WGU Global Business (VFC1) (PVFC)

What is a benefit of implementing a system of free trade? Reduced import quotas would result in more domestic sales due to scarcity. Increased export quotas would result in more international sales of domestic goods. Reduced tariffs would result in lower costs of imported raw materials. Increased tariffs would result in more revenue generated for the government.

Reduced tariffs would result in lower costs of imported raw materials. In a free trade system, tariffs are reduced or eliminated to increase the ease and efficiency with which trade can be accomplished.

Which legislation is aimed at increasing ethical financial transparency in corporate America and affects foreign businesses that want to be listed on a U.S. stock exchange? FCPA FTCA SOX NAFTA

The Sarbanes-Oxley Act (SOX) is legislation aimed at increasing ethical transparency in corporate America and applies to foreign businesses that want to be listed on a U.S. stock exchange.

What is a benefit for making a foreign direct investment (FDI)? The investment will increase the Chinese company's risk of doing business internationally. An inflow of capital into the country chosen by the Chinese company will benefit the company. Profits will decrease for the Chinese company because it will avoid tariffs. The country chosen by the Chinese company will increase jobs for local people.

The country chosen by the Chinese company will increase jobs for local people. A benefit of foreign direct investment is an increase in jobs for the country where the investment is made.

Which condition is part of a contract between international companies that are based in different nations? A provision against arbitration clause A choice of law clause A clause against unfair contract terms A structure that is vertical in nature

e of law clause A choice of law clause specifies the laws and the jurisdiction under which international disputes will be settled. International businesses operating in different countries include such clauses in their contractual agreements to clarify ahead of time how disputes will be settled.

During a training session, the employees are asked to identify irregularities. Which activity should be identified? A grocery store employee forgetting to report rotting produce A data entry technician unintentionally entering incorrect data An employee taking home office supplies for personal use An employee siphoning funds from the office account

An employee siphoning funds from the office account Correct! An irregularity occurs when an employee intentionally defrauds a company.

Which laws must a U.S. company follow when engaging in business with other countries? The business chooses which laws to adopt Both the United States and the host country's laws The host country's, but not the United States' laws The United States, but not the host country's laws

Both the United States and the host country's laws U.S. companies are required to follow both its own laws and those of the host country.

Which unethical act is addressed by the U.S. Foreign Corrupt Practices Act of 1977? Nepotism Cronyism Bribery Favoritism

Bribery The U.S. Foreign Corrupt Practices Act of 1977 outlawed bribery of foreign officials.

How does globalization support tolerance for different people and ideas? By improving global wages By increasing the access to information By enhancing global morality By strengthening protectionist tendencies

By increasing the access to information Globalization increases access to others, which in turn, increases access to a variety of information.

How should a company ensure that internal controls are effectively implemented? By performing due diligence with procedures By creating systems that are new to the company By simplifying procedures in accounting By providing financial data to shareholders

By performing due diligence with procedures A company ensures that internal controls are effectively implemented by ensuring that procedures are clearly articulated and by consistently auditing employees to ensure compliance.

Which economic integration stage offers economic collaboration by removing trade barriers between member countries and establishing a mutual trading policy with nonmembers? Customs union Free trade area Common market Political union Correct! A customs union offers economic collaboration by removing trade barriers between member countries and establishing a mutual trading policy with nonmembers.

Customs union A customs union offers economic collaboration by removing trade barriers between member countries and establishing a mutual trading policy with nonmembers.

A multinational corporation (MNC) in a highly unionized country is seeking to move its operations overseas. Which factor is a benefit of this action? Overcoming competitive intensity in the industry Moving away from regulatory issues related to operations Decreasing labor costs to increase negotiation strength Identifying new markets overseas for new customers

Decreasing labor costs to increase negotiation strength Multinational corporations tend to save a lot in labor costs by moving operations overseas. As they seek to lower costs by taking advantage of lower wages overseas, they have better negotiation power with the unions in their home country.

Company A is located outside the home country of Company B. Company B has acquired Company A with the intent of controlling and managing Company A's assets. Which practice is being used by Company B? Partnership Portfolio investment Merger Foreign direct investment

Foreign direct investment Investments made by international companies with the intention of controlling those assets in a foreign market represents foreign direct investment.

What is a benefit of creating a regional economic integration agreement? Decreased competition Greater import potential Increased national cultural identity Improved financial growth

Improved financial growth Trade agreements create more growth opportunities for countries to trade among themselves as barriers to trade and investment are removed.

What is a potential influence of the existence of multinational corporation (MNC) on international relations? Creates international trade barriers Improves relations between countries where the MNC operates Worsens relations between countries where the MNC operates Eliminates international trade barriers

Improves relations between countries where the MNC operates An MNC improves relations between countries, as they need to cooperate to trade.

A sole, national telephone company was found violating antitrust laws and was forced to separate into regional companies. What caused the violation of the antitrust laws? Service disruptions Reduced competition Technological innovation Increased profits

Reduced competition Antitrust laws are enacted to protect consumer's rights to competition in the marketplace. The sole, national company was a monopoly, and no competition occurred.

Which economic actor benefits as the U.S. dollar weakens? A U.S. tourist abroad A foreign investor in the U.S. A U.S. investor abroad A foreign firm exporting to the U.S.

A U.S. investor abroad A U.S. investor abroad invests money in another country by first converting U.S. dollars to a foreign currency, making the investment, then later converting+ it back to U.S. dollars. As the U.S. dollar becomes weaker, the rate of return on the investment is larger as the investor gets more U.S. dollars from converting back from the foreign currency.

A company is training new employees and helping them identify discrepancies. Which scenario indicates a discrepancy that should be identified by the employees? An employee fails to record large transactions with a customer. An accounting manager siphons a significant amount of funds from the company's account. A data entry technician unintentionally entered incorrect data into the system. An employee takes home high-quality office equipment.

A data entry technician unintentionally entered incorrect data into the system. Incorrectly entered data is a discrepancy. The mistake was unintentional in this case.

Which economic actor benefits as the U.S. dollar strengthens? A foreign firm exporting to the U.S. A foreign tourist in the U.S. A U.S. investor abroad A U.S. exporting firm

A foreign firm exporting to the U.S. The firm earns U.S. dollars through export sales, then converts it back into their home currency. A stronger U.S. dollar would mean they can buy more of the home currency.

