ib midterm

Your 7-year-old sister and 5 of her friends open a lemonade stand every summer. This past summer, they made $40 per day for 45 days. The divided the money evenly between themselves. None of them paid taxes on their money. What was her contribution to annual national GDP? $300 $150 $1,800 $0

$0

Imagine that the exchange rate for trading Shealton Sheas for Rosmanian Ros is 0.75 Ros to 1 Sheas. Given that Sheas is the domestic currency, estimate the exchange rate for trading Sheas to Ros. 0.75 Ros 1 Sheas 1 Ros 0.75 Sheas

0.75 Ros

Which of the following BEST describes high-context culture? A culture that relies on direct means of conveying messages with little background information A system of shared beliefs and rituals expressing the way adherents interpret their place in the universe A culture that uses more implicit messaging and contextual elements to convey information A set of moral principles or values to guide and shape behavior, ensuring that people can interact and live together effectively

A culture that uses more implicit messaging and contextual elements to convey information

In the context of money, identify a true statement about fiat currencies. A country can undermine the value of its fiat currency, rendering it valueless. The value of fiat currencies remains constant. They are digital currencies that are monitored by distributed peer networks. Bitcoin is an example of a fiat currency.

A country can undermine the value of its fiat currency, rendering it valueless.

Culture, which is society's unique set of values and norms that govern how people live and interact, is often compared to an iceberg for what reason? Icebergs are not found everywhere, much like culture is only present in some places. An iceberg is steady and maintains consistent form, just as a culture which has established over a period of time. An iceberg can be seen above water (i.e., visual aspects), while part of it is hidden under the water (i.e., influences more difficult to discern). An iceberg is immobile and stays exactly where it is, and culture does not change or evolve over time.

An iceberg can be seen above water (i.e., visual aspects), while part of it is hidden under the water (i.e., influences more difficult to discern).

Imagine you are a foreign exchange currency trader trying to predict exchange rate shifts. Which of the following is likely to result in domestic currency appreciation? An increase in aggregate demand for foreign goods and an equivalent decrease in political stability. An increase in foreign direct investment and an equivalent decrease in aggregate demand for foreign goods. An increase in aggregate demand for foreign goods and an equivalent increase in government debt. An increase in foreign direct investment and an equivalent decrease in the supply of its currency.

An increase in foreign direct investment and an equivalent decrease in the supply of its currency.

Which of the following is a similarity between the ideal of dharma and the Protestant work ethic? Both refer to a work culture of rugged collectivism and dependency. Both roughly translate to a state of complete spiritual perfection. Both state that work should be undertaken solely for monetary benefit. Both focus on a person's moral obligation to contribute to the greater good of society.

Both focus on a person's moral obligation to contribute to the greater good of society.

Somchai, a Thai, follows a religion that does not worship any god—it promotes interconnectedness among all living creatures. His religion represents the middle way between capitalism and socialism and proclaims that spiritual liberation can be achieved by avoiding extremes. In this context, Somchai is most likely a _____. Buddhist Hindu Christian Muslim

Buddhist

A corporate cultural training specialist is hired to train management who will be working in a new country about the local culture. This specialist has been tasked to prepare them with a program highlighting the similarities and differences between their cultures, so that they can implement strategies to become effective managers in the new location. This type of training would be considered which type of cultural intelligence quotient? Behavioral None of the answers are correct. Motivational Cognitive

Cognitive

An American manager at a subsidiary office in Brazil has a Brazilian employee, João, who is always very punctual. The rest of his Brazilian employees are not punctual like João, which, although he is not surprised, upsets him. This is an example of a manager with a high level of which factor(s) of cultural intelligence? Motivational but not cognitive CQ Behavioral but not motivational CQ Cognitive and behavioral CQ Cognitive but not behavioral CQ

Cognitive but not behavioral CQ

What is the FIRST step a company should take when considering opening operations in a foreign country with potentially high political risk? Conduct a political risk analysis Send the CEO to meet with the current government to discuss risk Avoid high-risk countries Buy political risk insurance

Conduct a political risk analysis

_____ describes laws and punishments that regulate social conduct and provide personal, property, and human rights protections. Criminal law Commercial law Administrative law Constitutional law

Criminal law

_____ are electronic currencies that are monitored by distributed peer networks that simultaneously keep track of currency ownership and trades. Cryptocurrencies Private currencies Microcurrencies Cost-push currencies

Cryptocurrencies

What is the knowledge to function effectively across cultural contexts? Future orientation Social norm Cultural intelligence Custom

Cultural intelligence

Which of the following is a society's unique set of values and norms that govern how people live and interact with each other? Future orientation Culture Religion Ethical system

Culture

In the context of managing exchange rate risks, which of the following statements is true of an option? Even after purchasing an option, it is not an obligation to buy a certain amount of currency at a given exchange rate. An option is similar to a forward contract that does not allow for purchase of currency from a bank. A trader uses an option to buy and sell currencies at different exchange rates on the same day. A trader planning to purchase an option is compulsorily required to couple a spot transaction with a forward transaction.

Even after purchasing an option, it is not an obligation to buy a certain amount of currency at a given exchange rate.

What term is BEST described as a government's seizure of assets as a result of political action? Expropriation Arbitrage Privatization Deregulation

Expropriation

Which of the following BEST describes "recentering"? Choosing a cultural dimension to examine The process by which you take what you have learned about another's culture and use that knowledge to adapt your own behavior and thinking The process of analyzing the impact of a cultural dimension on the specific business you are attempting Finding or creating shared ground, or areas of overlap between old and new behaviors and understanding

Finding or creating shared ground, or areas of overlap between old and new behaviors and understanding

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

Franchising

An international business that specializes in military jets will be most interested in which category of output? Net exports Government spending Gross exports Private consumption Gross investment

Government spending

Which of the following is a difference between individualistic cultures and collectivist cultures? In collectivist cultures, job security is a principal motivator, whereas in individualistic cultures, the opportunity to overcome challenges and grow is often a main motivator for employees. Unlike employees in individualistic cultures, employees in collectivist cultures take more responsibility for their life independent of the organization. Unlike employees in individualistic cultures, employees in collectivist cultures want money rather than benefits as compensation. In collectivist cultures, employees are more likely to look outside the organization for training and to satisfy personal needs such as friendship, whereas in individualistic cultures, employees are more likely to rely on the organization for training and socialization.

