IMS Exam 1

The United States became one of the first countries to prohibit dumping into its own market, in: A. 2006. B. 1856. C. 1916. D. 1776. E. none of the above.

1916

The level of services exports in 2010, worldwide, was:

A. $3.7 trillion.

How many countries in the EU use the euro as their currency?

A. 17

If Ecuador has an absolute advantage in coffee and Argentina in wheat, then, according to trade theory:

A. Ecuador should focus production on coffee and trade for wheat. B. Ecuador would do well to produce its own coffee rather than import it from Bolivia. C. Argentina should focus on producing wheat and trade for coffee.

Reasons for international firms to enter into foreign markets are linked to which of the following desires

A. Increased sales and reduced costs B. Protecting sales and profits from being eroded by competitors C. Creation of new markets.

International business differs from domestic business in that a firm operating across borders must deal with what environmental forces?

A. International B. Foreign

Which of the following are identified in the text as being drivers of globalization?

A. Technological

The Treaty of Rome, signed in 1957, established a common market for coal and steel for:

A. West Germany, Belgium, the Netherlands, France, Luxembourg, and Italy.

The Doha Development Agenda is:

A. a WTO conference on trade.

As stated in the text, an international business is:

A. a business whose activities involve crossing national borders.

A nation having absolute disadvantages in the production of two goods with respect to another nation has ___________ in the production of the good in which its absolute disadvantage is less.

A. a comparative advantage

NAFTA maintains restrictions on the movement of labor, a limitation that suggests it is:

A. a free trade area.

An international company is:

A. a global company. B. amultidomestic company.

The increased internationalization of business requires __________ to have a basic knowledge of international business.

A. all managers

The WTO has made progress on trade-related intellectual property rights (TRIPS). An example of this progress is:

A. an agreement that property rights should not take precedence over public health.

The Chinese concept of guanxi is an example of:

A. an informal, cognitive institution.

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the CEOs strongly believed that:

A. an international orientation should be an important part of college business education. C. the importance of international business skills and knowledge for promotion to senior executive positions was higher for companies anticipating an increased level of importance of international activities in the next five years.

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the internationally oriented courses that were viewed as being the most important for early career positions included topics related to:

A. an introduction to international business. B. international strategy and competitiveness. C. international legal and political issues.

The rapid expansion of world exports since 1980 demonstrates that:

A. business people must be prepared to meet increased competition. C. the opportunity to increase sales by exporting is a viable growth strategy.

Porter's Diamond Model of national advantage

A. claims that the ability of local firms in a country to utilize the country's resources to gain a competitive advantage is based on demand conditions, factor conditions, substitute products, and firm strategy, structure, and rivalry.

Offshoring is an application of:

A. comparative advantage.

Examples of the kinds of uncontrollable forces listed in the text are:

A. competitive. B. technological.

Environment as used in the textbook is the forces surrounding and influencing the life and development of the firm and is classified as:

A. controllable or uncontrollable. C. internal or external.

According to supporters of the globalization of trade and investment, free trade

A. creates more and better jobs.

IMF quotas are determined by the relative size of a nation in the global economy and:

A. determine the weight of the nation's voting in the IMF. B. determine how much a nation can borrow from the IMF. C. are the nation's "dues" to the IMF.

The UN is important to international business for many reasons, including that it

A. develops standards and norms in technical areas.

The WTO exists to:

A. establish and help implement rules of trade among nations in order to increase trade flows.

In examining the volume of international trade

A. exports of merchandise grew nearly fivefold between 1990 and 2010. B. exports of services grew more than 10-fold between 1980 and 2010.

This type of institution operates through laws and regulations, with coercion as the regulative mechanism.

A. formal

Firms that have substantial operations in more than one country are called:

A. global companies. B. multidomestic firms.

According to opponents of the globalization of trade and investment

A. globalization has produced uneven results across nations and people. B. globalization has had harmful effects on labor and labor standards. C. globalization has contributed to a decline in environmental and health conditions.

Management has no direct control over the external environment of the firm but can exert influence by

A. heavy promotion of new products to change cultural attitudes. C. lobbying.

Economic integration often progresses:

A. in stages, from free trade area to customs union to common market.

The monopolistic advantage theory suggests that firms in oligopolistic industries are likely to _______________ foreign direct investment when they have technical and other advantages over indigenous firms.

A. increase

International institutions offer graduating international business majors:

A. interesting career development and internship opportunities.

The forces over which management does have some command are called:

A. internal. B. controllable.

Foreign subsidiaries must obey the local laws. If they don't, according to the text they are subject to

A. legal action by the host country. C. seizure by the host government.

If you already have a job, you can enhance your opportunities for international experience by:

A. making your boss and the human resource management department personnel aware of your interest. B. meeting people in the home office who work with the company's foreign subsidiaries. C. taking additional international business courses and making sure that people in your company know what you are doing.

According to the text, the dimensions along which management can globalize (standardize) their company's international activities include

A. markets. B. competitive strategy.

Regional trade agreements such as NAFTA can be seen to impact the WTO:

A. negatively, because they undercut the nondiscrimination principle of the WTO.

The major function of the World Bank is to serve as a:

A. nonprofit banking cooperative for its members to meet development needs.

Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as:

A. normative and cognitive.

According to the text, political drivers of globalization include

A. preferential trading agreements. B. reduction of barriers to trade and foreign investment.

The main purpose of the OECD is to

A. provide economic research and a discussion forum.

The proportion of world commercial services exports accounted for by ___________ has evidenced an overall decline since 1980

A. the European Union B. Africa

That the common interest of all nations in a workable international exchange rate system transcends their conflicting international interests is the premise of:

A. the International Monetary Fund (IMF).

According to the text, the reasons international firms enter foreign markets are linked to:

A. the desire to increase profits and sales. C. the desire to protect profits and sales from being eroded by competitors.

In developing economies, informal institutions tend to play a greater role than in developed economies, possibly because

A. the developing economies have more ambiguity and lack formal institutions by definition, so informal institutions step into the breach. C. informal institutions emerge to give order to the unstructured, chaotic environment.

The international environment is the interactions between:

A. the domestic environmental forces and the foreign environmental forces. C. the foreign environmental forces of two countries when an affiliate in one country does business in another country.

IDA's purpose is to loan to:

A. the poorest nations.

In examining the volume of international trade:

A. the proportion of manufacturing value added generated by South and East Asia has quadrupled since 1980.

The most serious recent challenge to the EU has been:

A. the recent financial crisis.

Many of the Asian countries that are major exporters to the United States are also significant importers of American goods because:

A. their rising standards of living enable their people to afford more imported products. B. they are purchasing large amounts of capital goods to further their industrial expansion. C. they are importing raw materials and components that will be assembled and subsequently be exported, often to the United States.

More than half of the exports from developing nations go to developed nations, and:

A. this proportion has been declining over the past 35 years. B. approximately 70 percent of exports from developed economies also go to other industrialized nations.

According to trade theory:

A. traders need to know the exchange rate between their own currency and that of the nation they are considering trading with before they can decide whether it is advantageous to import, export, or buy locally.

The international business manager can choose to

A. transfer a management practice intact. B. transfer and adjust a management practice. C. not transfer a management practice at all.

Supporters of mercantilism:

A. viewed accumulation of precious metals as an activity essential to a nation's welfare.

Hofstede's long-term orientation tends to be found in:

Asian cultures and Brazil

One measure of the magnitude of international trade and how it has grown is that _____________ of everything grown or made in the world is now exported

B. 25 percent

The monopolistic advantage theory states that:

B. FDI is made by firms in oligopolistic industries possessing technical advantages over local companies.

All UN member-countries belong to the UN's:

B. General Assembly.

The World Bank's two major institutions are the International Development Association and the:

B. International Bank for Reconstruction and Development (IBRD).

_______________ occurs primarily because of relative price differentials among nations

B. International trade

Is the WTO's idea of "fair competition" really a code phrase for free trade?

