, promote the principle that government may intervene to ensure that business practices benefit society.

collectivistic

Which of the following is one reason that international business has grown at such a rapid pace in the past few decades?

the end of the political schism between the Communist and non-Communist blocs

Critics of freer markets are most likely to claim which of the following?

A freer market skews income distribution and fosters inequality.

Which of the following is the most accurate statement about culture?

Although most cultural variables are universal, the forms these variables take differ from culture to culture.

Which of the following statements is true concerning the competitive environment of international business?

Being a leader in one country doesn't guarantee you'll be a leader in any other country.

The shifting of national borders has created which of the following situations for international business?

It has made comparisons of historical data on international transactions problematic

Managers who are knowledgeable about ________ are better able to identify the location, quantity, quality, and availability of the world's natural resources.

Geographic factors

The broadening set of interdependent relationships among people from different parts of the world is known as ________.

Globalization

Which of the following is a reason for recent governmental relaxation in restrictions on cross-border trade or resource movements?

Governments believe that domestic producers will become more efficient as a result of foreign competition.

Which of the following best defines international business?

It includes all business transactions involving two or more countries, whether the transactions are conducted by private or governmental organizations.

The United Nations' ________ measures life expectancy, educational attainment, and the standard of living in a given country.

Human Development Index

Which of the following statements about approaches to political risk management is not true? Active political risk management assumes that political events unfold in observable patterns that statistical methods can detect. Active political risk management assumes that positive and negative political events in any country are neither independent nor random events. Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards. Passive political risk management assumes that it is difficult, if not impossible, to systematically model political risk.

Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards.

Which of the following must be true about a company in order for it to be considered a multinational enterprise?

The company does not limit its evaluation of markets and production to any one country.

When two countries are very culturally close, ________.

a company may overlook important subtleties

A(n) ________ law system is based on a systematic and extensive codification of laws and puts political officials in charge of specifying accessible, detailed, and written law that applies to all citizens.

civil

The increasing number of people with dual citizenship and people who maintain close contact with their home countries even though living abroad suggest that nations in the future will ________.

accept the transfer of culture both in and out of their boundaries

Some countries opt for a mixed economic system in the belief that although an economic system should aspire to achieve the efficiencies created by free markets, it must also support policies needed to ________.

achieve low unemployment

Capitalism is a free-market system built on all of the following notions EXCEPT ________. arbitrary property rights the right to earn a profit in return for individual effort private ownership of assets private control of investment

arbitrary property rights

The statement that summarizes all economic transactions between a country and the rest of the world during a given period of time is the ________.

balance of payments

In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would ________.

be added to the GNI of the United States but not the GNI of Mexico

Ethnocentrism in international business refers to the ________.

belief that what works best at home should work best everywhere

When businesspeople communicate with people whose language is different from theirs, they should ________.

budget extra time for translation and clarification

Which of the following types of political risks often is caused by ethnic conflict or civil disorder and includes random political developments that adversely affect the operations of all companies in a country?

catastrophic political risk

Proponents of the ideal of ________ argue that individual interests are not as important as the welfare of the group.

collectivism

Governments have signed treaties to protect foreign-owned property rights, such as investments and patents. A primary reason for doing so is to ________.

gain reciprocal advantages

When a company wishes to introduce change in a foreign country, its likelihood of success can be improved by ________.

gaining the support of opinion leaders

Although critics complain that globalization causes the consumption of too many nonrenewable resources while despoiling the environment, those in favor of globalization counter that ________.

globalization encourages the adoption of uniform and superior standards for combating environmental problems

In a command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are planned by ________.

government officials

An economic system is the set of structures and processes that ________ in a country.

guides the allocation of resources and shapes the conduct of business activities

In a(n) ________ culture, people tend to regard seemingly peripheral information as pertinent to decision making and infer meanings from things that people say either indirectly or casually.

high-context

A culture that prefers to first settle principles rather than small issues is most accurately characterized as ________.

idealist

Organizing work differently to improve productivity will likely fail ________.

if changes interfere with strongly-held values.

Foreign direct investment ________.

includes partially owned foreign operations as long as the owner has controlling interest

International businesspeople need to understand social stratification systems where they do business because ________.

such systems indicate who people in a given culture will respect more

The view that globalization is inevitable is based on the belief that ________.

technical advances in transportation and communications are too pervasive for globalization's growth to be hindered

In a country characterized as a high collectivist culture, ________.

the collectivism may be present in kinship arrangements, but not in the workplace

The recent expansion of technology has contributed to growth in international business through ________.

the creation of new products that are important in world trade

The term cultural distance refers to ________.

the degree to which countries' cultures are separated by attributes such as language, ethnicity, and religion