International business

True

Businesspeople measure material culture to determine whether a market can support production activities. True/False.

True.

Islamic law is the most widely practiced theocratic legal system today. True/False.

True

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

False

Subcultures exist only within a nation's borders. True/False.

protestant work ethic

The ________ played a major role in the development of capitalism and free enterprise in nineteenth-century Europe.

True.

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

Right Wing Totalitarianism

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

False.

When a country's currency is weak relative to other nations, domestic products are more expensive than imports. True/False.

True

When a country's religious leaders are also its political leaders, its political system is called a theocracy. True/False.

True.

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

environmental degredation

Which of the following is a major obstacle to economic transition?

relaxed trade and investment barriers

________ facilitate(s) the process of cultural imperialism.

one's place is determined by the circumstances of their birth.

A caste system is a system of social stratification in which ________.

personal ability and actions determine an individual's social status and mobility

A class system is a system of social stratification in which ________.

newly industrialized country (NIC)

A country that has recently increased the portion of its national production and exports derived from industrial operations is called a(n) ________.

False.

A culture with small power distance tends to be characterized by considerable inequality between superiors and subordinates. True/False.

D) enforce world trade rules

A major flaw of the original General Agreement on Tariffs and Trade (GATT) was that it lacked the power to ________.

True

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

False.

According to Adam Smith, international trade should be restricted by tariffs and quotas in order to give a country an absolute advantage. True/False.

long term orientation

According to Hofstede's framework, a culture that scores low on ________ can change more rapidly because tradition and commitment are not impediments to change.

feminity

According to Hofstede's framework, cultures scoring high on the dimension of ________ generally have more relaxed lifestyles in which people are more concerned about caring for others as opposed to material gain.

masculinity

According to Hofstede's framework, cultures scoring high on the dimension of ________ tend to be characterized by personal assertiveness and the accumulation of wealth, typically translating into an entrepreneurial drive.

power distance

According to Hofstede's framework, organizations which have cultures that score high on ________ tend to be more hierarchical, with power deriving from prestige, force, and inheritance.

comparative advantage

According to the theory of ________, trade is beneficial even if one country is less efficient in the production of two goods, as long as it is less inefficient in the production of one of the goods.

market forces should determine trade flows

Adam Smith believed that ________.

D) developed

An established consumer market that primarily comprises the middle class and possesses efficient infrastructure is characteristic of ________ markets.

Japan

An investor wants to invest in a country that has a high gross national income (GNI). Which of the following countries would most likely qualify as a prospect?

False.

Anarchism is the belief that every aspect of people's lives must be controlled in order for a nation's political system to be effective. True/False.

B) individualism

Andy comes from a culture that emphasizes hard work and promotes the entrepreneurial spirit within individuals. While he and his coworkers are encouraged to achieve their personal goals, they are also held responsible for their actions. According to Hofstede's framework, which of the following dimensions does this culture illustrate?

D. political risk insurance

CADE Enterprises, a U.S. manufacturer, received assistance from the Overseas Private Investment Corporation when it expanded operations into Saudi Arabia. Which of the following types of support did CADE most likely receive from OPIC?

wealthier, westernized countries

Christopher Electronics plans to expand into foreign markets. Top executives want the firm to focus only on locations where the rule of law prevails. Which of the following should most likely be considered by Christopher?

True

Cultures isolated by topographical barriers are characterized by slower cultural change. True/False.

True

Cultures that score low on uncertainty avoidance tend to be less open to change and new ideas. True/False.

A) large uncertainty avoidance

According to Hofstede's framework, a culture with ________ values security and places its faith in strong systems of rules and procedures in society.

technological infrastructure in the nation

According to the Porter diamond, which of the following is an example of an advanced factor?

B) national business environment

Each ________ is composed of unique cultural, political, legal, and economic characteristics that define business activity within that nation's borders.

D) exploits workers in low-wage nations

Globalization is criticized because it ________.

personal relationships

Guanxi, in the Chinese business context, means ________.

strategic CSR

Horizon Ltd. is a software company that, over the last year, incorporated social responsibility into its core operations to create value and build competitive advantage. Which layer of corporate social responsibility does Horizon Ltd. function at?

True

In the maturing product stage of the international product life cycle theory, production facilities are introduced in countries with the highest demand. True/False.

False.

Incentives and rewards for individual business initiatives are an important aspect of collectivist cultures. True/False.

Antitrust laws

Laws designed to prevent companies from fixing prices, sharing markets, and gaining unfair monopoly advantages are called ________.

encourage MNEs to increase production activities in a country

Local content regulations are primarily intended to ________.

True

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

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/False.

True

Material culture often displays uneven development across a nation's industries. True/False.

False.

Mercantilism views competition for the world's wealth as a positive-sum game. False.

False

Most of the world's merchandise trade is composed of trade in agricultural products. True/False

the capacity of the industry to innovate and upgrade

National competitive advantage theory states that a nation's competitiveness in an industry depends on ________.