A country produces goods more efficiently than all other countries in the same industry. Which type of advantage does this country have? Comparative Competitive Absolute Protectionist

Absolute An absolute advantage is a term coined by Adam Smith and refers to the multiple things that a country can do more efficiently than other countries.

A multinational corporation has manufacturing facilities in many Asian countries due to cheaper labor. Which strategy is the corporation using? Centralized portfolio management Market expansion Acquisition of resources Realignment of capital expenditures

Acquisition of resources Resource acquisition will offer more capital, access to raw materials, and technology.

How does the Sarbanes-Oxley Act (SOX) attempt to increase the public's trust in American companies? By refusing to protect persons who report behaviors that are illegal or unethical in a public company By enforcing companies' compliance with a dual listing on the U.S exchange By requiring public companies to have and reveal a code of business conduct and ethics By strengthening disclosure of insider transactions and permitting loans to executives

By requiring public companies to have and reveal a code of business conduct and ethics SOX requires public companies to have and reveal a code of business conduct and ethics and to include these codes on their websites.

A company sells products that many have reported on social media to be culturally insensitive, and sales have decreased significantly since the negative publicity began. How are consumers responding to the publicity? By considering sustainability By notifying government agencies By voting with their purchases By focusing on supply chain

By voting with their purchases Consumers who do not believe the product is made in alignment with their values may not buy the product. Not buying the product is considered voting with one's wallet.

Which level of economic integration permits the formation of economically integrated exchanges of goods and services between parties from member countries? Common market Political union Customs union Free trade area

Common market The common market permits the formation of economically integrated markets between member countries, removing trade barriers and any restrictions on the movement of labor, technology, and capital.

A company is reviewing how ethical consumerism is being addressed in the organization. It is hoping to improve its awareness of this factor and how it will influence future business decisions. How does this factor affect business decisions? Companies must consider the age of the intended audience for a product. Companies must remember that their consumers may care about more than just the final product. Companies that hide their production methods can avoid negative impacts of ethical consumerism. Companies that make good financial decisions will be perceived well by the public.

Companies must remember that their consumers may care about more than just the final product. Nearly half of North American consumers report punishing a company by not purchasing a product if they disagree with its manufacturing or other business practices.

A company is reviewing intangible assets that are covered by intellectual property laws. Which asset is being reviewed? Copyright Corporate securities Customer list Goodwill

Copyright Intellectual property law covers intangible assets like patents, trademarks, and copyrights.

Countries A, B, and C have a trade agreement. Country C imposes high tariffs on all raw materials imported from Country A, and Country B imposes a lower tax on the same raw materials. These raw materials are unique to Countries B and C and essential to Country A. What is the effect of this set of actions on these countries? Country A will do more business with Country C. Country A will do more business with Country B. Country A will do the same amount of business with Country B and Country C. Country A will cease doing business with Countries B and C.

Country A will do more business with Country B, due to the lower tax rate.

What is one option for the Chinese company to make a foreign direct investment (FDI)? Invest 5% in a furniture company in the US. Sell unfinished furniture to a company in Italy that will complete it Merge with an even larger China-based multinational company Create a joint venture with a furniture company in Indonesia

Create a joint venture with a furniture company in Indonesia. A joint venture with a foreign company is an option for making a foreign direct investment.

Which strategy is used by governments to limit the foreign direct investment in a country? Creating domestic ownership restrictions in the country Decreasing the value of the country's currency Creating foreign ownership restrictions in the country Increasing the value of the country's currency Correct! Many countries restrict the percentage of ownership by foreign investors.

Creating foreign ownership restrictions in the coun Many countries restrict the percentage of ownership by foreign investors.

Which term describes the normative beliefs and practices passed from generation to generation that help define a group of people? Office norms Cultural norms Graft norms Legal norms

Cultural norms Shared and integrated systems of beliefs and practices that are passed down through generations and characterize a cultural group are cultural norms.

A new employee has recently transferred from the U.S. headquarters to a foreign office, and a coworker has been assigned to help the employee become acclimated to the new location. The coworker decides that the best place to start is with a description of the culture of the region since it is significantly different from the United States. Which piece of information is this coworker providing to this employee? Business practices codified by current legislation Details about how the community functions Business practices required of global companies Details about universal ethical conduct

Details about how the community functions Culture describes a collective way of life and provides details on how the community functions in terms of their actions and beliefs.

Which action is used by companies wishing to avoid working with vendors who use sweatshops? Allowing vendor practices to be flagged by nongovernmental organizations such as the National Labor Committee Sending a whistleblower to the job sites to ensure the vendor practices safe working conditions Developing and imposing a company internal code of conduct for vendor labor practices Establishing national child labor laws and requiring vendors to comply with them

Developing and imposing a company internal code of conduct for vendor labor practices A code of conduct for vendors is contractually imposed, and often publicly posted, to ensure the reputation of the company is protected.

Which agreement was formalized in 1993 to create a political and economic union to help a large group of countries cooperate and coordinate key aspects of their economic policy? Mercosur CAFTA-DR EU ASEAN

EU fits the description and has the goals described.

What is enhanced when creating regional trade agreements? National cultural identity Economic opportunity Global trade integration Labor restrictions

Economic opportunity Regional trade agreements create more opportunity for countries to trade with one another by removing barriers to trade.

A company produces the same product over and over, and it has caused the manufacturing cost of the product to become cheaper and more competitive in international markets than similar products in the industry. Which approach is this company using to achieve this ability? Economies of scale Greater competition Intra-industry trade Comparative advantage Previousquestion

Economies of scale As the company repeatedly produces the same product, the scale (numbers of products produced) allows the company to make the products cheaper than competitors.

Which economic benefit will result in the company's decision to move operations to the U.S. or Mexico? Eliminating tariffs and duties Increasing access to natural resources Implementing a country of origin rule Protecting intellectual property

Eliminating tariffs and duties. If the Chinese company moved its operations to the U.S. or Mexico, it would result in the elimination of tariffs and duties due to the NAFTA regional integration and trading agreement that reduces trade barriers between those nations.