In collectivist cultures, job security is a principal motivator, whereas in individualistic cultures, the opportunity to overcome challenges and grow is often a main motivator for employees.

In the context of foreign exchange rates, which of the following statements best describes the process of dollarization? It is the process wherein a dollar has intrinsic value such that it can be traded for a specified amount of gold. It is the process of eliminating currencies that are backed by a physical commodity. It is the process of a country abandoning its currency and using another currency instead. It is the process of a country fixing its currency to a foreign currency that is usually stronger or more stable.

It is the process of a country abandoning its currency and using another currency instead.

Which of the following is true of horizontal structuring? It involves clearly defining job responsibilities. It determines where in a hierarchy a company's decisions are made. It reflects the way a company decides to subdivide itself. It involves following a strict chain of command.

It reflects the way a company decides to subdivide itself.

In the country of Losan, majority of the population is employed in the manufacturing sector. However, as the nation's overall income is low, little demand exists within Losan for the manufactured products. Yet, the government of Losan keeps its currency valuation quite low to ensure that: Losanian goods are comparatively cheaper in the world market. limited number of manufacturing jobs are created in Losan. Losanian goods create more competition in the world market with their high prices. the currency can be abandoned easily for a higher value currency.

Losanian goods are comparatively cheaper in the world market.

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

Low power distance and high collectivism

In the context of foreign exchange rates, which of the following scenarios exemplifies dollarization? The country of Denbarrow bases its currency on the gold standard such that the value of the currency can be determined by the ability to trade it for a specified amount of gold. Pereraus, a developing country, mandates the use of electronic currencies that can be monitored by distributed peer networks for all trading purposes. Melton, a country facing serious crisis, uses the currency of Alarodo as legal tender for conducting transactions. The country of Zansas pegs its currency, the Zan, to the U.S. dollar at 5.75 Zan per dollar.

Melton, a country facing serious crisis, uses the currency of Alarodo as legal tender for conducting transactions.

Volkswagen Group China, which was a joint venture established in 1984 as the Shanghai Volkswagen Automotive Co., had to adapt from German cultural aspects in terms of management and operations to a Chinese cultural approach. As Germany tends to have a low power distance culture and China would be considered to have a high power distance culture, what was the MOST likely adaptation that Volkswagen had to take into consideration when they opened a manufacturing facility in China with local employees? They would have to bring the employees into meet one-on-one with management to establish good relations and also gain insight into how vehicle design should be developed in China. Facilitate an appropriate communication protocol by surveying Chinese employees and their German counterparts and developing a collaborative plan. Immediately communicate to employees there will be no questioning of corporate policy. Recognize that China is a high-power distance culture and little consultation is expected between managers and subordinates.

Recognize that China is a high-power distance culture and little consultation is expected between managers and subordinates.

Kelly is a manager in a multinational firm. She manages a culturally diverse team of five employees. She realizes that to build a cohesive team, she needs to understand the key cultural differences among her team members. Therefore, she reads about the culture of each of her team members and understands how cultural differences among them could impact business interactions. In the context of managing cultural differences, which of the following is the immediate next step that Kelly should take? She should develop a shared vision and a common understanding to bridge the cultural divide among her team members. She should decenter and then recenter. She should create a list of ethnocentric practices that can be adopted in the workplace. She should solicit uncommon information.

She should decenter and then recenter.

Mantonian franc is the currency of Mantonia, a country with a floating exchange rate system. The government of Mantonia does not directly intervene in the currency exchange. Hence, it has no direct influence on the price of the nation's currency. However, it is involved in other indirect actions such as buying currencies of other countries. Which of the following statements supports the fact that the act of buying currencies of other countries can affect the floating exchange rate? The nation's government is obligated to print more money. The demand for the domestic currency of Mantonia decreases. Mantonian franc is guaranteed to appreciate beyond a threshold amount. The nation's government embraces dollarization.

The demand for the domestic currency of Mantonia decreases.

A U.S. multinational firm with operations in Africa records its assets in local market currencies daily. During a period of economic instability in one of the firm's African markets, the country's central bank decides to lower interest rates by printing currency to make more available to its citizens. How will the central bank's decision affect the U.S. firm in this African market? The value of commercial loans will increase. The demand for consumer products will increase. The value of firm property in country will decrease. The cost of buying equipment will decrease.

The value of firm property in country will decrease.

In the context of social stratification, which of the following is a difference between U.S. culture and Japanese culture? U.S. culture values accomplishment and achievement regardless of age, whereas Japanese culture values the wisdom and experience of age. In Japan, businesspeople are very conscious of schedules, whereas in the United States, businesspeople view time as elastic. U.S. culture has high power distance, whereas Japanese culture has low power distance. Full-time work in Japan consists of 40 hours a week, whereas full-time work in the United States consists of 35 hours a week.

U.S. culture values accomplishment and achievement regardless of age, whereas Japanese culture values the wisdom and experience of age.

Which of the following is a difference between customs and social mores? Unlike customs, breaking social mores does not usually have serious consequences. Unlike customs, social mores include socially approved standards of behavior such as how to greet others. Unlike customs, social mores are deeply, morally significant. Unlike customs, social mores are uniform across all cultures.

Unlike customs, social mores are deeply, morally significant.

Which of the following is a difference between high power distance and low power distance? Unlike managers in high power distance cultures, managers in cultures with low power distance act with unlimited authority. Unlike managers in low power distance cultures, managers in cultures with high power distance are open to and may solicit the ideas and opinions of their subordinates. Unlike low power distance, high power distance means considerable consultation is likely to occur between managers and subordinates. Unlike high power distance, low power distance results in a more collaborative environment.

