CBA-396 International Business Test #1 JSU (Lenn Rainwater)

Which of the following is an example of deregulation?

A country that encourages foreign direct investment

For privatization to work, it must also be accompanied by _____.

A general deregulation of the economy

Which of the following is an example of intellectual property?

A music score

The downside of increased globalization is _____.

A severe crisis in one region can affect the entire globe

According to political scientist Samuel Huntington, the rise of Islamic fundamentalism is a response to the _____.

Alienation produced by modernization

Which of the following is true regarding international businesses?

All MNEs are international businesses

A society's social structure refers to its _____.

Basic social organization

The _____ associated with doing business in a country are a function of that country's political, economic, and legal systems.

Benefits, costs, and risks

The two largest emitters of carbon dioxide are _____.

China and the United States

A law system that is based on a detailed set of laws organized into codes is _____.

Civil

A condition where people tend to perceive themselves in terms of their class background and this shapes their relationships with members of other classes is known as _____.

Class consciousness

A _____ is a less rigid form of social stratification in which social mobility is possible.

Class system

A political system that prioritizes the needs of the society over individual freedoms is called _____.

Collectivism

Which of the following is a step in the shift toward a market-based economic system?

Creation of a legal system to safeguard property rights

The connection between _____ and _____ has important implications for the choice of countries in which to locate production facilities and do business.

Culture; competitive advantage

In many countries entrepreneurs and other business leaders, eager to protect their property rights and ensure the dispassionate enforcement of contracts, had pushed for _____; this contributed to a wave of democratic revolutions during the late 1980s and early 1990s.

Democratic reforms

People's right to protest on issues of accountability in public expenditure would be possible in a _____ political setup.

Democratic

Several of the fastest-growing Asian economies adopted more _____ governments during the past three decades, including South Korea and Taiwan.

Democratic

A market economy encourages innovation because _____.

Economic freedom leads to greater incentives for innovation

The Uruguay Round provided _____.

Enhanced protection for patents, trademarks, and copyrights.

"Beggar thy neighbor" retaliatory trade policies involved countries progressively lowering trade barriers against each other, which contributed to the Great Depression of the 1930s.

False

A class system is a rigid form of social stratification in which the position a person has by birth cannot be changed through his or her own achievements or luck.

False

A country with a well-functioning market economy does not need laws protecting private property rights and providing mechanisms for contract enforcement.

False

A current trend in international business is the decline of medium-sized and small multinationals, known as mini-multinationals.

False

A firm needs to become a multinational enterprise to engage in international business.

False

A market with a large number of consumers with low living standards will have a relatively large market when measured in economic terms.

False

A nation's legal system is usually of very little interest to international business managers, because international businesses are headquartered in different countries.

False

According to supporters of free trade, as countries get richer they commit greater violation of environmental and labor regulations.

False

An antagonistic relationship between management and labor classes may result in lower costs of production.

False

Because of its individualistic mind-set, Japanese culture is more supportive of entrepreneurial activities than American culture.

False

Democracy is a form of government that prohibits opposing political parties.

False

GDP allows a more direct comparison of living standards in different countries than other measures.

False

GDP is one of the measures used by the Human Development Index (HDI) to measure the quality of human life in different nations.

False

Hofstede's study found that in masculine cultures, sex roles were less sharply distinguished, and little differentiation was made between men and women int he same job.

False

Hong Kong has economic freedom, so it follows that it also has political freedom.

False

In a command economy, the prices are determined by the free interplay of demand and supply.

False

In a totalitarian country, there are safeguards to protect an individual's right to freedom of expression, opinion, and organization.

False

In today's world of global communications, rapid transportation, and global markets, cultural differences have ceased to exist.

False

Islam is a polytheistic religion, like Christianity and Judaism.

False

Johann's business does not make consumer products; therefore, it would not be likely to participate in global markets.

False

Judge Michaels operates in a country with a civil law system. This system has more flexibility than a common law system.

False

Managing an international business is quite similar to managing a domestic business.

False

Many 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

Most property in poor countries is owned legally by investors.

False

Norms are abstract ideas about what a group believes to be good, right, and desirable.

False

Outsourcing is a process that is limited to manufacturing enterprises.

False

Patents discourage companies from committing themselves to extensive basic research.

False

Political freedom is one of the measures used by the Human Development Index (HDI) to measure the quality of human life in different nations.

False

Product liability can be much lower if a product does not conform to required safety standards.

False

Product liability sets certain safety standards to which a product must adhere.

False

Since Wally's Whistles is a medium-size business, it wouldn't benefit from globalization.

False

Sine 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

The Foreign Corrupt Practices Act does not allow for grease payments.

