CBA 396 Ch. 1-4 Exam
T or F. A country with a well-functioning market economy does not need laws protecting private property rights and providing mechanisms for contract enforcement.
False
T or F. A current trend in international business is the decline of medium-sized and small multinationals, known as mini-multinationals.
False
T or F. A market with a large number of consumers with low living standards will have a relatively large market when measured in economic terms.
False
T or F. A nation's legal system is usually of very little interest to international business managers, because international businesses are headquartered in different countries.
False
T or F. According to supporters of free trade, as countries get richer they commit greater violation of environmental and labor regulations.
False
T or F. An antagonistic relationship between management and labor classes may result in lower costs of production.
False
T or F. Because of its individualistic mind-set, Japanese culture is more supportive of entrepreneurial activities than American culture.
False
T or F. Contracts under a civil law system tend to be very detailed with all contingencies spelled out.
False
T or F. Democracy is a form of government that prohibits opposing political parties.
False
T or F. Economic risks are independent of political risk.
False
T or F. GDP allows a more direct comparison of living standards in different countries than other measures.
False
T or F. GDP is one of the measures used by the Human Development Index (HDI) to measure the quality of human life in different nations.
False
T or F. Hong Kong has economic freedom, so it follows that it also has political freedom.
False
T or F. In Sen's view, development is an economic process that should be assessed primarily by material output measures such as GNI per capita.
False
T or F. In a totalitarian country, there are safeguards to protect an individual's right to freedom of expression, opinion, and organization.
False
T or F. Islam is a polytheistic religion, like Christianity and Judaism.
False
T or F. May totalitarian regimes were able to deliver economic progress to the vast bulk of their populations, which curbed the spread of democracy during the late 1980s.
False
T or F. Norms are abstract ideas about what a group believes to be good, right, and desirable.
False
T or F. Outsourcing is a process that is limited to manufacturing enterprises.
False
T or F. Product liability can be much lower is a product does not conform to required safety standards.
False
T or F. Since Wally's Whistles is a medium-sized business, it wouldn't benefit from globalization.
False
T or F. Since the late 1980s, there has been a strong move away from a more free market economic model and toward more centrally planned and mixed economies.
False
T or F. The Foreign Corrupt Practices Act does not allow for grease payments.
False
T or F. The Republic of Elbow has a command economy, and as such, its objective is to encourage free and fair competition between private producers.
False
T or F. The Uruguay Round, finalized in Dec. 1993, reduced protection for patents, trademarks, and copyrights.
False
T or F. The World Bank has focused on policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties.
False
T or F. The communists believed that socialism could be achieved by democratic means and turned their backs on violent revolution and dictatorship.
False
T or F. The mudarabah contract is the most widely used Islamic banking method, because it is the easiest to implement.
False
T or F. The state of Illinois was having budget difficulties, so it hired several private management consultancy firms to manage some state-owned enterprises. This is an example of privatization.
False
T or F. The value systems and norms of a country are unrelated to the costs of doing business in that country.
False
T or F. To facilitate international business, property rights are defined in a consistent way across countries.
False
T or F. Totalitarian states promote human freedom and human development, which facilitates economic progress.
False
Which of the following is a first-mover advantage?
International firms may gain experience in that country's business practices
What is true about the International Monetary Fund?
It is seen as the lender of last resort to nation-states whose economies are in turmoil.
____ is required for a business environment to be conducive to innovation and entrepreneurial activity.
Strong legal protection of property rights
Which of the following statements pertaining to innovation and entrepreneurship is true?
They are the engines of growth
Which of the following statements about the legal systems of countries is true?
They can affect the attractiveness of a country as an investment site or market.
T or F. A caste system is a closed system of stratification in which social position is determined by the family into which the person is born.
True
T or F. A theocratic law system is one in which the law is based on religious teachings.
True
T or F. According to Hofstede, the concept of Confucian dynamism captures attitudes toward time, persistence, protection of face, and respect for tradition.
True
T or F. According to WTO data, the volume of world merchandise trade has grown faster than the world economy since 1950.
True
T or F. According to globalization critics, the decline in unskilled wage rates is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers.
True
T or F. Because Russia has shown signs of shifting back toward greater state involvement in economic activity and authoritarian government, doing business in Russia is considered risky.
True
T or F. Both Hindus and Buddhists stress the afterlife and spiritual achievement rather than involvement in this world.
True
T or F. Education plays an important role, from an international business perspective, as a determinant of national competitive advantage.
True
T or F. Evidence suggests that technological change has had a bigger impact than globalization on the declining share of national income enjoyed by unskilled labor.
True
T or F. Globalization of production can help companies lower their overall cost structure or improve the quality or functionality of their product offering.
True
T or F. Hofstede's research has been criticized because it was culturally bound.
True
T or F. If a country's economy is to sustain long-term economic growth, the business environment must be conducive to innovations an entrepreneurial activity.
True
T or F. In countries where the value of group identification is considered to be primary, managers and workers are discouraged from moving from company to company.
True
T or F. In mixed economies, governments tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.
True
T or F. Individualism has led to a high degree of managerial mobility between companies resulting in managers who have good general skills but lack company-specific experience.
True
T or F. International businesses that are ill-informed about the practices of another culture are likely to fail.
