mgmt 425 ch 10

Which of the following factors is the most important determinant of economic distance? A. the wealth and per capita income of consumers B. the ethnicity and religion of consumers C. the presence of legal institutions in a country D. the topography of a country

A. the wealth and per capita income of consumers

Can define and explain the CAGE distance framework For which of the following companies will geographic distance be the most relevant factor in deciding whether or not to trade with a target country? A. a firm that manufactures cell phone batteries B. a firm that extracts and exports iron ore C. a firm that produces movies D. a firm that sells wristwatches

B. a firm that extracts and exports iron ore

Can define and explain the CAGE distance framework A greater cultural distance between two trading countries A. increases linguistic similarities between the two countries. B. increases the liability of foreignness. C. reduces the uncertainty of doing business. D. reduces the transaction costs associated with business.

B. increases the liability of foreignness.

Can define and explain the CAGE distance framework (identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. It may also be used to understand patterns of trade, capital, information, and people flows.) Under the CAGE distance framework, the administrative and political distance between two countries primarily increases with A. differences in climates and time zones. B. the absence of a trading bloc. C. physical remoteness. D. the lack of connective ethnic and social networks.

B. the absence of a trading bloc.

Can define and explain the CAGE distance framework Zeda is a country of English-speaking people and has a very profitable economy. Which of the following countries is most likely to be the closest to Zeda in terms of cultural distance? A. Olax, which has the same wealth and per capita income as Zeda B. Jordax, which has a very profitable economy and where people speak Jordaxian C. Segar, where people speak English and have a low standard of living D. Terra, which is located close to Zeda and is easily accessible by road

C. Segar, where people speak English and have a low standard of living

Which of the following statements best explains why Walmart is finding it difficult to replicate its existing business model in India? A. because of the political differences between India and U.S. B. because NAFTA prohibits Walmart from investing in countries outside North America C. because of the large economic distance between U.S. and India D. because Walmart's low-cost strategy has not been accepted by Indian consumers

C. because of the large economic distance between U.S. and India

Can define and explain the CAGE distance framework How has the administrative and political distance between Canada, Mexico, and the United States been reduced? A. by adopting similar national cultures B. by lowering the disparities between their per capita incomes C. by establishing the North American Free Trade Agreement (NAFTA) D. by reducing their linguistic differences

C. by establishing the North American Free Trade Agreement (NAFTA)

Can define and explain the CAGE distance framework When two neighboring, democratic countries that are part of a trading bloc follow different religions and social norms, they most likely have high ______ distance. A. political B. geographic C. administrative D. cultural

D. cultural

Can define and explain the CAGE distance framework United Nerumbia and Fernsland are two neighboring countries with strong economic disparities. However, both the countries share a common national language and the same political ideologies. The relationship between these two countries will most likely affect the trade of A. food processed in Fernsland. B. movies and TV shows produced in United Nerumbia. C. iron ore extracted in Fernsland. D. luxury items manufactured in United Nerumbia.

D. luxury items manufactured in United Nerumbia.

Can define and explain Geert Hofstede's cultural dimensions (Four dimensions of culture have emerged: power distance, individualism, masculinity-femininity, and uncertainty avoidance. More recently, Hofstede added a fifth cultural dimension: long-term orientation.) Which of the following is part of Geert Hofstede's cultural dimensions? A. locus of control B. self-efficacy C. span of control D. power distance

D. power distance

Can define and explain the CAGE distance framework SmallWorld Inc. is a global Internet company that offers country-specific variations of its sites, keeping in mind the linguistic and religious differences between the countries. SmallWorld Inc. is most likely doing this to A. reduce its geographical distance from the other countries. B. increase its administrative distance from the other countries. C. increase its economic distance from the other countries. D. reduce its cultural distance from the other countries.

D. reduce its cultural distance from the other countries.

Can define and explain the CAGE distance framework The administrative and political distance between two trading countries reduces when A. there are FDI restrictions in the host country. B. there is no independent central bank in the host country. C. there are tariffs and trade quotas in the host country. D. there is a well-functioning capital market in the host country.

D. there is a well-functioning capital market in the host country.