Unlike high power distance, low power distance results in a more collaborative environment.

___________ are a society's backbone, identifying what the members of that society believe is good, right, and desirable; whereas _________ are the social rules that govern people's interactions within that culture, both in terms of customs or social mores. Values; norms Norms; motivations Values; taboos Norms; traditions

Values; norms

In the context of managing exchange rate risks, which of the following best exemplifies a company that is engaged in forward exchange rate transactions? ABC Inc. purchases foreign currency at present-day rates in anticipation of future transactions. OPY Corp. diversifies its production of textiles to the global markets in which it operates. XYZ Corp. reaches an agreement with Iond bank to trade currency at a future date at the rate agreed to and specified at the time of the deal. RTN Inc. simultaneously purchases and sells the currency of Zanvia at two different rates.

XYZ Corp. reaches an agreement with Iond bank to trade currency at a future date at the rate agreed to and specified at the time of the deal.

Macro political risk differs from micro political risk because it affects all foreign investments and operations, while micro political risk ________. affects a specific firm, sector, or project affects foreign operations in the home market affects specific operations in the home market only affects all foreign operations in the host country

affects a specific firm, sector, or project

In the context of money, unlike fiat currencies, cryptocurrencies: are not controlled by intermediaries. do not facilitate trade. do not store value. are not monitored by distributed peer networks.

are not controlled by intermediaries.

In the context of managing cultural differences, once you have recognized cultural differences, the next step is to: change and adapt your own views of the world to better appreciate the elements of another culture. develop a shared vision and a common understanding to bridge the cultural divide between you and others. select the cultural dimensions to be examined and assess their impact on the specific business that you are attempting. solicit uncommon information by changing the way meetings are run in order to incorporate different cultural styles.

change and adapt your own views of the world to better appreciate the elements of another culture.

The country of Ghathan has been in serious foreign debt for quite some time. It has large amounts of debt denominated in dollars, euros, and pounds. In the given scenario, the government of Ghathan is most likely to: make its exports cheaper. consider overvaluing the national currency. stop employment drives in the manufacturing sector. reduce purchase of foreign goods.

consider overvaluing the national currency.

The people of Jirasta, a European country, believe that individuals should lie face down on the ground and join their hands while greeting others. This is an example of a _____ in Jirasta. social stigma social more custom taboo

custom

Increasing tuition at universities ________. decreases the cost of skilled labor increases the GDP decreases the supply and efficiency of labor increases the amount of capital in the economy

decreases the supply and efficiency of labor

In the context of the foreign exchange market, _____ is defined as a decrease in the value of one currency relative to another currency. depreciation decompensation undervaluation spot exchange

depreciation

ABC Corp., a U.S.-based company, is signing a business deal with Syphed Inc., a company based in the country of Yanghor. The base currency for the deal is the U.S. dollar. The counter currency for the transactions between the two companies is Yang, the official currency of Yanghor. To be able to conduct business in Yanghor, ABC Corp. should identify how much of U.S. dollars will be required to buy an equivalent amount of purchasing power in Yang. In short, ABC Corp. needs to identify the _____ of the currency of Yanghor. exchange rate equity value dividend capital share

exchange rate

The fluctuation of exchange rates is a significant risk factor for Sedantha Inc., a company based in Velezland that imports miniature grape vines from the country of Highlands. The company usually purchases these vines during early fall and decides to pay for them after a few months. This could be termed as a risky exchange because the true cost of the vines can swing dramatically with currency shifts. In this scenario, Sedantha Inc. can eliminate currency risk by using _____ to lock in an exchange rate. needs assessment forward contracts volatility analysis environmental scanning

forward contracts

During the 1950s, Ghajna, a developing nation, used currency whose value was determined based on the value of gold. People in Ghajna could present currency worth of 10Gaj, Gaj being the currency of Ghajna, to a government-approved bank and receive 10Gaj worth of gold in return. The nation used gold as the base to value its currency. In this scenario, we can say that the nation of Ghajna had the _____ in place during the 1950s. gold bond gold standard gold variant gold stock

gold standard

In the context of institutions that make foreign exchange happen, nonfinancial customers include: small commercial banks. large banks such as JP Morgan Chase. hedge funds. governments and businesses.

governments and businesses.

Taverna is a manufacturing-dependent nation. The Taverna government plans to increase the supply of the national currency by a major proportion in an effort to devalue the currency in international markets. In this scenario, the Tavernan government prefers to have its currency undervalued in an effort to: make goods more expensive in world markets. pay off foreign debts easily. encourage citizens to buy foreign-produced products. help drive exports.

help drive exports.

An American manager complains to his boss about one of his employees, who is Chinese. "She never chimes in during meetings or tells me what she thinks of the direction we are taking the division when asked." This manager likely misunderstands the high level of collectivism in China. high power distance in China. high level of individualism in China. low power distance in China.

high power distance in China.

Shyam, a manager in a company, prefers using straightforward and concise messages to convey information to his subordinates. He does not believe in providing much background information and believes that direct communication gives him more control over a situation and allows him to take responsibility for his actions. In this scenario, Shyam most likely belongs to a: low-assertion and low-context culture. high-assertion and high-context culture. low-assertion and high-context culture. high-assertion and low-context culture.

high-assertion and low-context culture.

If the Mexican peso is considered overvalued relative to the U.S. dollar, dollar denominated debt held by the Mexican government is MOST likely appropriately valued. about the same, valuation-wise. more expensive than it should be if the currency was appropriately valued. less expensive than it should be if the currency was appropriately valued.

less expensive than it should be if the currency was appropriately valued.

In contrast to undervalued currencies, overvalued currencies: make foreign trading unfavorable for domestic industries. make it easier for a country to pay down foreign debts. boost domestic manufacturing sectors. make imports expensive.

make it easier for a country to pay down foreign debts.