True

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

piracy

On a recent trip to Hong Kong, a group of tourists found several Prada bags being sold on the pavement. They cost only a few dollars and were clearly fake; though they bore the Prada trademark. This is an example of ________.

True.

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

trade surpluses

One of the major pillars upon which the practice of mercantilism rested was ________.

False

People in collectivistic cultures are given freedom to focus on personal goals. True/False.

False

Pluralistic political systems include authoritarian regimes such as communism and fascism. True/False.

B) former communist nations lure professionals back to their homeland

Reverse brain drain is the process by which ________.

Robert does not believe that a violent revolution is needed to seize control over resources

Robert believes 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. However, he does not think of himself as a communist, but as a socialist. Which of the following statements about Robert is true?

Regional pacts

Some nations encourage ________ because of recent resistance to worldwide trade agreements.

National culture

The French Government promotes the concept of ________ by building museums and monuments to preserve the legacies of important events and people.

True.

The World Trade Organization's dispute settlement system has the ability to penalize offending nations. True/False.

righteous moralist

The ________ view says that a company should maintain its home-country ethics wherever it operates because the home-country's view of ethics and responsibility is superior to others' views.

True

The bureaucracy is the part of government that implements the rules and laws passed by elected representatives. True/False.

C) international firm management

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

The government considers banking sector as important to 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?

manufactured goods

The international product life cycle theory was put forth for ________.

traditional

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

False.

The power of the General Agreement on Tariffs and Trade (GATT) to settle trade disputes is what sets it apart from the World Trade Organization (WTO). True/False.

True

The theories of comparative advantage and absolute advantage assume that countries are driven only by the maximization of production and consumption. True/False

zero-sum game

The theory of absolute advantage destroys the mercantilist idea that international trade is a ________.

living standards of its people

The theory of absolute advantage measures a nation's wealth by determining the ________.

B) settle trade disputes between its members

The three main goals of the World Trade Organization (WTO) are to help the free flow of trade, help negotiate the further opening of markets, and ________.

False

The value of trade passing through the borders of all countries exceeds the amount of goods and services they produce. True/False.

economic nationalism

Today, countries seen by others as trying to maintain a trade surplus and expand their national treasures at the expense of other nations are accused of practicing ________.

both believe that the government should control all types of economic activity

What do communists and socialists have in common?

At the time of their collapse, standards of living in most centrally planned economies were at or above those of market economies.

Which of the following disagrees with the concept of centrally planned economies?

There are gains to be made from specialization and increasing economies of scale.

Which of the following is an argument offered by the new trade theory?

establishing a trusting relationship before proceeding with business

Which of the following is an important factor in forming successful business ventures in China?

Subculture

Which of the following is defined as a group of people who share a unique way of life within a larger, dominant culture?

The purchasing power parity is a poor indicator of a people's total well-being.

Which of the following is true about economic development of a nation?

Human development index

Which of the following measures the extent to which a government equitably provides its people with a long and healthy life, an education, and a decent standard of living?

Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards.

Which of the following statements about approaches to political risk management is NOT true?

C) Political risk is a major deterrent for companies that want to invest abroad.

Which of the following statements is true about the political risks in a global marketing environment?

they are learned from role models

Which of the following statements is true of attitudes?

The theories assume labor to be the only resource used in the production process.

Which of the following statements is true regarding the assumptions of the absolute and comparative advantage theories?

left-wing totalitarianism

Which of the following terms is also used to refer to communism?

Brain drain

Which of the following terms is used to refer to the departure of highly educated people from one profession, geographic region, or nation to another?

barter

Which of the following terms is used to refer to the exchange of goods and services for other goods and services instead of money?

Churning

Which of the following terms is used to refer to widespread job turnover throughout an economy?

Confiscation

Which of the following terms refers to the forced transfer of assets from a company to the government without compensation?

Britain

Which of the following was a prominent mercantilist nation?

Trademarks

________ are words or symbols that distinguish a product and its manufacturer from competitors.

Political risk

________ is the chance that political forces may change a country's business environment in ways that lead investors to lose some or all of the value of their investment or be forced to accept a lower-than-projected rate of return.

Expropriation

________ is the forced transfer of assets from a company to the government with compensation.

Risk Management

________ is the layer of corporate social responsibility whereby a company develops a code of conduct that it will follow in its global operations and agrees to operate with greater transparency.

Purchasing power

________ is the value of goods and services that can be purchased with one unit of a country's currency.

secondary footprint

________ measures the indirect carbon dioxide emissions from the whole life cycle of products-from their manufacture to eventual breakdown.

Pluralism

________ political systems include democracies, constitutional monarchies, and some aristocracies.

Expropriation

________ refers to governmental action to dispossess a company or investor.

cultural imperialism

________ refers to the replacement of one culture's traditions, folk heroes, and artifacts with equivalents from another.

Mercantilism

________ says that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports.