International Business Exam Questions

Which of the following has been reduced as a result of globalization? -environment and labor laws -foreign exchange transactions -volume of goods and services -regulation of markets -differences in material culture

Differences in material culture

True or False. Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country.

True

True or False. The World Trade Organization, the International Monetary Fund and its sister institution the World Bank, and the United Nations were all created by voluntary agreement between individual nation-states.

True

Nobel Prize-winning economist Amartya Sen would agree that ________ is/are an important factor in development of a country. -tariff barriers -deregulation -privatization -basic health care -religious sanctity

basic health care

As a judge in France, Maurice is not allowed to interpret the law but relies on a strict set of codes to determine the outcome of a case. Which type of law is in place in France? -common law system -civil law system -mixed law system -tribal law system -theocratic law system

civil law system

An individual's right to do something may be restricted on the grounds that it runs counter to "the good of society" when the political system emphasizes -collectivism -democracy. -individualism. -capitalism. -privatization

collectivism

A ________ economy follows the principles of collectivism as resources are allocated based on "the common good." -mixed -private -supply -market -command

command

Which of the following services CANNOT be outsourced to foreign nations? -transcribing medical files -delivering closing arguments for a lawsuit -handling consumer queries -interpreting MRI scans -debugging software

delivering closing arguments for a lawsuit

What political system has a government that is by the people, exercised either directly or through elected representatives? -right-wing totalitarianism -democracy -communism -socialism -tribal totalitarianism

democracy

When Mark Zuckerberg co-founded Facebook, he was acting as a(n) ________ since he was the first to commercialize this innovative new product. -late-mover -political action committee -multinational -regulator -entrepreneur

entrepreneur

A country that has lax intellectual property laws will find that -many companies in the country will focus on innovative products. -firms will be reluctant to enter into such a country. -imitating a patented product or process will become difficult. -inventors and authors will have better opportunities to grow and to be rewarded. -most of the companies in the country will commit themselves to extensive basic research.

firms will be reluctant to enter into such a country.

Which of these is not used to determine culture? -economic philosophy -religion -geography -social structure -language

geography

What is the shift toward a more integrated and interdependent world economy called? -globalization -international trade -Moore's Law -foreign direct investment -containerization

globalization

Which of the following refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors such as labor, energy, land, and capital? -globalization of production -globalization of markets -containerization of production -dispersal of production -industrialization of markets

globalization of products

When Aristotle said that private property is more highly productive than communal property, he was advocating for -totalitarianism. -monarchism. -individualism -anarchism -collectivism.

individualism

U.S.-based Centra Corporation is hesitant about entering into a licensing agreement with Fission, Inc., a company from another nation, due to the likelihood that Fission will break a contract or expropriate property rights. What specific type of risk is Centra Corporation trying to avoid? -ethical -legal -economic -technological -political

legal

The mother tongue of the largest number of people is -Mandarin. -French. -English. -Spanish. -Hindi.

mandarin

James is the warehouse supply manager for a major tool corporation. It is his job to take inventory of the tools the company has available and send orders to make more tools when supplies run low. This supply and demand form of production is an example of a ________ economy. -market -command -private -public -socialist

market

ABC Company is hesitant about entering Ukraine, because the country has been experiencing social unrest in recent years. Based on this information, what type of risk is ABC Company trying to avoid? -ethical -legal -economic -technological -political

political

Marietta told the management team that the company would have to find a new way to produce the vitamin because the Food and Drug Administration had recently banned "nofon," the key ingredient in their product. The standard set by the FDA is a type of -tariff barrier. -trademark. -intellectual property law. -private action. -product safety law.

product safety law

In the United States, citizens have the right to elect officials who make decisions on behalf of the public. This practice is the reason the United States is a -tribal totalitarian regime. -socialist state. -theocratic state. -representative democracy. -pseudo-democracy.

representative democracy

The base for the adjustment of purchasing power parity is the cost of living in -the United Kingdom. -the United States. -China. -Brazil. -Russia.

the United States

A country that has ________ lowers the risk of doing business in that country. -a high rate of inflation -a low standard of living -the presence of more than one ethnic nationality -the presence of a strong legal system -a large number of nonperforming loans

the presence of a strong legal system

The spread of democracy among countries is most likely to lead to -the widespread use of centrally planned command economies. -a strong shift toward a mixed economy. -the promotion of greater competition. -a decline in privatization. -a decrease in innovation and entrepreneurship.

the promotion of greater competition.

