International Business Quizzes (1-4)

At Six Sigma, a production process would be highly accurate and create just ______.

3.4 defect per million units

Which of the following is a measure that is developed by the UN to measure the quality of life in different nations?

Human Development Index

Modern socialism has been popularized largely through the work of _____.

Karl Marx

US had a large and growing trade deficit between 1980 and 1985. Despite this, the value of the dollar rose during this period. Which of the following is a factor that caused this occurrence?

US attracted heavy inflows of capital from foreign investors during this period

The ____ was established on October 24, 1945 by 51 countries committed to preserving peace through international cooperation and collective security.

United Nations

Which feature of an economic union differentiates it form a common market?

a common monetary and fiscal policy

A dirty float refers to a situation in which _____.

a country tries to hold its currency against an important reference currency without a formal pegged rate

A free market economy in which property rights are protected leads to subsequent economic growth, which often leads to the establishment of:

a democratic regime

Country X and Country Y reach an agreement to boost bilateral trade. They agree to remove all barriers to the trade of goods and services. They, however, are free to determine their own trade politics with regard to nonmembers. Which level of economic integration is this an example of?

a free trade area

When companies disperse different stages of the value chain to those locations around the world where perceived value is maximized or where the costs of value creation are minimized, companies create:

a global web of value creation activities

A situation in which none of the available alternatives seems morally acceptable is called

an ethical dilemma

Eurodollars _____.

are dollar banked outside of the US

A country's _____ keeps track of its payments to and its receipts from other countries.

balance-of-payments accounts

A Eurocurrency is any currency _____.

banked outside of its country of origin

Responding to pressure for ____ requires that a firm differentiate its product offering and marketing strategy from country to country

being locally responsive

Centralization:

can give top-level managers the means to bring about needed major organizational changes by concentrating power and authority in one individual or a management team

Hofstede's dimension of Confucian dynamism

captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition and reciprocation of gifts and favors.

Which of the following is a closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime?

caste system

Centralization and decentralization differ because:

centralization ensures the decisions are consistent with organizational objectives, which decentralization can result in decisions at variance with organizational goals

Turnkey projects are most common in which of the following industries?

chemical, pharmaceutical and metal refining

What is the term for a company's formal statement of the ethical priorities it expects all of its employees to follow.

code of ethics

In a(n) _____ economy the government plans the goods and services that a country produces, the quantity in which they are produced and the prices at which they are sold.

command

Three countries agree to remove barriers to trade between member countries and adopt a common external trade policy toward nonmembers. They also agree to allow people and other factors of production to move freely across their borders. Which level of economic integration is this an example of?

common market

Tariffs do not benefit:

consumers

An important drawback of a purely domestic capital market is that the _____.

cost of capital tends to be higher than it is in a global market

Which of the following is a step in the shift toward a market-based economic system?

creation of a legal system to safeguard property rights

The continuing persistence of _____ differences between nations acts as a major brake on any trend toward global consumer tastes and preferences.

cultural and economic

In its extreme viewpoint, _____ suggests that if a culture supports slavery, it is all right to use slave labor in the country.

cultural relativism

Which of the following statements is true of the deregulation of financial industry?

deregulation helped the development of an international capital market

Which of the following is one of the four elements that constitute a firm's marketing mix?

distribution strategy

Which of the following arguments is against the use of fixed exchange rates?

each country has the freedom to choose its own inflation rates

Which of the following terms refers to the unit cost reductions associated with large sized outputs?

economies of scale

If a firm can realize location economies by moving production elsewhere, it should avoid:

exporting

Which of the following is a drawback of the Eurocurrency market?

exposure to foreign exchange risk

A(n) ____ is a grouping of various types of machinery, a common materials handler and a centralized cell controller.

flexible machine cell

The element of risk into investing in a foreign assets is more with ___ exchange rates.

floating

A Japanese firm prefers expatriate Japanese managers to head its foreign operations because these managers have been socialized into the firm while employed in Japan. This indicates that the firm:

follows an ethnocentric staffing policy to maintain a unified corporate culture

What kind of retail systems do rural India and China have?

fragmented

Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country?

free trade

Regardless of a firm's domestic structure, its international division tends to be organized on:

geography

Which of the following arguments is in favor of floating exchange rates?

governments can restore monetary control by removing the obligation to maintain exchange rate parity

Firms pursuing a transnational strategy:

have a very high need for cultural controls

Class-based conflict between workers and management in class-conscious societies can lead to:

increased costs of doing business

The lowering of barriers to trade and investment between countries is likely to lead to _____ throughout the EU.

increased price competition

Economies of scale arise from all of the following sources, EXCEPT:

increasing fixed costs by limiting them to small volumes

The tenet of _____ is that the welfare of society is best served by letting people pursue their own economic self-interest.

individualism

FDI occurs when a firm:

invests directly in facilities to produce a product in a foreign country

A country has an absolute advantage in the production of a product when it ______.

