Multinational Business Midterm

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

A guideline for responsible action by a firm in its operations worldwide is a(n) ________. A) code of conduct B) corporate monitoring policy C) education program D) honor code

Eileen, a manager at an international restaurant chain, wants to know if it will be most cost effective to buy 1,000 pounds of sugar in Country X or in Country Y using U.S. dollars. Which of the following is Eileen most likely trying to determine? A) purchasing power parity B) economic growth rate C) gross domestic income D) gross national product

Ellen, a U.S. citizen, worked for a U.S. firm in Germany for four years and was transferred back to the firm's home office in Chicago two months ago. Ellen feels significant dissatisfaction with her job and life in Chicago, which is most likely a result of ________. A) reverse culture shock B) polycentrism C) culture shock D) ethnocentrism

In which of the following countries would business activity, given its status as a "not free" marketplace, be under the greatest government control? A) Vietnam B) Pakistan C) India D) Brazil

Managing and cultivating diverse teams is facilitated by first encouraging team members to ________. A) understand each other's culture before dealing with the tasks at hand B) jump into the task allowing the team members to react and adapt to each other C) deal with fellow team members as they would in their own culture D) establish strict rules on how the task will be performed

Most counterfeit goods are made in markets in which ________ is the basis of the legal system. A) the rule of man B) the rule of law C) religious doctrine D) corporate precedent

The term "________ culture" describes a country in which the norm is a money-and-things orientation and a belief that it's better to "live to work" than to "work to live." A) high masculinity B) physiological C) non-fatalistic D) high-femininity

The trade theory that says a country should export more than it imports is known as ________. A) mercantilism B) absolute advantage C) comparative advantage D) import substitution

The trade theory that says countries should concentrate production on those products using their most abundant production factors is the ________. A) factor proportions theory B) theory of comparative advantage C) theory of absolute advantage D) theory of nontradable goods

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

Which of the following problems in China is blamed for the annual loss of $250 billion by American MNEs? A) intellectual property violations B) environmental hazards C) child labor violations D) embezzlement

Which of the following statements about GE and its "Green is Green" movement is true? A) GE is responding in part to the fact that it is operating in many countries which require compliance with higher environmental standards than exist in the United States. B) GE has decided to develop new products that are environmentally friendly rather than adopt internal policies to reduce greenhouse gas emissions. C) GE has moved aggressively to reduce greenhouse gas usage internally but has not been able to develop commercially viable "clean" technologies. D) GE considered joining the U.S. Climate Action Partnership but decided the group was too radical in its approach to reducing greenhouse gas emissions.

________ people account for the largest percentage of global production. A) English-speaking B) Mandarin-speaking C) French-speaking D) Spanish-speaking

A 1977 U.S. law that outlaws bribery payments by U.S. firms to foreign government officials is known as the ________. A) Anti-Bribery Act of 2004 B) Foreign Corrupt Practices Act C) Zero Tolerance Initiative D) Sarbanes-Oxley Act

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

A culture in which people prefer to finish one task before starting another is most accurately characterized as which of the following? A) low-context B) monochronic C) pragmatic D) high power-distance

A major criticism of offshoring is that it ________. A) increases production costs B) exchanges good jobs for bad jobs C) threatens the sovereignty of larger countries D) allows companies to avoid payment of any taxes

According to the PLC theory, at an early stage of a product's life cycle the product is likely to be made in a more ________ method than in its later stages. A) capital-intensive B) labor-intensive C) land-intensive D) low-cost

According to the teleological approach, individuals base moral decisions on ________. A) personal and social responsibilities B) consequences of an action C) cultural value systems D) opinions of peers

El Salvador has a population density of about 620 people per square mile and neighboring Honduras a population density of about 115 people per square mile. According to the factor proportions theory of trade, one would expect El Salvador's exports to Honduras to ________. A) have a lower labor-to-land ratio than its imports from Honduras B) have a higher labor-to-land ratio than its imports from Honduras C) embody more capital per square mile than its imports from Honduras D) embody more capital per worker than its imports from Honduras

Evaluating the importance of potential clients or partners by the way they dress is an example of using ________. A) pragmatism B) silent language C) polychronism D) fatalism

Expatriate managers located in cultures characterized by ________ have noticed that local employees are highly motivated by retirement programs. A) low uncertainty avoidance B) high future orientation C) low masculinity D) high power distance

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

Premium Manufacturing is planning to expand operations overseas. Executives at the firm are considering a number of different countries. Which of the following countries would most likely have the lowest start-up costs? A) India B) China C) Japan D) Guatemala

Presently, which of the following countries is BEST characterized as a pure example of a command economy? A) Russia B) North Korea C) China D) Vietnam

Recently, the Economist Intelligence Unit investigated the status of democracies around the globe. Relying on 60 indicators that focus on the performance of free elections, civil liberties, government functioning, political participation, and political culture in a country, the study found that ________. A) almost all of the world's democracies are full democracies B) nearly half of the world's democracies qualify as "full" or "flawed" democracies C) less than a quarter of the countries studied are outright authoritarian regimes D) most democracies are hybrid political systems that share theocratic and totalitarian characteristics

Reebok pays a royalty to the German Soccer League to use the team's logo on t-shirts that it sells. Reebok and the German Soccer League most likely have a ________. A) turnkey operation contract B) licensing agreement C) portfolio investment D) joint venture

The saying "When in Rome, do as the Romans do" applies to the ________ approach. A) teleological B) relativism C) normativism D) deontological

Which of the following countries is the best example of a mixed economic model? A) United States B) France C) United Kingdom D) Australia

Which of the following is NOT true about cultural diversity? A) Companies may gain competitive advantages by bringing together people of diverse backgrounds. B) Cultural diversity is most successful when domestic and foreign firms establish joint ventures. C) Cultural diversity may help a company gain deeper knowledge about products and services. D) The process of bringing people of different national cultures together is often difficult.

Which of the following is a primary business objective for pursuing ethical behavior? A) avoiding industrial sanctions B) developing competitive advantages C) developing creative advertisements D) discouraging false commitments to the firm

Which of the following is an example of an acquired group membership? A) national origin B) religion C) gender D) race

Which of the following is an indication of the increased globalization of business since the end of World War II? A) Foreign trade has largely replaced foreign ownership as a means of conducting international business. B) World trade has grown more rapidly than world production. C) Globally, consumers now depend on foreign output for more than half their consumption. D) Countries have increased their import restrictions to counter the rising tide of imports.

Which of the following is one of the primary business objectives for pursuing ethical behavior? A) avoiding industrial sanctions B) developing competitive advantages C) developing creative advertisements D) discouraging false commitments to the firm

Which of the following is the MOST accurate statement about culture? A) Cultural variables can easily be isolated from other factors such as economic and political conditions. B) Although most cultural variables are universal, the forms these variables take differ from culture to culture. C) Most cultural variables are superficial and can easily be influenced by environmental factors. D) Within a culture, everyone responds to particular cultural variables the same way.

Which of the hypothetical new products, if successful, would most likely diffuse its production and sales according to the product life cycle theory? A) a Ferrari sports car selling for $200,000 to a niche, upper-end market B) a Sony television that receives global transmissions without a satellite dish or cable connection, introduced at a high price but targeted eventually for sale to a mass market C) a new Diet Coca-Cola soft drink flavored with cranberries D) a Kyocera plastic chip carrier, which is expected to be quickly obsolete because of innovations

Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes? A) shareholders B) society C) employees D) customers

________ is a general, sustained rise in prices measured against a standard level of purchasing power. A) Deflation B) Inflation C) Expansion D) Reflation

________ political risks arise from political actions, such as public corruption or a partisan judicial system, that interfere with transactions between sellers and buyers and that can significantly raise the costs of getting things done. A) Systemic B) Procedural C) Catastrophic D) Distributive

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

A flag of convenience is ________. A) the declaration that a product is made in a country that has easier legal access to a given foreign market B) a designation for products originating within a particular trading group C) the registration of a ship by a shipping company in a country that charges low taxes D) the indication that a shipping organization can sail in international waters

Assume that company executives at the firm would like to increase sales by expanding into an international market. Which of the following factors, if true, best supports a decision to expand sales globally? A) It can offshore most of its production. B) It can obtain all of its resources for the same price overseas. C) Its costs of making additional sales would not increase disproportionately. D) The foreign market has higher real interest rates.

Contact among countries brings about cultural change, which is a process called ________. A) cultural collision B) cultural imperialism C) cultural diffusion D) polycentrism

Countries often use local content regulations to determine the proportion of the product that must be made in the local market versus made outside of the local market in order to ________. A) maximize product safety B) ensure a cultural fit C) favor domestic companies D) relieve production pressures on local companies

If an MNE convinced a popular priest that its vitamin-enriched soft drink would benefit parishioners' health, the MNE would be using ________ to help bring about change. A) participation B) reward sharing C) an opinion leader D) materialistic motivation

Managers should be more precise in their directions to subordinates when ________. A) the company has a philosophy of geocentrism B) the society believes age equals wisdom C) uncertainty avoidance is high D) power distance is low

The belief that there are universal standards of behavior that all cultures should follow is called ________. A) humanism B) relativism C) normativism D) naturalism

The comparative advantage theory holds that a country will gain from trade ________. A) when it exports products for which it has an acquired advantage and imports products for which another country has a natural advantage B) if it exports goods it can produce more efficiently than other countries and imports goods other countries can produce more efficiently than it can C) even though it can produce all goods more efficiently than other countries D) if it exports products using its abundant production factors in exchange for products for which it has scarce production factors

The diamond of national advantage would be best used to answer which of the following questions? A) How do developed countries prevent the trade of blood diamonds? B) How can developing countries create a significant trade surplus? C) Why do specialized competitive advantages differ among countries? D) Why do most innovative products originate in developed countries?

