International Buisness (Test One)

The North American Free Trade Agreement was formed in 1994 among

Canada, Mexico, and the United States

Some countries consider bribes to be

Compensation for work that would otherwise not be completed by underpaid government workers

which of the following best illustrates the globalization of production?

Daily Diamonds, an American jewelry manufacturer, buys diamonds from South Africa and exports them to India for the cutting process.

Which of the following is most likely to be the result of a country having lax intellectual property laws?

Firms will be reluctant to enter into such a country

If GNI adjusted for cost of living in China is about $13,000 while GNI adjusted for cost of living is about $56,000 in the United States, then

Americans enjoy a higher standard of living

According to the __________ it is illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority

Foreign Corrupt Practices Act

___________ measures the total annual income received by residents of a nation

Gross national income

which of the following best exemplifies an entrepreneur

Javier purchased an invention made by his friend to start a company hat processes plastic bags into synthetic cloth

Richard purchased a computer for $600 in 2015. Compared to the $900 computer that he had purchased way back in 2012, the new one seems to be more efficient in terms of the price he has paid and the power of the microprocessor technology. This is best explained by:

Moore's Law

which of the following countries has seen a relative decline in its share of world output between 1960 and 2014?

United States

Which of the following was established to ensure that nation-states adhered to the rules laid down in trade treaties?

World Trade Oranization

The organization of approximately 185 countries that have all signed treaties to protect intellectual property rights is know as the

World intellectual property organization

in the context of cost, which of the following can be considered as the most attractive market or investment site?

a country that has a well-developed body of business contract law

Capricorn Creative Inc., a U.S. based advertising firm, was the first in the advertising industry to identify the growth potential of Brazil and to make huge investments in it's economy. As a result, the firm was able to build brand loyalty and gain experience in that country's business practices. In the language of business strategy, Capricorn Creative has typically benefited from:

a first-ever advantage

John Smith a U.S. based businessman, paid the equivalent of $20 to an official of the country of Murudi to expedite the overnight delivery of critical documents. When questioned, John Smith claimed this was not a bribe. The $20 is an example of

a grease payment

ABC company, which is headquartered in the United States, has production plants in Mexico and Vietnam. According to this information, ABC company is

a multinational enterprise

which of the following nations is most likely to be unappealing as a place for doing business?

a nation that has a totalitarian political system

As a result of _____, large amounts of economic activity in India are unrecorded and the official GDP figures of the country fail to tell the entire story of the economy.

active bartering

which of the following statements is a general implication of globalization

as a result of globalization, a severe crisis in on region of the world can affect the entire globe

which of the following of the Cold War are has vanished

bipolar world

which of the following is a law system based on a detailed set of laws organized into codes

civil

A legal system which is based on a detailed set of laws organized into codes is referred to as a

civil law system

The needs of society as a while are generally viewed as being more important than individual freedoms when emphasis is on

collectivism

which of the following legal systems is most likely to be based on tradition, precedent, and custom?

common law

which of the following is a form of totalitarianism which advocates that socialism can be achieved only through a totalitarian dictatorship?

communist totalitarianism

Those who believe that socialism can be achieved only through violent revolution and totalitarian dictatorship are called

communists

product safety and product liability laws are enforced to protect

consumers

which of the following is most likely to be observed in today's global economy?

continued rise in the share of world output accounted for by developing nations such as China and India

which of the following refers to documents that specify the conditions under which an exchange is to occur and detail the rights and obligations of the parties involved?

contracts

A composer can protect an original musical score from being copied and sold by someone else by acquiring for the score a

copyright

you can adjust GNI per capita by purchasing power to account for differences in the

cost of living

Which of the following services CANNOT be outsourced to foreign nations?

delivering closing arguments for a lawsuit

Which of the following refers to a political system in which the government is by the people, exercised either directly or through elected representatives?

democracy

in the contest of global economy, which of the following has been widely accepted since the late 1980s?

deregulation of economies

Which of the following has been reduced as a result of globalization?

differences in material culture

an argument in support of the falling barriers to international trade and investment is that the falling barriers

drive the global economy toward greater prosperity

Generally, the costs and risks associated with doing business in a foreign country are typically lower in:

economically advanced countries

ABC Toys, a U.S. - based toy manufacturer, has set up a manufacturing plant in Hong Kong. This is an example of

foreign direct investment

What is the shift toward a more integrated and interdependent world economy called?

globalization

Which of the following refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors such as labor, energy, land, and capital?

globalization of production

in a pure command economy, the prices at which goods and services are sold are planned by the

government

A payment made to expedite or to secure the performance of a routine governmental action is called a

grease payment

Which of the following does the U.S. law and OECD convention allow as an exception?

grease payments or speed money

which of the following measures the total annual income received by residents of a country and is regarded as a yardstick for the economic activity of a country

gross national income

Some economists support the practice of paying small bribes based on the argument that they

help promote economic growth

Globalization opponents argue that "exporting jobs" to low wage nations has contributed to

higher unemployment in wealthy in wealthy advanced economies such as the United States