B. Not really. Trade relationships among nations can be exceedingly complex, and the WTO supports fair competition, which may mean freer trade rather than free trade.

EU rulings:

B. affect all businesses within the EU and those that trade within the EU.

"Trade without discrimination" in the WTO means that

B. all trading partners must be treated the same.

The capability of one nation to produce more of a good with the same amount of input than another country is:

B. an absolute advantage

The OECD is called the "rich man's club" because its members:

B. are 34 of the world's wealthiest nations.

The major globalization drivers include all of the following except:

B. cultural.

Opponents of globalization argue that globalization has produced

B. deleterious effects on labor and labor standards. C. uneven results across nations and people.

The Organization for Economic Cooperation and Development provides information on:

B. economic and other activities within its member-nations.

The OECD has encouraged members to:

B. eliminate bribery in all commercial transactions.

Historically, international business

B. existed before the time of Christ. D. was influenced by the rise of the Ottoman Empire.

Environmental forces can be classified as:

B. external. C. uncontrollable. D. internal.

Foreign environmental forces often operate differently than domestic environmental forces because:

B. force values are different. C. changes are difficult to assess.

According to the text, personnel working in a foreign subsidiary are working in the international environment

B. if they are responsible for the subsidiary's exports. C. if they are also responsible for the management of another foreign subsidiary.

Between 1980 and 2010, the level of merchandise exports from Africa

B. increased by 250 percent.

Due to the expanding importance of foreign-owned firms in local economies, host governments have made their policies toward these companies:

B. more liberal.

Locating activities in another nation is:

B. offshoring.

The WTO is the only international organization designed to establish and help implement:

B. rules of trade among nations.

The major globalization drivers include all of the following except:

B. social.

The theory of resource endowment:

B. states that a nation will trade goods that can be produced with the production factor that is most abundant.

The proportion of world commercial services exports accounted for by ____________ has evidenced an overall decline since 1980.

B. the Middle East C. Latin America

Firms from __________ had the largest total outstanding stock of direct overseas investment at the beginning of 2010.

B. the United States

Foreign business denotes

B. the domestic operations within a foreign country.

The impact of the EU on the WTO could be said to be negative, since:

B. the favored trade relationships among EU members are not extended to nonmember countries, so the EU undercuts the WTO.

The kinds of forces in the foreign environment are __________ those in the domestic environment except that they occur in foreign nations.

B. the same as

The level of merchandise exports in 2010, worldwide, was:

C. $15.2 trillion.

The level of service exports worldwide increased more than _______ between 1980 and 2010

C. 10-fold

The EMU (European Monetary Union or Economic and Monetary Union) has established the euro, a currency that is used in:

C. 16 of the EU member-countries.

The worldwide stock of outward FDI is estimated to have increased _______ between 1990 and 2010.

C. 9-fold

The geographical area that receives the most International Development Association (IDA) credits and grants is:

C. Africa.

Two good places to begin country-level research are the websites of the:

C. BIAC and CIA.

The three largest markets for American exports of goods in 2010 were:

C. Canada, Mexico, and China.

_______ refers to the transportation of any domestic good or service to a destination outside a country or region.

C. Exporting

Mercantilists believed that:

C. a nation should have an export surplus in order to accumulate precious metals.

In a free trade area, members drop internal tariffs. External tariffs:

C. are maintained independently by each member.

International business really began:

C. before the time of Christ.

More than one-half of the exports from developing countries go to __________ countries, and this proportion has been _____________ over the past 35 years.

C. developed; decreasing

The first principle of the WTO's five basic principles is trade without:

C. discrimination.

According to the text, the tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is called:

C. economic globalization.

Economies of scale and the experience curve:

C. explain why many companies will engage in international trade.

When considering where to export, advantages to managers of focusing on a nation that is already a sizable purchaser of goods coming from the home country include:

C. export and import regulations are not insurmountable.

The domestic environment is composed of all the uncontrollable forces originating in the __________ that surround and influence the life and development of the firm.

C. home country

The United Nations is probably the best known among:

C. international organizations.

The international product life cycle:

C. is concerned with the role of innovation in trade patterns.

International institutions are important to international business managers because, in general, they:

C. limit choices, thereby providing ways to settle disagreements and resolve conflicts.

Adam Smith claimed that:

C. market forces, not government controls, should determine direction, volume, and the composition of international trade.

Decision making in the international environment is __________ it is in a purely domestic environment

C. more complex than

Regarding the annual outflows of foreign direct investment:

C. much of the recent increase has been associated with mergers, acquisitions, and other international investments made by companies in industries facing increased competition and global consolidation.

When considering where to export, advantages to managers of focusing on a nation that is already a sizable purchaser of goods coming from the home country include:

C. satisfactory transportation facilities have already been established.

ASEAN began as a:

C. security and military alliance among Southeast Asian nations.

Unconscious reference to one's own cultural values when judging behavioral actions of others in a new and different environment is called:

C. self-reference criterion.

The IMF initially played a central role in:

C. setting fixed exchange rates among nations' currencies with an established par value based on gold.

The EU's impact on international business is:

C. substantial, since EU standards, especially in the areas of ecology and sustainability, impact any firm that wants to do business in the EU.

To sum up international trade theory, we can say that the primary reason for trade is:

C. the existence of price differentials among nations.

International business differs from domestic business in that a firm operating across borders must deal with:

C. the foreign environment. D. the international environment. E. the domestic environment.

ASEAN began as a defensive alliance of 10 Asian nations concerned about:

C. the spread of communism in their region.

Most African nations have their main trade relationships:

C. with developed nations, often built on former colonial ties.

A term Hofstede uses to describe long-term orientation is:

Confucian dynamism

At the beginning of 2010, the value of the outstanding stock of foreign direct investment of all nations totaled more than:

D. $19 trillion.

UNCTAD, an agency of the United Nations, estimates there are __________ international firms in the world.

D. 82,000

The following country is not a member of ASEAN

D. China

Which country does not belong to the OECD?

D. China

The main difference between a free trade area (FTA) and a customs union is that in a customs union, there is:

D. a common external tariff.

The Doha Development Agenda is:

D. an extended conference of the WTO initially convened in Doha.

A global company is:

D. an organization that attempts to standardize operations worldwide.

A multidomestic company is

D. an organization with multicountry affiliates.

The purpose of the International Financial Corporation (IFC) is to invest in companies and financial institutions in developing countries in order to build:

D. domestic capital markets

Regarding foreign direct investment and trade:

D. fewer government barriers to trade, increased competition from globalizing firms, and new production and communications technology are causing many international firms to disperse the activities of their production systems to locations close to available resources.

At the end of World War II, the UN called for the conference that set up the World Bank and the IMF. This conference was:

D. held at Bretton Woods, New Hampshire.

The IBRD is a major institution of the World Bank whose function is to loan to:

D. middle-income and creditworthy poor nations.

Theory based on ____________________ states that international and interregional differences in production costs occur because of differences in the supply of production factors.

D. resource endowments

The idea that WTO members treat all members equally is known as:

D. the MFN (most-favored-nation) principle.

The UN's International Court of Justice (ICJ) is also known as:

D. the World Court.

The EU began as a common market for:

D. the coal and steel industries.

The results of liberalized trade so far have been:

D. uneven for developing and developed economies.

Informal institutions are composed of sets of:

D. voluntary agreements.

Regarding the volume of international trade, exports of goods and services ___________ in 2010

D. were nearly $19.0 trillion

Which of the following is explained by international trade theory?