The pushback against democracy has powered a rise in totalitarianism, a situation that is likely to include which of the following? A) increasing adoption of the principles of the rule of law B) growing demands worldwide for greater fairness and justice in legal proceedings C) increasing adoption of the principles of the rule of man D) suppression of state-control in the direction of legal activities

The shifting of national borders has most likely created which of the following situations for international business? A) It has left rural residents more isolated from technology. B) It has complicated the understanding of behavioral factors affecting business. C) It has increased physical barriers to exporting. D) It has slowed communications between a company's headquarters and foreign operations.

What is the primary concern regarding anti-corruption measures in the EU? A) resistance to an official anti-fraud commission B) inability to adopt a corruption definition C) lack of uniform laws across nations D) failure to conduct internal auditing

Which of the following best defines international business? A) It includes all economic flows between two or more countries. B) It includes all private economic flows between two or more countries. C) It includes all business transactions involving two or more countries. D) It includes all business transactions in countries other than your home country.

Which of the following countries has a collectivist orientation? A) Canada B) Australia C) Japan D) Netherlands

Which of the following is NOT a characteristic of capitalism? A) private ownership of assets B) right to profit from individual effort C) state control of factors of production D) private control of investment

Which of the following is a reason for global companies to NOT take religious beliefs into account? A) Religion has an impact on almost every business function. B) A company could get in trouble with local religious authorities. C) A manager's religious training should be implemented in the company he/she manages. D) Religion may influence consumer behavior.

Which of the following is a statement that summarizes all economic transactions between a country and the rest of the world during a given period of time? A) trade deficit B) Gini coefficient C) balance of payments D) purchasing power parity

Which of the following types of political risks often are caused by ethnic conflict or civil disorder and include those random political developments that adversely affect the operations of all companies in a country? A) systemic political risk B) procedural political risk C) catastrophic political risk D) distributive political risk

Which of the following would most likely be used in a totalitarian system to promote unconditional support for the official ideology? A) privately owned media outlets B) a parliamentary system C) state control of the education system D) a representative legislative body

Which term refers to two or more companies that share ownership of an FDI? A) turnkey operation B) transnational firm C) joint venture D) franchise

Why is the argument that "anything legal is ethical" most likely insufficient? A) Everything that is unethical is also illegal. B) The law is an extremely efficient way to solve ethical dilemmas. C) Laws are frequently based on imprecisely defined moral concepts. D) Laws can never be changed; thus, rules for all possible ethical dilemmas are found in the law.

A U.S. firm with manufacturing facilities in Nigeria will most likely be faced with a ________ legal system. A) civil B) common C) customary D) mixed

A company starting out with a global focus, usually because of the international experience of its founders, is called a ________. A) multinational enterprise B) transnational company C) strategically allied company D) born-global company

A firm that concentrates on national cultural differences in terms of averages is more likely to ________. A) underestimate market demands B) increase political risks C) seek cultural collision D) overlook outliers

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

Bantam Enterprises, a multinational enterprise, makes significant efforts to avoid being perceived as socially irresponsible. What is the most likely reason for this? A) Social irresponsibility can lead to labor strikes by international unions. B) Socially irresponsible companies usually have fewer exports and more imports. C) Cultural barriers increase for companies that are socially irresponsible, which hinders expansion into additional countries. D) Social irresponsibility can lead to negative publicity from nongovernmental organizations, which could hurt a company's reputation.

Barkely Enterprises, a U.S. manufacturer, received assistance from the Overseas Private Investment Corporation when it expanded operations into Saudi Arabia. Which of the following types of support did Barkely most likely receive from OPIC? A) financial capital B) cultural training C) legal guidance D) political risk insurance

Based on the hierarchy-of-needs theory, in which of the following would fulfillment of lower-order needs be the best motivator? A) wealthy countries B) Protestant countries C) high femininity countries D) very poor countries

Communism primarily relies on a system of ________. A) private business ownership B) competitive pricing and marketing C) market-generated supply and demand D) government-controlled economic activity

In addition to understanding the laws affecting business in countries where their companies operate, it is most important for managers to understand the ________. A) methods for appointing local judges B) ethical rationale behind the laws C) history of the local legal system D) degree of law enforcement

In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would ________. A) be added to the GNI of the United States as well as to the GNI and GDP of Mexico B) not be added to the GNI of the United States but would be added to the GNI of Mexico C) only affect the computation of GDP and have no bearing on GNI D) be added to the GNI of the United States but not the GNI of Mexico

In which of the following countries would there be the highest likelihood of encountering a bribery situation? A) Germany B) United States C) South Korea D) Russia

The approach a company takes when it bases foreign operations on an informed knowledge of its organizational culture along with home- and host-country needs, capabilities, and constraints is called ________. A) polycentrism B) ethnocentrism C) neocentrism D) geocentrism

The issues that are the foundation of the Ethical Trading Initiative (ETI) include all of the following EXCEPT ________. A) employment is freely chosen B) working conditions are safe and hygienic C) child labor shall not be used D) workers receive hourly wages that are consistent around the world

The more closed a society is, the more important ________ group membership is. A) acquired B) age-based C) education D) ascribed

The most internationally mobile factor of production is ________. A) labor B) management C) long-term capital D) short-term capital

The owner of a U.S. football team and the owner of a Canadian hockey team purchase a British soccer team. This is an example of a ________. A) royalty B) portfolio investment C) turnkey operation D) joint venture

The two main categories in the balance of payments are the ________. A) merchandise exchange account and the services account B) external debt and the unilateral transfers account C) merchandise trade account and the capital account D) current account and the capital account

The view that globalization is inevitable is most likely based on the belief that ________. A) international organizations will replace nation-states B) protesters against globalization will be persuaded to change their views C) people want more global homogeneity of cultures D) technical advances in transportation and communications are highly persistent

U.S. companies monopolize much of the international entertainment media, which largely portrays U.S. products and lifestyles as glamorous and appealing. This situation would most likely be used as an example of ________. A) the stronger work ethic typical of developed countries B) the spread of high-context cultures C) cultural fragmentation D) cultural imperialism

Under the ________ form of totalitarianism, the regime confines itself to political control of the state. It does not regulate the economic and social structure of society. A) fascist B) communist C) theocratic D) authoritarian

Which of the following is a condition that powered the worldwide spread of democracy from 1970 onward? A) Totalitarian regimes delivered acceptable economic progress to their populations. B) Economic advances caused contentment among the working class and minimized the need to push for democratic reforms. C) Many groups were able to successfully challenge the legitimacy of democratic systems. D) Information and communications technologies broke down the ability of the state to control access to uncensored information, especially that from foreign sources.

Which of the following is most likely a basis for a Jamaican natural advantage in international trade? A) product technology developed by a Jamaican company B) high literacy rates among Jamaican citizens C) the use of English as the primary language D) beautiful beaches and climate

Which of the following is most likely a characteristic of a "partly free" country, such as Guatemala, Pakistan, or Tanzania? A) strict religious constraints B) fair election procedures C) respect for civil liberties D) weak rule of law

Which of the following is most likely a true statement about the global economy since the 1980s? A) Socialist governments are intervening more in global exchanges. B) Wealthy countries are exercising total control over emerging markets. C) Developing countries are losing growing shares of their foreign-exchange reserves. D) Emerging economies are adopting the principles and practices of free markets.

Which of the following is most typical of a command economy? A) Consumers have choices of many substitutes for any given product. B) Quality of products and services tends to be consistent. C) The prices of goods and services frequently change. D) Many products are usually in short supply.

Which of the following is permitted by the Foreign Corrupt Practices Act? A) a bribe paid by foreign firms operating in U.S. territories B) a bribe paid by a U.S. firm operating in a foreign country that permits bribes to be paid C) a payment to a foreign government official to influence a customs official D) a payment to a customs official to clear legitimate merchandise

Which of the following is the LEAST likely reason that small countries worry about overdependence caused by globalization? A) A large country on which they depend may pressure them on political matters. B) A large international firm may dictate its terms of operations in a small country. C) A large company may exploit legal loopholes to avoid tax payments. D) A large country may substantially increase its demand for the small country's production.

Which of the following statements is most likely FALSE? A) Developing countries trade mainly with developed countries. B) Developed countries trade mainly with other developed countries. C) Cultural similarity among countries enhances their trade with each other. D) The greater the geographic distance between countries, the greater the trade.

Which of the following undesirable results will most likely occur for a country running a favorable balance of trade? A) higher unemployment B) higher domestic interest rates C) fewer funds to invest abroad D) granting credit that may be risky

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

________ refers to a political system in which government is organized by and accountable to the people. A) Totalitarianism B) Fascism C) Socialism D) Democracy

________ typically results when demand decreases and supply increases. A) Inflation B) Chronic inflation C) Reflation D) Deflation

A civil law system anchors itself in the wisdom of daily experience or, more intellectually, great spiritual or philosophical traditions.

A culture in which people prefer to handle tasks sequentially is a polychronic culture.

A culture with a preference for a problem-solving style that first settles principles is a pragmatic culture.

A joint venture is an example of a portfolio investment.

Political risk insurance is more likely to be purchased by MNEs that apply an active approach to political risk management.

Pursuing responsible behavior for strategic and financial success is an example of relative behavior.

Stockholders are typically more interested in corporate social responsibility than in earning profits.

Studies indicate that employee morale is largely unaffected by a company's corporate behavior.

As exemplified in China, the government in a collectivist society is highly connected to and interdependent with business.

By operating internationally, a company may take advantage of business-cycle differences among countries and thereby reduce its financial risks.

Change agents intentionally cause or accelerate social and cultural change.

Civil conflict, tax discrimination, weak legal systems, and terrorist actions are political risks faced by MNEs operating in foreign countries.

Creolization refers to the mixing of cultural elements that occurs during cultural diffusion.

It is difficult to compare globalization of business over time because shifting national borders have changed the nature of transactions from domestic to international and vice versa.

Laws on local business activities directly influence the operations of domestic and foreign companies in areas such as hiring and firing workers.

Managers need to understand not only the laws of countries where they operate, but also how those laws are enforced.

Most cultural variables are universal.

The four favorable domestic conditions of the diamond of national advantage help to explain how and where globally competitive companies develop and sustain themselves.

