BusM430

Which of the following is a reason for recent governmental relaxation in restrictions on cross-border trade or resource movements? All countries have signed binding reciprocal trade agreements through international organizations. Governments hope that other countries will lower their barriers in response. Most countries face surpluses of workers, so they seek foreign markets in need of labor supplies. Governments typically welcome the opportunity to increase the offshoring of a country's domestic producers.

Governments hope that other countries will lower their barriers in response.

Which of the following best defines international business? It includes all public economic flows between two or more countries. It includes all private economic flows between two or more countries. It includes all business transactions in countries other than your home country. It includes all business transactions involving two or more countries, whether the transactions are conducted by private or governmental organizations.

It includes all business transactions involving two or more countries, whether the transactions are conducted by private or governmental organizations.

. The methods a country uses to regulate business practices, define how companies conduct business transactions, specify the rights and obligations of those engaged in business transactions, and provide legal redress to those who believe they have been wronged in business transactions are aspects of a country's ________. political system philosophical orientations legal system basis of rule

Legal system

The ________ of a country specifies the rules that regulate political, social, and business activities so a society can pursue economic and social development and resolve disputes without collapsing into anarchy. political philosophy legal system political system philosophical orientation

Legal system

Lesson 2 Self Check

Lesson 2 Self Check

Lesson 2 speedback

Lesson 2 speedback

Lesson 3 Speedback

Lesson 3 SPeedback

Lesson 3 self check

Lesson 3 self check

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Lesson 4 Speedback

A system in which individuals, rather than the government, make the majority of economic decisions is commonly referred to as a ________. market economy command economy mixed economy centrally planned economy

Market economy

People in ________ have greater economic freedom than those in ________. South America; North America South America; Europe North America; Asia Asia; Europe

North America; Asia

Critics of offshoring claim all EXCEPT which of the following? Incomes of workers in offshoring countries have gone down as a percentage of national income. Workers who have been displaced by offshoring do not have the skills needed for higher-value jobs. Cost savings are seldom passed on to final consumers. Offshoring reduces the incomes of people in low-wage countries.

Offshoring reduces the incomes of people in low-wage countries.

A business's day-to-day activities are best described as its ________ concerns. cultural strategic political operational

Operational

Political systems based on the ________ paradigm, such as those of Japan and China, promote the principle that government may intervene to ensure that business practices benefit society. collectivistic individualistic laissez-faire pluralistic

collectivistic

A ________ law system is based on tradition, judge-made precedent, and usage, and assigns a preeminent position to existing case law as a guide to dispute resolution. theocratic civil customary common

common

In a market economy, the patterns of resource allocation are most directly influenced by ________. alliances among key consumer groups that negotiate with companies to improve the quality of the purchasing process industry coalitions that strive to improve the efficiency of production government administrators who monitor the equilibrium of supply and demand consumers who "vote" by their personal decision to buy or not buy products

consumers who "vote" by their personal decision to buy or not buy products

When divergent cultures come in contact, ________ occurs. cultural collision culture shock power distance group membership

cultural collision

Cultural change imposed by an alien culture is called ________. ethnocentricity creolization collectivism cultural imperialism

cultural imperialism

The two main categories in the balance of payments are the ________. merchandise trade account and the capital account income receipts and payments on assets account and the unilateral transfers account current account and the capital account merchandise exchange account and the services account

current account and the capital account

Which of the following has not been a major force increasing globalization in recent decades? liberalization of cross-border trade growing pressure from consumers decreasing global competition an increase in and expansion of technology

decreasing global competition

A worrisome outcome of chronic inflation is that it tends to ________. give central banking officials excessive flexibility to manage monetary policy increase the real income of people, thereby inflating their expectations erode confidence in a country's currency lead to lower demand, triggering lower prices and eventually lower employment

erode confidence in a country's currency

Foreign direct investment ________. in terms of value, is mainly undertaken by small companies includes the ownership of foreign bonds is undertaken only by large companies includes partially owned foreign operations as long as the owner has controlling interest

includes partially owned foreign operations as long as the owner has controlling interest