E. All of the above

The three nations that exported the largest amount of goods to the United States in 2010 were:

E. Canada, Mexico, and China.

Which of the following elements are included in Porter's Diamond Model of national advantage?

E. None of the above

Regarding economic and social development:

E. for the Trade and Development Index, the best regional performance among developing countries was that of the countries of the East Asia and Pacific region.

According to the Exporter Data Base, small and medium-sized enterprises accounted for ___________ of all U.S. exporters.

E. nearly 98 percent

Regarding foreign investment:

E. none of A, B, and C.

According to the theory of comparative advantage:

E. none of A, B, or C.

The theory of overlapping demand:

E. none of A, B, or C.

Dunning's eclectic theory of international production states that if a firm is going to invest in production facilities abroad, it must have the following kinds of advantages:

E. none of the above.

__________ was the world's leading manufacturing country for about 1,800 years, until it was replaced by Britain in about 1840.

E. none of the above.

Regarding annual inflows of FDI:

E. two of A, B, and C.

The area with the greatest capacities in renewables as of 2010 is: A. the United States. B. European Union. C. India. D. Japan.

European union

Adam Smith explained how countries can benefit from international trade even if they lack any absolute advantage over their trade partners

False

An arrangement in which one or more activities that could be provided in-house are instead provided by another company is offshoring.

False

Arguments in support of mercantilism largely disappeared after the end of the mercantilist era in the late 1700s.

False

China, Mexico, and Japan are the three largest trading partners of the United States, in terms of the total volume of imports and exports.

False

Direct investment refers to overseas purchases of stocks and bonds to gain a return on the funds invested

False

Foreign direct investment may be an attempt by foreign companies to establish competitive advantage over potential competitors in other markets, due to possession of advantages not available to local firms. Such advantages possessed by foreign companies over their local competitors include knowledge about local market conditions and cost efficiencies from operating at a distance

False

Globally, the overall level and rate of growth of merchandise exports exceed those of commercial services.

False

If a Chinese worker earns $1 a day, then goods produced by this worker will cost less than the same goods produced by an American earning $18 an hour

False

Importing and foreign direct investment are two approaches to meeting overseas demand.

False

International firms must export their products or services in order to establish and expand their overseas operations.

False

International trade includes exports, imports, and foreign direct investment

False

Linder's theory of overlapping demand explains the direction of trade for minerals and agricultural products

False

Michael Porter claims that demand conditions, factor conditions, related and supporting industries, and firm strategy, structure, and rivalry, rather than government and chance, are factors that affect national competitiveness

False

Portfolio investment is the purchase of sufficient stock in a firm to obtain significant management control

False

Record levels of American outward foreign direct investment from 2000 to 2009, totaling more than $2 trillion, caused U.S. exports to decline during this time period.

False

Small and medium-sized enterprises accounted for nearly one-third of all U.S. exporters.

False

The dollar value of total world exports in 2010 was greater than the gross national product of every nation in the world except China.

False

The dynamic capability theory states that for a firm to invest overseas, it must have three kinds of advantages: ownership specific, internalization, and location specific

False

The level of merchandise exports coming from Africa decreased between 1980 and 2010.

False

The primary reason for international trade is a lack of natural resources in the developed nations.

False

The proportion of the outstanding stock of foreign direct investment accounted for by the United States declined by two-thirds between 1980 and 2010

False

The only cultural framework described in the text that is based on communication styles is:

Hall's high and low context

Sam Palmisano, CEO of IBM, has described a new way of doing business that goes to equity of distribution by observing that: A. profit sharing will need to increase. B. stakeholder theory provides a way forward, combining local and global. C. IBM would end its colonial company model and move on to an integrated model with high levels of trust among stakeholders. D. A and B.

IBM would end its colonial company model and move on to an integrated model with high levels of trust among stakeholders

The oldest orderly marketing arrangement, which was disbanded through the WTO, is the: A. Multi-Fiber Agreement (MFA). B. Jamaica Agreement. C. Textile Co-operation Treaty (CTC). D. Japanese truck export quota. E. Paris Convention.

Multi-Fiber Agreement (MFA)

The main transportation artery of Europe is the: A. Venice canal system. B. Danube-Dresden waterway. C. Lake Constantine system. D. Rhine waterway.

Rhine waterway

Lack of folkore knowledge is illustrated by:

Smirnoff's use of a Che Guevara image in Cuba, because Che is a national hero there. & Apple's use of an image of the Dalai Lama, because it offended China, where the government sees the Dalai Lama as a political dissident.

Nations whose mountains divide them into smaller regional areas include: A. the United States, Mexico, and Canada. B. Switzerland, Afghanistan, China, and Colombia. C. Luxembourg, France, and Romania. D. Estonia, Latvia, and Lithuania.

Switzerland, Afghanistan, china and colombia

A nation's relative ability to design, produce, distribute, or service products within an international trading context, while earning increasing returns on its resources, is known as national competitiveness

True

According to the text, differences in taste, a demand variable, can reverse the direction of trade predicted by the theory

True

According to the theory of comparative advantage, a nation can gain from trade if it is not equally less efficient in producing two goods

True

An important development in the level of worldwide FDI is the emergence of what has been called the "bamboo network" of ethnic Chinese family businesses based outside China

True

Approximately 70 percent of the exports from developed countries go to developed countries.

True

Both developed nations and developing nations tend to trade more with developed nations.

True

Currency devaluation helps a nation avoid losing markets and regain competitiveness in world markets.

True

Developed by the United Nations Conference on Trade and Development, the Trade and Development Index is a tool whose goal is to assist efforts "to systematically monitor the trade and development performance of developing countries with a view to facilitating national and international policies and strategies that would ensure that trade serves as a key instrument of development

True

Dunning's eclectic theory of international production provides an explanation for the choice by the international firm of its overseas production facilities

True

Historically, approximately two-thirds of the value of corporate investments made in the United States from abroad has been spent to acquire going companies rather than to establish new ones

True

Historically, foreign direct investment has followed foreign trade, and one reason is that foreign trade is typically less costly and less risky than making a direct investment into foreign markets

True

If a nation is continuing to receive appreciable amounts of foreign investment, its investment climate must be favorable

True

In 2009, the top 10 exporting and importing nations collectively accounted for over half of all exports and imports of merchandise and services worldwide.

True

Industrialized nations invest primarily in one another just as they trade more with one another

True

Internalization theory suggests that what an organization is good at should not be outsourced without very careful consideration

True

International trade theory shows that nations will attain a higher level of living by specializing in goods for which they possess a comparative advantage and importing those for which they have a comparative disadvantage.

True

Reflecting their continued economic development, developing countries have dramatically increased their share of FDI stock, from 1 percent in 1980 to 14 percent in 2010

True

Some observers have argued that American industry and the American economy as a whole will be strengthened by offshoring activities to workers in India or other nations that have comparative advantages in areas such as labor costs.

True

The book value, or the value of the total outstanding stock, of all foreign direct investment worldwide was $19 trillion at the beginning of 2010

True

The central idea of mercantilism is that there should be an export surplus so a nation can accumulate precious metals.

True

The development of expanded regional trade agreements, such as the Association of Southeast Asian Nations, Mercosur, and the EU, can substantially alter the level and proportion of trade flows within and across regions

True

The first formulation of international trade theory, by Adam Smith, was motivated by political considerations.

True

The magnitude of international trade and how it has grown are reflected in the fact that one-fourth of everything grown or made in the world is now exported.