The identity of a nation is typically promoted through symbols, monuments, and museums.

The law is often based on imprecisely defined moral concepts that cannot be separated from legal concepts.

The ownership of foreign bonds is an example of a portfolio investment.

The recent expansion of technology has contributed to the growth in international business by creating new products that are important in world trade.

The rule of man, a practice that has been in play for millennia, presumes that the law is the will of the ruler, whether the king, czar, raj, or emperor.

When analyzing the key elements of a country's economic environment, it is best to apply a systems perspective.

Where future orientation is high, people are more willing to delay gratification by investing.

A manager practicing relativism would most likely ________. A) adapt to local conditions instead of implementing home-country practices B) enforce home-country laws on host-country employees and suppliers C) refuse to change company policies and procedures to comply with local norms D) apply universal laws to each country despite local customs and traditions

A worrisome outcome of chronic inflation is that it tends to ________. A) erode confidence in a country's currency B) give central banking officials excessive flexibility to manage monetary policy C) increase the real income of people, thereby inflating their spending and borrowing levels D) lower consumer demand for foreign goods, which triggers lower prices and eventually lower employment

According to Transparency International, companies from which of the following countries are more likely to pay bribes? A) China B) Japan C) Singapore D) Belgium

According to the product life cycle (PLC) theory, production and sales are primarily domestic in the introductory stage because ________. A) businesses need quick market feedback B) tariff reductions remain under negotiation C) international transport costs are too high D) international patents have not been approved

According to the text, which of the following has resulted from GE's Ecomagination initiative? A) rising profitability for many GE products B) increasing doubt among GE's foreign partners C) reducing investments by GE due to poor returns D) improving pollution levels near GE plants in China

Advanced communication systems have contributed to growth in international business by ________. A) enabling better oversight of global operations B) reducing the effects of global competition C) decreasing the cost of cargo transportation D) reducing export regulations

Although there are different views about the purpose of a political system, most analysts agree that an essential task of a political system is to ________. A) integrate the different elements of a society into a functioning unit B) allocate scarce resources among competing users C) develop reasonable attitudes and outlooks within the population D) protect individuals within the country from foreign threats

An economic system is the set of structures and processes that ________ in a country. A) guides the allocation of resources and shapes the conduct of business activities B) directs the movement of specific products to specific consumers C) sets the standards of competitive success for companies in the economy D) stipulates the roles and responsibilities of consumers

Assume a firm plans to expand internationally. If its managers wish to avoid pitfalls caused by differences in "silent language," they should consider differences in ________. A) normal proximity during conversations B) degree of detail expected in written contract C) the meaning of slang words during presentations D) importance of adherence to schedules

Businesspeople seeking to understand more about another culture in order to successfully conduct business within that culture would be best advised to do which of the following? A) observe the behavior of people who have gained respect within that cultural environment B) rely on stereotypes, which are based on averages, to gain an understanding of the culture C) avoid cultural research studies because they perpetuate unjustified stereotypes and behaviors D) memorize the cultural variations that are typically encountered in a specific cultural environment

Carnival Cruise Lines lowers its taxes by all of the following EXCEPT ________. A) hiring host-country nationals who pay no taxes B) taking advantage of taxation laws in foreign countries C) sailing in international waters outside countries' tax jurisdiction D) paying substantial port fees instead of taxes during stopovers

Critics of the view that regionalization will prevail over globalization most likely base their argument on the belief that ________. A) regionalization is a transition stage toward globalization B) neighboring countries are more apt to disagree politically than distant countries C) neighboring countries are too geographically similar to benefit from trade D) business in non-territorial areas is not regional

Ethical dilemmas tend to be ________ for MNE managers than for domestic managers. A) more complicated B) less controversial C) easier to decide D) less common

Factor mobility refers to the movement of which of the following combinations? A) capital, technology and people B) currency, profits and raw materials C) labor, capital and management D) trade, profits and materials

Firms that operate in countries that have adopted the Kyoto Protocol are required to either reduce emissions or ________. A) purchase carbon credits from other firms B) file petitions to appeal the requirement C) cease manufacturing operations D) pay fines to the UN

ION Software is the registered owner of a program designed to help sort and organize incoming and outgoing e-mail. Which of the following legal conventions does ION most likely have? A) intellectual property right B) trademark credential C) patent certificate D) TRIPS permit

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

In a democracy, ________. A) citizens have the right to participate in the decision-making process B) the opportunity to truly participate in the political process is restricted to a select few C) the court system is directly supervised by the political system D) the rights of the individual are merged with the state

According to the PLC theory, what is the most likely reason that companies manufacture products in locations with high labor rates during the introductory stage of a product's life cycle? A) Doing so allows use of long production runs using capital-intensive methods. B) Many consumers are willing to pay high costs for the newest products. C) Transportation costs are reduced by focusing on markets in developed countries. D) Import restrictions prevent production in countries other than the ones making product innovations.

All of the following are areas in which commercial activities take place outside the territory of any nation EXCEPT ________. A) noncoastal areas of the oceans B) the Panama and Suez Canals C) outer space D) Antarctica

All of the following are features of the diamond of national advantage theory EXCEPT ________. A) firm strategy, structure, and rivalry B) strategic trade policy regulations C) related and supporting industries D) demand conditions

Assume an enterprise is considering establishment of a foreign production facility. Which of the following best supports this decision? A) Its foreign competitors have higher production costs than it has. B) Its main competitor successfully opened a foreign plant. C) Its suppliers follow an agglomeration strategy. D) None of its competitors have foreign production facilities.

Assume the following conditions: In the United States it takes 4 units of resources to produce a ton of potatoes and 5 to produce a ton of coal. In Canada it takes 6 units of resources to produce a ton of potatoes and 10 to produce a ton of coal. According to the theory of comparative advantage, ________. A) there would be no basis for trade B) the United States should import potatoes from Canada and export coal to Canada C) the United States should export both potatoes and coal to Canada D) the United States should export potatoes to Canada and import coal from Canada

Between now and 2050, countries undergoing a simultaneous population reduction and an increased percentage of retirees in the population most likely will need more ________. A) imports B) immigrants C) domestic products D) favorable balances of trade

Certain attitudes can link groups, such as managers, from different nations more closely than managers within a given nation. As a result, international businesspeople should most likely ________. A) assume that there are few significant cultural differences among nations B) examine relevant groups when comparing nations C) adopt universal operating methods D) avoid cultural imperialism

Countries with a ________ legal system tend to encourage precise, detailed contracts, whereas countries with a ________ legal system tend to encourage shorter and less specific contracts. A) theocratic; mixed B) common; civil C) civil; customary D) customary; common

Countries with varied climates and varied natural resources generally ________ than countries with less varied climates and natural resources. A) have lower per capita incomes B) depend less heavily on trade C) have more ethnic subgroups D) have higher endowments of capital relative to labor

Creolization refers to ________. A) government efforts to maintain a distinct cultural identity through legislation and language B) the process of mixing elements of an outside culture with those of a national culture C) the use of stereotypes to describe a culture D) changes as cultures evolve over time

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

Cultural change imposed by an alien culture is called ________. A) multicultural ethnocentrism B) cultural imperialism C) collectivism D) high-context

Devon, an accounts manager at a large electronics firm, does not have any direct international responsibilities; however, Devon would most likely benefit from studying international business issues so that he can ________. A) conduct better job interviews B) better understand how foreign operations affect the company's competitive position C) supervise and evaluate subordinates who have global assignments D) understand the legalities of importing and exporting products overseas

During a time of reflation, the government is most likely to ________. A) lower taxes B) print money C) reduce interest rates D) support infrastructure

General Electric has focused on being more "green" in recent years most likely because ________. A) the industry has always looked to GE as a trend setter in green technology B) GE executives believe the firm can strategically align investor and environmental interests C) GE executives realize that the firm can save significant money through the use of solar technology D) the U.S. government has decided to use GE as a test case to see if the adoption of the Kyoto Protocol can actually work for a U.S. firm

History suggests that if the economic crisis worsens, we are likely to see more people question the ________. A) fall of communism B) legitimacy of capitalism C) practicality of mixed market economies D) correlation between economic freedom and prosperity

In a command economy, ________. A) businesses and consumers are assumed to be the best judges of how resources should be allocated B) the government sets goals and determines the price and quantity of what is produced C) different economic sectors coordinate the activities of the federal government D) each enterprise sets its goals before making reports to the central government

In a country's balance of payments, the ________ tracks all trade activity in merchandise. A) capital account B) current account C) payment account D) deficit account

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

In societies where trust is high, ________. A) people tend to be more future-oriented B) business costs are typically lower C) people tend to be more fatalistic D) family businesses are dominant

International businesspeople need to understand social stratification systems where they do business because ________. A) such systems reflect a culture's willingness to accept new products B) such systems indicate who people in a given culture will likely respect more C) the high similarity among countries lets firms effectively use global hiring practices D) what is an ascribed group membership in one country is an acquired one in another

Monique has recently been hired as an accounts supervisor at Ballston Enterprises. She wants to understand Ballston's values and its expectations for employee behavior. Which of the following would most likely provide Monique with this information? A) mission statement B) code of conduct C) vision statement D) employee contract

Most of the world's goods and services are sold ________. A) in international markets B) in the countries where they are produced C) through exports to small countries D) through exports to large countries

Most world trade takes place ________. A) between developed countries and developing countries B) among developed countries C) among developing countries D) between raw material exporters and manufacturing exporters

Neomercantilism describes the approach of countries that try to run a favorable balance of trade to ________. A) build up gold reserves B) achieve a social or political objective C) lower their rates of inflation D) buy raw materials more cheaply

Safe work environments motivate ________; challenges motivate ________. A) individualists; collectivists B) collectivists; individualists C) non-fatalists; fatalists D) materialists; non-materialists

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

The inability of a company to gain foreign production factors to use in its domestic operations most likely ________. A) entices the company to export its own production factors B) stimulates the company to adopt efficient substitute methods of production C) stimulates foreign companies to invest in that domestic market D) causes the company's products to move more rapidly through their life cycles

The recent global financial crisis has interrupted the trend of national economies ________. A) rapidly adopting the command market model B) steadily adopting the free market model C) moving from the mixed to the command model D) turning away from the mixed model

The same automobile company produces Fiats and Ferraris. The company builds an engine plant in China with low production costs for Fiats but not Ferraris. The probable reason is that ________. A) Fiat competes mainly on a focus strategy, whereas Ferrari competes mainly on a mass-market strategy B) Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy C) Ferrari faces global competitors in China, whereas Fiat competes in China mainly against Chinese competitors D) although Ferrari did not build an engine plant, it will use the same Fiat engines in its models

Which of the following assumptions was made in the original theories of absolute and comparative advantage? A) Specialized labor seeks efficiency. B) Labor resources are fully employed. C) Countries pursue objectives other than economic efficiency. D) Production networks enable countries to concentrate on particular functions.