is more efficient than any other country in producing it

The worldwide product division structure:

is weak in local responsiveness

An advantage of engaging in in-house production of products and components is that ____.

it enables a firm to protect the proprietary technologies that it has

A country's trade balance is in surplus when _____.

it exports are more than its imports

What is the primary advantage of licensing?

it helps a firm avoid the development costs associated with opening a foreign market

Which of the following is the main principle of mercantilism?

it is in a country's best interests to maintain a trade surplus

Which of the following is a drawback of a just-in-time system?

it leaves a firm without a buffer stock of inventory

Which of the following statements is true about the United Nations Universal Declaration of Human Rights?

it transcend national borders

Firms engaging in a ____ with a local company can benefit from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems and business systems.

joint venture

Which of the following is a function of World Bank?

lending money to governments for development

Globalization of markets results in markets becoming _____.

less diverse

Which strategy focuses on increasing profitability by customizing the firm's goods or services so they provide a good match to tastes and preferences in different national markets?

localization strategy

Economies that arise from performing a value creation activity in the optimal place for that activity are referred to as:

location economies

Advantages that arise from using resource endowments or assets that are tied to a particular place and that a firm finds valuable to combine with its own unique assets are known as:

location-specific advantages

The WTO promotes ______.

lowering of barriers to cross-border trade and investment

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

mergers and acquisitions are quicker to execute than greenfield investments

The utilitarian approach to business ethics suggests that:

moral worth of actions or practices is determined by their consequences

Eurobonds are ____.

normally underwritten by an international syndicate of banks

Which of the following is a reason why the EU is considered an imperfect economic union?

not all members of the union have adopted the euro

The norms and values systems that are shared among the employees of a company are referred to as:

organizational culture

When using the Euromarkets, companies _____.

pay less for the loans

Under a ____ exchange rate regime, a country will attach the value of its currency to that of a major currency

pegged

Which control system is most widely used by small firms?

personal

The General Agreement on Tariffs and Trade (GATT) was responsible for ______.

policing the global marketplace

____ pricing is the use of price as a competitive weapon to drive weaker competitors out of a national market.

predatory

The cost of capital is the _____.

price of borrowing money

In several Wester democracies, the poor performance of state-owned enterprises, because of protection from competition and guaranteed government financial support, led to _____.

privatization

Identify the theory that argues that advanced nations have an incentive to develop a new offering and hence such nations always tend to create a good or service for the first time.

product life-cycle

In a pure market economy:

production is determined by the interaction of supply and demand.

Local content regulations:

protect domestic producers by limiting foreign competition

Which of the following is the prime reason why Africa has attracted FDI in recent years?

raw material availability

A large-scale entrant is more likely than a small-scale entrant to be able to capture first-mover advantages associated with ______.

scale economies

Religion may be defined as:

shared beliefs and rituals that are concerned with the realm of the sacred

When two parties agree to exchange currency and execute the deal immediately, the transaction is a

spot exchange

___ is required for a business environment to be conducive to innovation and entrepreneurial activity.

strong legal protection of property rights

By lowering production costs, ____ help domestic producers compete against foreign imports.

subsidies

Which of the following is a consequence of subsidies?

subsidies protect inefficient domestic producers

____ activities of the value chain provide inputs that allow the primary activities to occur.

support

If the demand for dollars outstrips its supply and if the supply of Japanese yen is greater than the demand for it, what will happen?

the dollar will appreciate against the yen

Which of the following observations is correct?

the economic principles of Islam prohibit the payment or receipt of interest

A foreign service premium is:

the extra pay that an expatriate receives for working outside his or her country of origin

Mores are:

the norms that are seen as central to the functioning of a society and its social life

Expatriate failure refers to:

the premature return of expatriate manager to his or her home-country.

Moral hazard arises when people behave recklessly because ____.

they know they will be saved if things go wrong

Which of the following statement pertaining to innovation and entrepreneurship is NOT true?

they require state ownership of means of production

A firm that is facing both strong cost pressures and strong pressures for local responsiveness should follow a(n) _____ strategy.

transnational

Which of the following specifically reduces the viability of an exporting strategy specifically for products with low value-to-weight ratios?

transportation costs

___ exists when the tastes and preferences of consumers in different nations are similar if not identical

universal needs

_____ is a quota on trade imposed by the exporting country, typically at the request of the importing country's government.

voluntary export restraint

A hardship allowance is paid:

when the expatriate is being sent to a location where such basic amenities are grossly deficient by the standards of the expatriate's home country.

In a _____, the firms owns 100 percent of the stock.

wholly owned subsidiary

When an exporting firm finds that its local agent is also carrying competitors' products, the firm may switch to a ____ to handle local marketing, sales, and services.

wholly owned subsidiary

A _____ structure encourages fragmentation of the organization into highly autonomous entities.

worldwide area