International Business Final 2021 Fall

Which of the following is a difference between Eastern and Western leaders?

Eastern leaders tend to consider a longer horizon in their decisions than Western leaders.

Country XYW is growing at 5% per year. Its government has analyzed the different industry clusters and written ten-year plans with detailed policies. The income distribution of XYW has performed well in the past decades of growth. Although the economy is very far from the richest countries, it is performing well. How would you describe a nation with these characteristics?

Emerging market economy

Which of the following is NOT one of the three main types of international laws?

Maritime law

Economic factors examined in PEST analysis include which of the following?

Market size

_____ is an interventionist trade theory which suggests that trade generates wealth for a country with a trade surplus, with emphasis on colonization and military conquest.

Mercantilism

_____ are large banks that borrow from and lend to governments, other banks, and corporations.

Money center banks

Which term refers to a system in which owners rent to a stranger something they are not using, such as room, a car, or even a service, using peer-to-peer services?

Shared economy

A developing nation's political leaders are implementing policies favoring equality of rights, freedom for all individuals, and a transition from privatization of industry to state regulation of business. Which ideology is being instituted?

Social democracy

Which of the following is not a factor in helping International businesses better assess the technology level of a country?

Social infrastructure

Understanding a country's education level falls under which section of the PEST analysis?

Sociocultural

Taverna is a manufacturing-dependent nation. The Taverna government plans to increase the supply of the national currency by a major proportion in an effort to devalue the currency in international markets. In this scenario, the Tavernan government prefers to have its currency undervalued in an effort to:

help drive exports.

A PEST analysis is a tool used to

help manage a company's external environment.

Global internet usage has _______ resulting in a _______ cost associated with gathering and using information.

increased; decreased

In the context of transportation networks, unlike air transport, shipping by sea:

is cheaper.

_________ refers to a way of doing business that supports the long-term ecological balance of the environment.

Sustainability

Which of the following is a political factor examined in a PEST analysis?

Tariffs

The United States economy makes less international calls than domestic ones. Major corporations' direct investments into expansion are largely domestic. Local trade is about 80%, when compared to international activity. The nation is following what economic trend?

Ten-percent presumption

The graph given below compares the GDP of a country with the country's energy consumption. Analyze the graph and identify a statement that is true for the years 1960-2000.

The country's GDP has increased with energy consumption.

Which description best fits the definition of globalization?

The evolution of an integrated and interdependent world economy

Which BEST defines transaction exposure?

The extent to which income from foreign transactions is exposed to currency fluctuations before payment is made

English is the unofficial language of business and the Internet, as the number of people learning this language worldwide over the past few decades has increased dramatically. How is this different than other major languages in the world, such as Arabic, Spanish, or Japanese?

The majority of people who speak English do not necessarily live in countries that are part of English culture.

What are a society's values?

The shared assumptions that identify what it believes is good, right and desirable

The "flat world" theory supposes:

The world has free access to markets, few barriers to competition, and consistent enforcement of regulations

What is the general relationship between freedom and income?

They are positively correlated.

What term is best described as a positive trade balance?

Trade surplus

There is a positive correlation between education spending and economic output.

True

A household product manufacturer creates a new liquid detergent for the Central American market. They are surprised when the detergent does not sell well soon after product launch. Which aspect of culture does the company not understand well about Central American consumers?

Uncertainty avoidance

A nation is investing more capital outside its borders than it receives from foreign direct investment. The nation is exporting more products than it accepts in imports. When measuring these changes year-over-year, which economic indicator BEST reflects these changes?

Balance of payments

Since its founding, Supercell, a Finnish company, has created mobile game apps for iOS and Android operating systems that can downloaded and played from anywhere in the world. This company is an example of which kind of firm?

Born global

How does engaging in international business reduce risk?

By spreading sales across multiple markets and avoiding the risk that an entire market base will be affected by a recession

Short-termism in a company can be avoided:

by promoting an understanding that sustainable activities might be good for profits.

Who can improve cultural intelligence?

Anyone who is motivated

Which BEST describes a multilateral organization?

A body that establishes and enforces guidelines governing the interactions of individuals, businesses, and governments in a globalized world

Which of the following BEST explains what a tax haven is?

A country that collects little to no corporate income tax

A nation plans to spend more money on housing projects for the poor. It will also increase expenditures on road infrastructure. Overall, these increases are substantial changes to its budget year-over-year. This nation MOST likely is implementing what change to its economic strategy?

Adjusting fiscal policy to increase consumption

Digital technology infrastructure includes:

All of these

Which of the following gives the definition of a bilateral trade agreement?

An agreement between two countries

Which of the following BEST relates to the term "market-based economy"?