Which of the following best explains Nike's quick response to criticism of unfair employment practices in developing countries? A) retaining employees B) improving public relations C) addressing product safety concerns D) cutting costs in order to improve profits

Which of the following best supports the idea that MNEs should remain in countries that allow child labor? A) MNEs have a positive influence on government employment policies in most foreign countries. B) Many MNEs have substantially improved the working conditions of their foreign plants. C) MNEs are required to pay child workers more than local companies. D) Most MNEs employ local managers to handle cultural differences.

Which of the following has MOST influenced consumers to demand access to foreign-made products? A) Declining global affluence has caused consumers to seek out lower-priced products from abroad. B) Consumers have become more efficient in using media and technologies to compare prices worldwide. C) Fearing that their governments will enact restrictive policies on imports, consumers are stocking up on foreign products before restrictions are put in place. D) Expectations of rising prices of foreign products have caused consumers to seek foreign products before their prices become prohibitive.

Which of the following ideas calls for assessing a country's performance based on factors such as life expectancy, leisure time, and income equality? A) microeconomics B) happynomics C) macroeconomics D) green economics

Which of the following ideas holds that a government should NOT interfere in business affairs? A) collectivism B) laissez-faire C) the rule of man D) pluralism

Which of the following is NOT a common argument for the slowing of future globalization? A) Antiglobalization interests have been successful in electing parties that oppose freer movement of trade or people. B) Technological, transportation, and communication advances will decline in the near future. C) Major countries have either ignored certain international treaties or have refused to sign them. D) The growing split between those who succeed in a global environment and those who do not will foster greater antiglobalization sentiments.

Which of the following is most likely a true statement regarding the rule of law? The rule of law is a hallmark of ________. A) a totalitarian government B) a democratic government C) societies that place ultimate power in the hands of one person D) countries that are considered "partly free"

Which of the following statements would most likely NOT be supported by an advocate of offshoring? A) Offshoring increases the number of high-value jobs in the home countries of offshoring companies. B) Offshoring is fundamentally better for workers than the introduction of labor-saving technologies. C) Workers displaced due to offshoring are able to find new jobs as easily as those displaced by technology. D) There are upper limits to offshoring because of the lack of skilled workers willing to work permanently for low wages.

Which stakeholder group primarily wants additional sales and increased productivity? A) customers B) shareholders C) society at large D) government

29) What is the most likely reason that governments cooperate with each other through treaties, agreements, and consultations? A) to gain an advantageous division of labor B) to be in compliance with United Nations' requirements C) to attack problems jointly that one country acting alone cannot solve D) to assure that all countries get an equitable share of taxes from multinational enterprises

According to the theory of comparative advantage, a country gains from foreign trade even though it may have an absolute advantage in the production of all products because ________. A) the country will forgo producing its less efficient output in order to produce its more efficient output B) workers become more efficient through specialization C) economies of scale will reduce cost D) there will be more incentive to develop cost-saving technologies

According to the theory of success and reward expectation, the greatest enthusiasm for work generally occurs when there is a ________ certainty of success combined with a ________ reward for success compared to the reward for failure. A) high; high B) high; low C) low; high D) low; low

All of the following countries have a totalitarian political system EXCEPT ________. A) China B) Russia C) South Korea D) Saudi Arabia

Although the U.S. film industry depends heavily on revenue in foreign countries, revenue from international markets is usually low for a sports-themed film. This is most likely due to ________ factors. A) political B) geographic C) behavioral (cultural) D) legal

An advocate of the legal-justification standard would most likely assert that the law ________. A) develops slowly in response to evolving societal dilemmas B) protects business activities that are unethical but not illegal C) contains enforceable rules that apply to everyone D) offers necessary moral flexibility for a society

An example of a U.S. merchandise import is an automobile made in ________ and sold ________. A) the United States by a Japanese company; in the United States B) the United States by a Japanese company; outside the United States C) Japan by a Japanese company; in the United States D) Japan by a U.S. company; outside the United States

Contrary to the product life cycle theory, there has been an increased tendency for companies to ________. A) sell products only in their home markets throughout the cycle B) produce and sell products in countries where counterfeiting is low C) introduce new products simultaneously in domestic and foreign markets D) sell new products in developing countries before expanding into developed countries

Ian, a financial manager, is preparing to transfer to Germany where he will serve as an expatriate manager of his employer's European office. Which type of legal system will Ian most likely have to deal with in Germany? A) mixed B) common C) civil D) theocratic

Imported flowers are now a stronger competitor to U.S. grown flowers in the U.S. market. Which of the following is likely the MOST important factor for this increase in imports? A) more effective production techniques B) advances in communication systems C) advances in transportation and logistics D) cross-national cooperation Answer: C

In Country X, all dimensions of economic activity, including pricing and production decisions, are determined by the central government. Which term best describes Country X? A) market economy B) mixed economy C) command economy D) democratic economy

In terms of international business, it is most accurate to say that ________. A) there is a universal "best way" to conduct business B) global competition affects large companies but not small ones C) most firms depend either on foreign markets and supplies or compete against companies that do D) government regulation of international business has little effect on a company's profits

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

In the United States, the unemployment rate indicates the ________. A) percentage of the labor force that wants to work full-time but can only find part-time employment B) number of people who have stopped looking for work because full-time jobs are unavailable C) percentage of unemployed workers seeking paid work relative to the total labor force D) number of workers eligible for government services and unemployment benefits

Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh and India, where child labor is common. Other clothing and footwear firms have recently faced criticism regarding the use of child labor, and Quantum executives want to avoid similar problems. Which of the following guidelines enforced by Quantum would LEAST likely be supported by the International Labor Organization? A) establishing bridge schools B) monitoring workplace safety C) allowing children ages 10-15 to work a maximum of 4 hours per day D) prohibiting abusive labor conditions

Some key ________ factors in a company's international business external environment are its product strategy and access to resources. A) geographic B) political C) competitive D) behavioral

Tatum Manufacturing recently opened a new facility in Hong Kong. The firm can most likely expect the Hong Kong government to ________. A) monitor market prices B) control natural resources C) ensure fair competition D) provide innovation incentives

Tests to substantiate the factor proportions theory have had mixed results most likely because ________. A) labor migration quickly outdates any studies B) most countries have a favorable balance of trade C) labor skills and education are not homogeneous D) large and small countries have different trade policies

The UN Global Compact is best described as a(n) ________. A) corruption mandate B) environmental initiative C) external code of conduct D) international trade guideline

The free trade theories of specialization primarily assume that ________. A) specialization leads to unemployment, but production gains compensate for job losses B) resources can move internationally from the production of one good to another C) resources can move domestically from the production of one good to another D) countries have objectives other than economic efficiency

The measure of the value of production that occurs within a country's borders without regard to whether the production is done by domestic or foreign factors of production is its ________. A) net national product (NNP) B) gross national product (GNP) C) gross domestic product (GDP) D) gross national income (GNI)

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

What is the primary problem associated with Anglo American PLC's ART program? A) unknown side effects to drugs and treatment B) rising costs of medications and procedures C) poor treatment adherence by employees D) lack of sufficient insurance coverage

When a company does business in another country whose official language is the same as its home country's, the company should most likely ________. A) assume that communications will go smoothly B) use back-translation on all written documents C) realize that words may have different meanings D) assume that word meanings are the same despite spelling differences

Which of the following is a true statement about China? A) The Chinese government's shift from communism to capitalism has led to an increase in FDI. B) China attracts FDI because the government has eliminated elaborate bureaucracies. C) The Chinese government manipulates market activities for political purposes. D) China lacks an educated pool of employees due to slowly developing industrialization.

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

Which of the following is most important when designing an internal code of conduct? A) requesting U.N. oversight and intervention when necessary B) communicating the code of conduct only to employees C) reporting results to external stakeholders D) forming local policies for each subsidiary

A multinational enterprise (MNE) is best defined as a firm ________. A) that is a member of the Fortune 500 B) with foreign business partners C) involved in global franchising D) with foreign direct investments

The Economic Freedom Index indicates that economic freedom is positively correlated with all of the following EXCEPT ________. A) life expectancy B) literacy C) environmental sustainability D) diversity

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

Which of the following calls for economic activity that meets present needs without hindering the future needs of society? A) privatization B) state capitalism C) economic freedom D) sustainable development

Which of the following countries has an individualistic orientation? A) Venezuela B) Japan C) Egypt D) Canada

Which of the following governmental actions is LEAST likely to increase national debt? A) macroeconomic stimulus plans B) unemployment benefits C) corporate bailouts D) T-bond sales

An objective of neomercantilism is to build up gold reserves.

An effective code of conduct reports results to external stakeholders.

Globalization of business has been stimulated by institutional developments that aid foreign trade and investment.

Governmental agencies and nongovernmental organizations monitor the behavior of companies and their employees to ensure that laws are being followed.

There is a positive correlation between economic freedom and economic growth.

There is a strong correlation between the intensity of religious belief and attributes that lead to economic growth, such as obeying laws and thriftiness.

Totalitarianism is a political ideology that typically involves constant indoctrination of the population by agents of the government to eliminate dissent.

A market economy gives individuals the freedom to decide where to work doing what, how to spend or save money, and whether to consume now or later.