True

The major part of foreign direct investment is made by large, research-intensive firms in oligopolistic industries.

True

The price of one currency stated in terms of another currency is the exchange rate.

True

The proportion of merchandise exports coming from Asia increased by over 90 percent between 1980 and 2010, with China accounting for nearly two-thirds of that increase.

True

The proportion of merchandise exports coming from Latin America and the Middle East decreased between 1980 and 2010.

True

The theory of absolute advantage suggests that under free, unregulated trade, each nation should specialize in producing those goods it can produce most efficiently.

True

There are a number of advantages in focusing attention on a nation that is already a sizable purchaser of goods coming from the would-be exporter's country

True

The International Energy Agency 2010 report observes that an energy revolution underway may well lead to: A. a 27 percent drop in oil usage. B. North America becoming the center of alternative energy research. C. Africa and the Middle East increasingly relying on fossil fuels. D. Europe relying increasingly on nuclear. The revolution is slow but underway, according to the IEA.

a 27 percent drop in oil usage

Heavy oil is: A. a group of unconventional oil sources such as oil sands, shale, coal, and natural gas, all of which via processing can yield oil. B. a rich oil found in deposits in Saudi Arabia and Kuwait whose molecular weight is heavier than normal oil. C. oil extracted from biomass that is reprocessed.

a group of unconventional oil sources such as oil sands, shale, coal, and natural gas, all of which via processing can yield oil.

Government protection of economic activities is: A. two of the following. B. a historical function of government. C. a recent responsibility of government. D. a socialist characteristic. E. stronger in democracies.

a historical function of government

E. T. Hall suggests that to learn another culture, you have to undergo extensive training or spend:

a lifetime in the other culture

International business can be a powerful political force, in part because: A. a recent Supreme Court ruling in the United States allows corporate contributions to political races. B. many top management team members are willing to accept roles with national security agencies. C. about half the world's 100 largest economic units are firms. D. business is all about achieving political goals. E. two of the above.

about half the world's 100 largest economic units are firms

Privately owned companies sometimes complain that government-owned companies have the following unfair advantages: A. higher-cost financing. B. ability to charge higher prices. C. access to government contracts. D. all of the above. E. two of A, B, and C.

access to government contracts

Porter in his diamond model distinguishes two types of factor conditions: A. positive and negative factors. B. contributing and disaggregating factors. C. advanced and basic factors. D. foreign and domestic factors.

advanced and basic factors

With factor conditions, Porter's diamond model distinguishes between basic factors, those a country inherits, and A. imported factors, those it brings in from abroad. B. demand conditions, the aggregate demand in the economy. C. climate conditions, the basic influence on business options in the specific location. D. advanced factors, those a country can mold: labor and infrastructure.

advanced factors. those a country can mold: labor and infastructure

Subsidies are problematic because they: A. are administered as a form of political patronage. B. aid export businesses or protect domestic businesses from imports. C. encourage nationalization. D. violate UN agreements. E. two of the above.

aid export businesses or protect domestic businesses from imports

A nontariff barrier is illustrated by: A. the French requirement in 1982 that all Japanese VCRs be inspected in Poitieres, far from the port and lacking speedy highway connection to the port. B. the widespread Japanese belief that American rice can cause cancer. C. the European attitude toward genetically modified crops. D. all of the above. E. two of A, B, and C.

all of the above

Arguments for trade restrictions include: A. national defense, infant industry, and job protection. B. punishment of offending nations. C. fair competition and retaliation. D. all of the above. E. two of A, B, and C.

all of the above

As an energy source, nuclear power: A. is growing significantly, especially in developing countries. B. has been growing as the price of oil climbs and cleaner energy sources (nonpolluting) are sought. C. has been exploited by France, which has one of the lowest greenhouse gas emissions in the industrialized world. D. all of the above.

all of the above

Geographical proximity contributes to: A. knowledge of the country by its neighbors. B. lower freight costs. C. the likelihood of trade relationships. D. all of the above.

all of the above

Nonfuel minerals: A. include chrome, manganese, platinum, and arsenic, all necessary for modern living. B. are mostly sourced through imports in the United States. C. frequently originate in China. D. all of the above.

all of the above

Nonquantitative nontariff barriers: A. are seen by many to be the most significant nontariff barrier. B. often involve government participation in trade, especially in customs and other administrative procedures. C. often involve standards. D. all of the above. E. two of A, B, and C.

all of the above

Standards are a way to establish nontariff barriers, and examples are: A. all of B, C, and D. B. Japan's refusal to import light mayonnaise. C. Canada's categorization of orange juice with added calcium as a drug and subject to special requirements. D. the prohibition of imported drugs at the consumer level in the United States. E. two of B, C, and D.

all of the above

The reasons a government may nationalize a firm include: A. to extract more money from the firm. B. to increase the firm's profitability. C. to preserve jobs. D. all of the above. E. two of A, B, and C.

all of the above

Zimbabwe is an example of: A. a richly endowed country that has suffered because of government instability. B. a government that expropriated private property, that is, nationalized it, and then redistributed it. C. a country whose leadership stole the 2008 election. D. all of the above. E. two of A, B, and C.

all of the above

An example of environmental dumping can be found in the: A. maquiladora plants of Mexico, located near the U.S. border and operating at lower environmental standards than would be required in the United States. B. nuclear waste shipments to developing nations. C. garbage shipments from New Jersey to developing nations. D. all of the above. E. two of A, B, and C.

all the above

In high-context cultures, face-to-face relationships tend to be important and: A. knowledge is situational. B. decisions focus around personal relationships. C. long term. D. all of the above.

all the above

Financial dumping is: A. sending excess financial resources to other nations. B. a government's decision to subsidize low interest rates for purchases of its exports. C. allowing a bank to have a low level of capital to total assets. D. all of the above. E. two of A, B, and C. q

allowing a bank to have a low level of capital to total assets

Why are rare earths a concern in industrialized economies? A. Although they are relatively common, they do not occur in concentrated form often. B. They are very rare. C. They are used in the smelting process. D. They are not a concern, except for political reasons.

although they are relatively common, they do not occur in concentrated form often

Facebook is:

an organization based on free association

Musical tastes vary across cultures:

and are built on the solid foundation of the octave

Nuisance tariffs: A. annoy the importers with red tape and administrative paperwork. B. are a historical anomaly. C. are found in developed nations more than in developing nations. D. have no point other than to indicate that tariff regulations change quickly. E. two of the above.

annoy the importers with red tape and administrative paperwork

Whereas Trompenaars was trained as an economist, Hofstede and Hall were trained as:

anthropologists

Natural resources are: A. anything that is alive in the natural world. B. anything provided by nature on which people depend. C. any raw material that becomes a component in a manufactured good. D. anything that is used for food or fuel.

anything provided by nature on which people depend

As we use frameworks to help us understand culture, it's important to remember that frameworks:

are comparative, with our own culture being the reference point

The specific-diffuse dimension looks at:

attitudes toward public and private life

A good example of the relationship between water supply and population concentration is: A. eastern Europe B. China C. Australia D. Japan

australia

Every continent has inland waterways that provide inexpensive access to interior markets except: A. Russia. B. North Africa. C. Australia. D. North America.

australia

Petroleum, a relatively cheap nonrenewable energy source, is: A. in abundant supply but is not environmentally clean. B. being increasingly depleted and is expected to run out in another 50 years, but in the meantime, improved retrieval techniques are being developed. C. clean, cheap, and available, but most of the reserves are located in countries whose leadership is critical of the industrialized world. D. expected to run out in another 10 years and needs to be replaced with renewable energy sources quickly.

being increasingly depleted and is expected to run out in another 50 years, but in the meantime, improved retrieval techniques are being developed.