A form of government in which political power is monopolized by a party, group, or individual that governs according to religious principles is called what type of totalitarianism? -communist -tribal -theocratic -representative -right-wing

theocratic

AllSpice Incorporated plans to do business with a company located in the Leone Republic, a common law country. The companies have agreed to draft the business contract in the Leone Republic. Since the contract will be drafted under a common law framework, what best characterizes the contract? -very detailed with all contingencies spelled out -short -less expensive than a contract drafted under a civil law system -somewhat general since many issues are already covered in the law -easy to draft

very detailed with all contingencies spelled out

Communists believed that socialism could only be achieved through -state-owned enterprises. -violent revolution. -the free flow of goods. -democratic principles. -the feudal system.

violent revolution

While it might differ in other countries, in the United States the customary distance apart that should be used in a business discussion is -3-5 feet. -5-8 feet. -18-24 inches. -at least 10 feet. -36 inches or under.

5-8 feet.

Which scenario best represents a mores violation? -Showing up late to a meeting in a country where time is equivalent to money. -Failing to bow in a country where bowing is a sign of respect. -Wearing casual clothes to a meeting in a country where the dress code is very formal. -Addressing a business partner by their first name in a country where appropriate titles and last names are used. -Bribing a government official in a country where bribery is illegal.

Bribing a government official in a country where bribery is illegal.

Which of the following best exemplifies foreign direct investment (FDI)? -Delicate Love, a reputable florist company in Holland, exports tulips and roses throughout the globe. -Samantha started an Italian restaurant in her home country, the United States, after she took cooking lessons from a well-known chef in Italy. -Yin and Yang Inc., a Chinese firm, supplies buttons and zippers to major denim brands in the United Kingdom. -Chivalry, a U.S.-based phone manufacturing company, has set up its own assembly plant in Japan to cater to the needs of the Asian market. -Pure Pearls, a jewelry store in the United States, imports harvested pearls from Indonesia, Philippines, and Australia.

Chivalry, a U.S.-based phone manufacturing company, has set up its own assembly plant in Japan to cater to the needs of the Asian market.

Intelligent Tool Corp. is planning to set up a production plant abroad. It has selected five potential countries based on their population size, stage of economic development, labor costs, and access to world markets. Considering the connection between culture and competitive advantage, which of the following countries would be the best investment site for Intelligent Tool Corp.? -Country A, where there is one prevalent religion and the society is characterized by a marked stratification between the upper and lower classes. -Country B, where education is well-developed and social stratification is lacking. -Country C, where education is well-developed and the society is characterized by a marked stratification between the upper and lower classes. -Country D, where education is undeveloped and there are two prevalent religions. -Country E, where education is undeveloped and there are seven major linguistic groups.

Country B, where education is well-developed and social stratification is lacking.

TimeForce, a U.S.-based company, is planning to expand operations to a foreign country. Considering the factors that make a country attractive as a place in which to do business, which country should TimeForce consider for entry? -Country A, which lacks democratic institutions and has a market-based economic system. -Country B, which has democratic institutions and where economic activity is heavily regulated by the state. -Country C, which has democratic institutions and where corruption is rampant. -Country D, which has democratic institutions and a market-based economic system. -Country E, which lacks democratic institutions and where property rights are always respected.

Country D, which has democratic institutions and a market-based economic system

American company Software Unlimited is planning to expand its operations to the Bangor Republic where the group is the primary unit of social organization. According to this information, what is a likely outcome for Software Unlimited from operating in the Bangor Republic? -Employees will strive to achieve a personal brand. -Employees will lack company loyalty. -Employees will constantly innovate with their creative ideas for products. -Employees will fail to obtain company-specific experience and knowledge. -Employees will achieve close cooperation with others.

Employees will achieve close cooperation with others.

True or False. A multinational enterprise (MNE) is any business that exports goods or services to consumers in another country.

False

True or False. After World War II, the advanced industrial nations of the West committed themselves to increasing barriers to the free flow of goods, services, and capital between nations.

False

True or False. As a result of globalization, we have been moving toward a world in which national economies are relatively self-contained entities.

False

True or False. Moore's law predicts, that every 18 months, the power of microprocessor technology decreases, while its cost of production increases.

False

True or False. The globalization of markets and production and the resulting growth of world trade, foreign direct investment, and imports all imply that firms are finding it easier to protect themselves from attack by foreign competitors.

False

True or False. Today, outsourcing efforts are confined to manufacturing activities.

False

What is one criticism regarding Geert Hofstede's research on cultural dimensions? -It did not consider physical capabilities. -The research team consisted of only Europeans and Americans. -It did not assume a one-to-one correspondence between culture and nation-state. -It did not assess cultures affecting the workplace. -It was too all-encompassing and did not allow for differences.

The research team consisted of only Europeans and Americans.

