international business exam 1 review

Theocracy

A ________ is a political system in which a country's religious leaders serve as its political leaders.

Democracy

A ________ is a political system in which government leaders are elected directly by the wide participation of the people or by their representatives.

False

A culture with large power distance tends to be characterized by considerable inequality between superiors and subordinates.

False

A culture's values tend to become inflexible over time.

True

A government can limit the economic activities of a foreign firm that resists its effort to introduce home-country nationals into the company.

False

A nation's cultural boundaries do not always correspond with its political boundaries.

False

A nuclear family comprises of one's immediate family, along with grandparents, uncles, aunts, and cousins.

True

A solid grasp of local values, customs, and traditions can help reduce a company's exposure to political risk.

Consolidation

As former competitors in many industries link up to challenge others on a worldwide basis, ________ occurs.

False

Barter is an alternative for buyers who lack money needed to pay for exports.

terry does not believe in eliminating political opponents

Both Pat and Terry believe that social and economic equality can be obtained only by establishing an economic system in which the government owns and controls all types of economic activity. Which of the following statements proves that Pat is a communist and Terry is a socialist?

true

Brain drain is the departure of highly educated people from one profession, geographic region, or nation to another.

cultural diversity

Critics of globalization say that global consumer-goods companies destroy ________.

True

Cultures isolated by topographical barriers are characterized by slower cultural change.

minority

Democracies try to preserve peaceful coexistence among groups of people with diverse cultural, ethnic, and racial backgrounds. These rights are known as ________ rights.

sustainability

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs indicates ________.

True

Ethnocentric firms typically use the same business practices in all cultures and markets.

False

Expropriation is said to have occurred when a foreign national company dispossesses a home-country company through uncompetitive practices.

True

Hispanics comprise a subculture in the United States.

False

If a foreign company is taken over by the host-country government and some form of compensation is paid, confiscation is said to have occurred.

individuals govern without the support of the people tightly control of people's live and do not tolerate opposing viewpoints.

In a totalitarian political system, ________.

False

International companies never have to customize products to comply with local standards if they are to do business in a particular country.

True

International companies often must customize products to comply with local standards if they are to do business in a particular country.

True

Lobbying is the policy of hiring people to represent a company's views on political matters.

False

Low levels of class consciousness encourage social mobility and lessen conflict.

True

Managers who take an active approach to political risk management are likely to rely on statistical modeling to quantify the precise degree of political risk.

True

Nationalization describes government seizure of an entire industry, with or without compensation.

True

Nations that invest in worker training programs are usually rewarded with an increase in productivity and a rise in income.

True

Nations with the poorest infrastructures and lowest personal incomes are called developing countries.

Importing

Olive oil prepared in a small Italian oil press factory and sold by large supermarkets in the United States is an example of a ________.

True

One of the key obstacles faced by countries in economic transition is the lack of managerial expertise.

False

Political risk insurance is more likely to be purchased by MNEs that apply an active approach to political risk management.

True

Political risk occurs when the property of an MNE is threatened through either confiscation or expropriation.

True

Political risk tends to be higher in developing countries compared to industrialized countries.

protect people from defectives product

Product liability laws are those which ________.

copyright infringement

Shimmer and Sparkle is an American jewelry store which discovers that several shops in developing countries are selling counterfeited necklaces under their name and label. Which of the following problems are they facing?

True

Social status is determined by family heritage, income, and occupation.

False

Subcultures contribute to national culture and cannot be safely ignored when making marketing and production decisions.

True

Subcultures exist in democratic countries with large populations.

True

Subcultures exist only within a nation's borders.

False

Subcultures mimic the values, preferences, and beliefs of dominant cultures.

True

The Foreign Corrupt Practices Act forbids U.S. companies from bribing government officials or political candidates in other nations.

False

The concept of purchasing power parity (PPP) must be applied to understand the true value of a currency in its home country.

True

The first step in analyzing a nation's potential for international business activity is to examine its business climate.

international firm management

The global business environment consists of four distinct elements: the forces of globalization, national business environments, the international business environment, and ________.

banking sector is as important as national security

The government maintains control over the banking industry in a country. Which of the following is most likely true if the country has a mixed economy?

True

The human development index (HDI) demonstrates that high national income alone guarantees human progress.

traditional

The population of a(n) ________ market is mostly rural and is characterized by poor infrastructure with little credit or collateral.

Born Global Firm

The rise of a new international entity called the ________ suggests that any company, regardless of age, experience, and resources, can engage in international business.

private sector

The segment of the economic environment comprising independently owned firms that seek to earn profits is called the ________.

Internationalization

The term ________ refers to entities cooperating across national boundaries.

Gross National Product

The value of all goods and services produced by a country's domestic and international activities over a one-year period is the country's ________.

technological innovation

Two major forces that underlie the expansion of globalization are falling barriers to trade and investment, and ________.

False

U.S. individuals are exempt from being prosecuted for bribery under the Foreign Corrupt Practices Act.

Right-Wing Totalitarianism

Under ________, the government endorses private ownership of property and a market-based economy but grants little or no political freedom.

true

Volunteer work and unpaid household work are not included in GNP.

True

When going global with an Internet presence, it is highly beneficial for a business to localize its Web site.

includes all business transaction involving two or more countries

Which of the following best defines international business?

the resolution of contractual dispute with local vendors

Which of the following factors should the legal experts of Wayne's consider while evaluating the legal systems of Paribo and Kirawi?

companies have to contend with the interference of local political opposition

Which of the following is a disadvantage of conducting business in totalitarian nations?

Capitalism

Which of the following philosophies asserts that ownership of the means of production belongs in the hands of individuals and private businesses?

Utilirian

Which of the following philosophies maintains that a company should maximize "good" outcomes and minimize "bad" outcomes wherever it operates?

National Sovereignty

________ involves the idea that a nation-state is autonomous, cannot intervene in the affairs of other nations, and can enter into binding international agreements.

secular totalitarianism

________ is a political system in which political leaders rely on military and bureaucratic power to support their rule.

What do communists and socialists have in common?

believed government should control all type of economic activity

Which of the following has NOT been a major force increasing globalization in recent decades?

decreasing global domination

The KOF Index measures the ________

extend of globalization

Which of the following statements would most likely be made by a SUPPORTER of globalization?

globalization encourage the adoption of uniform and superior standards for combating environmental problems

The purpose of the General Agreement on Tariffs and Trade (GATT) was to ________.

promote free trade by reducing tariffs