The principle that an individual has the freedom to pursue his or her interests is called ________. socialism collectivism individualism totalitarianism

individualism

Which of the following is characterized by low dependence on an organization and a desire for personal time, freedom, and challenges? collectivism anarchy individualism democracy

individualism

The so-called "misery index" is the sum of a country's ________. external and internal debt trade deficit and inflation rate unemployment level and total debt inflation and unemployment rates

inflation and unemployment rates

The term globalization is sometimes used to mean the ________. integration of world economies through the reduction of barriers to the movement of trade, capital, technology, and people movement of jobs to high-wage countries business being undertaken outside the confines of any nation uneven distribution of resources and this distribution's influence on different products and services in different parts of the world

integration of world economies through the reduction of barriers to the movement of trade, capital, technology, and people

A(n) ________ grants the registered owners of a particular invention, literary or artistic work, symbols, names, images, or designs the right to determine the use of their ideas. trademark credential patent certificate intellectual property right TRIPS permit

intellectual property right

One of the potential problems for an MNE that practices too much polycentrism is ________. excessive dependence on home-country control indifference to cultural differences losses incurred by using risky but innovative practices in unfamiliar markets loss of effective and innovative home-country practices in deference to proven host-country practices

loss of effective and innovative home-country practices in deference to proven host-country practices

1. According to the theory of success and reward expectation, the greatest enthusiasm for work generally occurs when there is a ________ likelihood of success combined with a ________ reward for success compared to the reward for failure. high; high low; low high; low low; high

low;high

In the Economic Freedom Index, ________ exhibit high economic freedom whereas ________ exhibit little to no economic freedom. mixed economies; market economies market economies; command economies command economies; market economies centrally planned economies; command economies

market economies; command economies

When a company does business in another country whose official language is the same as that of the company's home country, the company ________. can assume that communications will go smoothly should use back-translation on written documents may encounter differences in meanings of the same words can assume that although some spellings are different that words will mean the same thing

may encounter differences in meanings of the same words

Although English is referred to as the "international language of business,"________. there is a growing disagreement over which version of English to use, e.g. British, American, or Australian monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis it is less frequently used than French in international business companies headquartered outside English-speaking countries all use their official language as their operating language

monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis

Because certain cultural attributes can link groups from different nations more closely than groups within a given nation, international businesspeople ________. should adopt universal operating methods must avoid cultural imperialism must be careful to compare relevant groups when comparing nations should assume that there are few significant cultural differences among nations

must be careful to compare relevant groups when comparing nations

The process of shifting production from a domestic to a foreign location is known as ________. outsourcing licensing joint venturing offshoring

offshoring

In a totalitarian political system, ________. governments direct most economic activity but few social ones political power resides with the citizens of the country an individualistic outlook shapes political debate and policy formation one agent monopolizes political power

one agent monopolizes political power

A(n) ________ ideology is the system of ideas that expresses the goals, theories, and aims of how society should work. economic technological political legal

political

Critics of the view that regionalization will prevail over globalization base their argument on the belief that ________. business in non-territorial areas is not regional regionalization is a transition stage toward globalization neighboring countries are too geographically similar to have many different goods to trade with each other neighboring countries are more apt to disagree politically than countries that are distant from each other

regionalization is a transition stage toward globalization

Societies in which people are willing to work hard and to blame and reward themselves for outcomes are most accurately characterized by a belief in ________. self-determination fatalism low power distance collectivism

self-determination

Which of the following is a strategic concern for international businesses? the number of days needed to start a business plans to secure credit from local banks how they hire workers to run foreign operations the extent of their product liability

the extent of their product liability

Gross national income (GNI), the broadest measure of economic activity for a country, is defined as ________. the total of all economic activity in one country less services, such as government administration, health services, and education the income generated by both total domestic production and the international production activities of national companies the income generated in one country, regardless of who owns the productive assets the total of all consumption and investment that takes place in a national economy

the income generated by both total domestic production and the international production activities of national companies

History suggests that if the economic crisis worsens, we are likely to see more people question ________. the practicality of mixed economies the legitimacy of communism the correlation between economic freedom and environmental stability the legitimacy of capitalism

the legitimacy of capitalism

In a representative democracy, ________. the people's elected representatives hold ultimate sovereignty democratic means are used to achieve a gradual transition from capitalism to socialism the extent of personal freedoms varies by class structure there is little consensus on inalienable freedoms

the people's elected representatives hold ultimate sovereignty

Most counterfeit goods are made in markets in which ________ is the basis of the legal system. the rule of law religious doctrine the rule of man judge-made precedent

the rule of man

In the United States, U3 is the official unemployment rate. This rate provides a measure of which of the following? those who have stopped looking for work because current economic conditions lead them to believe no work is available those who are not working but are willing and able to work for pay, currently available to work, and actively searching for work all of these options those who want to work full-time but are only able to find part-time employment due to economic conditions

those who are not working but are willing and able to work for pay, currently available to work, and actively searching for work