Most developed nations have:

both a and b (small power distance and high individualism)

In order to really understand another culture:

both the spoken and unspoken languages are important to understand

Production managers have discovered that their introduction of new production methods across cultures is affected by varying attitudes toward:

change

Which country controls the export market of rare earths? A. Brazil B. Russia C. the United States D. China

china

Although it pollutes heavily, this energy source is on the rise everywhere, especially in China: A. natural gas. B. coal. C. nuclear. D. diesel.

coal

Cote d'Ivoire uses child labor, often imported and kidnapped, in the cultivation and harvesting of: A. marijuana. B. palm oil. C. cocoa bean. D. poppy. E. none of the above.

cocoa bean

If people belong to strong, cohesive in-groups that look after them in exchange for loyalty, the culture is likely to be:

collectivist

The trend for firms in regard to country risk assessment (CRA) is to: A. avoid it as an added cost in competitive markets. B. concentrate much more on CRA in making decisions about foreign activities. C. use CRA in obviously dangerous locations, but only in those situations. D. all of the above. E. two of A, B, and C.

concentrate much more on CRA in making decisions about foreign activities

Hall's high and low context is based upon communication styles and specifically on the role of:

context

Trompenaars' particularist dimension describes a culture in which:

context is considered when rules are applied & relationships rather than rules are applied

According to Trompenaars, a culture's attitude toward the environment can range from:

control over the environment to harmony with it

Barriers to trade: A. are a political issue but affect the cost of imports only marginally. B. cost consumers billions of dollars per year. C. save jobs in unprotected industries at $231,289 per job per year. D. none of the above. E. two of A, B, and C.

cost consumers billions of dollars per year

Social dumping occurs when an exporting country: A. imposes an export tax on domestic businesses that export, to compensate for the opportunity cost to the domestic market. B. creates unfair competition based on lower costs, which undermines social support systems to the worker. C. target-markets to specific vulnerable groups in the importing country. D. exports goods that are not sellable in the domestic environment due to hazards and safety issues. E. two of the above.

creates unfair competition based on lower costs, which undermines social support systems to the worker

New types of dumping include: A. cultural, social, financial services, and tax dumping. B. truck, financial services, and black-market dumping. C. gray-market, subsidiary, and transfer-pricing dumping. D. two of the above. E. all of A, B, and C.

cultural, social, financial services, and tax dumping

The North-South divide uses climatic differences to explain: A. population differences. B. trade patterns. C. differences in human development. D. cultural differences.

differences in human development

Porter's diamond is a model that offers an explanation of: A. differing levels of success among the national players in world markets. B. endowment factor differentials. C. the impact of climate on development. D. macro-level FDI.

differing levels of success among the national players in world markets

Customs procedures in many countries often: A. are transparent and fair. B. discriminate against imports and favor exports. C. are online and impersonal. D. two of the above. E. all of A, B, and C.

discriminate against imports and favor exports

Environmental sustainability is both local and global because: A. environmental conditions do not recognize national borders. B. governments are not prepared to address environmental issues beyond the UN. C. business has become global, so sustainability must follow the trend. D. all of the above.

environmental conditions do not recognize national boarders

When you assert that a certain aspect of your own culture is superior, you are probably exhibiting:

ethnocentric behavior

Transshipping is used to: A. reduce shipping costs, like consolidation. B. avoid import administration. C. evade allocated quotas. D. all of the above. E. two of A, B, and C.

evade allocated quotas

Unlike quotas, voluntary export restraints (VERs) are imposed by the: A. importing country's government. B. exporting country's government. C. either the importing or exporting country's government; what matters is that they are voluntary. D. the importing company. E. none of the above.

exporting country's government

A culture's sense of beauty and taste is:

expressed in the culture's art and music and important for international managers to know about

World Bank studies have shown that underdevelopment is often due to: A. factors such as parasites and viruses that are a part of tropical climates and expand unchecked because of the lack of winter temperatures. B. mental slowness in people of the climates around the equator. C. socialist political regimes. D. lack of government investment in education.

factors such as parasites and viruses that are a part of tropical climates and expand unchecked because of the lack of winter temperatures

"When in Rome, do as the Romans do" is a solid, moral guideline.

false

A common cause of the added complexity of foreign environments is managers' unfamiliarity with other cultures and is called self-reference syndrome.

false

A company headquartered in another country is known as a foreign business.

false

A comparison based on hourly wages is a reasonable guide to a need to protect domestic jobs.

false

A compound duty is a combination of specific and variable duties.

false

A culture's aesthetics is the sense of moral behavior taught to the young.

false

A historical function of capitalist—but not communist—governments has been the protection of the economic activities within their geographic area of control.

false

A multidomestic company is an organization that attempts to standardize and integrate operations worldwide in all functional areas.

false

ASEAN, whose initial goal was political, to foster peaceful relations among members, includes China as its core member.

false

According to the definitions in the text, a multidomestic firm is an organization that attempts to standardize operations worldwide in all functional areas.

false

According to the text, environmental elements over which management does have some control—including competitive, labor, and financial forces—are called internal forces.

false

According to the text, the international environment is all of the uncontrollable forces originating outside the home country that surround and influence the firm.

false

According to the text, the self-absorption criterion is probably the biggest cause of international business blunders.

false

All EU members use the euro and thus have given up part of their national sovereignty to the EU.

false

Although India is a member of the WTO and has benefited greatly from increased trade as a result of WTO agreements, China is not yet a member.

false

Although some business areas are affected by culture, accounting and finance are objective and thus universal.

false

Although the EU can influence the practices of businesses located in non-EU-member countries, Microsoft has been able to maintain business in the EU much as it conducts business in the United States.

false

Among trading blocs, the EU has the largest GDP per capita.

false

An examination of the 2009 Human Development Report shows that only 23 of the 182 countries for which data were available had average annual GDP per capita growth rates that were higher than the U.S. growth rate for the period 1990-2007.

false

An important assumption that the IMF makes is that a strong organization with rules and penalties for their violation is necessary to support trade.

false

An international company is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences

false

Anthropologist E. T. Hall suggests that to learn another culture, you need to spend two weeks in it with a training program.

false

As discussed in the chapter, institutions are organizations constructed to create jobs for government employment initiatives.

false

As the term is used in the text, foreign business is business whose activities are carried out across national borders.

false

Because Austria sided with the West in the Cold War, it became a favored location for offices of international firms servicing eastern European operations.

false

Because it is a high polluter, coal is on the decline as an energy source.

false

Biomass is a category of renewable energy fuels based on their heavy weight.

false

Bodies of water, much like deserts and mountains, also serve as barriers to trade.

false

Britain was the world's leading manufacturing country for about 1,800 years, until it was replaced by the United States at the end of the 1800s.

false

Business makes few costly mistakes in product introductions into foreign markets.

false

Businesses favor unstable governments because they present more profit opportunities.

false

By and large, the UN record of facilitating business transactions has been minor.

false

Climate differences explain differences in human and economic development because the less temperate climates limit mental powers.

false

Coal and nuclear power are both in decline as energy sources

false

Compassion has nothing to do with sustainable business. Business is business

false

Country risk assessment is a measure of the threat of nationalization.

false

Country risk assessment is an evaluation that assesses a country's political situation and policies to determine how much risk exists of a change in that country's government.

false

Critics of large global firms compare these firms' sales with nations' total sales to illustrate the tremendous size of these firms

false

Culture includes everything objective, and religion contains values and is thus not a part of culture.

false

Economic cooperation often begins with a common market, as in the case of the EU.

false

Environmentally sustainable businesses need to consider the economic and ecological systems in which they function, but not the social.

false

Examples of informal, normative institutions would include local town/city governments and the U.S. government.

false

Exporting refers to the transportation of any good or service to a destination inside a country or region.

false

External environmental forces are commonly referred to as controllable.

false

Fair competition is a strong rationale for trade barriers.

false

Feminine cultures in Hofstede's dimensions care about relationships and are not focused on business success. It is quality of life that matters.

false

Formal institutions operate through laws and regulations. They require members to make a written commitment.

false

Former British prime minister Tony Blair led the privatization movement.

false

Geographical proximity is rarely a major reason for trade.

false

Gift-giving across cultures is a simple kindness and need not be complicated with attempts to understand. The act of generosity says everything in and of itself.

false

Heavy oil is oil weighted down with an extra carbon molecule, and it can be gasified using the Fischer-Tropsch process.

false

Hofstede's framework is based on social science theory.

false

In Hall's use, context is the irrelevant environment in a communication act.

false

In human resources, laws administered by the Equal Employment Opportunity Commission, (EEOC) allow an American company to be successful on the cultural front in all foreign labor markets.

false

In organizing their international activities, there are five dimensions along which management can globalize or standardize these activities.

false

Informal cognitive institutions are not important to international managers because such managers localize their hiring, and so they can draw on local talent.

false

International business differs from domestic business in that a firm operating across borders must deal with the forces of two kinds of environments—domestic and foreign.

false

Kidnap, ransom, and extortion are techniques often used by terrorists against which no insurance is available.

false

Leadership is universal; all people want to be led by a strong leader.

false

Leadership traits may vary some by culture, but underneath they build on the idea that all people want to be led and directed.

false

Low-context cultures tend to be polychronic, with a lot going on at one time.

false

New types of dumping include concession dumping.

false

Nonrenewable energy sources include coal, fossil fuels, and ocean thermal energy conversion.

false

Nontariff barriers that are not quantitative can be divided into two groups, those that are established by the government participation in trade and those that are administrative.

false

One example of nationalization of private companies is the nationalization of French-owned firms in Europe after World War II.

false

One way that the WTO defines dumping is the selling of a product abroad for less than the average cost of production in the importing nation.

false

Only in communist countries do governments own the factors of production.

false

Only national governments bring cases. Of course, national governments can bring up claims made by businesses, but the government brings the complaint.

false

Only those companies that have foreign operations need to be aware of what is occurring globally in foreign markets and their industry.

false

Opponents of globalization argue that globalization has contributed to an improvement in environmental and health conditions.

false

Paying ransom makes sense because a life is saved and the payments can be traced.

false

Permanent members of the UN Security Council vote on Security Council measures, and only the secretary-general of the UN, Ban Ki-Moon, has veto power.

false

Porter's diamond model suggests that Switzerland should not be competitively successful.

false

Protection of infant industries through trade restrictions is used only in developing nations.

false

Recently, regional trade agreements have grown, a trend that may be seen to strengthen the WTO, according to the text.

false

Religion is not an important aspect of culture in countries that are secular and have split the church from the state.

false

Retaliatory trade restrictions are not made for dumping because price competition is protected by the WTO.

false

Sanctions against nations are not a form of trade restriction because the motivation is political.

false

Sanctions are a trade restriction that is effective in forcing change.

false

Spoken language does not demarcate culture, but body language does

false

Stakeholder theory suggests that balancing competing tensions in a business is impossible and that recognizing this early in the process is helpful.

false

Subsidies from the United States to its sugar industry have been critical in helping to prevent a loss of jobs from American companies that are high users of sugar.

false

Sustainable approaches in business usually involve trade-offs such as lower profits compensated by reduced marketing costs and improved image/reputation.

false

Switzerland exports cheese and chocolate because one of its factor endowments is lots of rich agricultural land.

false

Terrorists avoid kidnapping because the repercussions can be harmful to their movement.

false

The Bretton Woods Conference established the European Union currency, the euro.

false

The Doha Development Agenda is an extended development plan for Doha, Qatar.

false

The EU has been unsuccessful at harmonizing customs and tax formalities within member nations' borders.

false

The EU is administered by the European Commission, a group composed of 27 commissioners elected at the EU level.

false

The UN General Assembly is the main staff organization responsible for the UN administration.

false

The United States has only about 10 percent of the world's population, so the vast proportion of most companies' potential customers are located elsewhere.

false

The WTO supports trade with discrimination as a basic right of trading nations

false

The World Bank funds infrastructure projects in developed countries.

false

The World Bank is made up of one large institution, IBRD.

false

The family is the basic unit of institutions based on free association.

false

The following is an area in which the UN plays a significant role for international business: loaning seed money for entrepreneurial start-ups in developed nations.

false

The forces in the international environment are the same as those in the domestic environment except that they occur in foreign nations.

false

The government officials who make decisions about import restrictions are particularly sensitive to their country's broad population of consumers, who will be hurt by international competition.

false

The international environment is composed of all the uncontrollable forces that surround and influence the firm's life and development

false

The length of the investment in a foreign country has no impact on the risk assessment for that investment. What matters is the economic and political situations in the country.

false

The national defense argument for trade restrictions is based on the development level of the country.

false

The only reason firms are nationalized is to spread a socialist-communist ideology.

false

The practice of country risk assessment is an exercise in xenophobic and ethnocentric thinking.

false

The reasons international firms enter foreign markets are all linked to either (1) the desire to increase profits or (2) the desire to increase sales.

false

The specific-diffuse dimension has to do with social patterns for child rearing

false

The stakeholder model for environmentally sustainable business has failed because we don't have an accounting system to measure the present costs of environmental irresponsibility.

false

The term international business is used to describe an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

false

The types of information a firm will need to judge country risks vary according to the nature of its business and the amount of money invested.

false

The unspoken language cannot tell the international manager something that the spoken language does not.

false

The utility of risk analyses of social, political, and economic factors increases rapidly over longer time spans.

false

There are few cultural misunderstandings in the discipline of marketing.

false

There are three main classes of social institutions, based on the conditions of their formation: family, kinship, and free association.

false

Trade barriers create costs that are paid by the government erecting the barrier.

false

Trading blocs always bring cost savings to international firms.

false

Transnational corporations account for approximately 25 percent of total global output and nearly 50 percent of world trade.

false

Trompenaars' achievement vs. ascription dimension describes social status based on what one does or who one is. The United States is a culture in which people build who they are through work, so its social status tends to be based on ascription.

false

Trompenaars' dimension of individualism vs. communitarianism differs greatly from Hofstede's individualism-collectivism dimension.

false

Trompenaars' dimension of universalism vs. particularism measures whether rules or rewards regulate behaviors.

false

Uncontrollable forces are external forces over which management cannot exert any influence.

false

Unlike the topography, the political climate of a country has relatively little influence on its exports.

false

Voluntary export restraints are imposed by the importing nation to avoid violating WTO rules.

false

We are each born with a unique culture.

false

When government-owned companies compete with private companies, the private companies have the advantage.

false

When operating in other cultures, if we realize that, underneath it all, we are all the same, we will be fine.

false

When people are kidnapped for ransom, the right response is to pay the ransom, get the hostages released, and then retaliate.

false

With globally networked transportation, location does not matter as a basic factor condition.

false

Hofstede's masculinity-femininity dimension suggests that, as an international manager, you might well:

find men and women equally ready to assume leadership roles in a feminine culture

