IBA 350 Study Guide Exam 1
________ refers to the steady integration and increasing interdependence of economies.
Globalization of markets
Which one of the following is an example of globalizing manufacturing?
An Indian apparel company sets up a factory in Madagascar.
________ are corporations or individuals with expertise in finance, legal advice, customs clearance, or support services that help firms perform international business transactions.
Facilitator
Assets such as technology, capital, and managerial talent are known as ________.
Factors of production
Which one of the following best explains the globalization of production?
Firms reduce manufacturing costs and retail prices by moving manufacturing activities to nations with lower costs of labor.
Which term refers to the continuing economic assimilation and interdependency of countries across the globe?
Globalization of markets
Which one of the following motivations for international expansion involves expanding overseas in order to grow the customer base and increase the number of products being manufactured?
Developing economies of scale
A ________ is a professional company that offers logistics and marketing services for focal firms as part of worldwide supply chains.
Distribution channel intermediary is a specialist
For some jobs, traveling the world and meeting people from various cultures and backgrounds facilitates career growth. In such cases, studying international business is most likely ________.
creating a competitive advantage for an individual
________ initiate international business activities by envisioning, crafting, and creating goods and services for global buyers.
Focal firms
Which one of these factors is driving global economic transformation?
Industrialization in fast-growth developing economies
________ involves the allocation of assets to another country or the attainment of assets in that particular country.
International investment
Which of the following represents the trend of economic disaster spreading from one country to another?
Contagion
For the U.S. economy, international trade is a critical element that generates one of every seven dollars of U.S. sales. This fact supports the idea that studying international business ________.
Contributes to the health of the U.S economy
Consumers' daily lives, partialities toward products, and spending habits all over the world are becoming increasingly similar. Popular brands now have global followings, and materials are becoming more standardized. This represents which dimension of globalization?
Convergence of customer preferences and standards
A company with ________ or fewer employees is defined as an SME.
500
Which of the following is a motivation for international expansion?
Being closer to supply sources
A newly established corporation that begins international business activity very early in its development, allowing it to move promptly into overseas markets, is called a ________.
Born global firm
________ risk represents possible losses or failures as a result of poorly developed or implemented business strategies, tactics, or procedures.
Commercial
________ represents possible losses or failures as a result of poorly implemented business strategies, maneuvers, or processes.
Commercial risk
________ involves possible adverse effects on operations and profitability due to developments in the political, legal, and economic environments of a foreign country.
Country Risk
Lifestyles, customs, and religion have a potential for causing which type of international business risk?
Cross-cultural
Which term refers to the risk of adverse fluctuations in exchange rates?
Currency risk
Which one of these describes a strategy that involves a firm's establishing a presence overseas by acquiring productive assets such as land, plants, equipment, capital, and technology?
Foreign direct investment
________ involves a company paying external suppliers and contractors, who are located in foreign nations, to perform value-adding activities.
Global outsourcing
________ inspires corporations to establish their sourcing, producing, and promoting activities on a worldwide scale in order to attain lower costs with higher efficiency.
Globalization
Which dimension of market globalization is a result of the North American Free Trade Agreement, as well as other countries' agreements that have facilitated reduced trade barriers among their members?
Growth of regional economic integration blocs
Based on her studies of international business, Yolanda Sanchez decides to buy paper for her office supply store from wood grown in sustainable forests in Canada, even though the sustainable paper costs more than other paper. Considering the reasons to study international business, which of the following best explains Yolanda decision?
Implementing corporate citizenship efforts.
Your roommate is uncertain about a college major. Knowing that she is passionate about social and environmental causes, you suggest that she major in international business. When she graduates and works for a large company, you assert that she will be able to influence the company's actions as they affect society and the environment. Which one of the following reasons for studying international business are you advocating?
International business supports sustainability and corporate citizenship.
________ is inspiring quicker dispersion of consumer products and brands across the globe.
International trade
Which term refers to the trend of corporations to methodically expand their worldwide business activities?
Internationalization
A(n) ________ is a large corporation with significant resources that executes countless business activities through a system of subsidiaries and affiliates located in various countries.
Multinational enterprise
A U.S. manufacturer of automatic car wash equipment has seen its U.S. sales decline. The manufacturer decides to expand into Mexico and Canada. This is an example of which one of the following motivations for international expansion?
Pursuing prospects for growth through market diversification
What should governments do to reduce the harm of globalization while also acquiring the benefits associated with globalization?
Regulate financial institutions appropriately
Which one of the following is an upstream value-chain activity?
Research and development
Which one of the following statements is most likely true?
Risks cannot be avoided, but they can be managed and anticipated.
Which phase of globalization is composed of the growth and supremacy of multinational enterprises in the industrial and agricultural industries?
Second phase
Leon's Luxury Clothing, located in Manhattan, designs a line of high end summer apparel for professional men and women. The company is considering opening a location in Brazil. The most likely reason for this international expansion is to __________.
Seek opportunities for growth through market diversification
When a domestic firm seeks opportunities in foreign markets, the firm's motive is best described as ________.
Strategic
Which one of the following factors best explains why trade growth has outperformed GDP growth over the years?
The liberalization of markets
Which of the following is a motive for international expansion?
To stay close to supply sources
Which of the following is NOT a motive for firms to internationalize?
To supplement unemployment in the domestic market by fostering foreign talent.