Which of the following is a reason that governments cooperate through treaties, agreements, and consultations? to gain a division of labor, such as by performing research and development in one country and production in another to assure that all countries get an equitable share of taxes from multinational enterprises to be in compliance with United Nations' requirements to attack problems jointly that one country acting alone cannot solve

too attack problems jointly that one country acting alone cannot solve

In a(n) ________ system, a single leader advocates a new society where wrongs will be corrected and harmony will prevail. totalitarian pluralistic representative individualist

totalitarian

A problem of using the nation as a reference point for culture is that ________. variations tend to be great within a country self-stereotypes tend to fall along national lines nations fail to mediate the different interests within their boundaries such an approach tends to be polycentric

variations tend to be great within a country

Presently, managers typically find that the rule of law is prevalent in ________. countries inclined toward totalitarian-style government developing, non-Western countries emerging economies experiencing rapid growth wealthier, westernized countries

wealthier, westernized countries

When companies face the same competitors in almost all countries where they operate, ________. what they learn about each other in one country is useful in predicting the other's strategies and actions elsewhere the market leader is the same everywhere there is less need to understand the physical and societal factors of each country they are less likely to enter joint ventures with other companies

what they learn about each other in one country is useful in predicting the other's strategies and actions elsewhere

Which of the following describes one of the conditions under which the major problems of cultural collision arise in international business? when local people have no expectation that foreigners should adjust to their culture when companies understand and adjust to the national cultures in which they do business when employees disagree on the style of art for decorating the office when a company's employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors

when a company's employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors

1. A multinational enterprise (MNE) is one that is ________. licensed to operate by the United Nations Transnational Center among the world's five hundred largest companies owned and managed by companies whose headquarters are split among different countries willing to consider market and production locations anywhere in the world

willing to consider market and production locations anywhere in the world

In a practical sense, the term political system is meant to signify the ________. philosophical orientations in a country working government in a country organization of military power in a country cultural values in a country

working government in a country

Politics, law, culture, and economy are all examples of ________ factors that can affect the ways in which companies produce and sell their products in foreign markets. 1.political 2.social 3.competitive 4.physical

Social

Which of the following types of political risks often is caused by ethnic conflict or civil disorder and includes random political developments that adversely affect the operations of all companies in a country? systemic political risk catastrophic political risk distributive political risk procedural political risk

catastrophic political risk

A foreign direct investment occurs ________. 1.when a company controls a company abroad 2.only when a company owns more than 50 percent of a foreign firm 3.when foreign ownership is in private rather than government securities 4.with the establishment of a partnership rather than the purchase of a foreign firm

1.when a company controls a company abroad

Proponents of the ideal of ________ argue that individual interests are not as important as the welfare of the group. collectivism pluralism capitalism individualism

collectivism

Select the correct order, going from low to high total impact on an MNE, of the following types of political risk: (1) procedural political risks, (2) systemic political risks, (3) distributive political risks, (4) catastrophic political risks. 3, 2, 1, 4 2, 1, 3, 4 1, 2, 3, 4 2, 3, 4, 1

2,1,3,4,

Governments have signed treaties to protect foreign-owned property rights, such as investments and patents. A primary reason for doing so is to ________. 1.gain reciprocal advantages 2.reduce the domestic effects of other countries' economic policies 3.reduce national conflicts leading to violent encounters 4.deal with areas of concern outside the territory of any one country

2.gain reciprocal advantages

When two countries are very culturally close, ________. foreigners and domestic citizens are treated differently a company may overlook important subtleties there is little chance of cultural friction communications between them need not be translated

A company may overlook important subleties

Critics of freer markets are most likely to claim which of the following? A freer market skews income distribution and fosters inequality. Freer markets are not correlated with higher growth rates. A freer market does not lead to higher per capita incomes. Freer markets do not encourage the accumulation of powerful self-interests.

A freer market skews income distribution and fosters inequality.

Which of the following is the most accurate statement about culture? Cultural variables can easily be isolated from other factors such as economic and political conditions. We generally expect people from another culture to behave differently than we do. Within a culture, everyone responds to particular cultural variables the same way. Although most cultural variables are universal, the forms these variables take differ from culture to culture.