When the industry practice was to charge a fee for each DVD rented by the customer, Netflix pioneered the subscription method, a new way to rent DVDs that was cheaper. This is an example of:

innovation

Patents, copyrights, and trademarks establish ownership rights over what type of property?

intellectual

Products of the mind, such as computer software, a screenplay, a music score, or the chemical formula for a new drug, constitute:

intellectual property

Michelle, an Italian fashion designer, sells her merchandise by exporting it to the United States, United Kingdom, and Brazil. According to this information, Michelle is most likely involved in

international trade

Due to strong legal protection of property rights, businesses and individuals will:

invest more in innovations

For foreign direct investment (FDI) to occur, a firm should primarily

invest resources in business activities outside its home country

The practices of bribery

is a normal part of business in some countries

which of the following is a typical function of a trademark?

it allows merchants or manufacturers to designate and differentiate their products

How does privatization help stimulate gains in economic efficiency?

it provides incentives to new private owners to search for increases in productivity and to enter new markets

When Galaxy Ventures, a real estate company, entered the low cost housing business, the market was already saturated with other players. Thus, the company was forced to exit the market due to lack of customer loyalty and substantial dividends. Which of the following is a term used to described the situation faced by the company?

late-mover disadvantages

MedPlus Incorporated, based in the United States, hesitates to enter into a joint venture with Azpak Limited, a Sri Lankan company, due to inadequate protection of intellectual property rights. MedPlus is trying to avoid what type of risk?

legal

what type of risk can be defined as the likelihood that a trading partner will opportunistically break a contract or expropriate property rights?

legal

Although China and India are very large markets when measured by number of consumers, they are relatively small markets when measured in economic terms due to their

limited purchasing power

countries that emphasize individual goal over collective goals tend to have what type of economic system?

market

which of the following refers to an economic systems in which the interaction of supply and demand determines the quantity in which goods and services are produced?

market

Royal Teas, a UK based company employing just 30 people worldwide, generates $1.5 million in revenues of which 60 percent comes from exports to Asian countries. In this context, Royal Teas is most likely classified as a

mini-multinational firm.

in what type of economy are certain sectors of the economy left to private ownership and free market mechanisms, while in other sectors there is significant state ownership and government planning?

mixed

If a country wants to improve its attractiveness as a place for doing business and as an investment site, it should:

move toward a market-based system

Your U.S.-based company wants permission to build a factory in a foreign country. You have been asked to pay a bribe in order to get the paperwork approved. You should

not pay because doing so is prohibited by the Foreign Corrupt Practices Act

ABC Medical Corporation has developed a new medication to treat a rare disease. Which type of legal protection grants ABC Medical Corporation exclusive rights for a defined period to the manufacture, use, or sale of the new medication?

patent

which of the following grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale of that invention?

patent

Black economy is most likely to be prevalent when:

people engage in barter agreements to avoid paying taxes.

When social unrest and disorder in a country causes drastic changes in its business environment that adversely affect the profit and other goals of a business enterprise, the business enterprise is said to be facing which of the following types of risk

political

in economic terms, the long-run monetary benefits of doing business in a country are most likely to be a function of the

present wealth of consumers of the country

which of the following creates an environment that is conducive to product and process innovations and to entrepreneurial activity?

privatization

which of the following movements started in great Britain in the early 1980s when then Prime Minister Margaret Thatcher started to sell state-owned assets such as the British telephone company?

privatization

which of the following type of laws hold a firm and its officers responsible when a product causes injury, death, or damage?

product liability

The motive behind the high tariffs imposed by nations on imports of manufactured goods, prior to World War II, was to

protect domestic industries from foreign competition

intellectual property rights are intended to

protect original ideas/works

the philosophy behind intellectual property rights is to

reward the creator of an idea

The advent of containerization has

significantly lowered the costs of shipping goods over long distances.

GNI figures are helpful in understanding an economy because they

tell us how poor a country is relative to another

the absence of a legal system that protects property rights and the lack of machinery to enforce that system in a market economy usually results in

the lack of incentive to engage in economic activity

Gerald bought his son, David, a computer two years ago. Recently, he decided to buy his daughter, Julian, a computer of her own. In the context of the two-year gap between the purchase of both the computers and Moore's law, it is most likely that:

the microprocessor in Julian's computer will be more advanced in terms of power tan that of David's

Which of the following has seen a positive change from 1960 to 2014?

the share of would output accounted for by developing nations

Both China and India have achieved high growth rates despite relatively weak property rights regimes and high levels of corruption, because of:

the shift toward a market-based economic system

A form of government in which political power is monopolized by a party, group, or individual that governs according to religious principles is called what type of totalitarianism

theocratic

Jewish law is an example of what type of law system?

theocratic

Why was the World Bank set up?

to promote economic development

which of the following is a form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties?

totalitarianism

which of the following protects the Nike "swoosh" logo form being used by any other shoe manufacturer?

trademark

Star Volans Inc. is planning on expanding its business globally. In terms of the costs involved in conducting business in a country, it will be most economical for the company if it chooses a country:

where politicians are held accountable by the electorate