False

The Republic of Elbow has a command economy, and as such, its objective is to encourage free and fair competition between private producers.

False

The Trade-Related Aspects of Intellectual Property Rights agreement attempts to reduce intellectual property protections to enhance trade.

False

The Uruguay Round, finalized in December 1993, reduced protection for patents, trademarks, and copyrights.

False

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

The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based.

False

The communists believed that socialism could be achieved by democratic means and turned their backs on violent revolution and dictatorship.

False

The globalization of the world economy has resulted in a relative increase in the dominance of U.S. firms in the global marketplace.

False

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

The term SOCIAL STRATA refers to the extent to which individuals can move out of the strata into which they were born.

False

The value systems and norms of a country are unrelated to the costs of doing business in that country.

False

To improve airport security following a major terrorist attack, the government of a country takes over the airport security industries. This is an example of privatization.

False

Totalitarian states promote human freedom and human development, which facilitates economic progress.

False

When Cyprus had a financial crisis, it went to the World Bank, known as the lender of last resort, to bail it out.

False

World Bank gives aid of $100 million to Kenya for creating rural health care facilities. This is an example of foreign direct investment.

False

There are three values central to the Confucian system of ethics that have very important economic implications. Which of the following is one of these values?

Honesty in dealing with others

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

_____ 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

Economic growth appears to be a function of a country's capacity for growth and its _____.

Free market system

Which of the following is a risk associated with globalization?

Global financial contagion

Several studies have shown that economic advancement and _____ are important factors in societal change.

Globalization

Which of the following is a feature of a democracy?

Governance by people or elected representatives

The influential Peruvian development economist Hernando de Soto has argued that much of the developing world will fail to reap the benefits of capitalism until they _____.

Have better defined and secure property rights

In 2000, the United Nations established the _____ to reduce the number of people who live in extreme poverty by 2015.

Millennium Development Goals

Class-based conflict between workers and management in class-conscious societies can lead to _____.

Increased costs of doing business

The social organization of Western society tends to emphasize on _____.

Individual achievement

Which of the following statements about individualism is true?

Individualism and democracy go hand in hand

_____ refers to a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun.

Indulgence

Which of the following is a first-mover advantage?

International firms may gain experience in that country's business practices

Issy's Ice Cream is an international business. As such, it _____.

Invests in international trade or investment

Which of the following is the most widely practiced theocratic legal system in the world today?

Islamic law

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

Google launched Google Plus to gain a foothold in the social media market. However, given that there are numerous social networking platforms and Facebook is already a leader in social media, Google Plus found it challenging to generate brand loyalty and establish itself in the market. This was because of _____.

Late-mover disadvantage

Globalization of markets results in markets becoming _____.

Less diverse

Which of the following is one of the measures that HDI is based on?

Life expectancy at birth

Which of the following is a characteristic of a command economy?

Limited international trade

The costs of doing business in a country tend to be greater if _____.

Local laws set strict standards with regard to environmental pollution

Which of the following factors is likely to make a country a more attractive location for international business?

Market-based economic policies

Hofstede's masculinity versus femininity dimension looked at the relationship between gender and work roles and found that in _____.

Masculine cultures, sex roles were sharply differentiated, and traditional "masculine values" determined cultural ideals

In 2008, the U.S. government took an 80 percent stake in AIG to stop that financial institution from collapsing, the theory being that if AIG did collapse, it would have very serious consequences for the entire financial system. What type of economy is this an example of?

Mixed

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

Which of the following statements about the use of spoken language is true?

Most people prefer to converse in their own language rather than English

Antitrust laws in the United States are designed to _____.

Outlaw monopolies

In the 1970s, the United States _____, which requires all publicly traded companies, whether or not they are involved in international trade, to keep detailed records that would reveal whether a violation of the act has occurred.

Passed the Foreign Corrupt Practices Act

The term _____ stresses that the political, economic, and legal systems of a country are interdependent.

Political economy

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

_____ is seen as a way to stimulate gains in economic efficiency by giving owners a powerful incentive--the reward of greater profits--to search for increases in productivity, to enter new markets, and to exit losing ones.

Privatization

In a pure market economy, _____.

Production is determined by the interaction of supply and demand.

Max Weber was a German sociologist who, in 1904, made the connection between _____ and "the spirit of capitalism."

Protestant ethics

The _____ adjustment allows for a more direct comparison of living standards in different countries.

Purchasing Power Parity (PPP)

Ethical systems are _____.

S set of moral principles, or values, that are used to guide and shape behavior

The rise in the number of mini-multinationals means that _____.

Small businesses are becoming increasingly involved in international trade and investment

People who share a common set of values and norms form a _____.