A market economy is one in which resources are primarily owned and controlled by individuals and companies.

A mixed economy is a system where economic decisions are largely market driven and ownership is largely private, but the government intervenes in many private economic decisions.

A political ideology is the collection of ideas that expresses the goals, theories, and aims that constitute a sociopolitical program.

A potential problem of polycentrism is failure to introduce innovative superiority.

Although countries are similar in terms of having a mandatory retirement age, they differ in what that age is.

An economic system is the set of structures and processes that guides the allocation of resources and shapes the conduct of business activities within a country.

An exception to the PLC theory in terms of production location is often a product with very rapid change in innovation.

Countries enact trade policies based on trade theories, which, in turn, affect companies' optimum production locations.

Ethnocentric firms typically use the same business practices in all cultures and markets.

General Electric's Ecomagination initiative is responding in part to the fact that it is operating in many countries that require compliance with higher environmental standards than exist in the United States.

Gross domestic product is the value of production that takes place within a nation's border, without regard to whether the production is done by domestic or foreign factors of production

In a command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are all planned by the government.

Inflation affects interest rates, exchange rates, the cost of living, general economic confidence, and the stability of the current political system.

International business includes all commercial transactions between two or more countries.

International companies often must customize products to comply with local standards if they are to do business in a particular country.

Managers who take an active approach to political risk management are likely to rely on statistical modeling to quantify the precise degree of political risk.

Many companies merge with or acquire other companies to gain operating efficiencies that help them compete with or become global leaders.

Many firms gain a global competitive advantage by fostering cultural diversity.

Many products' location of production will shift internationally as the products go through their life cycle.

Multilateral development banks encourage development in risky environments through financial incentives.

Normativism asserts that universal standards of behavior exist and should be accepted in all cultures.

Research indicates that democracy is declining around the world and that totalitarian regimes are increasing.

Similarity among people is both a cause and effect of national boundaries.

The collapse of communism in the late 1980s and early 1990s led to a more widespread adoption of the principles of capitalism.

The comparative advantage theory holds that a country will gain from trade even though it can produce all goods more efficiently than other countries.

The factor proportions theory holds that countries should concentrate production on those products that use their most abundant production factors.

According to the A.T. Kearny/Foreign Policy Globalization Index, countries ________. A) tend to be ranked similarly on all four dimensions B) are more globalized on the political dimension than on personal contact C) that are large in land mass and population are less globalized than small countries D) sometimes rank high on one dimension and low on another

All of the following are reasons piracy has occurred EXCEPT ________. A) technology allows copyrighted material to be reproduced cheaply without much loss of quality B) some countries offer little protection for certain products C) in some cultures, people see little morally wrong in buying counterfeit goods D) the protection of intellectual property rights varies little from country to country

All of the following are types of products that are usually exceptions to what is predicted by the product life cycle theory EXCEPT ________. A) trendy clothing B) luxury items C) differentiated products D) consumer durables

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

American hamburgers, Japanese sushi, Italian pizza, Mexican tacos, and Middle Eastern pita bread are now commonly found in most countries. This best supports the argument that ________. A) although visible expressions of culture are becoming homogenized, basic differences in societal values remain strong B) globalization fulfills lower order needs in Maslow's hierarchy C) cultural imperialism is increasingly widespread D) cultural hybridization is occurring

An example of a Japanese service export is a visit by a ________. A) Japanese citizen to Disneyland in the United States B) Japanese citizen to the Japan Pavilion at Epcot Center in the United States C) U.S. citizen to the Japan Pavilion at Epcot Center in the United States D) U.S. citizen to Tokyo Disneyland in Japan

The rule of law holds that governmental authority is legitimately exercised only in accordance with written, publicly disclosed laws that have been appropriately adopted and which are enforced in keeping with established procedure.

The so-called "misery index" is the sum of a country's inflation and unemployment rates.

The term collectivism refers to a system that stresses the primacy of societal goals over individual goals.

The theory of absolute advantage holds that there are advantages to trade because different countries can produce different goods more efficiently than others.

Transparency International, the OECD, and the ICC are all working to stop bribery around the world.

U.S. MNEs that operate in Europe are under pressure to conform to the emissions standards of the Kyoto Protocol.

Under mercantilism, colonial powers sought to run trade surpluses with their colonies by preventing the colonies from manufacturing.

Under the practice of extraterritoriality, legal and ethical values in a country may cause its companies to operate abroad according to home country laws rather than host country laws.

Assume a U.S. firm plans to expand into Mexico, Germany, or Japan. Its executives are traveling to each country to meet with local businesspeople in the decision-making process. Which of the following would be LEAST beneficial when the executives make a presentation? A) requesting a translator with technical vocabulary knowledge B) simplifying vocabulary and terminology for the audience C) conducting back translations for written work D) avoiding repetition to prevent boredom

Assume a firm has operations in Tokyo, where there is a collectivist culture. Which of the following would most likely motivate the firm's Japanese employees? A) "employee-of-the-month" programs B) extensive vacation time C) on-the-job challenges D) good health benefits

Comparative advantage differs from absolute advantage in that the former ________, whereas the latter ________. A) holds that countries should specialize their production; does not B) holds that trade should be kept as nearly in balance as possible; says countries should seek a favorable balance of trade C) bases trade on natural advantages; bases trade on acquired advantage D) states that there is a basis of trade even if one country can produce everything more efficiently than another country; does not deal with this issue

Costa Rica's recent economic transformation to depend more on high-tech manufacturing is largely due to its adoption of ________ trade policy. A) an import substitution B) a comparative advantage C) a factor proportions D) a strategic

Eight of the top 10 exporting and importing countries are countries with ________. A) cheap labor forces B) small land masses C) natural advantages D) developed economies

Elway, a computer firm, has high foreign sales in Asia and wants to expand sales into Europe. Which of the following statements provides the most appropriate advice for Elway executives? A) Although countries' market sizes differ, companies usually face about the same number of competitors in each national market. B) In most industries, companies face the same competitors in each country where they operate. C) It takes about the same amount of resources to gain national distribution in one country versus another. D) Being a leader in one country does not guarantee market leadership in another country.

Harmon Clothing has a production facility located in Venezuela. Recently, Harmon has been unable to arrange for overseas loans due to the burdensome regulatory policies of the Venezuelan government. Which type of political risk is Harmon most likely experiencing? A) catastrophic B) distributive C) procedural D) systemic

In a country that emphasizes collectivism, ________. A) the interests of the individual are more important than the interests of the state B) one person or political party exercises absolute control over the political and economic systems C) the needs of society and the needs of individuals are treated as equally important D) the needs of society take precedence over individual freedoms

In a market economy, the patterns of resource allocation are most directly influenced by ________. A) government administrators who monitor the equilibrium of supply and demand B) industry coalitions that strive to improve the efficiency of production and service C) consumer group alliances that negotiate with firms to improve product quality D) consumers who "vote" by their personal decision to buy or not buy products

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

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

It is most accurate to say that within most nations' borders, people largely share such essential attributes as ________ and ________. A) work attitudes; occupations B) lifestyles; education level C) education level; ethnicity D) values; language

Jack, an American accounts manager, is preparing a presentation for a group of Japanese business people. Jack's presentation would be most effective if he ________. A) told an opening joke to put everyone at ease B) used slang to create an informal atmosphere C) used long words to impress his counterparts D) budgeted extra time for translation and clarification

Limitation of logging in the Amazon region is generally viewed as environmentally beneficial for the planet as a whole; however, unemployed Brazilian workers have felt that job creation inside Brazil is more important than climate protection outside Brazil. This example best illustrates which of the following? A) why smaller countries are concerned that large international companies are powerful enough to dictate operating terms B) why globalization is needed to foster uniform standards for combating environmental problems C) how cultural homogeneity threatens the cultural foundation of smaller nations D) how global interests can conflict with a country's local interests

Most people's basic value system is ________. A) modified significantly between childhood and adulthood B) altered during adulthood through imposition C) affected primarily by teenage peer pressure D) acquired mainly during early childhood

Organizing work differently to improve productivity will likely fail ________. A) if the workforce has a low tolerance for authoritarianism B) if workers participate in planning the improvement C) unless changes are compatible with competitors' practices D) if changes interfere with strongly held value systems

The Ethical Trading Initiative (ETI) is primarily focused on ________. A) fair trade laws for undeveloped countries B) tiered pricing by pharmaceutical firms C) greenhouse gas emission reduction D) employment practices of MNEs

The Gini coefficient estimates a country's ________. A) gross national product B) economic development C) political and legal risk D) income inequality

The ________ of a country specifies the rules that regulate behavior, the processes by which laws are enforced, and the procedures used to resolve grievances. A) political system B) political philosophy C) philosophical orientation D) legal system

A strategic trade policy is one that develops industries to lessen dependence on foreign military goods.

Cultures do not transcend national (state) boundaries.

The lack of cultural guidebooks and research specifically for international managers poses a significant problem for global firms.

The process of shifting production to a foreign country is known as outsourcing.

The protection of intellectual property rights is very similar from country to country.

The range of economic systems in the world today, when represented on a spectrum, has one end anchored by the idea of capitalism, the other with that of socialism.

The specific learned norms based on attitudes, values, and beliefs of a group of people are known as ethnology.

The teleological approach asserts that individuals make moral judgments independent of consequences.

The terms multinational corporation and multinational company are frequently used synonyms for strategic alliances.

The view that regionalization, rather than globalization, will prevail in the future is largely based on the use of common languages among countries in a region.

Totalitarian countries are favored by MNEs because state governments typically favor foreign investors over local companies.

Uneven income distribution is largely a problem confined to poorer nations.

