International Business Chapter 1 quiz

The opponents of globalization argue that freer trade and investment allows international companies to

close factories in high-wage-area developed nations and move them to low-wage developing countries.

A firm is less likely to offer a standardized product globally when

the benefit of serving the customers with an adapted product may outweigh the benefit of a standardized product.

the two main forces that underlie the globalization of markets and production

Falling barriers to trade and investment and technological innovation

The name we give to the trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies.

Globalization

An agency that was created to regulate fixed exchange rates and to enforce the rules of the international monetary system

International Monetary Fund

Why do most international firms today support reasonable environmental laws?

They recognize that healthy future markets require a sustainable approach to the business expansion for future local markets for their goods and services

Why do companies typically produce goods and services abroad?

To reduce their overall labor costs

Operating across borders and time zones could complicate the job of coordinating and controlling international business activities especially for smaller firms. To operate more efficiently, international companies tend to

accelerate the use of technology, email, video conferencing, the internet, and intranets

International Business refers to:

any commercial transaction that crosses the border of two or more nations

Which one of the following best describes the sourcing of key production inputs, such as raw materials or products, for assembly as well as the international outsourcing of service? a. Globalization of production b. Globalization of production c. Customization d. Commercialization e. Internationalization of products

b. Globalization of production

A company that adopts a global perspective and engages in international business from or near its inception is known as a

born global firm

Which of the following is a major flaw of the original GATT? a. it did not reduce trade barriers low enough b. it enforced strict trade rules on participating nations c. it led to the increase of non-tariff trade barriers d. it lacked the power to enforce trade rules e. it did not make enough progress to reduce agriculture subsidy

d. it lacked the power to enforce trade rules.

The globalization impact on the gap between rich and poor nations varies. One group of nations, such as china and India, is closing the gap with rich economies while a second group of poor countries is falling further behind, such as most countries in Africa. On closer inspection this is due to which one of the following? a. The industrialization and modernization level b. Convergence of consumer lifestyle c. A country's international monetary policy d. Technological advances in communications e. The level of embracing globalization by developing countries.

e. the level of embracing globalization by developing countries

the main purpose for establishing regional trade agreements such as the NAFTA and APEC is to

foster trade and boost cross-border investment

The revision in 1994 of the GATT clearly defined intellectual property rights in order to​ ________.

give more protection to copyrights, trademarks, and patents

Convergence in buyer preferences in countries around the world

globalization of markets

Japan's largest paper company, Nippon Seishi, has decided to own huge forests and corresponding processing facilities in Australia, Canada, and the U.S. so it can

guarantee a steady flow of its wood pulp

Multinational corporations are key players in international business and can be described as companies that:

have direct investments in the form of marketing or manufacturing subsidiaries abroad in multiple countries

A firm that produces a product with universal but seasonal appeal and is trying to level its income stream and reduce or eliminate wide variations in domestic sales can supplement its domestic sales with

international sales

globalization of markets can benefit companies that sell a global product and creates new market opportunities abroad especially if their home market

is small or becoming saturated

Globalization supporters argue that globalization increases wealth and efficiency in both developed and underdeveloped nations because of

openness to international trade increases national production

The power of WTO that sets it apart from the GATT is its capability to

penalize offending nations and the power to settle trade disputes

Companies that sell global products can standardize certain market activities in order to

reduce marketing costs

Some of the critics of globalization argue that the relentless pursuit of low-cost goods has led to

sending manufacturing jobs abroad

Opposition groups allege that globalization empowers organizations erodes the

sovereignty of a nation