INTB Module 7 Multiple Choice
An important phenomenon that is changing the population distribution everywhere is the A. move to rural areas for simpler, safer living. B. urban-to-rural shift. C. increase in housing costs. D. rural-to-urban shift. E. rise in single parent families.
D.
As a general rule, the underground economy in a country will be bigger when A. tax rates are lower. B. drug use is higher. C. income levels are low. D. government red tape is oppressive. E. economic growth is slow.
D.
Economies with per capita incomes in the low to middle range that are in a transition toward developed status are known as A. undeveloped economies. B. socialist economies. C. high-income economies. D. emerging market economies. E. less-developed economies.
D.
Generally, we can assume that the higher the GNI/capita value A. the lower the tax rate. B. the smaller the population. C. the larger the population. D. the more advanced the economy. E. the higher the growth rate.
D.
Most developed nations share the following characteristic(s): A. disguised unemployment or underemployment. B. access to health care and a wide range of health problems. C. vigorous international trade, especially in agriculture and manufacturing. D. a large base of productive capital. E. plentiful educational opportunities and illiteracy.
D.
A large international debt may cause a government to A. impose wage controls. B. increase government spending. C. eliminate price controls. D. restrict bankers' ability to issue debt. E. start a trade war.
A.
Because of the importance of economic information to the control and planning functions at headquarters the collection of data and preparation of reports is usually the responsibility of A. the home office. B. economists in the subsidiaries where changes are occurring. C. economic consultants. D. government economists. E. industry associations.
A.
From comparisons of income distribution studies over time, it generally appears that A. income is more evenly distributed in the richer nations. B. there are few variations in income distribution among developed and developing nations. C. comparisons over time demonstrate that income redistribution changes relatively quickly, so older data have limited value. D. the middle quintiles in most nations are growing at the expense of the bottom 20 percent. E. income inequality decreases in the early stages of development and reverses in the later stages.
A.
Generally, because of higher birth and fertility rates, developing countries have more _________ populations than industrial countries. A. youthful B. mature C. healthy D. unhealthy E. ethnically diverse
A.
Income distribution studies confirm the belief that, generally, income is more evenly distributed in the A. richer nations. B. developing nations. C. newly industrialized nations. D. Pacific Rim nations. E. African nations.
A.
According to the text, a large international debt may result in A. reduction in the level of component production at the local level. B. decreased levels of foreign exchange available for importing components for local assembly. C. increased numbers of importers. D. growing levels of sales by home country factories that sell to the subsidiary in the indebted nation. E. increasing consumer confidence.
B.
According to the text, population size A. provides a basis for estimating consumption of low-priced, mass-consumption products, such as cigarettes and soap. B. and GNI/capita are necessary for estimating consumption of low-priced, mass-consumption products such as soap and soft drinks. C. alone is insufficient for estimating consumption of any product. D. and employment rates are sufficient for estimating consumption of low-priced, massconsumption products such as soap and economy automobiles. E. is an excellent indicator of economic strength.
A.
According to the text, primary reasons for relative changes in labor costs include increases or decreases in A. compensation. B. total output. C. inflation rates. D. hours worked. E. level of education.
A.
According to the text, primary reasons for relative changes in labor costs include increases or decreases in A. hours worked. B. total output. C. inflation rates. D. exchange rates. E. level of education.
A.
According to the text, the highest percentage of population in urban areas by the year 2030 will be in A. more developed regions. B. less developed regions. C. emerging markets. D. least developed countries. E. more agrarian societies.
A.
When measuring the value produced in an economy, most international organizations prefer to use A. GNI. B. GDP. C. GNP. D. PPP. E. Gini.
A.
According to the book, economic analyses become more complex when a firm enters overseas markets because, unlike the situation for a company operating domestically A. the uncontrollable economic variables must be forecast. B. management must operate in two new environments, foreign and international. C. economists know less about foreign exchange rates. D. analysts must now forecast the values for both socioeconomic and economic variables. E. both the uncontrollable economic variables must be forecast and economists know less about foreign exchange rates.
B.