What does business ethics implicitly regulate? Employee behavior Consumer preference Consumer action External stakeholders

Employee behavior Employers want employees to self-regulate so that when a stimulus appears they will take proper action in the interest of everyone involved, either directly or indirectly.

Which governmental entity was created to provide regulatory authority regarding pollution by industry? Federal Bureau of Investigation Department of Commerce Department of Agriculture Environmental Protection Agency

Environmental Protection Agency Correct! The agency was created in 1970 to monitor industry and industry's environmental practices. The agency is not under any cabinet-level department.

What is the term for the concept that people should purchase goods and services from organizations that match their own values and beliefs? Ethical consumerism Consumer ethics Organizational ethics Ethical purchasing

Ethical consumerism There is an industry that exists to provide information about the ethical behaviors of organizations to allow consumers to support organizations that align with their own personal values and beliefs.

A business invests in an assembly plant located near a port in a foreign country. The business will import parts and raw materials for final assembly as a finished product, then export these products for international sales. The business receives tax incentives. What is the name for the geographic area where these products are assembled? Export processing zones (EPZs) Import-free zones Foreign direct investment (FDI) zones Tax-free zones

Export processing zones are distinct geographic areas usually located near a port, where parts are imported for final assembly into a finished product that is then exported back out of the country. Based on local governmental regulations, such investments usually are provided a tax incentive.

What is an advantage of regional economic integration? Mergers and acquisitions encourage start-ups of small businesses. Continued discussions help nations gain additional political rights. Flexibility on labor movement develops job opportunities. Employment shifts preserve member countries' resources.

Flexibility on labor movement develops job opportunities. Economic integration often removes labor movement restrictions, which help increase job opportunities.

Which exchange rate regime allows a currency's value to fluctuate according to the foreign exchange market? Crawling pegs Fixed Floating Pegged Correct! This regime automatically adjusts to economic circumstances.

Floating This regime automatically adjusts to economic circumstances.

Which international activity allows a nation, such as Singapore, to create a sustainable economy without the abundance of natural resources? Foreign direct investment Nationalization of industry Economic sanctions Application of tariffs

Foreign direct investment In the absence of natural resources to drive an economy, nations, such as Singapore, need to invite foreign direct investments to create industry.

Which economic actors are suppliers of U.S. dollars? Foreign investors buying bonds issued by the U.S. Foreign companies purchasing a U.S. firm Foreign firms exporting to the U.S. Foreign tourists visiting the U.S.

Foreign firms exporting to the U.S. These firms will earn U.S. dollars but will need their own currency to pay the workers based in their country; thus they are suppliers of U.S. dollars and demanders of their home currency.

A large, publicly traded telecommunications company falsified its earnings report and hid debt. Which unethical practice did the company engage in? Insider trading Fraudulent accounting Bribery Kickback

Fraudulent accounting This company conducted accounting fraud by hiding debt and falsifying earnings.

Which level of economic integration is formed when trade barriers are removed between member countries but there is no mutual policy on trading with nonmember countries? Political union Common market Customs union Free trade area Correct! The free trade area allows basic economic cooperation so member countries remove barriers to trade among themselves.

Free trade area The free trade area allows basic economic cooperation so member countries remove barriers to trade among themselves.

Which agreement was created in 1981 among Arab states, to expand trade, economic growth, and development and to promote social welfare, peace, and stability? AEC Mercosur APEC GCC

GCC The GCC is made up of six Arab states in the Gulf region as a trade bloc.

Country A has been criticized by other countries for giving generous tax credits to its corn farmers, which in turn, enables the country's farmers to sell corn on the international markets cheaper than all other countries. Which term is used by other countries to describe this practice? Absolute advantage Government subsidies Free trade Trade surplus

Government subsidies The farmers are getting payment in the form of tax credits. This creates an unfair advantage to the farmers of Country A.

A global company has warned managers that the country involved in their current business venture typically expects small payments to be made to government officials to expedite decisions and transactions. The company has encouraged managers to avoid this type of unethical practice. Which form of activity is the company concerned about? Oil payments Trade policies Grease payments Unfair competition

Grease payments When a business engages in making small payments to government officials to expedite activities, it is a grease payment.

A coffee company received international criticism for an employee negatively responding towards a customer. The response was said to be racially motivated. The company needs to take swift action to improve how all employees in the organization are viewed by ethical consumers. Which course of action should the company take to meet this goal? Give the person affected company gift cards Fire the worker's supervising manager Have employees attend sensitivity training Show instances of employees helping that population

Have employees attend sensitivity training This is a solution that addresses the entire company and does not cause harm to any employees for any mistakes.

A company that released a new vehicle marketed as being environmentally friendly is found to have cheated when testing the vehicle's total emissions. The company would like to repair damage from the negative publicity by changing its image and catering more to ethical consumers. Which action should the company take to reach this goal? Retest the vehicles using its own test environment and protocols Hire a new leader to send the message that practices have changed Market the original product strongly so ethical consumers receive the information Ask political supporters to modify the environmental emission regulations

Hire a new leader to send the message that practices have changed Establishing a new image and leader can help consumers trust the company again after practices have changed.

How is contract law structured as it applies to global business among nations? Tribunal Horizontal Vertical Arbitral

Horizontal A horizontal business structure means that no nation is in a legally dominant position over another.

What is the directional nature of contracts between international businesses? Vertical contracts with horizontal legal structure Horizontal contracts with vertical legal structure Horizontal contracts with horizontal legal structure Vertical contracts with vertical legal structure

Horizontal contracts with vertical legal structure The contracts between international companies are more like a treaty and are therefore horizontal in nature. However, since the parties choose which of the laws apply for resolution of disputes under the contract, the contracts also have vertical legal structure.

What will be the effect of the German trade policy on Sure Start's rechargeable batteries in the first year? If the German automakers meet the requirement, there will be no impact. Sales to German automakers will increase. Sure Start will increase prices to German automakers. Sure Start's profit for rechargeable batteries sold in Germany would increase.

If the German automakers meet the requirement, there will be no impact. As long as German automakers meet the requirement that 75% of parts are produced domestically, there would be no impact to Sure Start's rechargeable battery imports. If the German automakers are unable to meet the requirement, the automakers will pay tariffs.