People generally prefer little consultation between superiors and subordinates in cultures where ________ is high. A) power distance B) fatalism C) individualism D) self-actualization

People in the port city of Jeddah were less culturally conservative than people in the interior of the country. The most likely reason for this is that ________. A) people in the port cities have more contact with foreigners B) the coastal area has to trade with countries using different religious holidays C) the coastal area has a culture with a higher uncertainty avoidance D) the coastal area is secular, whereas the interior of Saudi Arabia has a state religion

Raj, an engineer, works long hours and takes full responsibility for both his good and bad work performance. Raj most likely believes in ________. A) self-determination B) low power distance C) collectivism D) fatalism

The United Nations' ________ measures life expectancy, educational attainment, and the standard of living in a given country. A) Human Development Index B) Emerging Economic Stability C) Genuine Progress Indicator D) Net National Product

The process of shifting production from a domestic to a foreign location is best known as ________. A) offshoring B) outsourcing C) licensing D) joint venturing

Which level of moral development involves an individual learning role-conformity from peers, parents, and laws? A) conventional B) principled C) autonomous D) preconventional

Local content regulations are primarily intended to ________. A) address cultural differences between local employees and expatriates B) encourage MNEs to increase production activities in a country C) address contract negotiation difficulties D) assess local tax rates on MNEs

Logan Electronics has a production facility in Bolivia. Recently, the firm was taxed at a significantly higher rate than a local electronics company. Which type of political risk is Logan most likely experiencing? A) systemic B) procedural C) distributive D) catastrophic

Studies indicate a strong correlation between the intensity of religious belief and ________. A) a desire to convert productivity gains into more leisure time B) an adherence to some attributes that lead to economic growth C) the belief that material success is related to salvation D) the degree of ethnocentrism exhibited in a culture

The term used by the United Nations as a synonym for multinational enterprise is ________. A) multinational corporation B) transnational company C) international firm D) born-global

What is the primary reason that Anglo American PLC developed its ART program? A) comply with government standards B) maintain a healthy workforce C) abide by union demands D) reduce employee benefits

Which of the following is most likely a FALSE statement about income inequality? A) The richest 1% of the world's population claims as much income as the bottom 57%. B) GNI is the most effective tool for estimating the relative wealth of a nation's citizens. C) Among industrialized nations, the United States has the largest inequality gap between rich and poor. D) Income inequality between metropolitan and rural areas threatens a country's social stability.

According to the Ethical Trading Initiative (ETI), ________. A) child labor cannot be used unless there are no suitable alternatives B) employment need not be freely chosen in order to be acceptable C) no harsh or inhumane treatment of workers should be allowed D) MNEs are not responsible for establishing codes of conduct

According to the PLC theory, developing countries have their best production advantage in which stage of the product life cycle? A) growth B) maturity C) decline D) introduction

According to the concept of green economics, measuring a country's economic performance should also take into account ________. A) market share B) population size C) ecological costs D) cost-of-living increases

According to the diamond of national advantage theory, the domestic existence of all four conditions best explains ________. A) the essence of an industry's development B) the position of a product in its life cycle C) where globally competitive firms develop and sustain themselves D) why countries rely on abundant factor endowments

As a leading exporter of luxury automobiles, Germany has built a strong reputation in engineering. Germany's trade most likely relies on a(n) ________. A) outward immigration restriction B) natural advantage C) acquired advantage D) neomercantilist policy

Elite Manufacturing seeks a foreign location with a highly favorable business environment and a comprehensive legal code. Which of the following countries would be most suitable for Elite? A) Japan B) Canada C) Singapore D) United Kingdom

Encouraging ethical behavior for the purpose of developing competitive advantages will most likely result in all of the following for a firm EXCEPT ________. A) strategic accomplishment B) consumer commitment C) industry resolutions D) financial success

Ethnocentrism in international business refers to the ________. A) study of group ethics and approaches to corporate social responsibility B) comparison of the Protestant ethic with other religious views C) belief that what works best at home should work best everywhere D) ethnic segmentation of marketing programs within countries

In a country that practices state capitalism, all of the following are most likely to be handled by the state EXCEPT ________. A) leveraging control of the financial system B) developing national corporations C) supporting the local activities of foreign competitors D) systematically managing trade relations

Proponents of ________ argue that individual interests are not as important as the welfare of the group. A) pluralism B) capitalism C) collectivism D) individualism

The 1997 Kyoto Protocol is best described as an agreement that requires ________. A) all members of the United Nations to reduce their greenhouse gas emissions by 5.2 percent B) the United States and Japan to control greenhouse gas emissions by 8% below 1995 levels C) the signatory countries to cut greenhouse gas emissions to 5.2 percent below 1990 levels D) the signatory countries to reduce greenhouse gas emissions by 80% by 2050

Which of the following is a common shortcoming of studies examining culture in different countries and regions? A) Cultures are static, which leads researchers to draw false conclusions from old data. B) It is impossible to compare countries because of differences in data. C) Responses are reported in averages, which can lead to a belief in unrealistic stereotypes. D) People are reluctant to complain about their own cultures, so they present only positive opinions to researchers.

Which of the following statements about the English language is most likely NOT true? A) The largest portion of global output is in English-speaking countries. B) A large portion of MNEs are headquartered in English-speaking countries. C) English is the official national language in most countries where FDI is encouraged. D) Many MNEs from non-English speaking countries use English as their operating language.

Which of the following statements best describes a pluralistic society? A) Multiple segments of society adhere to the same political philosophy. B) Two dominant political parties rule local and federal governments. C) Different ideologies are held by different segments of society. D) Various ethnic groups belong to the official political party.

All of the following are international business translation problems EXCEPT which of the following? A) All written work requires back translation in order to be understood in a second language. B) Because languages and the common meaning of words are constantly evolving, the intended meaning of a word may be different from what the listener or reader understands. C) Some words in one language simply don't have a direct translation into another language. D) Words mean different things in different contexts, thus the wrong context may be translated.

All the following are reasons for the lower international mobility of people than capital EXCEPT ________. A) the differences in economic return between countries are lower for people than for capital. B) it is more expensive to move people than capital. C) people may have to learn another language and adapt to a different culture. D) international capital transfers have less cumbersome legal restrictions than international movements of people.

Assume the following conditions: In the United States it takes 5 units of resources to produce a ton of potatoes and 10 to produce a ton of coal. In Canada it takes 6 units of resources to produce a ton of potatoes and 9 to produce a ton of coal. According to the theory of absolute advantage, ________. A) the United States should export potatoes to Canada and import coal from Canada B) the United States should export coal to Canada and import potatoes from Canada C) the United States should import both potatoes and coal from Canada, while concentrating on production of more valuable goods D) there would be no basis for trade

Because consumers want a greater variety of goods and services at lower prices, many governments have ________. A) reduced their restrictions on the international movement of goods and services B) acted to tax most imports at a lower rate than domestic products C) sought to eliminate reciprocal advantages negotiated through international organizations and treaties D) increased their participation in multinational problem-solving efforts

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

How has the Kyoto Protocol affected U.S. companies operating in Europe? A) U.S. companies are changing the way they do business in order to comply with new emissions standards in Europe. B) The Kyoto Protocol has not affected U.S. companies with subsidiaries in Europe because the U.S. has not signed the Kyoto Protocol. C) Before U.S. companies can open any more European subsidiaries, the U.S. government must sign the Kyoto Protocol. D) Because the United States is not a party to the Kyoto Protocol, U.S. companies may not operate in European countries that have signed the Kyoto Protocol.

Nontradable goods are BEST defined as ________. A) products and services for which exporting costs are excessive B) factors of production that exceed safety regulations C) goods used for national defense D) products that comprise a portion of the inputs for finished products

One way that developed countries specialize in order to gain acquired advantages is by ________. A) allocating research efforts more heavily in specific sectors B) emphasizing production in natural resource endowments C) restricting imports to those in the service sector D) subsidizing the transport of exports

Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh and India, where child labor is common. Other clothing and footwear firms have recently faced criticism regarding the use of child labor, and Quantum executives want to avoid similar problems. Which of the following would be the best approach for Quantum? A) improving conditions at the subcontract facilities B) developing an external ethics code for foreign partners and letting them worry about compliance C) requiring local governments to alter their labor policies D) leaving the market and focusing on domestic production

Since the late 1980s, the growing emergence of freer markets has been powered by the realization that ________. A) economic growth is directly related to economic freedom B) economic growth has a limited effect on the standard of living C) adoption of free market principles contributes to social injustices D) centrally planned economies are best designed to deliver progress

Some observers feel that international institutions and the people working in them cannot adequately handle the complexities of an interconnected world. Based on this, these observers believe that ________. A) globalization will slow in the future B) globalization is nevertheless inevitable C) international business will grow primarily on a regional basis D) private companies will replace international organizations in running the world's economy

Taylor Enterprises wants to expand its operations into Asia. Managers are focusing on countries with high degrees of economic freedom most likely because the firm is interested in a country with ________. A) minimal government intervention B) standardized minimum wages C) laws favoring sustainability D) state-run corporations

The ________ view calls for companies to develop low-cost, high-powered, resource-minimizing innovations that can be marketed to the billions of people living on less than a few dollars a day. A) Base of the Pyramid B) Hierarchy of Needs C) Happy Planet Index D) Gini coefficient

The fact that an English word such as blue jeans has entered the Spanish language, while a Spanish word such as macho has come into American English illustrates that ________. A) cultural diffusion is a two-way process B) cultural trends come from emerging nations C) existing national borders are shifting D) material cultures are becoming universal

The recent global financial crisis has led to which of the following? A) governments seeking to impose more constraints on capitalism B) governments seeking to eliminate constraints on capitalism C) governments seeking to increase the interdependence of developing economies D) governments seeking to eliminate the interdependence of developing economies

The widening set of interdependent relationships among people from different parts of the world is known as ________. A) globalization B) offshoring C) franchising D) outsourcing

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

Visible exports and imports are ________. A) merchandise imports and exports B) the sum total of goods and services traded C) international transactions paid for in money rather than barter D) typically a country's least common international economic transactions

Wharton Enterprises, a U.S. firm, manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently, Wharton has production facilities in the United States and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following best supports a decision to manufacture the new product in the United States instead of China? A) Intellectual property rights are strongly protected by U.S. patent laws. B) A strategic marketing plan can be quickly developed in the United States. C) Contract enforcement is a simple process in the United States. D) The United States is experiencing an economic recession.