Reductions in birth rates are occurring worldwide because A. governments are scaling back family planning programs. B. of an increased level of urbanization. C. women are experiencing a decline in status. D. governments are encouraging higher levels of marriage and at earlier ages. E. of declining levels of health and education in many nations.
B.
The ________ includes the interactions between domestic and foreign environmental forces, or between sets of foreign environmental forces when an affiliate in one country does business with customers in another. A. foreign environment B. international environment C. host country environment D. global environment E. alien environment
B.
The amount of income left after paying taxes and making essential purchases is known as A. personal savings. B. discretionary income. C. personal income. D. disposable income. E. free cash flow.
B.
The highest rates of urbanization are occurring in A. high-income countries. B. low- and middle-income nations. C. heavily populated nations. D. thinly populated nations. E. post-industrial nations.
B.
According to the text, relative changes in wage rates among nations may cause the multinational firm to A. choose new exchange rates. B. reduce the number of workers. C. change its sources of supply from one country to another. D. install labor-saving machinery. E. eliminate product lines.
C.
The percentages of household expenditures spent on food and beverages by residents of industrialized nations are _______________ the percentages spent by residents of developing nations. A. half B. twice C. equal to D. triple E. two-thirds
A.
The rate of growth of GNI/capita may be more important to marketers than just GNI/capita because A. a stable rate indicates low risk for entry. B. a high rate indicates a fast-growing market. C. a high rate indicates economic instability. D. low rates indicate political stability. E. it indicates how much investment will be needed for entry.
B.
_____________ birth rates are welcomed by governments in some developing nations, but are causing concern in industrialized nations. A. Rising B. Level C. Declining D. Erratic E. Stable
B.
Unit labor costs will not rise in unison with wage rates if A. the governments institute wage and price controls. B. productivity decreases faster than wages increase. C. the gains in productivity are greater than wage increases. D. interest rates rise less than wage rates. E. advertising costs decline.
C.
Which of the following is true regarding the Big Mac Index? A. It is an index calculated by McDonald's to determine if their Big Mac sandwiches are properly priced within international markets. B. It calculates a per capita level of Big Macs that are sold in various countries of the world. C. It can indicate whether a particular currency is undervalued. D. It compares the value of a Big Mac to other items in a basket of goods economists traditionally use for economic analyses. E. It provides the empirical foundation for a trickle-down theory of economics called Burgernomics.
C.
Regarding population size as a characteristic for analysts to examine A. Population size alone is an excellent indicator of economic strength. B. Population size alone is a good predictor of demand for consumer durables. C. Population size alone is an excellent indicator of market potential. D. Population size alone is a poor indicator of market potential. E. Population size alone is a poor indicator of market potential for products such as soft drinks.
D.
The World Bank categories countries based on GNI per capita, using the following categories: A. undeveloped economies, developing economies, developed economies. B. developed economies, industrializing economies, developing economies. C. developing economies, newly industrializing economies, developed economies. D. high-income economies, middle-income economies, low-income economies. E. less developed economies, more developed economies.
D.
The after-tax personal income of consumers is known as A. personal savings. B. discretionary income. C. personal income. D. disposable income. E. free cash flow.
D.
The percentages of household expenditures spent on transportation, communication, and health care by residents of industrialized nations are _______________ the percentages spent by residents of developing nations. A. half B. two-thirds C. equal to D. twice E. triple
D.
__________ is a measure of the number of inhabitants per area unit. A. Urbanization B. Population size C. Population distribution D. Population density E. Population
D.
Japan is mentioned in the age distribution section because A. it is the fastest-graying nation in the industrial world. B. in the future it may have almost as many retirees as children. C. its declining population means that the country's wealth will be spread among a smaller number of people, increasing its overall prosperity. D. its declining population means that the country's social security funds will last a longer amount of time. E. its increasing fertility rate will allow it to compensate for an increased number of aged people.
A.
Most developed nations share the following characteristic(s): A. technological dualism. B. high productivity and incomes in some regions and little economic development in others. C. unequal distribution of income. D. a large and dominant share of total output coming from manufacturing. E. a substantial middle class.