A firm based in Country A exports products to Country B. The currency in Country A is strong in comparison to the currency in Country B. Which strategy should the firm use to capitalize on the value of its currency? Reduce domestic sales and increase its exports to Country B Increase domestic sales and reduce its exports to Country B Reduce the selling price of foreign sales Increase the selling price of domestic sales

Increase domestic sales and reduce its exports to Country B The currency the firm is receiving from foreign sales is worth less than the currency it receives from domestic sales, making it more profitable to sell domestically.

A business, operating globally, wants to increase its overall productivity. Which strategy should the business use? Improve trade regulations Enhance international relationships Maximize labor force Increase process technology

Increase process technology Correct! When a business adds technology to its process, it allows the business to maximize economies of scale.

Countries A and B participate in trade agreements that allow free trade among participant countries. However, Country A imposed quotas on several imported products to protect its domestic products. What is the effect, if any, on the domestic prices of these products? Cannot be determined Stays the same Increases Decreases

Increases Restriction can serve to increase the domestic prices of the same products.

A company is concerned about source code theft of digital property. The company is reviewing a law that governs this behavior. Which law is being reviewed by this company? Labor Anti-trust Intellectual property Contract

Intellectual property law applies to digital property.

Which type of laws deals with the rules for securing and enforcing legal rights to inventions, designs, and artistic works? Personal property Intellectual property International property Real property

Intellectual property laws deal with the rules for securing and enforcing legal rights to inventions, designs, and artistic works.

Which business component does the TRIPS agreement help protect for member nations? Intellectual property protection for all member nations Policies that member nations use to conduct business in other member nations Agreements between member nations to protect manufacturing patents Standard transportation agreements between member nations

Intellectual property protection for all member nations The TRIPS agreement incorporated intellectual property rights into the World Trade Organization.

An accountant for a transnational company feels pressure from senior management to hide losses from the firm's operational activities. The requested action is legal but certainly does not give an accurate financial picture of the firm's current finances and could influence foreign investment. What type of stimulus is being used in regards to this company's organizational ethics? Internal Technical Political External

Internal Since this is from within the company, this type of stimulus of ethical concern would be internal.

What impact will the German Transportation Agency's decision to halt imports of rechargeable batteries have on Sure Start in that country? It could prevent future sales and operations. It could decrease competitive intensity. It could decrease the cost of sales in Germany. It could restrict U.S. automobile imports.

It could prevent future sales and operations. The agency is deciding if it should halt imports of rechargeable batteries until the exact cause is determined. This could affect Sure Start's ability to establish manufacturing in the country. If the batteries are the cause of the fires, this could prevent Sure Start from selling in Germany.

How can the corruption perceptions index (CPI) be used to understand international business ethics? It identifies nations in which corruption is frequent. It provides practical tools to build ethical integrity. It describes the global rules of trade between countries. It establishes a unified economic and monetary system.

It identifies nations in which corruption is frequent. Transparency International's corruption perceptions index (CPI) tracks, rates, and ranks 180 countries based on their levels of corruption and illicit behaviors. Identifying nations in which corruption is frequent is important to understanding international business ethics.

How is global business positively affected by intercultural exchange? It decreases complexity to improve commercial identities. It decreases the rate of change associated with industrial colonization. It increases the number of diverse participants enhancing community trades. It increases worldwide connections that support commodity trading.

It increases worldwide connections that support commodity trading. Correct! Spreading of ideas, meanings, and values around the world enables and enhances the commodity exchange process.

A large U.S. corporation is entering a foreign market but is having significant delays in acquiring the necessary permits to begin operations. A local official tells the project manager that a financial incentive should be paid to speed up the permit process. The official stresses that other companies engage in this practice and that it is acceptable in the local culture, so the project manager pays the incentive. How is this action characterized? It is acceptable as it is customary in the local culture. It is acceptable under Transparency International practices. It is a violation of World Economic Forum standards. It is a violation of the U.S. Foreign Corrupt Practices Act.

It is a violation of the U.S. Foreign Corrupt Practices Act. Correct! The FCPA does not allow these incentives regardless of whether they occur in the home or host country.

A company is conducting a legal risk analysis for a country that has a civil law system. Which statement accurately characterizes this legal system? It is based on a detailed set of laws that form a code. It is a moral, not a commercial, system. It relies on the opinions of those well-trained in law. It permits judges to interpret the law.

It is based on a detailed set of laws that form a code. The civil legal system is based on a set of laws that form a code and it is based on how the law is applied to the facts.

An American salesperson is attempting to do business in a Middle Eastern country. What is one of the major cultural issues the salesperson needs to understand about this part of the world? It is more relationship-based than the United States. Individualistic culture is stronger in the Middle East than in the United States. It is more rules-based than the United States. Secular culture is stronger in the Middle East than in the United States.

It is more relationship-based than the United States. Compared to United States and other Western cultures, relationships, including those in business, are more important.

A business has experienced significant internal and external events, and the owner decides to respond effectively while maintaining the rules of behavior the company has always vocalized as being appropriate. Which component has guided this owner's response? Ethical conundrum Ethical standardization Personal ethics Organizational ethics

Organizational ethics Correct! Organizational ethics is how a business responds to stimuli in an ethical manner.

Which advantage will the company gain over other Chinese furniture companies if it becomes a multinational business through foreign direct investment? It will be able to avoid the tariffs that host countries have placed on furniture imports. It will be harder for them to exit the host country's market if sales begin to decrease. The company will be more competitive in the home country's furniture market. There will be more risk of incurring higher costs in another country.

It will be able to avoid the tariffs that host countries have placed on furniture imports. Because the U.S. has placed tariffs on furniture produced in China, moving production to another country that has lower tariffs or that is tariff free will benefit the company.

A business has recently started selling in a new global marketplace. Shortly after the company made this global expansion, the new country opted to implement ad valorem tariffs. How will this change affect the company? It will levy a fixed tax on the goods imported. It will provide increased corporate tax breaks. It will levy a variable tax based on the value of goods imported. It will impose a value-added tax on corporate profits.

It will levy a variable tax based on the value of goods imported. Ad valorem tariffs are taxes calculated as a percentage of the value of the goods imported and are used to regulate imports and raise revenues for government coffers.