What is an accurate description of how the political economy of many of the world's nation-states has changed radically since the late 1980s? -There has been a move away from centrally planned and mixed economies and toward a more free market economic model. -New communication technologies have increased countries' ability to control access to uncensored information. -Market-based economic systems have been replaced by command economies. -There has been a significant reduction of the middle class. -Democratic governments have been replaced by totalitarian governments.

There has been a move away from centrally planned and mixed economies and toward a more free market economic model.

True or False. The Uruguay Round extended GATT to cover services as well as manufactured goods.

True

True or False. The lowering of trade and investment barriers allows firms to base production at the optimal location for that activity.

True

Which of the following was established to ensure that nation-states adhered to the rules laid down in trade treaties? -World Trade Organization -United Nations -International Monetary Fund -World Bank -Group of Twenty

World trade organization

A country that has ________ is an unattractive choice for international business. -strong protection of property rights -market-based economic policies -a closed totalitarian dictatorship -the presence of business contract law -a large market size in terms of population

a closed totalitarian dictatorship

People in the West tend to associate a representative democracy with -weak property rights protection. -a command economic system. -a theocratic regime. -low level of life expectancy at birth. -a market economic system.

a market economic system.

According to the UN Charter, one of the four purposes of the UN is to -provide enhanced protection for patents. -encourage high tariffs on imports of manufactured goods. -promote the establishment of multinational treaties. -be a center for harmonizing the actions of nations. -facilitate globalization of production.

be a center for harmonizing the actions of nations

Corinne has analyzed the overall attractiveness of doing business with three possible countries and has determined that Country A is the best choice based on the potential for huge economic growth that should occur there because of recent advances in technology. Which factor of overall attractiveness is Corinne basing her decision on? -costs -risks -norms -behaviors -benefits

benefits

In many of the world's nation-states, there has been a move away from ________ since the late 1980s. -economic gains -democratization -free markets -centrally planned command economies -legal systems to safeguard property rights

centrally planned command economies

In the country of Doran, all businesses are owned by the state. The government plans production, fixes commodity prices, and also directs investments to ensure they benefit the nation as a whole and not only a few individuals. What type of economy has the country of Doran adopted? -market -mixed -traditional -command -capitalist

command

Members of the legal profession would refer to tradition, precedent, and custom in a(n) ________ law system. -collectivist -theocratic -civil -individualist -common

common

With increased economic progress, cultures across the world seem to be moving toward some universally accepted values and norms. This is known as the -ethnocentrism hypothesis. -dynamism hypothesis. -class consciousness hypothesis. -convergence hypothesis. -power distance hypothesis.

convergence hypothesis.

The system of values and norms that are shared among a group of people and together create a design for living is known as a -society. -culture. -tradition. -nationality. -ritual

culture

A country that abolishes laws that regulate private enterprises and removes price controls is in the process of -deregulation. -industrialization. -divestiture. -diversification. -isolationism.

deregulation

If a country exercises tight control over prices and output, prohibits private enterprises from operating in most sectors of the economy, and severely restricts foreign direct investment and international trade, it is against the practice of -protectionism. -deregulation. -a command economy. -collectivism. -industrialization.

deregulation

The main reason that gross national income figures can be misleading is because they -don't consider differences in the cost of living. -are determined by individual governments instead of a national institution. -are an adjustment of the purchasing power parity (PPP). -measure the total dollar amount of imports coming into a nation. -allow for a direct comparison of living standards in different countries.

don't consider differences in the cost of living

Which of the following BEST increases a country's competitive advantage and its attractiveness as a location for international business? -prevalence of communist ideals -education system that is well developed -belief in monotheism -presence of more than one language or culture -presence of class or caste differences

education system that is well developed

Shayla is from South Africa and believes that the customs and beliefs of her culture are superior to those she has encountered during her trip to America. Shayla's attitude is an example of -ethnocentrism. -Confucian dynamism. -cultural convergence. -collectivism. -class consciousness.

ethnocentrism.

MaryAnne is always late to meetings and she knows she needs to be better about being on time because it is expected by almost everyone living in the United States. This attitude toward time is an example of a -moral. -belief. -value. -folkway. -mores.

folkway

In a pure command economy, the prices at which goods and services are sold are planned by the -consumers. -producers -government. -private monopolists. -World Trade Organization.

government

A payment made to expedite or to secure the performance of a routine governmental action is called a -grease payment. -government fee. -tariff. -lump payment. -protection payout.

grease payment.