If a Big Mac costs SFr6.50 in Switzerland and US$5.67 in the United States, and the current spot exchange rate is 0.97 (U.S. dollar is the domestic currency), the Swiss franc is overvalued. undervalued. appropriately valued. pegged.

overvalued.

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

peg.

In the context of managing cultural differences, the term _____ refers to finding or creating shared ground, or areas of overlap between old and new behaviors and understanding. ergonomics recentering dejobbing codetermination

recentering

FreeMart is an online fashion store that readily accepts payments in the form of cryptocurrencies. These digital currencies can be sent directly by a consumer to the store's wallet. This enables faster processing of a consumer's order. In this scenario, these currencies: refer to electronic currencies. are designated to be controlled by intermediaries. are backed by all national governments. refer to currencies that are present in a physical form.

refer to electronic currencies.

Motivational cultural intelligence quotient (CQ) measures an individual's: expertise on every culture. ability to mimic the customs of the people around him or her. sense of desire to function effectively in different cultural settings. understanding of the beliefs, customs, and taboos of foreign cultures.

sense of desire to function effectively in different cultural settings.

In many parts of Yugrastia, an Asian country, marrying one's cousin is considered unethical. The people of Yugrastia frown upon this kind of incest to the extent that this norm has been codified into law. Such offenses are punishable by up to 5 years in prison. In this scenario, the norm that prohibits marriage to a family member is an example of a _____. custom folkway naming taboo social more

social more

In the context of foreign exchange, the difference between the buy and sell price for a currency is referred to as a _____. spot rate dividend valence spread

spread

In Japan, employees are motivated by competition and group success. As such, managers are MOST likely to work long hours in an effort to improve production efficiency. focus on inclusion across gender and race. resolve conflict through compromise and negotiation with all parties involved. focus on their workers' work/life balance.

work long hours in an effort to improve production efficiency.

Sam bought a new car in 2011 for $20,000. In 2015, Sam sold his car to Joe for $12,000. What contributions did the sale of the car make in 2011 and 2015 respectively? $20,000; $12,000 $20,000; $8,000 $20,000; $0 $0; $32,000

$20,000; $0

Apricot Inc., an American food and beverage company, is devising strategies to expand its business in Austria. Jonathan, a manager at Apricot, believes that a PEST analysis is the best way to get a picture of the competitive landscape in Austria. Which of the following statements supports his belief? A PEST analysis can be used to reinforce old assumptions about how managers should run the company in Austria. A PEST analysis can be used to analyze the internal business environment of the company. A PEST analysis can be used to implement appropriate practices from local Austrian cultures while avoiding problematic ones. A PEST analysis can be used to increase its per-unit costs by excluding its fixed costs.

A PEST analysis can be used to implement appropriate practices from local Austrian cultures while avoiding problematic ones.

Ether Inc., a British telecommunications services company, uses PEST analysis to identify and assess the technological factors that are likely to affect its business operations in India. Which of the following is a technological factor that Ether is most likely to examine in its PEST analysis? Advancement of infrastructure in India Workforce productivity in India Preferences of customers in India Offshoring backlash in India

Advancement of infrastructure in India

Which of the following is true of international business? Operating in multiple countries can maximize the impact of economic swings an individual company may experience over the years. When operating globally, companies rely on the fact that the government of a country will not come along and take their property without warning or justification. When a company conducts business globally, external factors are consistent across companies and even industries. By diversifying the places where its products are made, a company can soften the impact of price increases or supply shortages that may occur in any one country.

By diversifying the places where its products are made, a company can soften the impact of price increases or supply shortages that may occur in any one country.

Waldorf Inc., an oil company, is faced with an ethical dilemma of whether or not to continue to use the process of hydraulic fracturing to drill petroleum from thousands of feet below the surface of the Earth. The company is facing social pressures from environmental groups to discontinue the process of hydraulic fracturing as it has adverse effects on the environment. Waldorf Inc. wants to use a proactive approach to deal with these social pressures. In which of the following ways can Waldorf Inc. improve its reputation as a highly ethical company? By creating new mission and vision statements By developing strategies to minimize the damage to the firm By engaging in corporate social responsibility (CSR) initiatives By building capabilities to quickly respond to these social pressures

By engaging in corporate social responsibility (CSR) initiatives

Amanda, a marketing manager at Xenon Inc., believes that the company should engage in international business as it will benefit the company in multiple ways. However, Kyle, an operations manager of the company, feels that it should concentrate on conducting business domestically. Which of the following statements supports Amanda's beliefs? By engaging in international business, Xenon can acquire new resources and knowledge. By engaging in international business, Xenon can engage in corporate social responsibility. By engaging in international business, Xenon can effectively use a single marketing strategy for all its products. By engaging in international business, Xenon can evade taxation in foreign markets.

By engaging in international business, Xenon can acquire new resources and knowledge.

_____ describes laws specifying the rights and duties of individuals in their business dealings, how businesses are created and organized, and how business is transacted. Administrative law Constitutional law Commercial law Public law

Commercial law

Which of the following is an example of a multinational corporation? Sable, a non-profit organization, is funded by countries from all over the world. Crayola Inc., an American smartphone company, operates in 36 countries across the globe. Teal Inc., an Irish steel company, imports iron ore from China. Educruz, a non-profit organization, provides advisory services to business schools in the developing world

Crayola Inc., an American smartphone company, operates in 36 countries across the globe.

The United States government realizes that consumption is falling, which may lead to a recession. They make a change in their fiscal policy. This may include which of the following? Decrease spending Pay off debt Decrease taxes Increase taxes

Decrease taxes

Which of the following is a difference between developed markets and emerging markets? Developed markets have high levels of economic activity, whereas emerging markets have low levels of economic activity. Developed markets have an intermediate income level among citizens, whereas emerging markets have a low income level among citizens. Developed markets experience average economic growth of around 2 percent/year, whereas emerging markets experience economic growth of at least 4 percent/year. Developed markets have economic policies of open trade and free markets, whereas emerging markets have economic policies that restrict open trade and free markets.

Developed markets experience average economic growth of around 2 percent/year, whereas emerging markets experience economic growth of at least 4 percent/year.

_____ are the moral principles of right and wrong that guide personal and organizational decision making. Customs Ethics Tariffs Sanctions

Ethics

_____ are payments made to speed up the actions that government officials are already bound to perform. Down payments Mortgage payments Facilitation payments Royalty payments

Facilitation payments

In the United States, the _____ regulates all forms of online advertising, data collection, and sales, and imposes penalties for companies making false claims or violating customers' rights. International Trade Administration National Trade Council Federal Trade Commission U.S. Trade and Development Agency

Federal Trade Commission

The _____ is a law signed by President Jimmy Carter in 1977 that made it illegal to pay foreign government officials for their assistance in obtaining or retaining business. Corruption of Foreign Public Officials Act Foreign Corrupt Practices Act Foreign Exchange Management Act Foreign Business Act

Foreign Corrupt Practices Act

Cora, an American citizen, is a critic of globalization. She believes that globalization has done more harm than good. She contends that globalization has detrimental effects on developed markets. Which of the following statements supports her contention? Globalization has increased wage-related expenses. Globalization has decreased the rate of development for lifesaving devices. Globalization makes it easy for employers to move jobs to cheaper locations. Globalization makes products and services expensive.

Globalization makes it easy for employers to move jobs to cheaper locations.

What is total factor productivity? How much capital is available in an economy How much annual GDP increases with an additional laborer How much labor is available in an economy How efficiently labor and capital work together

How efficiently labor and capital work together

Shinzo Abe is the president of Japan and has asked you for advice on his fiscal and monetary policy. He wants to do each of the following to help break Japan out of its deflationary cycle. Which of the following do you recommend that he NOT do? Increase the money supply Increase taxes Reduce trade tariffs Increase government spending

Increase taxes

A country is transitioning from a command to a market economy through deregulation of industries. How will this decision impact the market? Increased competition Decreased innovation Increased prices Decreased service

Increased competition

In a recent speech, a political candidate talked about democracy and human rights. The candidate said that the "average citizen knows what's best for him...the government doesn't need to design or plan his life..." These musings are MOST likely indicative of which political ideology? Socialism Anarchism Collectivism Individualism

Individualism

According to author Thomas Friedman, which of the following is true of the flat world? Individuals in poor countries with limited infrastructure are able to compete with people in rich, well-developed countries. Most of the world's cities are much more connected at the local level than they are to any other domestic city, and more connected domestically than to any foreign city. The few cities that dominate international financial markets — Frankfurt, Hong Kong, London, New York, Singapore — represent the peak of global integration. Ten percent of activity is conducted globally, and the remaining ninety percent is conducted domestically.

Individuals in poor countries with limited infrastructure are able to compete with people in rich, well-developed countries.

A company planned to build a new plant in Industrial Town, but civil unrest in the area has delayed their plans indefinitely. This directly affects which variable of GDP? Net exports Government spending Investment Private consumption

Investment

Which of the following is true of globalization? It increases socioeconomic equality in emerging markets. It builds on the principle of sovereignty to strengthen the relationships that connect us. It makes it difficult for employers to move jobs to cheaper locations. It makes it difficult to buy and sell internationally.

It builds on the principle of sovereignty to strengthen the relationships that connect us.

Which of the following is true of the World Trade Organization? It was established to rescue countries from financial crises. It is considered a “lender of last resort” to nations whose economies are in trouble. It focuses on preventing war by promoting economic development in poor countries. It came about as a result of negotiations in the 1990s.

It came about as a result of negotiations in the 1990s.

Which of the following is true of the G20? Its chair rotates quarterly among the members and is responsible for hosting the quarterly summit. It operates with a permanent secretariat or staff. It consists of representatives from the International Monetary Fund and the World Bank. It consists of finance ministers and central bank governors of the 19 largest economies in the world.

It consists of finance ministers and central bank governors of the 19 largest economies in the world.

Identify a true statement about the World Trade Organization. It ensures that member nations impose the minimal number of restrictions on each other. It came about as a result of negotiations in the 2000s. It was established to rescue countries from financial crises. It focuses on preventing war by promoting economic development in poor countries

It ensures that member nations impose the minimal number of restrictions on each other.

Which of the following is true of a joint venture? It ensures that neither of the two original companies is directly harmed by failure. It involves one company allowing another company to use its trademarks, patents, copyrights, or expertise. It is similar to licensing, but it requires a much higher level of commitment from the two companies involved. It increases the risks of not knowing the local market.

It ensures that neither of the two original companies is directly harmed by failure.

Which of the following is true of globalization of production? It includes the component parts, skill sets, or information required to produce a product or service. It includes obtaining land, labor, and capital locally. It helps companies take advantage of national differences in cost and quality. It is limited to manufacturing.

It helps companies take advantage of national differences in cost and quality.

Which of the following is true of arbitrage? It treats differences across nations as constraints. It involves obtaining land, labor, and capital from domestic markets. It is limited to manufacturing. It involves searching for deals on production factors across geographic boundaries.

It involves searching for deals on production factors across geographic boundaries.

Which of the following is true of the United Nations? It is funded by over 1,000 member companies, typically multinational corporations with more than $5 billion in revenue. It provides heavily subsidized loans to poor governments in an effort to help them build infrastructure such as roads, the private sector, and public utilities. It was established as a way to get countries to resolve their differences through diplomacy, with the goal of maintaining and promoting global peace. It ensures that international trade runs freely and fairly between countries and that member nations impose the minimal number of restrictions on each other.

It was established as a way to get countries to resolve their differences through diplomacy, with the goal of maintaining and promoting global peace.

Neon Inc. wants to engage in international business to increase its sales. Travis, a manager at Neon, feels that licensing is the best way through which the company can enter a foreign market. However, Isaac, another manager at the company, is skeptical of licensing. Which of the following statements supports Isaac's skepticism? Licensing often increases the risks of not knowing the local market. Licensing can prevent companies from receiving royalties. Licensing transfers the ownership of the child company to the parent company. Licensing can result in lost opportunities for parent companies.