Society

An act as simple as shaking hands when meeting new people is an example of _____.

Symbolic behavior

Which of the following was established to maintain order in the International monetary system?

The IMF

Which of the following focuses on making low-interest loans to cash-strapped governments in poor nations that wish to undertake significant infrastructure investments?

The World Bank

The World Trade Organization promotes _____.

The lowering of barriers to cross-border trade and investment

During the past two decades, change in Latin America has been characterized by _____.

The sale of state-owned enterprises to private investors

Which of the following is a reason that little progress has been made toward the ambitious goals set at the 1992 Earth Summit in Rio de Janeiro?

There is a culture of denial in the United States

Which of the following is true of the supporters of debt relief for HIPCs?

They include Bono, the Dalai Lama, and Jeffrey Sachs among their ranks.

Why did many Japanese firms invest in North America and Europe in the 1970s?

To provide a hedge against unfavorable currency movements

Systems that emphasize collectivism tend toward _____.

Totalitarianism

A country's economic system and property rights regime are reasonably good predictors of economic prospects.

True

A theocratic law system is one in which the law is based on religious teachings.

True

According to critics of globalization, today's interdependent global economy limits a nation's national sovereignty.

True

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

According to supporters of debt relief, new democratic governments in poor nations should not be forced to honor debts incurred by corrupt and dictatorial predecessors.

True

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

Both Hindus and Buddhists stress the afterlife and spiritual achievement rather than involvement in this world.

True

Education plays an important role, from an international business perspective, as a determinant of national competitive advantage.

True

Folkways include rituals and symbolic behavior.

True

For privatization to work, it must also be accompanied by a more general deregulation and opening of the economy.

True

Foreign direct investment by non-U.S. firms increased because they wanted to disperse production activities to optimal locations and to build a direct presence in major foreign markets.

True

Fred wanted to protect his novel from piracy, so he copyrighted it. Patents, copyrights, and trademarks establish ownership rights over intellectual property.

True

Globalization of production can help companies lower their overall cost structure or improve the quality or functionality of their product offering.

True

Guanxi is an important mechanism for building long-term business relationships and getting business done in China.

True

Hofstede's research has been criticized because it was culturally bound.

True

If a country's economy is to sustain long-term economic growth, the business environment must be conducive to innovations and entrepreneurial activity.

True

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

In mixed economies, governments tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.

True

In mixed economies, in certain sectors the state sets prices, owns businesses, limits private enterprise, restricts investment by foreigners, and restricts international trade.

True

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

International businesses that are ill-formed about the practices of another culture are likely to fail.

True

Many of the world's larger trading nations, including India and the United Kingdom, have not ratified the United Nations Convention on Contracts for the International Sale of Goods (CISG).

True

Max Weber believed that Protestantism encouraged capitalism's development by emphasizing the importance of wealth creation and frugality.

True

Max Weber believed that devout Hindus would be less likely to engage in entrepreneurial activity than devout Protestants.

True

Most modern democratic states practice representative democracy.

True

New information and communication technologies have enabled the spread of democratic ideals.

True

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

Peruvian development economist Hernando de Soto has argued that the chronic inability of property owners to establish legal title to the property they own is a key problem for innovation and entrepreneurial activity in developing nations.

True

Property rights can be violated in two ways--through private action and through public action.

True

Rivers Inc., a U.S.-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

Some believe the Cold War was simply about nuclear proliferation, but in many respects, it was a war between collectivism and individualism.

True

Studies of privatization in Central Europe have shown that the process often fails to deliver predicted benefits if the newly privatized firms continue to receive subsidies from the state and if they are protected from foreign competition.

True

The convergence hypothesis states that there is a slow but steady merging occurring across different cultures toward some universally accepted values and norms.

True

The cost of microprocessors continues to fall, while their power increases. This statement supports the predictions made by Moore's Law.

True

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

The number of command economies has fallen dramatically since the demise of communism in the late 1980s.

True

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

The political systems of a country raise ethical issues that have implications for the practice of international business.

True

Upon meeting a foreign business executive, a Japanese executive will hold his business card in both hands and bow while presenting the card to the foreigner. This is an example of ritual behavior.

True

When Penelope returned home from vacation, she found her store had been robbed and her most valuable merchandise was gone. This violation of property rights is considered private action.

True

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

According to Islam, those who hold property are regarded as _____.

Trustees

The _____ was established on October 24, 1945, by 51 countries committed to preserving peace through international cooperation and collective security.

United Nations

Although many countries have stringent intellectual property regulations on their books, the enforcement of these regulations has often been lax. This has been the case even among many of the 185 countries that are now members of the _____, all of which have signed international treaties designed to protect intellectual property.

World Intellectual Property Organization

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