What is the most likely reason that a universal scheme for assessing the performance and potential of a country's economic environment does NOT exist? A) difficulties of identifying a definitive set of predictive economic indicators B) a lack of reliable economic data from most developed economies C) the isolation of most markets from each other D) static nature of the marketplace

When a company successfully responds to foreign production and market opportunities, ________. A) other companies will likely emulate its successful practices B) it likely has a long-term advantage over competitors C) it will downsize its domestic operations D) its home government likely raises taxes on the company

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

Which of the following BEST describes a result of cultural collision in international business? A) A company implements practices that are less effective than intended. B) Local employees are overlooked for promotions by home country managers. C) Expatriate managers rely too heavily on local employees for negotiating business deals. D) Foreign and domestic companies make adjustments for the local culture and legal environment.

Which of the following BEST explains how a firm reduces risk by operating internationally? A) taking advantage of business-cycle differences among countries B) buying competitive risk insurance unavailable domestically C) preventing competitors from operating in the countries it has entered D) operating in less competitive environments than those at home

Which of the following best explains why international business has grown rapidly in the past few decades? A) the end of the political division between the Communist and non-Communist blocs B) greater income equality in most countries C) growing concern about climate change D) increased concerns about terrorism

Which of the following is most important to the effectiveness of an internal code of conduct? A) ensuring that employees understand the code by requiring confirmation in writing B) paying bonuses to suppliers and distributors that agree to the code C) relying on nonprofit NGOs to develop guidelines D) adhering to industry standards and norms

Which of the following most likely complicates ethical behavior for firms that expand overseas? A) local laws and values B) expatriate management C) unstable financial settings D) international codes of conduct

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

Which of the following statements most likely undermines the arguments for a strategic trade policy? A) Entrepreneurs, rather than governments, should take business risks. B) Developed countries have production lead time over developing countries. C) If big companies can figure out what products to develop, so can governments. D) Governments have limited resources, so industries with greater growth potential should be targeted.

Which of the following statements would most likely be made by a SUPPORTER of globalization? A) Globalization encourages the adoption of uniform and superior standards for combating environmental problems. B) Economic growth created by globalization is largely in services, which involves the use of few nonrenewable resources. C) Global competition discourages resource-saving technologies, which are costly. D) Air pollution and toxic runoff problems increase with global economic growth.

Which of the following was a notable trend in political systems during the second half of the 20th century and beginning of the 21st century? A) A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems. B) A wave of theocratic revolutions occurred as people around the world looked to spirituality to guide them. C) Socialistic revolutions swept the world as countries aspired toward greater social justice. D) A totalitarian revolution swept the world as people looked to strong state leadership in uncertain times.

A foreign direct investment occurs when ________. A) a company owns at least 25% of a foreign firm B) a company has a controlling interest in a foreign company C) foreign ownership is in private rather than government securities D) a foreign firm agrees to a licensing agreement with a large conglomerate

A manager who refuses to bribe customs officials in a foreign country, even though it is morally acceptable in that country, is most likely to believe in which of the following perspectives on ethics? A) relativism B) normativism C) humanism D) existentialism

A system in which individuals, rather than the government, make the majority of economic decisions is commonly referred to as a ________. A) command economy B) market economy C) private economy D) mixed economy

A system of ________ law sets the framework for the system of government and defines the authority and procedure of political bodies to establish laws and regulations. A) criminal B) constitutional C) civil D) commercial

According to Adam Smith's theory of absolute advantage, specialization allows countries to increase their efficiency for each of the following reasons EXCEPT ________. A) labor could become more skilled by repeating the same tasks B) transportation costs could be lowered by producing closer to markets C) labor would not lose time in switching from the production of one kind of product to another D) higher production would provide incentives for the development of more effective working methods

Although globalization may bring economic growth, critics nevertheless contend that ________. A) the growth is too fast B) the inequality of gains puts some people in a relatively worse economic situation C) this growth is mainly for the future, thus ignoring present economic growth needs D) the cultural foundations of sovereignty are supported by globalization

Managers at Morrison Manufacturing are considering expanding the firm's production overseas and want to ensure that the firm is located in a country with a high degree of economic freedom. Presently, which of the following locations would most likely offer Morrison the highest economic freedom? A) Bolivia B) Hong Kong C) Venezuela D) North Korea

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

The march toward greater political freedoms and more expansive civil liberties, beginning in the 1970s, strongly fueled a sense of ________. A) less predictable operating conditions for companies B) the inevitability of democracy C) different rules for domestic versus international competition D) weaker property rights

The nation offers a workable reference for studying cultural differences because ________. A) a nation contains only one distinct culture B) similarity among people is both a cause and effect of national boundaries C) the commonality of language within a nation eases the process of conducting surveys D) different groups within the same country always have more in common with each other than with groups in other countries

The so-called "misery index" is the sum of a country's ________. A) foreign and national debt B) inflation and unemployment rates C) unemployment level and total debt D) trade deficit and long-term inflation rate

To determine whether the standard of living within a country is rising or falling, economists would most likely use which of the following measures? A) per capita GNI B) GNI growth rate C) purchasing power parity D) degree of human development

When a company wishes to introduce change in a foreign country, its likelihood of success can most likely be improved by ________. A) introducing many changes simultaneously B) gaining the support of local opinion leaders C) agreeing to make some home-country changes in return D) employing expatriate managers to supervise local workers

Which of the following is NOT a key stakeholder group that a company must work to satisfy in order to survive in a global environment? A) employees B) competitors C) shareholders D) customers

Which of the following is NOT an example of normativism? A) A U.S. subsidiary operating in China that is forced to follow some U.S. laws, even though China has no comparable laws B) A U.S. sweatshop operating in Thailand that does not follow U.S. labor laws but allows children to work 60 hours a week C) An MNE manager who, after working in the host country, tries to implement foreign practices in the home-country office D) A British subsidiary operating in Indonesia that maintains the same health and safety standards for its foreign factories that are required in Great Britain, even though the British government does not require it to use those standards

Which of the following languages has the most NATIVE speakers? A) English B) Mandarin C) Spanish D) Hindi

Which of the following statements describes an inconsistency of the Foreign Corrupt Practices Act (FCPA)? A) Facilitation payments are classified as bribery. B) Facilitation payments are excluded from the FCPA's definition of bribery. C) Payments to officials who are not directly responsible for carrying out the law are legal. D) Payments to foreign officials who carry out the law are considered illegal by provisions of the FCPA.

hich of the following assumptions was made in the original theories of absolute and comparative advantage? A) Specialized labor seeks efficiency. B) Labor resources are fully employed. C) Countries pursue objectives other than economic efficiency. D) Production networks enable countries to concentrate on particular functions.

A governmental strategic trade (industrial) policy is one that ________. A) lessens dependence on foreign military goods B) seeks reciprocal free trade agreements between developed and developing countries C) targets the resources needed to support industries that seem to fit best with the country's advantages D) limits imports to encourage domestic production of what would otherwise be imported

Countries with large land areas are generally less dependent on trade than countries with small land areas because of ________. A) highly restricted economic scales B) self-sufficiency with natural resources C) higher transportation costs related to foreign trade D) the development of unique products that have a limited demand

Country X is in the process of transforming from a command economy to a market economy. This process most likely involves ________. A) standardized procedures implemented by the state B) high economic growth rates for the long term C) privatization of many factors of production D) violent political and legal upheaval

Kevin, marketing manager of the North American Bowling League, has decided to televise major bowling competitions to viewers in multiple countries rather than only in Canada and the U.S. Which of the following goals would this most likely help Kevin accomplish? A) acquiring new resources B) minimizing corporate risks C) increasing sales and profits D) obtaining competitive advantages

Market economies are primarily characterized by ________. A) formal cooperation among government, companies, and workers to achieve stable growth B) heavy government spending and high taxation to pay for a range of social services C) minimal governmental participation D) restricted consumer powers

Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as ________. A) competitive advantage B) the Kyoto Protocol C) sustainability D) externality

Pender Pharmaceuticals is considering expanding overseas and is focusing primarily on the BRICs. Which of the following countries is one that Pender is considering? A) Indonesia B) Chile C) Russia D) Bangladesh

The Human Development Index measures the average achievements in a country on three basic dimensions of human development, including ________. A) promotion of cultural values B) quantity of free time C) extent of knowledge D) sustainability

The OECD Convention against bribery is an example of a(n) ________. A) bilateral agreement developed for the EU B) agreement that targets the demand side of bribery C) agreement that targets the supply side of bribery D) UN Convention dominated by developing countries

The ________ starts with the same accounting framework used to calculate GDP but then adjusts for values assigned to environmental quality, population health, livelihood security, equity, free time, and educational attainment. A) Gross National Index B) Net National Product C) Genuine Progress Indicator D) Human Development Index

The attempt to resolve small issues before principles is a characteristic of which of the following? A) relativism B) monochronic behavior C) pragmatism D) uncertainty avoidance

The distinguishing feature of political ideologies along the political spectrum is ________, with some emphasizing its primacy and others opposing it. A) capitalism B) socialism C) freedom D) liberalism

The term "cultural distance" refers to the ________. A) physical space between people during communication B) time it takes people to adjust to the language, traditions, and norms of a foreign culture C) degree to which countries differ on cultural dimensions D) preferred relationship between superiors and subordinates in a given culture

Under mercantilism, governments sought to influence trade by ________. A) establishing bilateral trading agreements with other countries B) limiting exports C) limiting imports and subsidizing exports D) encouraging the development of manufacturing in their colonies

When divergent cultures come in contact, ________ occurs. A) power distance B) culture shock C) cultural collision D) group membership

Which of the following is NOT one of the reasons that foreign investment may stimulate exports from the home (donor) country? A) The investor often sends home-country components to its facilities abroad. B) The investor often sends home-country equipment to its facilities abroad. C) Home-country aid usually goes where the investments are made. D) The foreign facility is adept at selling the investors' home country products.