An economic system that encourages individuals and businesses to determine how much private consumption and investment to make in the economy.

Which of the following BEST describes the term "clean economy"?

An economy that produces goods and services with environmental benefit

_____ is the native language of the largest number of people.

Chinese

Which of the following is a political system in which the workers collectively own the factors of production and the production outputs are allocated to workers based on their needs?

Communism

_____ is usually the first stage in sustainable innovation.

Complying with existing laws aimed at protecting the environment

_____ are electronic currencies that are monitored by distributed peer networks that simultaneously keep track of currency ownership and trades.

Cryptocurrencies

What is the knowledge to function effectively across cultural contexts?

Cultural intelligence

Which of the following is true?

Currencies under the gold standard have intrinsic value.

________ is BEST described as the process by which you take what you have learned about another culture and then use that knowledge to adapt your own behavior and thinking.

Decentering

Bilateral agreements between nations are exempt from the most favored nation clause. These agreements are MOST likely used for what purpose?

Decrease tariffs and trade barriers between two countries.

A U.S.-based packaged foods company establishes subsidiary operations in Brazil. Six months later, a Chilean competitor announces its plans to enter the Brazilian market. The Chilean firm's CEO is from Brazil. How should the U.S. firm approach this competitive challenge?

Develop a strategy to mitigate consumer ethnocentrism.

Which of the following is not a form of democracy?

Dictatorial democracy

Which of the following is NOT a common foreign market entry mode?

Distributing

We can increase the supply of labor by all the following EXCEPT:

Extending vacation time

In the United States, the _____ regulates all forms of online advertising, data collection, and sales, and imposes penalties for companies making false claims or violating customers' rights.

Federal Trade Commission

_____ is the permission to use another company's trademarks, patents, copyrights, and expertise according to a strict template setting out the way it does business.

Franchising

Political liberty is measured by a number of factors. Some international organizations collect and compile data for the measurements and release annual reports. Which are the two MOST important organizations that publish such reports?

Freedom House and Heritage Foundation

Coca-Cola relied on the global convergence of markets to expand to other countries. What does global convergence mean?

Global convergence represents the spread of common preferences across country borders

Corporation DDD likes to manufacture their phones in low-wage countries to save labor costs. They also look for cheaper commodities made in emerging economies. What is the name of this corporate phenomenon?

Globalization of production

The United States has several computer manufacturers. These manufacturers buy the chipsets, processors, ram memory, exterior cases and other components from factories in Asia, and then they assemble the final products in America. This increases the output of the U.S., and it is an element of which economic indicator?

Gross Domestic Product

Which of the following refers to the abilities, skills, experience, and knowledge possessed by individuals?

Human capital

Of the following, which is an area of common ethical issues facing international businesses?

Human rights

Derian Inc., a national investment firm, has a culture that encourages collaboration between managers and employees. Managers at the firm take inputs from their team members before making any decisions. The employees of the firm feel that they are on an equal footing with their managers. As a result, they prefer working in groups and rely on the firm for training and socialization. In this context, which of the following pairs of characteristics most likely describes the work culture of Derian Inc.?

Low power distance and high collectivism

A country is transitioning from a command to a market economy through deregulation of industries. How will this decision impact the market?

Increased competition

Which of following is NOT one of the main types of legal systems in the world?

Individual law

A multinational company that sells financial consulting services to consumers focused on wealth accumulation and economic independence is evaluating potential markets for entry. Which political dimension should the company identify in its prospective market before entry, in order to increase the likelihood of selling its services?

Individualism

The Foreign Corrupt Practices Act is a law enacted in 1977 that makes it illegal for American companies or citizens to pay foreign government officials to help in obtaining new business or retaining business in other countries. In 1988, it was expanded to cover foreign companies that operate in or have securities listed in the United States. What is TRUE regarding this law?

It allows specific payments, known as facilitation payments, to government officials to perform tasks they were already bound to perform, such as obtaining new licenses or permits in that country.

Which of the following BEST describes SWIFT?

It is a global telecommunications company that facilitates secure international payment transfers from one bank to another.

In the context of globalization, identify a true statement about research and development (R&D).

Over the past decade, international companies are spending more money on R&D than in product manufacturing.

Country A and B have similar economic systems, standards of living, shared values, and homogeneous socioeconomic classes. Which benefit would a trade partnership MOST likely have for these two nations, considering these factors?

Overlapping demand

Which of the following would you expect NOT to happen as the product matures along the international product life cycle?

Producer focuses on the domestic customer

Corruption affects businesses by (select all that apply):

Providing fertile ground for organized crime, terrorism, and other threats to human security Eroding the quality of life Undermining democracy and the rule of law

What are the three Rs of managing cultural differences which can provide a leader or company with the steps necessary to managing a diverse group?