Licensing can result in lost opportunities for parent companies.

Which of the following best defines the 10% presumption? Only about 10 percent of products produced in the United States are industrial products; the remaining 90 percent are consumer products. Only about 10 percent of countries are sovereign nations; the remaining 90 percent are not sovereign. Only about 10 percent of the world’s organizations are multilateral; the remaining 90 percent are bilateral. Only about 10 percent of activity is conducted globally; the remaining 90 percent is domestic.

Only about 10 percent of activity is conducted globally; the remaining 90 percent is domestic.

Which of the following is NOT one of the imperfections of GDP and GNP? Does not tell us who is benefitting from a country's production Does not factor in long-term effects of boosting output Does not account for people's wellbeing Only applicable to capitalist economies

Only applicable to capitalist economies

A U.S. firm would like to enter a foreign market but wants to avoid exposure to political instability that could limit ownership of assets. The firm's priority is accessing the increasing number of consumers who value foreign products like the goods it sells, but it must be positioned as a regional entity. Which approach to market entry should the firm use for large-scale product adoption? Locate in market despite expatriation and asset risk Operate in adjacent country and sell to target market Remain in home country and lose potential profits Wait until another foreign firm enters the market

Operate in adjacent country and sell to target market

A country will host national elections to choose its legislative body of government. These elected officials will form a cabinet amongst themselves. This is MOST likely reflective of which political system? Theocratic government Totalitarian government Presidential government Parliamentary government

Parliamentary government

Nebula Inc. is an American multinational software development company, and it has operations in Orvetia. It has a working hours policy of nine hours a day. However, in Orvetia, a country in Eastern Europe, the labor laws specify that employees should work only eight hours a day. Which of the following external factors is affecting Nebula's operations in Orvetia? Technological factors Political factors Sociocultural factors Economic factors

Political factors

__________ refers to the principles, laws, and procedures relating to a particular form of government. Property rights Political system Political ideology Micro political risk

Political system

FP Mining Company was founded with public funds in 1977, and it generates more than $4B profit each year. The government owns 85% of the company's stock and the rest of the shares are held by investors. When it was founded, the company was wholly owned by the state. This company is an example of which form of corporation? State-owned enterprise State-owned privatization Privately-owned enterprise Privately-owned privatization

State-owned enterprise

Examples of political risk include all the following EXCEPT: Expropriation Insurrection Stock market crash Currency and trade controls

Stock market crash

Sue lives in New York City and makes six times as much as Margaret, who lives in upstate New York and works a similar job. To determine who has a higher standard of living, what information is needed? Who has the greater education How much money Sue earns Who has been working longer Sue's PPP and Margaret's PPP

Sue's PPP and Margaret's PPP

Which of the following best illustrates global convergence? Sylvester Inc., an American car-manufacturing company, uses the Japanese business philosophy of kaizen. Micra Inc., an Indian mining company, engages in corporate social responsibility by providing training services to local schools. Hexagon Corp., a steel company in the United States, has many plants in different parts of the country. Swedish company IKEA that sells and manufactures its bookshelves in many countries.

Swedish company IKEA that sells and manufactures its bookshelves in many countries.

Which of the following examples best illustrates the globalization of production? Taupe, an Australian non-profit organization, is funded by Australian multinational companies. Hazel Inc., an Irish textile company, engages in corporate social responsibility. Tanner Inc., an American publishing company, outsources writing services to India. Silva Hotels & Resorts, a Brazilian hotel chain, provides hospitality services to tourists from all around the world.

Tanner Inc., an American publishing company, outsources writing services to India.

Vermilion Inc. is an American business consulting company. The company is planning to open its office in Argentina. Jensen, a manager at Vermilion, suggests that the company should conduct a PEST analysis before taking this step. Which of the following is a political factor that Vermilion should take into consideration in its PEST analysis? Tax rates in Argentina Poverty rates in Argentina Wage rates in Argentina Specific industry conditions in Argentina

Tax rates in Argentina

Literia, a country in Asia, is experiencing a financial crisis. Its currency has lost much of its value, and the country's currency reserves are depleting. In this scenario, which of the following multilateral organizations is most likely to provide loans to Literia to rescue it from its financial crisis? The United Nations The World Bank The World Trade Organization The International Monetary Fund

The International Monetary Fund

Bella, a professor at the University of California, believes that the rule of law promotes international business. Which of the following statements supports her beliefs? The rule of law varies according to the status of any who violate the law. The rule of law puts a check on governmental power in a country. The rule of law gives companies the discretion to set and enforce laws. The rule of law states that the president is the ultimate authority.

The rule of law puts a check on governmental power in a country.

Rhombus Inc. is a German consumer electronics company. It is planning to start its operations in India. Which of the following is an economic factor that Rhombus should consider before starting its operations in India? The major and minor religions in India The stability of trade cycles in India India's labor laws India's intellectual infrastructure

The stability of trade cycles in India

What is a form of totalitarian autocratic government in which leaders rule by a mandate from God by interpreting religious law? Terrorist organization Theocratic government Democracy State-owned enterprise

Theocratic government

Which of the following is true of political systems? They are solely shaped by the political ideologies that support the system. They directly affect the opportunities available to international businesses. They include the principles, laws, and procedures relating to a particular industry. They are independent of the cultural and religious values of a country.

They directly affect the opportunities available to international businesses.

Identify a true statement about political systems. They influence the economic, sociocultural, and technological climate in a given country. They do not influence the opportunities available to international businesses. They include the principles, laws, and procedures relating to a particular industry. They are solely shaped by the political ideologies that support the system.

They influence the economic, sociocultural, and technological climate in a given country.