How does the existence of a multinational corporation (MNC) affect a country's engagement in political conflict? It would make countries more likely to go to war. The host country will have a political advantage over the home country. It would make countries less likely to go to war. The home country will have a political advantage over the host country. Correct! Countries do not like to go to war with a country in which they are doing business. The existence of an MNC could influence the country to not go to war with the home country of the MNC.

It would make countries less likely to go to war. Countries do not like to go to war with a country in which they are doing business. The existence of an MNC could influence the country to not go to war with the home country of the MNC.

Which action of Sure Start represents the application of the global strategic rivalry theory? Maintaining production with no investment in batteries for use in traditional vehicles Expanding into Europe and Asia to supply batteries to electric car manufacturers in those markets Adding an office in the South American market to help manage the business throughout the continent Launching a new research division to focus on a rechargeable battery for use in electric cars

Launching a new research division to focus on a rechargeable battery for use in electric cars Global strategic rivalry theory is about how multinational companies need to gain a competitive advantage against other multinational companies in their industry through activities such as research and development.

Which agreement was established in 1988 and now has both political and economic goals to keep peace and stimulates economic growth in South American countries? CARICOM CAFTA-DR MERCOSUR NAFTA

MERCOSUR This is also named the Common Market of the South, or Mercado Común del Sur, and fits the agreement described.

Which convention protects decent working hours for a cruise ship director who travels in international waters? Equal Remuneration Convention Forced Labor Convention Maritime Labor Convention, 2006 Domestic Workers Convention, 2011

Maritime Labor Convention, 2006 The Maritime Labour Convention, sometimes called the "Seafarer's Bill of Rights," protects the rights of seafaring workers and is law for multiple countries. This convention protects decent working hours for a cruise ship director that travels in international waters.

Which drawback is involved when regional agreements are created? Countries move production to more expensive labor markets in member countries. Member countries will trade less with nonmember countries. Companies experience higher overall costs. Regions with higher economic development increase their gap over lower developed regions.

Member countries will trade less with nonmember countries. When a regional agreement is made between countries, those members will trade more with each other and trade less with nonmember countries.

A firm in Country A exports products to Country B. The currency in Country B is strong relative to the currency in Country A. What does this mean for the firm? Increased domestic sales Decreased foreign sales Less valuable export sales More valuable export sales

More valuable export sales When the currency from the point of sale in Country B is converted into the currency of Country A, it will buy more of that currency.

Which core principle of the World Trade Organization supports equality among member nations and helps fight discrimination among them? Controlled tariffs Free trade Multilateral trade agreements Most-favored-nation (MFN) status

Most-favored-nation (MFN) status This principle states that countries must trade without discrimination for other countries.

Which situation describes how Sure Start is applying the absolute advantage theory? Adding an office in the South American market to help manage the business throughout the continent Expanding into Europe and Asia to supply batteries to electric car manufacturers in those markets Moving production of the batteries used in electric cars to Vietnam where labor is less expensive Establishing a European headquarters in Germany and moving key leaders to that country

Moving production of the batteries used in electric cars to Vietnam where labor is less expensive The absolute advantage theory states that a country that can produce a product cheaper or faster than another country should focus on that advantage. Moving production of the batteries used in electric cars from the United States to Vietnam where labor is less expensive applies the absolute advantage theory.

Which agreement was implemented in 1994 and helped form a free-trade zone between Canada, the United States, and Mexico by decreasing tariffs and trade barriers? NAFTA CARICOM USMCA CAFTA-DR

NAFTA This trade agreement was implemented in 1994 and had the described trading goals.

Which issue was the main purpose of the creation of the European Union?

Natural resources Correct! The driving issue was that one country or region could control natural resources, such as oil or land, in a monopoly to the detriment of other European countries.

Which law allows organizations damaged by an oil spill to ask for compensation and file a civil lawsuit? Oil Pollution Act Clean Water Act Safe Drinking Water Act Petroleum Sector Refinery Rule

Oil Pollution Act The Oil Pollution Act of 1990 allows organizations damaged by an oil spill to communicate with the company responsible for the spill to ask for compensation and file a civil lawsuit.

A farmer knows that it takes 100 hours of labor to produce 100 bushels of corn. It only takes 50 hours of labor to produce 100 bushels of soy. Currently, a bushel of corn is selling at three times a bushel of soy. Which type of cost should the farmer use to determine what to plant? Export Absolute advantage Opportunity Free trade

Opportunity Opportunity will bring in the most revenue. The farmer will probably plant corn since the opportunity cost of not planting corn is greater given the current selling price of corn.

Which term describes how a company ethically responds to an external stimulus? Organizational ethics Situational market ethics Ethical consideration Value chain ethics

Organizational ethics

The World Trade Organization is designed to judge potential market manipulations of its members. The United States has accused several countries around the world of dumping steel.

Paris This agreement was completed in 2016 to stop or at least slow global warming. Not all countries agreed to these goals.

Which intellectual property right describes a chemical company's filing on their innovative industrial process invention? Trademark Service mark Patent Copyright

Patent A patent is filed to protect the right to an innovative invention, which must be a manufactured product, an apparatus, chemical composition, or a manufacturing process.

Which outcome is a result of a company ensuring that shrinkage is reported in accounting? Customer trust decreased Mismanagement of inventory Petty theft being reduced Perishable goods going unrecorded

Petty theft being reduced Discrepancies are unintentional accounting errors due to reasons such as incorrectly entered data and shrinkage. Accounting shrinkage can reduce petty theft, mismanaged inventory, and perishable goods going unrecorded.

Which country characteristic is most important to foreign direct investors according to a study by the World Bank? Low tax rates Political stability and security Access to land or real estate Macroeconomic stability and favorable exchange rate

Political stability and security A recent World Bank study showed political stability and security to be the most important country characteristic when choosing a country to invest in.

Which level of economic integration presents an alliance of all policies by a common organization? Common market Customs union Political union Free trade area

Political union A political union is defined as when a single nation is formed and a mutual organization confederates all policies.

Which type of tariff is put in place to specifically ensure that domestic industries are given an advantage? Ad valorem Revenue Export Protective

Protective A protective tariff is put into place to reduce the number of imports of a product that is produced domestically and to increase the cost of the imports to make the domestic product's price more appealing to consumers.