A.
Most developing nations share the following characteristic(s): A. unequal distribution of income, with a very small middle class. B. a broad range of products for export, usually based on basic manufacturing. C. high savings rates. D. a productive agricultural sector that supports much of the population. E. political stability based on a nondemocratically elected government.
A.
The ________ includes all the uncontrollable forces originating outside the home country that surround and influence the firm. A. foreign environment B. international environment C. host country environment D. global environment E. alien environment
A.
The ratio between the number of older people and younger people, on whom elders are dependent to supply the funds to provide social security benefits, is called the ___________. A. dependency ratio B. grandparent dilemma C. population distribution D. population density E. graying challenge
A.
Where GNI increases faster than the population A. there probably is an expanding market. B. the market is probably contracting. C. the country where this occurs may be subject to political unrest. D. the market is becoming less attractive for business. E. there is probably a surplus of technical and university graduates.
A.
Which of the following is not true regarding the Atlas conversion factor? A. It was developed to reduce the impact of inflation-based changes on GNI estimates. B. It is the arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, Japan, the United Kingdom, and the United States. C. Incomes measured by the Atlas conversion factor are generally more stable over time. D. Changes in income rankings are more likely to be due to relative economic performance than to fluctuations in the exchange rate. E. Dissatisfaction with both the PPP and conversions using official exchange rates caused the World Bank to adopt the Atlas methodology to derive per capita GNI estimates.
A.
__________ is/are straining the social security systems of Japan and other industrialized nations. A. Early retirements B. The fact that retirees are working longer C. The fact that the birth rate is increasing D. The growing number of people in the workforce E. Decreasing lifespans
A.
A measure of an economy's size based on the market value of goods and services produced within a nation in a year is A. net national income. B. gross domestic product. C. gross national product. D. gross national income. E. the Gini coefficient.
B.
A measure of the degree to which family income within a country is distributed equally is A. gross national income. B. the Gini index. C. gross domestic product. D. the Atlas conversion factor. E. purchasing power parity.
B.
According to the text, an examination of the world's population and predictions for future populations suggests that which of the following countries will not experience a significant decline in its population by 2050? A. Japan B. The United States C. China D. Italy E. Russia
B.
According to the text, scarcity of foreign exchange can affect even firms that merely export to nations with high foreign debt because A. the government cannot borrow more money to pay for the exports. B. governments of those nations are likely to impose import restrictions. C. their export sales will depend on the ability of those governments to borrow foreign exchange. D. they will have to pay more for their foreign exchange. E. their wage rates will increase significantly.
B.
According to the text, the market analyst may determine a country is not a good market by making a simple calculation based on A. GNI/capita, total population, and the size of the hidden economy. B. GNI, total population, and income distribution. C. GNI/capita, population by state or province, and the number of pharmacies. D. Pet sales, number of CD players, and per capita lint production. E. GDP, GDP growth rate, and tax burden.
B.
According to the text, unit costs of labor will decrease even though the firm is required to pay more to workers, provided A. management compensation decreases significantly. B. productivity increases fast enough. C. advertising costs are proportional. D. interest rates rise slowly. E. government regulations are eliminated.
B.
According to the text, which of the following is not one of the rationales for why most seasoned managers supplement their analyses by looking at economic growth rates as well as measures of an economy's absolute size? A. Emerging and developing economies grew more than three times faster in 2012 and 2013 than did developed economies. B. GNI forecasts on their own are of no value to managers conducting economic analyses. C. Forecasts suggested that emerging and developing economies would grow at more than double the rate of developed economies in 2014 and 2015. D. Data such as overall GNI or GNI per capita can provide a snapshot of the size of an economy, but they fail to inform a manager about whether and how fast an economy is growing, or perhaps even shrinking. E. Rapid and rising economic growth rates suggest consumer demand, which often indicates that trade and foreign direct investment are likely to increase as well.
B.
Dissatisfaction with both the purchasing power parity (PPP) and conversions using official exchange rates caused the World Bank to adopt what methodology to derive per capita GNI estimates? A. Gini coefficients. B. Atlas conversion factors. C. The inflation-growth coefficient. D. The Zurich formula. E. The Human Development Index.