A nation implements a policy that restricts licenses and permits for all firms that want to enter its market and establish short-term operations without foreign direct investment. What type of adverse action is this policy MOST likely to create? Expropriation Trade controls Currency limits Contract breach

Trade controls

Genevieve is a manager at Titanium Inc., an American apparel company. Before opening its manufacturing units in China, Genevieve believes that Titanium should analyze different contextual environments to understand long-term trends in China and assess how they might affect Titanium's business there. Which of the following is an economic factor that Titanium should take into consideration in its PEST analysis? Offshoring backlash in China Advancement of infrastructure in China Government efficiency in China Workforce productivity in China

Workforce productivity in China

Imagine that Belseria, a developing country in South America, recently became a member of a multilateral organization that works toward preventing war by promoting economic development in poor countries. The organization assists poor countries in building their infrastructure by providing them with heavily subsidized loans. Given this information, it can be said that Belseria most likely became a member of the _____. World Trade Organization Red Cross World Bank International Monetary Fund

World Bank

David belongs to a faction of individualists who believe that individuals should be free from any system of control. This faction believes that individuals should have the right to govern themselves without the need of any system of government. Given this information, it can be said that this faction is most likely a group of _____. anarchists modernists capitalists fascists

anarchists

Omega Inc., an American semiconductor company, made a contract with Delta Inc., a Canadian computer manufacturing company, on 25th September 2017, to manufacture and deliver 1,000 chipsets on 3rd October 2017. However, Omega Inc. failed to deliver the chipsets on the agreed date. Omega Inc. wants to avoid a lawsuit and reach a settlement outside the courts. Delta Inc. agrees to consult a third party to reach a binding decision. Given this information, it can be said that Omega Inc. and Delta Inc. are engaged in _____. arbitration subsidization customization deregulation

arbitration

Sienna Inc., a cosmetics company, recently started its business in the United States. It has experienced fast growth in the first eight months. To continue its success in the international market, Sienna has decided to open its branches in Europe. Given this information, it can be said that Sienna is a _____ firm. born global joint venture boutique partnership

born global

Liberis, a country in East Africa, operates under a system of law that aims to prevent litigation and promote confidence in transactions. The law has ancient Roman origins. Under this law, judges in Liberis are bound not by earlier rulings, but by a written constitution and detailed statutory code that is always binding. Given this information, it can be said that Liberis operates under _____. civil law common law commercial law theocratic law

civil law

The United Kingdom, the United States, and Australia are examples of countries that rely on _____. theocratic law common law civil law customary law

common law

Hexagram Inc., an American car-manufacturer, recently started its operations in India. To successfully carry out its operations in India, Hexagram should: consider the fact that the Indian government can take its property without warning. consider all the assumptions and culture-specific knowledge about India. assume that the Indian customers and suppliers speak the same language. assume that all Indian businesspeople understand the norms of business.

consider all the assumptions and culture-specific knowledge about India.

In Kiserk, a country in Central America, a body of law sets the bounds of government and governmental procedures, including creating the authorities that establish laws. Given this information, it can be said that this body of law is the _____. commercial law theocratic law procedural law constitutional law

constitutional law

Nebula Inc. is an American smartphone manufacturer that sells smartphones in 36 countries across the globe. Nebula makes both low-end and high-end smartphones to cater to the needs of different markets across the world. There is a high demand for Nebula’s low-end smartphones chiefly in developing nations. Its high-end smartphones have buyers mostly in developed nations. One of the challenges that Nebula faces is planning its sales strategy to suit different markets. Given this information, it can be said that Nebula’s smartphones are an example of _____. consumer products natural products industrial products perishable products

consumer products

Ervetia is a country in Europe, which has recently adopted a new economic policy. The government of Ervetia has now opened doors to foreign investments and free trade relations with other countries. The number of private companies in Ervetia has also started increasing at a fast pace. Given this information, it can be said that Ervetia is most likely a(n) _____. developed market frontier market emerging market prediction market

emerging market

Market-based economies ________. have emphasis on agriculture and self-sufficiency are driven by government intervention encourage individuals and businesses to determine their investment in the economy depend on machinery and technological advancement

encourage individuals and businesses to determine their investment in the economy

Niall is an assembly-line worker in a car-manufacturing firm in Detroit. Assembly-line workers like Niall constitute the _____ of the car-manufacturing firm. visible artifacts economies of scale factors of production intangible resources

factors of production

Gross Domestic Product is a measure of ________. finished goods and services produced within a country's borders, regardless of whether they are made by domestic or foreign companies finished goods and services produced by a certain country's citizens within that country's borders a country's supply of labor multiplied by its supply of capital multiplied by TFP finished goods and services produced by citizens of a country, regardless of where in the world the companies are headquartered

finished goods and services produced by a certain country's citizens within that country's borders

Maya Inc., an Indian apparel company, now sells its apparels in the United States, Canada, Australia and New Zealand. Derek, the CEO of Maya Inc., believes that free access to markets, few barriers to competition, and uniform trade regulations have enabled Maya Inc. to expand its business operations internationally. Derek’s beliefs are consistent with Thomas Friedman’s theory of the _____. flat world spiky world round world divided world

flat world

Dasom Inc., a South Korean smartphone manufacturer, sells its smartphones in 64 countries around the world and has offices in 36 counties. Dasom's business expansion best exemplifies _____. globalization commodification subsidization nationalization

globalization

The Commerce Coalition (CC) is an intergovernmental organization operating in South Asia that consists of seven member nations. The CC was established to enable free trade across these seven countries of South Asia. A citizen of any of the member nations can easily purchase goods produced in another member nation without paying additional taxes. Given this information, it can be said that the large market created by the CC is an example of a(n) _____. gray market globalized market oligopolistic market monopolistic market

globalized market

According to Amartya Sen, a Nobel Prize—winning economist, globalization: perpetuates inequality throughout the world. has led to the advent of the "round world." has economic repercussions. has enriched the world scientifically and culturally.

has enriched the world scientifically and culturally.