A farmers market has many vendors and consumers who all sell and buy the same produce at the same price. Which type of market is represented? Monopoly Pure competition Monopolistic competition Oligopoly

Pure competition Since vendors can enter and exit the market freely with no barriers and the products are homogenous, it is a pure competition.

Which action of an organization would change consumer perceptions of the organization's ethical standards? Defend the organization's actions Provide free products to everyone Hold a town hall meeting to discuss events Remedy negative events immediately with change

Remedy negative events immediately with change Correct! When the actions of employees become the center point of an organization, it is critical to respond with change to address and remedy the error in order to recover from a negative and unfortunate event.

An American employee is working in a Chinese firm in China and notices an ethical violation. The employee tells a colleague, who is Chinese, and the colleague advises the American employee to save face. What does the Chinese colleague mean by this advice? Confront the people who are responsible since they could retaliate Ensure that the supervisor is aware of the situation to avoid being personally accused Report only if directly asked if a violation occurred Make sure that everyone knows the person who discovered the ethical violation

Report only if directly asked if a violation occurred For Chinese, saving face means that the employee should not reveal information that may harm another unless directly asked a specific question.

A major footwear brand company is contracting the manufacturing of its products to a contractor's manufacturing plant overseas. The footwear company has been accused of turning a blind eye to sweatshop practices at other overseas contract locations before. How should the footwear company ensure that the contractor will comply with the standards set forth in the code of conduct that explicitly prohibit this practice?

Require that the factories be available for inspections Making the factories available for inspections and audits, sometimes unannounced, is a best practice to ensure compliance with the code of conduct.

Which act affects the global business landscape by clarifying auditor independence issues, accountability of senior executives, disclosure of insider trading, and intellectual property rights? Sarbanes-Oxley Act Federal Trade Commission Act Sherman Antitrust Act National Environmental Policy Act

Sarbanes-Oxley Act This act clarifies auditor independence issues, puts greater accountability on senior executives, enforces disclosure of insider trading, and prohibits loans to executives.

A large corporation deceived regulators with fake holdings and cheated shareholders out of massive amounts of money. Which unethical practice was used by the corporation? Insider trading Bribery Securities fraud Kickback

Securities fraud This company conducted securities fraud by cheating shareholders and creating fake holdings.

A company requires one employee to be responsible for maintaining a machine. Another employee is responsible for maintaining accounting records for that machine. Which internal control has the company implemented? Managing inventory Accounting for shrinkage Reviewing cash flows Segregating duties Previousquestion

Segregating duties Correct! Irregularities are intentional accounting errors with the purpose to defraud, and this action is used as an internal control to prevent irregularities.

Which activity is considered a foreign direct investment (FDI) by a multinational corporation? Providing guidance for franchises in the host country Setting up manufacturing plants in the home country Setting up manufacturing plants in the host country Providing guidance for franchises in the home country

Setting up manufacturing plants in the host country FDI is when a company invests in manufacturing or some other major asset in another (host) country.

Which type of duty is required to take care of the collective environment across the nation? Individual Shared Assigned Customs

Shared Nation states and industry have a shared responsibility to take care of the collective environment of the nation. Collectively, both can accomplish more.

Country A exports farming equipment to Country B, while Country B exports car manufacturing equipment to Country A. Both countries are highly developed and could develop these industries separately but instead made the decision to export and import these products from each other. Which unique condition caused this practice between the two countries? Technology similarity Skill specialization Convertible currencies Foreign direct investment

Skill specialization One country can gain a particular advantage in manufacturing one type of equipment by the nature of the labor skills and resources. Country A has a comparative advantage in one product and Country B in another.

A cruise ship employs over 200 workers over the course of 18 years. One worker describes terrible living conditions and the limited amount of food that employees are given to eat. Which labor convention is being violated by the employer? Domestic Workers Geneva The Maritime Labour Worst Forms of Child Labour

The Maritime Labour This convention sets out seafarers' rights to decent working conditions.

What makes the enforcement of United Nations Environmental Program regulations difficult? Sovereign rights of nations Pure competitive markets Peacekeeping missions of nations World Food Program distributions

Sovereign rights of nations The sovereign rights of nations preclude the United Nations from enforcing the regulations. United Nations compliance is normally voluntary and agreements tend to be nonbinding.

The British East India Company used expansionist policies to gain profits in the East Indies by collecting unreasonable taxes from Indians. Which unethical practice was used by this company? Colluding to commit finance fraud Hiding debt from investors Stealing from the people they ruled Creating fake assets

Stealing from the people they ruled This company had many unethical expansionist actions, such as using torture and stealing from the people it ruled.

Which strategy should a government use to offset the cost of manufacturing domestically? Antitrust laws Subsidies Tariffs Antidumping laws

Subsidies Subsidies, such as grants or tax breaks, are used to offset domestic manufacturing costs by giving companies funds or tax breaks.

How do governments help companies offset the cost of manufacturing domestically? Tariffs Subsidies Anti-trust laws Anti-dumping laws

Subsidies are monies given to industry to keep prices competitive on a global level.

Which policy can a country implement to make another country's products more expensive than their own products? Convertible currency Free trade Privatization Tariffs

Tariffs These are taxes which are placed on products imported from another country to protect domestic markets.

Which international agreement involved nations committing their resources to limiting greenhouse gas emissions? Environmental Protection Agency National Environmental Policy World Trade Organization Kyoto Protocol of 1992

The Kyoto protocol of 1992 aimed to reduce greenhouse gas emissions; however, it did not set a goal to keep long-term global temperature increase at below 2° C.

An employee at the U.S. Patent and Trademark Office was casually talking to a friend who worked at Company XYZ. The patent office employee mentioned that a pending patent application for Company XYZ was about to be denied, and the decision would become public in a few days. The public release of the report was likely to result in a severe reduction in the stock price of the company. The friend who worked at Company XYZ then placed an online trade transaction to sell all shares of stock they owned in Company XYZ the next day. Which specific law passed by the U.S. Congress did the Company XYZ employee violate? Sarbanes-Oxley Act (SOX) North American Free Trade Agreement (NAFTA) Foreign Corrupt Practices Act (FCPA) Freedom of Information Act (FOIA)

The Sarbanes-Oxley Act (SOX), legislation passed by the US Congress, is designed to address a lack of trust in corporate America by the investing public. SOX specifically addresses an employee selling stock based on information not known by the public.