B.
From comparisons of income distribution studies over time, it appears that in early stages of development A. income inequality decreases. B. income inequality stays the same. C. the upper and lower quintiles grow at the expense of the middle quintile. D. the middle quintile grows at the expense of the upper and lower quintiles. E. The upper quintiles grow at the expense of the middle and lower quintiles.
B.
Generally, because of higher birth rates, A. developed nations have more youthful populations than do developing nations. B. developing nations have more youthful populations than do developed nations. C. there is an increasing demand in developed nations for products used in schools and for products used by children. D. the developed nations provide growing markets for transportation systems, fertilizer, and appliances. E. the developed nations will have increased demand for medical care and related products.
B.
International economic analyses A. provide data to governments regarding a company's prospective markets. B. should providing economic data on actual and prospective markets. C. are focused on economic conditions of nations in which a company's major competitors are located. D. rely on published government data for input. E. are primarily prepared for use by governments.
B.
The percentage of the population living in urban areas is A. increasing in high-income nations, but decreasing in low- and middle-income nations. B. increasing everywhere. C. increasing in low- and middle-income nations, but decreasing in high-income nations. D. becoming younger because older people retire to urban areas. E. increasing in low- and high-income nations, but stable in middle-income nations.
B.
The percentages of household expenditures spent on consumer durables by residents of industrialized nations are _______________ the percentages spent by residents of developing nations. A. half B. twice C. equal to D. triple E. two-thirds
B.
Which of the following is not true about India, according to the text? A. India has 300 million people 20 to 34 years of age. B. India has a total population of 1.27 billion people, the third largest in the world. C. India has 150 to 200 million people who are completely fluent in spoken English. D. India has 6.1 students in college, versus only 3.4 million college students in China. E. India generates 13 percent of its GDP from the manufacturing sector, versus 30 percent for China.
B.
A measure of how a nation's income is apportioned among its people is A. gross national income. B. gross domestic product. C. income distribution. D. the Atlas conversion factor. E. purchasing power parity.
C.
According to the book, what is the purpose of economic analyses? A. To anticipate political developments within and across countries. B. To forecast exchange rates. C. To assess the overall outlook for the economy and the impact of economic changes on the firm. D. To anticipate the rate at which companies will develop new competitive strategies. E. To provide well-paying jobs for economics graduates.
C.
According to the text, a large international debt may cause a government to A. remove wage controls. B. increase government spending. C. impose price controls. D. reduce debt payments. E. print more money.
C.
Because ____________ consumer expenditures eliminate differences in relative prices, marketers use these data to analyze how the composition of consumption changes with the level of development. A. normalized B. inflation-free C. PPP-based D. historical-cost E. growth adjusted
C.
Examples of socioeconomic data are A. GNI, GNI/capita, income distribution. B. total population, population density, and population distribution. C. GNI/capita, total population, and population distribution. D. total population, income distribution, and population density. E. GNI growth rates, GNI income/capita, and income distribution.
C.
GNI/capita, a crude estimate of purchasing power, must be further refined by A. an examination of the amount of income tax paid. B. a census to determine the total population. C. incorporating data on how the national income is actually distributed. D. determining the amount of discretionary income. E. calculating the amount of tax avoidance by individuals and corporations.
C.
If a nation's GNI is small, but a small percentage of its population receives a large percentage of that income A. it may be a good market for high-priced industrial products. B. it may be a good market for high-volume, high-priced consumer products. C. it may be a good market for low-volume, high-priced luxury products. D. it is unlikely to be a promising market. E. then there will be good growth in the future.
C.
Reductions in birth rates are occurring worldwide because A. governments are scaling back family planning programs. B. of a reduced level of urbanization. C. women are gaining an enhanced status. D. governments are supporting alternatives to marriage. E. of declining levels of health and education in many nations.
C.