Within the context of the individual as the basic unit of a social organization, what is an implication of the emphasis on individualism in many Western societies? -high degree of social stratification -low degree of competition between individuals -high degree of managerial mobility between companies -low degree of entrepreneurial activity -high degree of cooperation between individuals

high degree of managerial mobility between companies

In the Republic of Nabu, natives are resistant to change and do not like to take risks. They value job security and retirement benefits. In addition, they have a strong need for rules and regulations. Based on this information, the Republic of Nabu demonstrates which cultural dimension identified by Hofstede? -individualism -femininity -high uncertainty avoidance -low power distance -masculinity

high uncertainty avoidance

The development of new products, processes, organizations, management practices, and strategies is called -deregulation. -privatization. -innovation. -private action. -protectionism.

innovation

What is one of the three measures used to determine the Human Development Index (HDI) of a country? -life expectancy at birth -gender ratio -carbon footprint of the country -wholesale price index -factors endowments

life expectancy at birth

According to Geert Hofstede, what dimension captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors? -social mobility -class consciousness -uncertainty avoidance -power distance -long-term versus short-term orientation

long-term versus short-term orientation

The social rules and guidelines that prescribe appropriate behavior in particular situations are called -values. -traditions. -taboos. -norms. -customs

norms

HealthWise Corporation has developed a new diet supplement to assist with weight loss. Which type of legal protection grants HealthWise Corporation exclusive rights for a defined period to the manufacture, use, or sale of this new diet supplement? -copyright -treaty -trademark -warranty -patent

patent

Jason runs a manufacturing company. He hires five people based on their physical abilities because they are able to lift heavy boxes in the stockroom and two people based who are able to strategically plan the company's next steps. Jason realizes that people are not equal in physical and intellectual capabilities, an aspect of which cultural dimension identified by Hofstede? -individualism -masculinity -uncertainty avoidance -class consciousness -power distance

power distance

In 2017, the Brazilian government transferred the state ownership of the electric company, the airports, highways, and ports to private investors to stimulate the economy. This is an example of -communism. -protectionism. -nationalization. -privatization. -socialism.

privatization

Economist Hernando de Soto believes that the benefits of capitalism will not be achieved until -a theocratic law system is in place. -property rights are better protected. -there is a shift from individualism to collectivism. -totalitarian governments are more widespread. -more nations adopt planned economies.

property rights are better protected

The motive behind the high tariffs imposed by nations on imports of manufactured goods, prior to World War II, was to -deter any possible attempts to promote communism. -safeguard patents, copyrights, and trademarks. -protect domestic industries from foreign competition. -prevent the occurrence of the Great Depression. -promote the trade of services over the trade of manufactured goods.

protect domestic industries from foreign competition.

The state senator was found guilty of ________ when she tried to extort money from an international business that wanted to open a manufacturing plant in her state. -public transparency -private violation -public action -foreign corrupt practices -private theft

public action

Julie asked her assistant to determine the gross national income of three different countries by evaluating the GNI against the cost of living in the United States. What measure is Julie asking her assistant to use? -factor endowments -gross domestic product -return on investment -cash reserve ratio -purchasing power parity

purchasing power parity

The United Nations Convention on Contracts for the International Sale of Goods (CISG) was introduced to -specify the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource. -resolve disputes that arise in international trade regarding which country's laws to apply. -make it illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority. -allow establishing ownership over intellectual property such as a computer software or a new drug. -set up a legal mechanism that will help protect a firm when its product causes injury, death, or damage.

resolve disputes that arise in international trade regarding which country's laws to apply.

The advent of containerization has -slowed down the globalization of markets and production. -made the economies of the world's nation-states less intertwined. -significantly lowered the costs of shipping goods over long distances. -made moving goods from one mode of transport to another extremely labor-intensive. -increased costs of coordinating and controlling a global organization.

significantly lowered the costs of shipping goods over long distances.

Connor was born into a poor family, but he worked hard during high school and went on to receive his master's degree in business. Today, he is considered "upper middle class" and enjoys a comfortable lifestyle. Connor's journey is an example of -social mobility. -a caste system. -reciprocal beliefs. -class consciousness. -a rigid class system.

social mobility

The social strata evident in a society is primarily derived from -socioeconomic characteristics. -evidence of competition. -government policy. -the collectivistic nature of the group. -individual characteristics such as physical appearance

socioeconomic characteristics

It has been noted that there is a connection between individualism that is fostered by Protestantism and -the willingness of a the willingness of a country to import foreign goods. -the extent of entrepreneurial activity in a nation. -the growth of the caste system. -government intervention in business activities. -feminine-based societies.

the extent of entrepreneurial activity in a nation.

Why was the World Bank set up? -to maintain order in the international monetary system -to formulate a coordinated policy response to financial crises -to police the world trading system -to preserve peace through international cooperation -to promote economic development

to promote economic development