What is a drawback of the U.S. furniture company having its cut and sew operation in Mexico? There are fewer opportunities to do business with multiple furniture companies in Mexico. The U.S. company may forgo trade with another company producing covers for less because they are not part of NAFTA. The number of U.S. furniture companies in Mexico are lower because of NAFTA. There are three member countries in NAFTA, so it is more difficult for U.S. furniture companies to decide on policies.

The U.S. company may forgo trade with another company producing covers for less because they are not part of NAFTA. This drawback can lead to doing business with more expensive producers.

Which organization aims to create support and cooperation among participating nations as well as respecting the unique laws and regulations of each sovereign country? WTO FDA FTC ECSC

The WTO, or the World Trade Organization, strives to ensure fair business practices among its member nations around the globe.

What did the Worst Forms of Child Labor Convention, 1999 define? Hourly wage rates The age at which a person becomes an adult Rights for domestic workers Rules of workplace of safety

The age at which a person becomes an adult The Worst Forms of Child Labor Convention defines a child as an individual younger than 18 years old.

A global buyer reviews a company's ethical profile and the social responsibility section of its annual report. Understanding that the company's values match the buyer's principles, the buyer purchases the company's products. Which action did the buyer perform regarding the purchase of the company's products? The buyer used organizational ethics. The buyer used personal ethics. The buyer practiced shareholder activism. The buyer practiced ethical consumerism.

The buyer practiced ethical consumerism. Correct! When a person evaluates a company's values and then makes purchases from the company based on the person and company's matched values, this is ethical consumerism.

Which two primary sources of law govern contracts in the United States? The common law and the Uniform Commercial Code The UN Convention on Contracts for the International Sale of Goods and a vertical structure The common law and U.S. Supreme Court The UN Convention on Contracts for the International Sale of Goods and a horizontal structure

The common law and the Uniform Commercial Code Common law comes from custom and from precedents set by other court decisions. The Uniform Commercial Code provides some a standardized laws and regulations for commercial transactions such as sales. They are the two primary sources of law that govern contracts in the United States.

Why does a company engage in foreign direct investment? The company wants to identify another company with which it can partner. The company wants to find a foreign source of financing for its foreign operations. The company wants to control organizational assets in another country. The company wants to find a domestic source of financing for its foreign operations.

The company wants to control organizational assets in another country. Foreign direct investment is when a company acquires a foreign firm or asset with the intent to control and manage it to strengthen its economic and financial market position.

How will the Chinese company recognize that the currency exchange environment is favorable for establishing U.S. operations? The dollar is weaker than the Chinese currency. The dollar is stronger than Chinese currency. The foreign direct investment in Chinese currency is restricted. The regional trade bloc adopts one currency.

The dollar is stronger than Chinese currency. A stronger U.S. dollar would mean that the Chinese company would receive more of its own currency in the exchange market, which would indicate that the market for the Chinese furniture in the U.S. would be more profitable and more favorable.

What is a disadvantage of regional economic integration? A higher number of trades lowers growth rates in less-developed countries. The exclusion of external countries reduces global free trade. Integrated agreements among a small number of countries create conflicts. Labor movement restrictions narrow job opportunities.

The exclusion of external countries reduces global free trade. Regional agreements may create trade barriers with nonmember countries, which lowers global free trade.

What effect does a command economy have on the process of globalization? The government is less flexible, so the globalization process is stopped. The economy is self-sufficient, so the globalization process remains unaffected. The government is welcoming, so the globalization process is increased. The economy is competitive, so the globalization process will be slowed.

The government is less flexible, so the globalization process is stopped. command economy results in a less flexible economy, so the globalization is halted. There is no market force to drive globalization forward.

What is a potential disadvantage of foreign direct investment from a host government's perspective? The host country's employees will be paid more than those in the home country. The demand for local currency in the host country may increase. The demand for the home country's products may decrease. The host country's natural resources may be depleted.

The host country's natural resources may be depleted. One of the possible problems for a host government is that foreign investors could transfer the natural resources away from the host country.

What is a benefit of foreign direct investment? The outflow of capital benefits the local but not global economies The outflow of capital benefits global and local economies The inflow of capital benefits global and local economies The inflow of capital benefits the local but not global economies Incorrect. The inflow of capital benefits the global economy.

The inflow of capital benefits global and local economies The inflow of capital to a country helps both the global and the local economies.

Which result occurs when a legally enforceable contract between two businesses from different countries is broken? The broken contract impacts political policy making. Resolution of the contract must be secured in 90 days. The party who broke the contract cannot sell goods. The party who has been affected can seek damages.

The party who has been affected can seek damages. Correct! When a legally enforceable contract is broken, the party who has been affected can seek damages so the business can be made whole as if the breach of contract did not occur.

What is an accurate characterization of the relationships between multinational corporations (MNCs) and the host country governments in which they operate? The relationships are mixed because MNCs can cause, but also solve, problems for the host country. The relationships are mixed because MNCs cause economic strife in the host country. The relationships are negative because MNCs take resources from the host country. The relationships are positive because MNCs provide jobs and capital to the host country. Correct! The relationships between an MNC and the host country can be both good and bad depending on a number of factors including economic development, resource distribution, and employment.

The relationships are mixed because MNCs can cause, but also solve, problems for the host country. The relationships between an MNC and the host country can be both good and bad depending on a number of factors including economic development, resource distribution, and employment.

What does Article 2 of the Uniform Commercial Code (UCC) govern? The required conduct of both parties in accordance with the contract The standards for the performance of business activities The required conduct of the initiator of a contract The standards for the countries from which the two businesses originate

The required conduct of both parties in accordance with the contract Article 2 of the UCC governs the obligations of the two parties, specifically with respect to the offer.

Which fact should a company opening its operations in the U.S. state of Louisiana note? The state follows a customary law system. The state follows a Talmudic law system. The state follows the canon law system. The state has a mixed law system.

The state has a mixed law system. Correct! The state of Louisiana follows a mix of both the civil and common law system, whereas the U.S. on the whole follows a common law system.

What happens to consumer surplus when tariffs and quotas are discontinued? They decrease. They increase. They remain unchanged. They are eliminated.