The Human Development Index is based on what three essential elements of human life? A. A long and healthy life, the ability to acquire quality medical care, and access to resources needed for a decent standard of living. B. Access to affordable education, the ability to acquire quality medical care, and access to resources needed for a decent standard of living. C. A long and healthy life, the ability to acquire knowledge, and access to resources needed for a decent standard of living. D. A long and healthy life, the ability to acquire knowledge, and affordable rates of taxation. E. A limited level of government restrictions over its people, strong adherence to principles of free trade, and equal access to education and health care.
C.
_______ refers to the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad. A. Gross domestic product B. Gross domestic income C. Gross national income D. Net national product E. Goods and services income
C.
__________ is a measure of how the inhabitants are distributed over a nation's area. A. Urbanization B. Population size C. Population distribution D. Population density E. Population
C.
According to the World Bank, populations in high-income economies use how much commercial energy per capita as do people in developing economies? A. Half as much B. Twice as much C. Five times as much D. Nearly seven times as much E. More than 10 times as much
D.
According to the text, an examination of the world's population and predictions for future populations suggests the following: A. The population of developing countries is nearly half of the world's total population. B. The 10 nations predicted to have the largest populations by the year 2050 are all developing countries. C. Because of low birth rates, developed nations will have a decreased demand for tourism and furniture. D. Because of low birth rates, developed nations will have an increased demand for financial services. E. The nation projected to have the largest population in 2050 is China.
D.
According to the text, commercial energy use per capita is related to the size of which of the following sets of modern sectors? A. Commercial buildings, agriculture, transportation B. Housing, agriculture, industry C. Manufacturing, agriculture, housing D. Urban areas, industry, motorized transport E. Government, agriculture, industry
D.
According to the text, the part of a nation's income that, because of unreporting or underreporting, is not measured by official statistics is known as the A. hidden economy. B. gray market. C. barter system. D. underground economy. E. shadow market.
D.
Which of the following is not true about China, compared to India? A. China has 1.12 million millionaires versus 182,000 in India as of the beginning of 2014. B. China is ranked third in the world in sales of luxury goods, ahead of India. C. China has a larger population, at 1.37 billion people, than does India. D. China attracted five times more foreign direct investment from 2000 to 2013 than did India. E. China has a higher level of manufacturing productivity than does India.
D.
Which of the following is not true regarding the underground economy? A. On average, for the 2000 to 2012 time period, it is estimated that the underground economy accounted for between 16 and 17 percent of GDP in OECD countries. B. On average, for the 2000 to 2012 time period, it is estimated that the underground economy accounted for between 30 and 50 percent of GDP in emerging economies. C. The underground economy is estimated to have exceeded 60 percent in Bolivia, Panama, and Zimbabwe. D. The underground economy in the United States decreased from 8 percent of GDP in 1970 to less than 4 percent in 2003. E. Large underground economies can create problems for public policy makers.
D.
According to the text, an important socioeconomic dimension is A. the increasing birth rate in most developed nations. B. the decreasing number of working women, which will increase demand for lower cost staples. C. the urban-to-rural shift, which impacts demand for housing. D. the increase in the number of elderly in developed nations, which reduces demand for health care. E. the increase in the number of working women, which may expand the market for convenience goods.
E.
According to the text, as the level of a government's debt increases A. a higher proportion of resources is invested into productive uses. B. government investments will increase. C. infrastructural investment will grow. D. consumer confidence will rise. E. more resources are directed toward payment of interest.
E.
Marketers are interested in knowing the trend of women entering the workforce because this may A. result in larger family income. B. provide a smaller market for consumer durables. C. be responsible for a baby boom. D. increase the proportion of elderly in the population. E. reduce the rate of rural-to-urban shift.
E.
The arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, Japan, the United Kingdom, and the United States, is known as A. the Gini coefficient. B. the Markov-Linder formula. C. the Kolgorov coefficient. D. the Zurich formula. E. the Atlas conversion factor.
E.
When an international manager is considering where to do business, one of the first considerations is A. whether the country has a democratically elected government. B. the dominant religion in the country. C. the size of the country. D. whether the country has a manufacturing sector. E. the size of the economy.
E.