In a small power distance culture:

first names are likely to be used in the office because the ideal is equality

Sustainable business models: A. incorporate a more socialist political approach to the marketplace. B. have as a goal to ensure that the marketplace exists for future generations. C. regard environmentalism as more important than profit. D. A and C.

have as a goal to ensure that the marketplace exists for future generations

Unconventional sources of petroleum such as oil sands and shale are often grouped together and referred to as: A. nonrenewable hopes. B. new sources. C. peak sources. D. heavy oil.

heavy oil

Hall suggests that communication tends to be implicit and indirect in:

high context

The largest portion of the world's proven oil reserves is located in: A. low-risk areas. B. high-risk areas. C. climate-challenging areas. D. developed nations' oil fields.

high-risk areas

In some countries people are relatively loosely connected and tend to focus on themselves and their immediate family. Hofstede would describe these countries as:

individualistic

Bodies of water that provide inexpensive access to interior markets are known as: A. inland waterways B. seaway outlets. C. river systems. D. inland oceans.

inland waterways

Two basic ways to understand the role of leadership are as providing direction for a collection of individuals and as:

integrating a group

The relationships among ecological, social, and economic systems in sustainable environments need to be: A. discreet. B. renewable. C. positive. D. interdependent.

interdependent

One example of the effect of topography is: A. isolated language groups, which require special marketing adjustments. B. regional metals markets. C. a unified China. D. equal distribution of populations.

isolated language groups, which require special marketing adjustments

Uncertainty avoidance describes man's search for Truth, according to Hofstede, because:

it describes how comfortable the culture's members feel in an unstucted situation

What is the role of the home country in risk assessment? A. It has no role. B. It is a significant consideration. C. It is used initially, but then more micro issues become the focus of CRA. D. None of the above. E. Two of A, B, and C.

it is a significant consideration

Culture plays a significant role in the discipline(s) of:

leadership, accounting, financing, marketing, human resources, and production

Culture is a group of shared worldviews, social rules, and interpersonal dynamics that is:

learned, interrelated, and shared

Quotas are a quantitative barrier that sets: A. limits, established by the importer. B. goals, established by the exporter. C. precise quantities of imports or exports, based on price. D. expectations on domestic and foreign sales. E. two of the above.

limits, established by the importer

The three characteristics of evolving sustainable business practices are: A. local, global, and improving quality of life. B. environmental sustainability, quality-of-life sustainability, and triple-bottom-line accounting. C. limits, interdependence, and equity. D. none of the above.

limits, interdependence, and equity

Import duties can be set to encourage: A. increased imports based on sales volumes. B. local input. C. price-fixing. D. imports from other suppliers. E. all of the above.

local input

In high-context cultures, relationships tend to be:

long term

Monochronic cultures tend to be:

low context

In more dense populations, international managers can expect: A. increased political discord. B. markets that respond well to word-of-mouth promotion. C. contrasting topographical features. D. lower marketing and distribution costs.

lower marketing and distribution costs

Government stability is a characteristic of a government that: A. makes sudden radical policy changes. B. readily shifts alliances to maintain power. C. maintains predictability in fiscal, monetary and political policies. D. two of the above. E. all of A, B, and C.

maintains predictability in fiscal, monetary and political policies

Europe follows the precautionary principle approach to environmental health and safety. This means: A. everyone takes precautions and is always on the watch for environmental issues. B. once a product is thought to be harmful, it is investigated immediately. C. manufacturers of new products need to prove the product is safe. D. consumers regularly review product safety regulations.

manufacturers of new products need to prove the product is safe

China's vast and mountainous terrain leads to: A. many languages and dialects. B. political unity, as in Switzerland. C. economic disparities. D. population disparities.

many language and dialects

Swiss exports are concentrated, high-density products that minimize the need for importing bulky materials because: A. mountain ranges increase transport costs into and out of Switzerland and limit local resources. B. the Swiss love of chocolate and watches influenced the export patterns. C. high-density exports encounter lower tariffs. D. B and C.

mountain ranges increase transport costs into and out of Switzerland and limit local resources

This is the cleanest of the nonrenewable fuel sources, and it has become a substitute for oil as oil prices increase: A. natural gas. B. diesel. C. nuclear. D. kerosene.

natural gas

Chouinard, the founder of Patagonia, observed that: A. triple-bottom-line accounting is the way to build sustainability. B. compassion is the first step in sustainability. C. our approach to fossil fuel consumption is clearly unsustainable. D. no business can be done on a dead planet.

no business can be done on a dead planet

Culture includes everything but:

none

This group of resources, which includes chrome and manganese, is used in many technology applications, and the United States imports many of these resources 100 percent: A. rare earths. B. nonfuel minerals. C. rare minerals. D. mineral gems.

nonfuel minerals

The marketed energy use has been dominated since 1980 by: A. renewable energy sources. B. nuclear energy and coal. C. nonrenewable energy sources. D. solar and wind power.

nonrenewable energy sources

The presence of tattoos suggests social outcasts universally, based on:

nothing, because this statement is not accurate

Instead of declining, this nonrenewable energy source, because of its lack of pollution and the rising price of oil, has seen significant growth: A. wind power. B. nuclear power. C. geothermal power. D. petroleum.

nuclear power

Wind power is sourced: A. on land only. B. on land and sea. C. where altitudes permit. D. in the Swiss Alps.

on land and sea

Nationalization and privatization are: A. similar trends. B. opposing trends. C. both risks faced by privately held firms. D. both risks not encountered in capitalist democracies. E. two of the above.

opposing trends

If people consider the context and relationships when they make decisions about the application of rules, they are likely to be:

particularist

Leadership may be influenced by sociocultural forces, and its model might be:

paternalistic, heroic, integrative, or directive

In HC cultures, time tends to be:

polychronic

The extent to which members of a society expect and accept that power is to be distributed unequally is termed by Hofstede as:

power distance

The primary motivation of tariffs is to: A. raise government revenue at the cost of importers. B. raise the price of imports, to protect domestic goods. C. punish countries over political issues. D. encourage foreign consumption. E. none of the above.

raise the price of imports, to protect domestic goods

Stakeholder theory pushes managers to be clear about how they want to do business, so it encourages: A. recognition of and transparency with values and underlying principles. B. discussion of profit center margins. C. strategy development from the top down. D. B and C.

recognition of and transparency with values and underlying principles

In an affective culture (Trompenaars), emotions are seen as:

responses to be freely displayed

An achievement culture is one in which members are:

rewarded for what they do, what they have accomplished, and so what they are

Densely populated areas coincide with: A. rivers, lakes, and seacoasts. B. inland waterways. C. rich mineral reserves and rare earth deposits. D. low levels of environmental awareness.

rivers, lakes, and seacoasts

An argument against using trade restrictions to punish an offending nation is that: A. sanctions seldom achieve their goal of forcing change in the offending country. B. sanctions are relatively harmful to the citizens of the offending country. C. sanctions are not condoned by the UN. D. sanctions decrease the cost of doing business. E. two of the above.

sanctions seldom achieve their goal of forcing change in the offending country

The top four countries in proven reserves are: A. China, Japan, Singapore, and Malaysia. B. Kuwait, Saudi Arabia, the United States, and Mexico. C. Qatar, Libya, Nigeria, and Venezuela. D. Saudi Arabia, Canada, Iran, and Iraq.

saudia arabia, Canada, iran, iraq

Dumping is: A. selling a product abroad for less than its production cost in the importing nation. B. selling a product abroad for less than the market price in the export nation. C. exporting a product to a third country without correct documentation. D. two of the above. E. all of A, B, and C.

selling a product abroad for less than the market price in the export nation

This material, when heated to 500°C, will yield 25 liters or more per ton of input: A. shale. B. biomass. C. natural gas. D. light petroleum.