Although most cultural variables are universal, the forms these variables take differ from culture to culture.

Which of the following is a reason for recent governmental relaxation in restrictions on cross-border trade or resource movements? Most countries face shortages of workers, so they seek foreign workers who can help them produce more. Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary. Governments believe that this will decrease the need to make their own companies more innovative. Governments believe that domestic producers will become more efficient as a result of foreign competition.

Governments believe that domestic producers will become more efficient as a result of foreign competition.

The statement that summarizes all economic transactions between a country and the rest of the world during a given period of time is the ________. balance on goods, services, and investments balance of trade balance of payments balance of international transactions

Balance of payments

Which of the following statements is true concerning the competitive environment of international business? It takes about the same amount of resources to gain national distribution in a large country as in a small one. Although countries' market sizes differ, companies usually face about the same number of competitors in each national market. Being a leader in one country doesn't guarantee you'll be a leader in any other country. In most industries, companies face the same competitors in each country where they operate.

Being a leader in one country doesn't guarantee you'll be a leader in any other country.

The transition to a different economic system follows a(n) ________ process in every country. systematic identical different random

DIFFERRENT

A major legal challenge that companies face in the global environment often involves which of the following? Dealing with product liability issues Dealing with employee motivation Dealing with product profitability Dealing with cultural issues

Dealing with product liability issues

The vigor of IPR protection is highly related to a country's stage of ________. natural resource development standardization of patent regulations economic development cultural heterogeneity

Economic development

Uneven income distribution ________. exists in almost every country is largely a problem for poorer nations is limited to a small share of the world population primarily affects people in urban settings

Exists in almost every country

The United Nations' ________ measures life expectancy, educational attainment, and the standard of living in a given country. Happy Planet Index Human Development Index Genuine Progress Indicator Gross National Happiness

Human Development Index

Organizing work differently to improve productivity will likely fail ________. unless workers are compensated with bonuses if the work force has a low tolerance for authoritarianism if changes interfere with strongly held values unless the changes are compatible with what competitors are already doing

If changes interfere with strongly held values

_______ is a general, sustained rise in prices measured against a standard level of purchasing power. Deflation Expansion Inflation Reflation

Inflation

_______ refer(s) to the creative ideas, innovative expertise, or intangible insights that give an individual, company, or country a competitive advantage. Intellectual property Proprietary goods Restrictive goods Exclusive ownership

Intellectual property

Which of the following statements about approaches to political risk management is not true? Active political risk management assumes that positive and negative political events in any country are neither independent nor random events. Active political risk management assumes that political events unfold in observable patterns that statistical methods can detect. Passive political risk management assumes that it is difficult, if not impossible, to systematically model political risk. Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards.

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

________ involves the sale and legal transfer of government-owned resources to private interests. Antitrust legislation Renationalization Deregulation Privatization

Privatization

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Self Check 4

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Speedback 1

Which of the following must be true about a company in order for it to be considered a multinational enterprise? The company does not limit its evaluation of markets and production to any one country. The company is large with vast resources. The organization must be a born-global company. The company holds direct investments in at least five countries.

The company does not limit its evaluation of markets and production to any one country.

In societies where trust is high, ________. people tend to be more future-oriented the cost of doing business tends to be lower people tend to be fatalistic family businesses are dominant

The cost of doing buissness tends to be lower

Although globalization may bring economic growth, critics nevertheless contend that ________. the growth is not fast enough the inequality of gains puts some people in a relatively worse economic situation the cultural foundations of sovereignty are supported by globalization this growth is mainly for the future, thus ignoring present economic growth needs

The inequality of gains puts some people in a relatively worse economic situation

In a democracy, ________. the opportunity to truly participate in the political process is restricted to a select few citizens have the right to participate in the decision-making process the rights of the individual cannot be suppressed for the benefit of the greater society the court system is directly supervised by the political system

citizens have the right to participate in the decision-making process

Which of the following is a true statement regarding the rule of law? The rule of law is a hallmark of societies that place ultimate power in the hands of one person. The rule of law is a hallmark of a democratic government. The rule of law is a hallmark of a totalitarian government. Under the rule of law, the law is an apparatus of the state.

