International Business Exam 1

Which of the following is an example of deregulation?

A country that encourages foreign direct investment.

Which of the following statements is true about an international business?

An international business must find ways to work within the limits imposed by government intervention.

Which of the following countries has been the largest recipient of foreign direct investment and received about $60 billion to $100 billion a year in inflows in 2004-2009?

China

Which of the following is NOT an example of internal stakeholders?

Customers

Peoples' right to protest on issues of accountability in public expenditure would be possible in a _____ political set-up.

Democratic

_____ involves removing legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate.

Deregulation

Many states in Asia, Latin America, and Western Europe have shifted away from a mixed economy to a market-based economy. Which of the following measures is most likely to be promoted by such states?

Deregulation of the economy

_____ are the routine conventions of everyday life.

Folkways

Which of the following is a risk associated with globalization?

Global financial contagion

Which of the following is a feature of a democracy?

Governance by people or elected representatives

Which of the following is a consequence of the emphasis on individual performance in many Western societies?

High degree of managerial mobility

Which of the following is a measure that was developed by the United Nations to measure the quality of life in different nations?

Human Development Index

Which of the following statements about mores is true?

In many societies, certain mores have been enacted into law.

Which of the following philosophies can be traced back to the ancient Greek philosopher Aristotle?

Individualism

Which of the following is true about International Monetary Fund?

It is seen as the lender of last resort to nation-states whose economies are in turmoil.

Which of the following statements is true about the United Nations Universal Declaration of Human Rights?

It transcends national borders.

Modern socialism has been popularized largely through the work of ____.

Karl Marx

Which of the following statements about the use of spoken language is NOT true?

Most people prefer to converse in English rather than their own language.

Which of the following factors hinders globalization of consumer goods market?

National differences in tastes and preferences

Which of the following statements is true about Samuel Huntington?

Samuel Huntington argues that the rise of Islamic fundamentalism is a response to the alienation produced by modernization.

What is the total cumulative value of foreign investments best referred to as?

Stock of foreign direct investments

_____ is required for a business environment to be conducive to innovation and entrepreneurial activity.

Strong legal protection of property rights

Which of the following was designed to allow GM to operate ethically in South Africa as long as the company did not obey the apartheid laws in its own South African operations?

Sullivan principles

_____ have/has the most to gain from reductions in agricultural tariffs and subsidies that are a part of the Doha agenda.

The world's poorer nations

The _____ was established on October 24, 1945, by 51 countries committed to preserving peace through international cooperation and collective security.

United Nations

The ______ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states.

World Trade Organization

A free market economy in which property rights are protected leads to subsequent economic growth, which often leads to the establishment of:

a democratic regime

For privatization to work, it must also be accompanied by:

a general deregulation of the economy.

The righteous moralist suggests that:

a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

Cultural relativism suggests that

a firm should adopt the ethics of the culture in which it is operating

A number of econometric studies have found consistent evidence of a hump-shaped relationship between income levels and pollution levels. According to this, as an economy grows and income levels rise:

after a while the pollution levels decrease

A situation in which none of the available alternatives seems morally acceptable is called:

an ethical dilemma

Cross-cultural literacy refers to:

an understanding of how cultural differences can affect business.

A change in political regime in a country can result in laws that _____ to international businesses.

are less favorable

A common law system is different from a civil law system because:

in a common law system a judge has the power to interpret the law, while in a civil law system a judge has the power only to apply the law.

Class-based conflict between workers and management in class-conscious societies can lead to:

increased costs of doing business.

The social organization of Western society tends to emphasize on:

individual achievement

Totalitarianism

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

Supporters of globalization maintain that the apparent decline in real wage rates of unskilled workers:

is due to technological changes that create greater demand for skilled workers.

Economic growth appears to be a function of a country's capacity for growth and ___________.

its free market system

In some countries, the official GNI per capita measured at PPP data does not reflect the actual total annual income because:

large amounts of economic activity may be in the form of barter agreements.

The likelihood that a trading partner will opportunistically break a contract or expropriate property rights is called a(n) ____.

legal risk

Globalization of markets results in markets becoming ____.

less diverse

Which of the following is a characteristic of a command economy?

limited international trade

The World Trade Organization promotes ____.

lowering barriers to cross-border trade and investment

Early outsourcing efforts were primarily confined to ____.

manufacturing activities

In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning.

mixed

The political economy of many of the world's nation-states has changed radically since the late 1980s. All of the following are trends that have been evident EXCEPT:

mixed economies are fast replacing market economies

BP, one of the world's largest oil companies, has made it part of the company policy to undertake "social investments" in the countries where it does business. There was no economic reason for BP to make this social investment, but the company believes it is morally obligated to give something back to the societies that have made their success possible. BP's actions are an example of:

noblesse obligation

The Kantian approach to ethics suggests that:

people should be treated as ends and never purely as means to the ends of others.

Facilitating payments are:

permitted under the amended Foreign Corrupt Practices Act.