Which of the following is a reason for an MNE to base its standards for ethical behavior on a country's laws? A) The law embodies many of a country's moral beliefs but is an inadequate guide for proper conduct. B) The law contains unenforceable rules that are impossible for society to follow. C) The law represents a consensus derived from significant deliberation. D) The law is based on precisely defined moral concepts.

Why is the United States both an exporter and importer of such products as vehicles and passenger aircraft? A) Buyers procure similar products for replacement parts. B) Transportation costs and cultural differences limit exporters. C) Companies differentiate products to appeal to different consumers. D) Bilateral trading agreements require this interchange for a number of products.

________ consists of specific learned norms based on attitudes, values, and beliefs of a group of people. A) Ethnology B) Civilization C) Culture D) Doctrine

________ is one of the primary business objectives for pursuing ethical behavior. A) Replacing home-country technology with host-country technology B) Minimizing federal investigations into corporate finances C) Avoiding being perceived as a socially irresponsible firm D) Imposing home-country behavior on the host country

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

All countries face the questions of what, how much, and with whom they should import and export. How they answer these questions primarily affects whether ________. A) nontradable goods become tradable B) products go through a lengthy life cycle C) companies adhere to laissez-faire export policies D) a company's present production location will be competitive

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. A) state-directed B) market C) command D) mixed

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

Which of the following BEST supports a nation's decision to implement a strategic trade (industrial) policy? A) The policies have usually resulted in big payoffs. B) Governments, rather than entrepreneurs, should take the risks of developing new industries. C) Consumer needs would otherwise not be met. D) Government actions should target industries that are believed to give the country its best export advantages.

Which of the following has NOT been a major force increasing globalization in recent decades? A) liberalization of cross-border trade B) increase in and expansion of technology C) growing pressure from consumers D) decreasing prices of natural resources

Which of the following is NOT a component of modern legal systems? A) constitutional law B) criminal law C) commercial law D) private law

Which of the following is NOT a likely reason for companies to act more ethically? A) Consumer boycotts may result from unethical corporate behavior. B) Irresponsible and unethical actions may lead to legal problems for MNEs. C) Unethical or irresponsible behavior can negatively impact employee morale. D) The company would like to raise its ranking on the Transparency International scale.

Which of the following is NOT affected by the Foreign Corrupt Practices Act? A) companies registered in the United States B) foreign firms operating in U.S. territory C) foreign firms quoted on a U.S. stock exchange D) foreign companies managed by U.S. expatriates

Which of the following is NOT one of the issues surrounding high levels of bribery and corruption? A) high poverty rates B) regional conflict C) political unrest D) high per capita income

Which of the following is NOT one of the three main reasons affecting international business for governments to cooperate with each other? A) to attack problems jointly that one country acting alone cannot solve B) to deal with issues that lie outside the territory of any nation C) to gain reciprocal advantages D) to establish a common language

Which of the following statements is most likely true about the postconventional level of moral development? A) Individuals learn what is moral but not why such behavior is moral. B) Individuals behave morally because they fear negative repercussions. C) Individuals learn how to conform to society's values through observation. D) Individuals behave morally because they believe such actions are right.

Which of the following statements is most likely true regarding relationships between MNEs and stakeholders? A) An MNE typically serves all stakeholder groups equally at any given time. B) No individual stakeholder group is powerful enough to cause the demise of an MNE. C) All stakeholders of an MNE have the same short-term and long-term goals and interests. D) The inability to adequately meet the long-term needs of all stakeholders increases the probability of an MNE failing.

Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the most attention? A) safe and hygienic working conditions B) reasonable living wages C) inhumane treatment D) child labor

Which one of the following is a primary assumption of the free trade theories of specialization? A) Domestic resources are unable to move from the production of one good to another. B) Countries have objectives other than economic efficiency. C) Specialization triggers unemployment. D) Resources are immobile internationally.

________ is the chance that political forces may change a country's business environment in ways that lead investors to lose some or all of the value of their investment or be forced to accept a lower-than-projected rate of return. A) Governmental risk B) Operating risk C) Transaction risk D) Political risk

A widely successful strategy for introducing change into a foreign country is to introduce many changes simultaneously.

According to experts, stakeholder participation in decision making is effective only in countries with an educated population.

According to the Ethical Trading Initiative, child labor cannot be used unless there are no suitable alternatives for employees.

According to the product life cycle (PLC) theory of trade, most new products are produced in countries where wage rates are low.

An important business objective for pursuing ethical behavior is to create a better relationship with corrupt politicians and customers.

An internal code of conduct is a set of guidelines, recommendations, and rules issued by entities within society but outside the firm with the intent of affecting the behavior of international business entities in order to enhance corporate responsibility.

Comparative advantage theory holds that gains from trade are the result of capital movements from countries with low interest rates to countries with higher interest rates.

Countries with a theocratic legal system encourage precise, detailed contracts whereas countries with a common legal system encourage shorter and less specific contracts.

Geographical barriers typically affect distribution channels within countries, but they rarely affect distribution channels between countries.

Globalization refers to all economic transactions among countries.

Governments primarily cooperate through treaties to create a global division of labor.

HIV/AIDS is affecting the operations of Anglo American PLC by forcing the company to invest outside of South Africa to avoid having to deal with workforce health issues.

Import restrictions are becoming less important because consumers increasingly want to buy goods and services produced in their own countries.

In a country with a high masculinity score, people have a tendency to feel sympathy towards individuals who are unemployed or homeless.

In a country's balance of payments, the current account and the capital account represent equal values.

In collectivist cultures based on kinship, security and social needs are met more effectively in the workplace than at home.

In response to the global financial crisis, the United States government took actions that increased economic freedom.

In the aftermath of the recent global financial crisis, there has been a significant reduction in the level of government involvement in economic affairs.

Inflation occurs because aggregate demand is growing as fast as aggregate supply.

International law takes precedence over national laws in determining permissible practices in pricing, distribution, advertising, and promotion of products and services in a particular country.

Most countries' imports account for more than half of their citizens' consumption.

Most world trade takes place between raw material exporters and manufacturing exporters.

National origin is an acquired group membership.

Supporters of globalization assert that the process helps countries strengthen their sovereignty.

The Foreign Corrupt Practices Act applies only to companies registered in the United States.

The Happy Planet Index measures well-being and perceptions of living conditions by assessing areas such as housing, incomes, security, and work-life balance.

The Human Development Index measures the average achievements in a country on three basic dimensions of human development: mortality, knowledge, and standard of living.

The OECD Convention against bribery is an example of an agreement that targets the demand side of bribery.

The UN Global Compact is a legally binding document that requires MNEs to establish codes of conduct.

The argument that "anything legal is ethical" is insufficient as a basis for ethical behavior because the law usually does not apply to everyone and does not have enforceable rules.

The balance of trade is a record of a country's international transactions that take place among companies, governments, or individuals.

The calculation of GNI per capita takes into account the differences in the cost of living from one country to another.

The factor proportions theory holds that countries should improve their competitiveness by importing capital and skilled employees from abroad.

The finite nature of natural resources should work as a disadvantage for the export prices of developing countries.

The free trade theories of specialization assume that countries will be better off even though some people are unemployed.

The government considers itself a better judge of resource allocation than businesses or citizens in a market economy.

The production of goods by a French company in Italy for sale in Italy is an example of an Italian merchandise import.

Under the theory of absolute advantage, countries hold two types of advantages—acquired advantages and technological advantages.

When a company does business in another country whose official language is the same as the company's home country, employees can assume that although some spellings are different, words will mean the same thing.

A car manufactured in the United States by Toyota would be included in the calculation of the GDP for the United States.

A common law system is based on tradition, judge-made precedent, and usage in which the courts assign a preeminent position to existing case law to guide dispute resolution.

A company with limited resources is more likely to achieve national distribution within a small country than within a large country.

A criticism of globalization is that as economic growth increases, too many nonrenewable resources are used.

A firm that begins operating in a culturally similar foreign country will most likely face few necessary cultural adjustments.

A payment to a customs official to clear legitimate merchandise is permitted by the Foreign Corrupt Practices Act.

According to utilitarianism, actions are moral if they produce the greatest amount of good for the greatest number of people.

Countries with large land areas are generally less dependent on trade than countries with small land areas.

Critics of offshoring assert that the short-term cost savings derived from offshoring hinder firms from developing more efficient production methods.

Cultural change may come by choice or imposition.

Economic indicators such as GNI, and its expression in terms of per capita, growth rate, and PPP, are not sufficient to develop a clear picture of the overall quality of life in a country.

English-speaking peoples account for a larger portion of global output than people who speak any other language.

GE's Ecomagination program has enabled the firm to develop a competitive advantage over its competitors.

Gaining some understanding of international business is important for any business student because global events and competition affect almost all companies.

Geocentrism is the preferred approach to international business practices for most global firms.

In most cases, if the misery index of a country is high, then consumers and businesses are less likely to spend and invest.

In societies where trust is high, there tends to be a lower cost of doing business.

In the long run, MNEs must adequately meet the needs of all stakeholders in order to prosper and survive.

Intellectual property refers to the creative ideas, innovative expertise, or intangible insights that give an individual, company, or country a competitive advantage.

Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as sustainability.

Most people's basic values are acquired during childhood and are not readily changed later in life.

Preference for a consultative management style is prevalent in a society with low power distance.

Relativism is the theory that ethical truths depend on the values of the groups holding them; thus, MNEs should adhere to or adopt the cultures of the countries in which they are located

The Third Wave of Democratization was partially triggered by improved communication systems.

The creation of a code of conduct includes steps such as establishing a global policy, communicating the code to employees, ensuring that the policies are followed, and reporting results to external stakeholders.

The existence of the four favorable conditions of the diamond of national advantage does not guarantee that an industry will develop in a given locale.

The fact that a company is the market leader in one country is no guarantee that it will be the leader in another country.

Understanding trade theories helps companies know if they will need to compete against goods and services produced abroad.

When a U.S. citizen flies Japan Airlines, the airline acts as a service exporter for Japan.

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