They increase. When barriers to trade are eliminated, consumer surplus increases, meaning that the price of goods or services will decrease and the quantity consumed will increase.

How do antidumping laws protect a domestic market? They prevent foreign companies from selling goods and services at or below cost. They restrict international companies from selling domestically. They restrict domestic companies from selling goods at prices above the price of production. They prevent international companies from foreign direct investment. Correct! Antidumping laws prevent foreign companies from selling goods at or below production cost to ensure domestic companies can stay competitive.

They prevent foreign companies from selling goods and services at or below cost. Antidumping laws prevent foreign companies from selling goods at or below production cost to ensure domestic companies can stay competitive.

Which benefit will Sure Start gain from opening the factory in Vietnam? It will allow them to move to the production of electric cars in the near future. They will achieve economies of scale in the production of rechargeable batteries. The U.S. government will give them subsidies for producing in Vietnam. The move will allow them to be fully integrated in production of rechargeable batteries.

They will achieve economies of scale in the production of rechargeable batteries. Because the factory in Vietnam will only produce rechargeable batteries, the company will be able to benefit from minimized production costs associated with lower labor and dedicated manufacturing operations as they scale up to mass production.

What is the purpose of internal controls? To create processes for credentialing accounting staff To establish procedures for manufacturing operations To ensure irregularities of a system's performance To create redundancies in a system to ensure it functions properly

To create redundancies in a system to ensure it functions properly Correct! Internal controls are extra procedures built into a system to help guarantee proper functions and reliability of the collected data. Internal controls should ensure systems run efficiently, effectively, and accurately and that they reduce accounting misstatements.

How do Congress and the Department of Agriculture use quotas to their advantage? To make sure that an excess of products will be annually imported To increase domestic prices to specific levels to make products profitable To track the amount of sales in a specific year to predict production of that item during future years To ensure that domestic companies are selling similar product amounts to eliminate domestic competition

To increase domestic prices to specific levels to make products profitable Congress works with departments to determine the quotas of imports that will keep domestic prices at an acceptable level.

A country with a new economy implemented trade protectionism in relation to countries with more developed economies. Why did the country take this action? To protect companies that export products from foreign laws To restrict domestic economic trade To restrict international economic trade To protect companies that import products from domestic laws

To restrict international economic trade Trade protectionism is implemented by creating national policies that restrict international trade to impact the balance between imports and exports, ensuring that exports are encouraged.

What is a reason for companies to engage in foreign direct investments? To increase imports to the home country To take advantage of tax exemptions offered by the home country To take advantage of tax exemptions offered by the host country To decrease imports to the host country Correct! Often countries offer tax exemptions to companies that invest in their economies.

To take advantage of tax exemptions offered by the host country Often countries offer tax exemptions to companies that invest in their economies.

Which stage of regional economic integration is represented by the North American Free Trade Agreement (NAFTA) that benefits the U.S. furniture company's production of covers in Mexico? Common market Trade bloc Trade union Customs union

Trade bloc NAFTA is an example of a trade bloc in which members reduce or remove all trade barriers between themselves, but can have trade barriers with nonmembers.

Country A exports more goods to Country B than it imports from Country B. Country A receives more monetary gain by using this practice. Which relationship does Country A have with Country B? Mercantilism Absolute advantage Protectionism Trade surplus

Trade surplus Trade surplus is when a country exports more than it imports from another country. For example, China normally exports more manufactured goods to the United States than it imports from the United States. China has a trade surplus.

Which type of intellectual property law protects a company's brand? Trade secret Patent Copyright Trademark

Trademark Correct! A trademark is any word, phrase, symbol, design, or combination thereof that identifies the source of a company's products or services, and it is protected by law.

How are free trade agreements handled differently than treaties in the United States? Treaties must be approved by the Senate, whereas free trade agreements must be approved by the House of Representatives. Treaties must be approved by both houses of Congress, whereas a free trade agreement only needs to be approved by the Senate. Treaties must be approved by the Senate, whereas a free trade agreement must pass both houses of Congress. Treaties must be approved by the House of Representatives, while a free trade agreement only needs to be approved by the Senate.

Treaties must be approved by the Senate, whereas a free trade agreement must pass both houses of Congress. Since a free trade agreement involves revenue from trade, it must be approved by both houses of Congress, whereas a treaty only needs to be approved by the Senate.

A U.S. organization has a factory in a foreign market that is well-known for sweatshops. To maintain the organization's social responsibility, the organization describes the factories and working conditions to its customers via its website. Which practice is this company using? Supporting ethical decision-making Limiting cronyism Using ethical transparency Improving brand image

Using ethical transparency Ethical transparency is sharing exactly what the organization is doing, especially in regard to working conditions.

An airplane manufacturer outsources the manufacture of some its parts and subassemblies. They are then returned to the manufacturer's main plant for final assembly. Which term describes the activity of this manufacturer? Foreign direct investment Vertical integration Industry privatization Value chain

Value chain The value chain is composed of the parts and input necessary to make a product. In this scenario, each part of the plane, when its manufactured and assembled, represents the airplane's value chain.

A car manufacturer purchases raw materials from Country A, manufactures the product in Country B, and has a sales force in Country C. Which term reflects this production process that international agreements now enable? Specialization Worker productivity Value chain Economies of scale

Value chain The value chain is the term for the process that describes how the inputs create the outputs of an organization.

Which organization aims to develop a global intellectual property infrastructure? TRIPS WTO WRC WIPO

WIPO Correct! This stands for World Intellectual Property Organization. Its goal is to develop a global IP infrastructure, build international respect for IP, and implement global policy related to IP.

Natural resources Correct! The driving issue was that one country or region could control natural resources, such as oil or land, in a monopoly to the detriment of other European countries.

World Trade Organization The World Trade Organization is designed to judge potential market manipulations of its members. The United States has accused several countries around the world of dumping steel.

An individual works in a global office where it is typical to pay small, unofficial fees to top administrators in the city to gain an advantage. The individual agrees to pay the fee needed to expedite placement of a business phone line at home so work can be completed after normal work hours. What is this inducement called? Installation fee Kickback Gratuity Grease payment

grease payment is a small inducement intended to expedite a transaction or service.