The rule of law is a hallmark democratic government

3. A(n) ________ law system is based on a systematic and extensive codification of laws and puts political officials in charge of specifying accessible, detailed, and written law that applies to all citizens. civil common administrative customary

civil

The increasing number of people with dual citizenship and people who maintain close contact with their home countries even though living abroad suggest that nations in the future will ________. redraw borders to accommodate separate cultures be more subject to cultural imperialism accept the transfer of culture both in and out of their boundaries increase efforts to maintain their separate identities

accept the transfer of culture both in and out of their boundaries

Some countries opt for a mixed economic system in the belief that although an economic system should aspire to achieve the efficiencies created by free markets, it must also support policies needed to ________. harness economic growth destabilize poverty rates inequitably distribute wealth achieve low unemployment

achieve low unemployment

Capitalism is a free-market system built on all of the following notions EXCEPT ________. the right to earn a profit in return for individual effort private ownership of assets arbitrary property rights private control of investment

arbitrary property rights

Ethnocentrism in international business refers to the ________. study of ethnic segments within countries belief that what works best at home should work best everywhere study of group ethics comparison of the Protestant ethic with other religious views

belief that what works best at home should work best everywhere

When businesspeople communicate with people whose language is different from theirs, they should ________. tell a joke to put everyone at ease use long words to impress counterparts budget extra time for translation and clarification use slang to create an informal and friendly atmosphere

budget extra time for translation and clarification

When a company wishes to introduce change in a foreign country, its likelihood of success can be improved by ________. introducing many changes simultaneously gaining the support of opinion leaders informing local people that the company would not be there if it did not know what was best agreeing to make some home-country changes in return

gaining the support of opinion leaders

Managers who are knowledgeable about ________ are better able to identify the location, quantity, quality, and availability of the world's natural resources. cultural factors competitive factors political factors geographic factors

geographic factors

8. The broadening set of interdependent relationships among people from different parts of the world is known as ________. globalization outsourcing franchising offshoring

globalization

Although critics complain that globalization causes the consumption of too many nonrenewable resources while despoiling the environment, those in favor of globalization counter that ________. globalization encourages the adoption of uniform and superior standards for combating environmental problems pollution and toxic runoff problems do not increase with economic growth the biggest problem of environmental despoliation occurs in the countries that are least globalized economic growth created by globalization is largely in services, which neither use too many nonrenewable resources nor despoil the environment

globalization encourages the adoption of uniform and superior standards for combating environmental problems

In a command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are planned by ________. local trade associations government officials private industries individual entrepreneurs

government officials

In a(n) ________ culture, people tend to regard seemingly peripheral information as pertinent to decision making and infer meanings from things that people say either indirectly or casually. fatalistic pragmatist high-context idealist

high-context

A culture that prefers to first settle principles rather than small issues is most accurately characterized as ________. high-context polychronic idealist pragmatist

idealist

international businesspeople need to understand social stratification systems where they do business because ________. such systems reflect the willingness of the local society to accept product innovations the high similarity among countries lets companies effectively use uniform hiring and promotion practices globally such systems indicate who people in a given culture will respect more what is an ascribed group membership in one country is an acquired one in another

such systems indicate who people in a given culture will respect more

The view that globalization is inevitable is based on the belief that ________. people want more global homogeneity of cultures technical advances in transportation and communications are too pervasive for globalization's growth to be hindered international organizations will replace nation states protesters against globalization will be persuaded to change their views

technical advances in transportation and communications are too pervasive for globalization's growth to be hindered

In a country characterized as a high collectivist culture, ________. workers generally dislike team-based work systems workers are best motivated through fulfillment of self-actualization needs the collectivism may be present in kinship arrangements, but not in the workplace there is little uncertainty avoidance

the collectivism may be present in kinship arrangements, but not in the workplace

The recent expansion of technology has contributed to growth in international business through ________. the tabulation of international transactions that previously did not appear in statistics reducing the effects of global competition the creation of new products that are important in world trade the liberalization of regulations of movements of resources across borders

the creation of new products that are important in world trade

The term cultural distance refers to ________. the degree to which countries' cultures are separated by attributes such as language, ethnicity, and religion the preferred relationship between superiors and subordinates in a given culture the normal space between people in a society when communicating the time it takes people to adjust to a different culture

the degree to which countries' cultures are separated by attributes such as language, ethnicity, and religion

4. Which of the following is one reason that international business has grown at such a rapid pace in the past few decades? the end of the political schism between the Communist and non-Communist blocs increased concerns about terrorism stricter government policies on cross-border movements decreasing global competition

the end of the political schism between the Communist and non-Communist blocs