Which of the following factors is NOT likely to make a country a more attractive location for international business?

planned economies

The General Agreement on Tariffs and Trade (GATT) was responsible for ____.

policing the global marketplace

Interdependent political, economic, and legal systems of a country make up its:

political economy.

The _____ dimension of Hofstede's study explores how a society deals with the fact that people are unequal in physical and intellectual capabilities.

power distance

The sale of state assets through an auction is most likely to lead to ____.

privatization

Since the collapse of communism at the end of the 1980s, the erstwhile communist nations have transformed their economies by globalizing their markets. This involves ____.

privatizing state-owned enterprises

Safety standards to which a product must adhere are set by:

product safety laws.

The United Nations Universal Declaration of Human Rights, related to employment, upholds all of the following EXCEPT:

prohibition of trade unions

Violation of property rights done through legal mechanisms such as levying excessive taxation and requiring expensive licenses or permits from property holders is called _______.

public action

A theocratic law system is one in which the law is based on:

religious teachings.

The World Trade Organization has estimated that the developed nations of the world can raise global economic welfare by $128 billion by:

removing subsidies given to their agricultural producers.

According to Amartya Sen, development should be:

seen as a process of expanding the real freedoms people experience.

Which of the following is not included in world merchandise trade?

services

Which of the following refers to the extent to which individuals can move out of the strata into which they are born?

social mobility

The idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences is known as:

social responsibility.

A group of people who share a common set of values and norms form a:

society.

According to Hernando de Soto, which of the following factors is essential for the developing world to be able to reap the benefits of innovation and entrepreneurship?

strong property rights

According to ____, the social responsibility of business is to increase profits, so long as the company stays within the rules of law.

the Friedman doctrine

According to political scientist Samuel Huntington, the rise of Islamic fundamentalism is a response to ____.

the alienation produced by modernization

Justice theories of business ethics focus on:

the attainment of an equitable distribution of goods and services.

Hofstede's uncertainty avoidance dimension considered:

the extent to which different cultures socialized their members into accepting ambiguous situations and tolerating uncertainty.

A civil law system tends to be less adversarial than a common law system because ____.

the judges' decisions are based on detailed legal codes

The utilitarian approach to business ethics suggests that:

the moral worth of actions or practices is determined by their consequences.

Mores are:

the norms that are seen as central to the functioning of a society and its social life.

The financial crisis in the U.S. in 2009 was triggered by ____.

the problems in the US subprime mortgage lending market

Norms refer to:

the social rules and guidelines that prescribe appropriate behavior in particular situations.

In all of the following scenarios, the costs of doing business in a country tend to be greater, EXCEPT where:

there are limits or caps on damage awards.

Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of all of the following reasons EXCEPT:

they are psychologically and geographically closer to the parent company

The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation.

tragedy of the commons

According to Islam, those who hold property are regarded as:

trustees.

External stakeholders:

typically comprise customers, suppliers, lenders, etc.

In the last two decades, Latin American countries like Brazil, Mexico, and Chile have ____.

welcomed foreign investment

Rawls' philosophy that inequalities are justified if they benefit the position of the least advantaged person is known as the:

difference principle

A major difference between Buddhism and Hinduism is that unlike Hinduism, Buddhism:

does not support the caste system.

A market economy encourages innovation because ____.

economic freedom leads to greater incentives for innovation

The state can expropriate the profits from innovation through legal means, such as ____.

excessive taxation

The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions excludes:

facilitating payments made to expedite routine government action.

A political system that prioritizes the needs of the society over individual freedoms is called ____.

collectivism

In a(n) _____ economy the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold.

command

Under the ____, cases are judged with reference to three characteristics: tradition, precedent, and custom.

common law system

The ________ believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.

communists

Which of the following provides exclusive legal rights to authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit?

copyrights

A multinational company is accused of paying bribes to the government of a host country to obtain permission to build a production factory. The public relations manager of the company defends the company's actions as being ethically sound; he states that in the host country, paying bribes to government officials is the accepted norm and is in keeping with the social practices in the host country. The public relations manager is using which of the following philosophical doctrines to defend the actions of the company?

cultural relativism

In its extreme viewpoint, _____ suggests that if a culture supports slavery, it is all right to use slave labor in the country.

cultural relativism

The system of values and norms that are shared among a group of people and that when taken together constitute a design for living best defines:

culture.

In many countries entrepreneurs and other business leaders, eager to protect their property rights and ensure the dispassionate enforcement of contracts, had pushed for ____. This contributed to a wave of democratic revolutions during the late 1980s and early 1990s.

democratic reforms

Hofstede's dimension of Confucian dynamism:

captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors.

A _____ system is based on a very detailed set of laws organized into codes.

civil law

An upper-middle-class manager tends to have a hostile relationship with the working-class employees in the firm because of his tendency to perceive himself as superior to them based on his class background. In this example, the manager exhibits:

class consciousness.