As part of its business, Casper Inc., an Australian smartphone company, has opened its manufacturing plant in Sao Paulo, Brazil. In this scenario, Brazil is the _____. parent country home country host country third country

host country

Mauve Inc., an American chain of cosmetics stores, purchases makeup applicators from China and sells them in its stores across the United States. Given this information, it can be said that Mauve is engaged in _____. franchising importing licensing exporting

importing

Germanium Inc., a software company, uses common operating systems for all its computers connected through the Internet. Given this information, it can be said that these operating systems are _____. enterprise planning systems business intelligence portals strategic information systems integrated technology platforms

integrated technology platforms

Any creation of the human mind is known as _____. a sustainable product arbitrage intellectual property an embargo

intellectual property

Chris is the global operations manager at Asterisk Inc., a Canadian apparel company. The company is planning to start operations in Brazil and Japan. Chris believes that Asterisk has the potential to boost its overall sales by setting up operations in Brazil and Japan if: it can persuade people in these two countries to buy its products. it can use a universal marketing strategy for its products to appeal to customers of both these countries. it follows the same business strategy for its global operations that it uses for its domestic operations. it understands that customers in both these countries have similar preferences.

it can persuade people in these two countries to buy its products.

Franchising is similar to licensing in that: it requires that the franchiser allows the franchisee to use its trademarks, patents, and copyrights according to a strict template outlining the way it does business. it involves the franchiser building new plants or offices and then hiring employees when the franchisee enters the franchiser's market. it requires the franchisee to pay a royalty in return for using the franchiser's intellectual property and receiving managerial support. it involves the franchiser purchasing goods or services from the franchisee to be sold in the franchiser's home market.

it requires the franchisee to pay a royalty in return for using the franchiser's intellectual property and receiving managerial support.

Octagon Inc., is an American oil company. It uses the process of hydraulic fracturing for drilling natural gas from several thousands of feet below the surface of the Earth. Although hydraulic fracturing complies with business regulations, Octagon Inc. has faced angry protests from environmental groups who claim that this process adversely affects the environment. Given this information, it can be said that Octagon Inc.'s actions are: ethical but illegal legal but unethical illegal and unethical ethical and legal

legal but unethical

Sanctity is a non-profit group that works toward increasing female literacy globally. It strives to promote women’s education in developing nations. Its members are engaged in providing training and advisory services to schools and colleges in developing nations. Sanctity is funded and managed by several governments worldwide. Given this information, it can be said that Sanctity is a _____. sole proprietorship multilateral organization limited liability company multinational corporation

multilateral organization

The government of Kuseria, a country in West Asia, has formulated a set of principles, ideas, and doctrines to establish and control social order in the country. Given this information, it can be said that the government of Kuseria has created a(n) _____. political ideology economic ideology nationalist ideology cultural ideology

political ideology

A(n) _____ consists of the principles, laws, and procedures relating to a particular form of government. cultural system economic system political system social system

political system

The increased promotion of free-market policies in China refocused national investment toward sectors that are strategically important to the country's economic stability. The result has been privatization of state-owned enterprises. expatriation of in-country foreign entities. organization of labor to protect workers. collective ownership of financial markets.

privatization of state-owned enterprises.

In Chiresia, a country in Western Africa, the government controls the right to mine all the minerals under the surface of land irrespective of who owns the land. This scenario illustrates that the government of Chiresia has denied _____ to land owners. suffrage rights political rights property rights riparian rights

property rights

Raising the reserve requirement ________. increases the total value of loans banks can make fuels spending and investment reduces the availability of credit for businesses releases money into the economy

reduces the availability of credit for businesses

Deregulation affects international business by _______. removing a regulatory burden increasing government oversight increasing market regulations removing market forces

removing a regulatory burden

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

round world

In the context of international business, unlike firms that are reactive, firms that are proactive _____. engage in actions that attempt to minimize damage to their reputation avoid engaging in corporate social responsibility (CSR) initiatives seek to build capabilities that build a reputation for ethical conduct seek to build capabilities that let them quickly respond to social pressures

seek to build capabilities that build a reputation for ethical conduct

Many organizations are now turning to practices that reduce waste, recycle metal, glass, plastics, and electronics, and cut greenhouse gas emissions. These practices are called _____ business practices. sustainable profitable unethical futuristic

sustainable

A group of pirates from Sukleis, a country in Southern Europe, seized an oil tanker for ransom, off the Mediterranean Sea. The oil tanker belonged to Kidero, another country in Southern Europe. The pirates were captured by the navy of Kidero. In the context of international law, it can be said that: the costs of prosecuting the captured pirates are less. the captured pirates can be prosecuted under the law of the sea. the captured pirates cannot claim asylum under any circumstances. the nationality of the victims is an invalid basis for assigning jurisdiction.

the captured pirates can be prosecuted under the law of the sea.

Under socialism ________, while under communism ________. individuals own capital; the central government plans the economy workers organize the economy; the central government plans the economy the central government plans the economy; individuals own capital the central government plans the economy; workers organize the economy

the central government plans the economy; workers organize the economy

Privatization is the process in which ________. the government builds private companies for foreigners to purchase the government converts government resources to private resources the government keeps public information private none of these

the government converts government resources to private resources

In a greenfield venture, _____. the parent company allows the child company to use its trademarks, patents, copyrights, or expertise the parent company builds new plants or offices and then hires employees when it enters the market the parent company buys an established company in a foreign country two or more companies jointly own a third, separate company

the parent company builds new plants or offices and then hires employees when it enters the market

Julio is a popular movie star in Gisonia, a country in Southern Europe. He was recently involved in a bar fight and was charged with battery. Julio faced the same consequences for the crime he committed as the rest of the country's general population. This scenario exemplifies _____. diplomatic immunity the rule of law arbitration the rule of the individual

the rule of law

The Gini coefficient measures ________. the rate of inflation the discount rate the wealth distribution the standard of living

the wealth distribution

In Jiledina, a country in Southern Europe, laws are based on Christian doctrines. The laws of the country govern crime, politics, business contracts, and religious observances. Given this information, it can be said that Jiledina operates under _____. customary law common law theocratic law commercial law

theocratic law