True
T or F. Max Weber believed that Protestantism encouraged capitalism's development by emphasizing the importance of wealth creation and frugality.
True
T or F. New information and communication technologies have enabled the spread of democratic ideals.
True
T or F. One of the UN's central mandates is the promotion of higher standards of living, full employment, and conditions of economic and social progress and development.
True
T or F. Property rights can be violated in two ways--through private action and through public action.
True
T or F. Rivers Inc., a US based sports apparel manufacturer, sets up a production unit in China to take advantage of the lower labor costs there. This is an example of foreign direct investment.
True
T or F. Some believe the Cold War was simply about nuclear proliferation, but in many respects, it was a war between collectivism and individualism.
True
T or F. The cost of microprocessors continue to fall, while their power increases. This statement supports the predictions made by Moore's Law.
True
T or F. The long-run monetary benefits of doing business in a country are a function of the size of the market, the present wealth of consumers in that market, and the likely future wealth of consumers.
True
T or F. The lowering of barriers to international trade enables firms to view the world, rather than a single country, as their market.
True
T or F. The number of command economies has fallen dramatically since the demise of communism in the late 1980s.
True
T or F. The parties to an agreement normally resort to contract law when one party feels the other has violated either the letter or the spirit of an agreement.
True
T or F. When communism collapsed, many of the communist countries lacked the legal structure required to protect property rights because all the property was earlier held by the state.
True
The ____ was established on Oct. 24, 1945, by 51 countries committed to preserving peace through international cooperation and collective security.
United Nations
The ____ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states.
World Trade Organization
A Japanese executive's ritual of presenting a business card to a foreign business executive is an example of
a folkways
The downside of increased globalization is
a severe crisis in one region can affect the entire globe
Cross-cultural literacy refers to
an understanding of how cultural differences can affect business
Studies of privatization in central Europe have shown that the process often fails to deliver predicted benefits if the newly privatized firms
are sheltered from foreign competition
A law system that is based on a detailed set of laws organized into codes is
civil
Paralleling the spread of democracy since the 1980s has been the transformation from
command economies to market-based economies
Under the _____, cases are judged with reference to three characteristics: tradition, precedent, and custom.
common law system
Peoples' right to protest on issues of accountability in public expenditure would be possible in a _____ political set-up.
democratic
Plato ____; he believed that society should be stratified into classes, with those best suited to rule administering society for the benefit of all.
did not equate collectivism with equality
Stagnation can occur in planned economies because
entrepreneurial individuals have few economic incentives for innovation
Which of the following is a legal means by which the state can expropriate the profits from innovation?
excessive taxation
Company Zee has been found guilty of manufacturing a product that caused harm to its users, violating criminal liability laws. Which of the following is the most likely outcome for Company Zee?
fines or imprisonment
When Jana visits her mother, she takes great pains to watch her language and use good manners because that is what her mother expects of her. This demonstrates the concept of
folkways
_____ are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils, neighborly behavior, and the like
folkways
Toyota is a multinational enterprise (MNE), which is a firm that
has production activities in more than two countries
There are three values central to the Confucian system of ethics that have very important economic implications. Which of the following is one if these values?
honesty in dealings with others
A common law system is different from a civil law system because
in a common law system a judge has the power to interpret the law, while in a civil law system a judge has the power only to apply the law
Which of the following philosophies can be traced back to the ancient Greek philosopher Aristotle?
individualism
Globalization of markets results in markets becoming
less diverse
According to Geert Hofstede's study, which of the following cultural dimensions would be characterized by a greater readiness to take risks and less emotional resistance to change?
low uncertainty avoidance
The concept of mobility between castes within an individual's lifetime
makes no sense to traditional Hindus
In which of the following economies would the government be most likely to take into state ownership troubled firms whose continued operation is thought to be vital to national interests?
mixed economies
The finance minister of a country considers several large, state-owned iron manufacturing units to be inefficient and a source of corruption. To generate resources for public expenditure and promote economic growth, the government decides to auction an entire iron manufacturing plant to sell it to a strategic investor. This process exemplifies
privatization
Since the collapse of communism over a quarter of a century ago, formerly communist nations have transformed their economies by globalizing their markets. This involves
privatizing state-owned enterprises
To account for differences in the cost of living, one can adjust GNI per capita by ____, which allows for a more direct comparison of living standards in different countries.
purchasing power
The World Trade Organization has estimated that the developed nations of the world can raise global economic welfare by $128 billion by
removing subsidies given to their agricultural producers
One reason for Japan's shift in values away from collectivism and toward individualism may be that
richer societies exhibit less need for social and material support structures built on collectives
Which of the following refers to the extent to which individuals can move out of the strata into which they are born?
social mobility
Since the late 1980s, there has been a spread of democracy. This is because
the socialist model failed to deliver economic progress to the vast bulk of their populations
____ refers to a state where political power is monopolized by a party, group, or individual that governs according to religious principles.
theocratic totalitarianism
Why did many Japanese firms invest in North America and Europe in the 1970s?
to provide a hedge against unfavorable currency movements
According to _____, suffering originates in people's desires for pleasure.
Buddhism
Which of the following countries has been the largest recipient of foreign direct investment and, in 2016, received a record $249.8 billion in inflows?
China