Recognition, Respect, Reconciliation

What are the reasons a company may decide to engage in international business? (select all that apply)

Reduce risk Increase sales Obtain access to resources

Which of the following is NOT one of the three different levels of law?

Regulatory law

_______ refers to the limit on the availability of such factors as materials, equipment, food, and fuel that reduce a company's ability to produce goods and services.

Resource constraint

Which of the following BEST defines micro political risk?

Risk that only affects a specific sector, firm, or project

Globalization has placed a pressure on companies to find the lowest cost labor in order to compete and increase profit share. A number of companies from Nike and Adidas have been accused over the years of engaging with subcontractor factories around the world at low prices due to very low wages paid to labor, in factories commonly referred to as "sweatshops". Consumer sentiment and negative media coverage has influenced many of these companies to change their labor practices in terms of monitoring their subcontractors and provide transparency to their corporate policies. Which type of practice is this MOST likely considered to be?

Unethical conduct

Which of the following would NOT be considered a visible aspect of culture?

Values

Which of the following is NOT an element of physical infrastructure?

Weather patterns

The Human Development Index is

a broad measure of well-being focused on health, education, and economics.

An absolute advantage is

a favorable position obtained by countries who are better at producing a specific good or service than any rival.

As our global economy has become integrated and reliant upon suppliers throughout the world, companies have been forced to adapt to maintain their efficiencies, cost control, and ability to deliver products on time to their customers. We have even seen this approach within the United States. Nissan and Volkswagen are both foreign automotive manufacturers that opened plants in Tennessee. As a result, many of the suppliers and key manufacturers necessary to provide for these customers have moved or been established in that state. Today, nearly 900 of these entities are working within Tennessee to supply to this industry. This type of structure is known as

a manufacturing cluster.

For two consecutive quarters in 2016, the gross domestic product of Hinseria, a country in West Africa, decreased. During these two quarters, the country's output shrank, and the general well-being of its citizens declined. This scenario is an example of _____.

a recession

In an effort to reassure the market and foreign investors, the Hong Kong government "fixes it currency," or holds the price steady in relation to the U.S. dollar. This is referred to as a

peg.

Fiat currency is BEST defined as a

piece of paper or a coin that has value merely because the issuing government says it does.

Unlike money center banks, conventional banks primarily do business with _____.

consumers

Unlike gross domestic product (GDP), gross national product (GNP):

counts the output that domestic companies make abroad.

Mixed political systems use ________.

elements of democratic and autocratic rule

Short-termism is BEST defined as a(n)

excessive focus on temporary results even at the expense of long-term interests and objects

Spain and Italy are both members of the European Union. Nayeli, a Spaniard, is able to purchase Italian-made bags from a handbag store in Spain without paying additional taxes. The market created by the European Union is a(n) _____.

globalized market

A reason for a government to wish to limit international trade is to:

protect its infant industries.

All of the following are primary goals of collaboration EXCEPT

keeping information private.

In Kiseria, a country in South Asia, labor laws require laborers to work in factories for 12 hours a day. Atlas Inc., a mining company, is planning to open its operations in Kiseria. However, Atlas Inc. feels that laborers are being exploited by making them work for unusually long hours. This scenario illustrates that Kiseria's labor practices are:

legal but unethical

The customs authority in Zedania strictly monitors and inspects its imports. It ensures that certain imported goods follow certain standards and come with appropriate labeling and safety requirements. This is especially necessary for products that are perceived as dangerous. Zedania is not a proponent of free trade. Given this information, it can be said that one of Zedania's reasons for establishing strict safety standards of imported goods is to:

limit the inflow of foreign goods.

Unlike domestic business, international business:

necessarily places greater emphasis on differences between countries.

According to critics of globalization, _____.

new technologies and the investment of foreign capital in developing countries may actually increase levels of inequality

Bianca is a student of international business at the University of Phoenix. She is of the opinion that the world is not fully connected. She believes that the global financial markets are controlled only by a few cities and that most businesses still operate in domestic markets. Bianca's views are consistent with the _____ argument.

round world

Purchasing power parity (PPP) adjusts GDP to account for differences in ________.

the cost of living

Privatization is the process in which ________.

the government converts government resources to private resources

Macro political risk is

the risk associated with adverse political actions affecting all foreign investments and operations in a host country.

Piracy is ________, and counterfeiting is _______.

unauthorized production of another's work; copying something with the intention of passing it off as original

To fight resource constraints, a company should:

use more renewable sources of energy than nonrenewable sources of energy.