Chapter 1-3 International Business

______________ involves the idea that a nation-state is autonomous, cannot intervene in the affairs of other nations, and can enter into binding international agreements. A) National sovereignty B) Cultural liberalism C) Communalism D) Authoritarianism

A) National sovereignty

Under the WTO agreement, ________. A) a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures B) there is no dispute resolution mechanism except for trade involving environmental products C) countries are allowed to place trade barriers on member countries with no particular justification, because like GATT the WTO has no enforcement mechanism D) tariffs are permitted to be levied by developed countries against developing countries but not against each other

A) a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures

An established consumer market that primarily compromises the middle class ad possesses efficient infrastructure is characteristic of _____________ markets. A) developed B) emerging C) frontier D) traditional

A) developed

The widening sets of interdependent relationships among people from different parts of the world is known as _______________. A) globalization B) outsourcing C) franchising D) offshoring

A) globalization

Supporters affirm that globalization __________________. A) increases wealth and efficacy in all countries B) curbs market flexibility in developed nations C) brings an end to practices like outsourcing D) causes worker dislocation that gradually lowers wages

A) increases wealth and efficacy in all countries

______________ is an effective alternative to traditional distribution channels for firms that sell digitized products. A) Digital switchover B) Electronic distribution C) Dual licensing D) Visual merchandising

B) Electronic distribution

Which of the following was originally created to regulate fixed exchange rates and enforce the rules of the international monetary system? A) World Bank B) International Monetary Fund C) European Union D) World Trade Organization

B) International Monetary Fund

The ___________ is an agency created to provide financing for national economic development efforts. A) Financial Stability Board B) World Bank C) Global Financial Markets Association D) World Trade Organization

B) World Bank

The rise of a new international entity called the ________ suggests that any company, regardless of age, experience, and resources, can engage in international business. A) transnational corporation B) born global firm C) global firm D) multinational corporation

B) born global firm

Konesia is a country in which rising incomes are increasing the global demand for basic products and services. Which of the following is the type of market featured in this country? A) virtual market B) emerging market C) traditional market D) feudal market

B) emerging market

Scenario: Topsy Turvey Toys and Ureshi Toys Topsy Turvy Toys is a U.S.-based retailer that buys all its merchandise from Ureshi Toys, a Japan-based toy manufacturer with production facilities in twelve nations. Ureshi Toys markets its toys globally without modification. The products that Ureshi Toys manufactures are examples of ______________. A) customized products B) global products C) intangible products D) niche products

B) global products

Scenario: Donna Bader, Globalization Opponent Donna Bader spent her final year at college studying the effect of various economic factors on the economy of developing nations. Based on the results of her study, she concluded that globalization does these countries more harm than good. Her argument is vulnerable to criticism because it fails to _________. A) demonstrate the importance of market flexibility B) show that political and cultural factors have been taken into account C) highlight the environmental effect of globalization D) quantify the disparity between high-income and low-income nations

B) show that political and cultural factors have been taken into account

Scenario: Jeans Unlimited Jeans Unlimited produces clothing for young adults. It designs its clothes at its New York headquarters and produces them at facilities located in two Southeast Asian countries. The company recently received negative press after one of its facilities was found using questionable labor practices, such as, employing children and operating in a manner that damages the environment. Jeans Unlimited plans to set up new facilities that are designed specifically to reduce impact on the environment. The management has emphasized on recycling and reusing most of their resources. What concept is the company emphasizing in this scenario? A) standardization B) sustainability C) industrialization D) ethnocentricity

B) sustainability

Most companies today operate in an environment of increased transparency and scrutiny regarding their business activities. This is due to _______________. A) the prosperity of developing nations B) the rise of social media C) labor market flexibility in developing nations D) the heterogeneity in markets

B) the rise of social media

Scenario: Donna Bader, Globalization Opponent Donna Bader spent her final year at college studying the effect of various economic factors on the economy of developing nations. Based on the results of her study, she concluded that globalization does these countries more harm than good. Which of the following, if true, weakens her argument? A) people in high-wage countries often can't afford hospital care without financial assistance B) with the exposure to new technology and cultural trends, the standard of living in developing countries has improved C) the employment rate of developed nations has been declining because of international outsourcing D) labor market flexibility across the world has seen little improvement over the last decade

B) with the exposure to new technology and cultural trends, the standard of living in developing countries has improved

______________ is defined as the dispersal of production activities to locations that help a company achieve its cost-minimization or quality-maximization objectives for a good or service. A) Globalization of markets B) Global governance C) Globalization of production D) Global offering

C) Globalization of production

Which of the following best defines international business? A) it includes business transactions in countries other than your home country B) it includes all economic flows between two or more countries C) it includes business transactions involving two or more countries D) it includes private economic flows between two or more countries

C) it includes business transactions involving two or more countries

Each ___________ is composed of unique cultural, political, legal, ad economic characteristics that define business activity within that nation's borders. A) international bond market B) capital market C) national business environment D) operational center

C) national business environment

Which of the following accurately identifies a difference between GATT and the WTO? A) at its inception, GATT had more member nations than the WTO currently has B) GATT could enforce member compliance with agreements, but the WTO cannot C) GATT withdrew the most-favored-nation clause, but the WTO reinstated it D) GATT rules did not cover trade in services, but the rules of the WTO do

D) GATT rules did not cover trade in services, but the rules of the WTO do

Scenario: Donna Bader, Globalization Opponent Donna Bader spent her final year at college studying the effect of various economic factors on the economy of developing nations. Based on the results of her study, she concluded that globalization does these countries more harm than good. Which of the following statements, if true, strengthens Donna's argument? A) Low-wage nations tend to have poorly developed transport and communication systems B) People in low-wage nations have a high mortality rate and no access to healthcare facilities C) Because of the increase in employment opportunities, workers from developing countries flock to developed countries D) Many companies take advantage of lenient labor laws by setting up facilities in low-income countries

D) Many companies take advantage of lenient labor laws by setting up facilities in low-income countries

Christopher, an accounts manager at a mid-sized health care firm, does not have any direct international responsibilities; however, Christopher would most likely benefit from studying international business issues so that he can: A) supervise and evaluate subordinates who have global assignments B) conduct better job interviews C) understand the legalities of importing and exporting products overseas D) better understand how foreign operations affect the company's competitive position

D) better understand how foreign operations affect the company's competitive position

Whereas relocating production to low-cost locales traditionally meant production of goods almost exclusively, it increasingly applies to the production of ________. A) perishables B) domestic products C) global brands D) services

D) services

The rules of the international monetary system are enforced by the World Bank. TRUE FALSE

FALSE

The term "globalization of production" refers to the convergence in buyer preferences in markets around the world. TRUE FALSE

FALSE

Export-processing zones are special areas in which companies engage in tariff-free importing and exporting. TRUE FALSE

TRUE

The General Agreement on Tariffs and Trade (GATT) was designed to promote free trade by reducing both tariffs and nontariff barriers to international trade. TRUE FALSE

TRUE