shale

The national defense argument for trade restrictions has been used in the United States to argue for restriction on imports of: A. munitions. B. uniforms. C. shoes. D. all of the above. E. two of A, B, and C.

shoes

Because of their close linkage, sociologists often combine the terms:

social and cultural

Kinship and free association are:

social institutions found in all societies and categorized by the conditions of their formation

The characteristics of Hofstede's long-term orientation include:

social order and hierarchial relationships

According to the text, the fastest-growing renewable energy source is: A. solar PV. B. nuclear power. C. wind power. D. biomass.

solar PV

This government commercialized the German Fischer-Tropsch process in order to obtain oil from coal through a catalyzed chemical reaction: A. Israel. B. the Sudan. C. South Africa. D. Germany.

south africa

Gift-giving in many cultures is marked by:

specific etiquette and meaning that may be markedly different from what the international manager knows in the home culture

Interface, the producer of Flor carpeting, has a solid record in sustainable business practice and: A. makes impressive contributions to sustainable development in developing economies. B. is committed to triple-bottom-line accounting. C. spins its products from petroleum. D. sources its raw materials from recycled plastic bottles.

spins its products from petroleum

The United States allocates quotas to 40 countries for specific tonnages of: A. sugar. B. roast beef. C. malt beer. D. soybeans E. two of the above.

sugar

Stakeholder theory is an understanding of how business works that: A. takes into account culture and environmentalism. B. rejects the importance of the bottom line. C. emphasizes planning. D. takes into account all identifiable interest holders.

takes into account all identifiable interest holders

Rare earths are a group of elements used in: A. jewelry. B. technology applications. C. farming. D. solar applications.

technology and applications

This is the only industrialized country that has not ratified the Kyoto Protocol, a UN convention on climate change: A. China. B. France. C. Russia. D. the United States.

the United States

That almost everyone in the United States self-identifies as middle class suggests that:

the United States measures small on the power distance dimension

Accounting controls directly relate to a culture's assumptions about:

the basic nature of people

Referring to Hall's high-and low-context framework, in a high-context culture,

the context carries much of the communication

Individualism-collectivism measures:

the degree to which people in the culture are integrated into groups

The masculine-feminine dimension is about:

the gap between men's and women's roles in the culture

Latin and Asian countries' scores on Hofstede's power distance dimension are relatively large and relatively low on:

the individualism dimension

The Council of European Union, the primary policy-setting institution of the EU, is composed of:

the member-states' ministers who represent the specific area being discussed.

Patagonia recognizes that doing business following the traditional approach, focusing on quarterly earnings, is not complete because this does not focus on: A. the negative impact of the business. B. the cost of environmental sustainability. C. consumer needs for green merchandise. D. triple-bottom-line (3BL) accounting.

the negative impact of the business

The stakeholder model requires businesses to think about: A. the stakeholders' interest in profitability. B. the network of tensions caused by competing demands. C. strategy in light of sustainability. D. the frequency of social issues faced by the stakeholders.

the network of tensions caused by competing demands

Proximity is a factor in explaining: A. a nation's political system. B. the number of a nation's political and trade relationships. C. language patterns. D. demand conditions.

the number of a nation's political and trade relationships

Topography, including mountains, deserts, plains, and bodies of water, greatly influences: A. political relationships. B. the physical distribution of products and services. C. the local approach to education and health services. D. local attitudes toward industrially developed economies.

the physical distribution of products and services

Deserts and tropical forests seem opposites, but they have this trait in common: A. they are good vacation spots, and thus an economic stimulator. B. they have small populations on their edges. C. they separate markets, increasing transportation costs. D. they are hospitable to insects.

the separate markets, increasing transportation costs

The most common form of direct government participation in trade is: A. the subsidy. B. shipping on national vessels. C. import duties. D. a combination of the above. E. none of the above.

the subsidy

Studies conducted by the World Bank indicate that tropical climates allow for: A. the unimpeded reproduction and growth of weeds, viruses, birds, insects, and parasites. B. lack of the need to provide heat and shelter that is present in northern climates. C. unparalleled trade. D. cultivation of citrus and four crops per year.

the unimpeded reproduction and growth of weeds , viruses, birds, insects, and parasites

An argument against the protection of an infant industry is that: A. in the long run the industry will have a competitive advantage. B. firms need protection from imports until the required investment capital is obtained. C. protection of emerging industries occurs only in developing nations. D. there can be high costs from subsidizing infant industries. E. Two of the above.

there can be high costs from subsidizing infant industies

The reasons a government may nationalize a firm include: A. to get government contracts. B. to promote the ideology of capitalism. C. to preserve jobs. D. all of the above. E. two of A, B, and C.

to preserve jobs

Physical barriers that have led to the development of separate languages in the same country are known as: A. political and cultural patterns. B. topographical barriers. C. linguistic tariffs. D. differentiating borders.

topographical barriers

A way to measure a company's success in sustainable business practices is: A. to examine the return on investment. B. triple-bottom-line accounting. C. to monitor the company in a social context. D. to review the marketing materials.

triple-bottom-line accounting

A business whose activities are carried out across national borders is known as an international business.

true

A global company is an organization that attempts to standardize and integrate operations worldwide in most or all functional areas.

true

A variable levy confers benefit on the domestic producer, as with the EU variable levy on grain.

true

According to the text, the domestic environment is all of the uncontrollable forces originating in the home country that surround and influence the firm's life and development.

true

According to the text, the level of intracompany trade of multinationals in 1930, as a percentage of world trade, may have exceeded the proportion at the end of the 20th century.

true

All managers need to have a basic knowledge of international business.

true

An example of an informal, cognitive institution would be the celebration of Halloween.

true

As Kofi Annan, former secretary-general of the UN, observed, the UN exists to help us master the challenges of our common, global destiny, which we can do only if we face them together.

true

Changing the method of going abroad from exporting to overseas production is often necessary to protect foreign markets.

true

China and India combined are using more marketed energy than is the United States, and this trend is projected to increase.

true

Cognitive institutions are important to the international manager because these institutions help the manager understand the schema operating in their international environments and are easily missed or misunderstood by the non-native, so schemas can easily lead to misunderstandings

true

Country risks are increasingly political in nature.

true

Cultural attitudes toward change can influence the acceptance of new production methods.

true

Duties may be used to encourage local input.

true

Environmental sustainability is about maintaining the environment, and it is both local and global.

true

Every coast between 20 and 30 degrees of the equator (north or south) is dry.

true

Expanded international trade is linked with the creation of more and better jobs.

true

External forces in the international business environment are commonly called uncontrollable forces.

true

Facebook is a social institution based on free association.

true

Foreign business refers to the operations of a company outside its home or domestic market

true

Globalization has produced uneven results across nations and people

true

Greater profits may be obtained by either increasing total revenue or decreasing the cost of goods sold.

true

Hall's high-and low-context framework is based upon communication styles.

true

Hofstede describes his Confucian dynamism dimension as dealing with Virtue regardless of Truth.

true

Hofstede's individualism-collectivism dimension measures the degree to which people tend to be integrated into groups.

true

Human resources are influenced by cultural values because values are the foundation of motivation and evaluation.

true

Importing refers to the transportation of any good or service to a destination into a country or region, from a foreign origination point.

true

In a customs union, common external tariffs are added to an existing FTA, as found in the Southern African Customs Union and Mercosur.

true

In high-context cultures, people tend to form long-lasting relationships that endure over time.

true

Institutions are constructed to provide meaning and stability to social life, regulate the relations of individuals to each other, and limit behavior of individuals and firms

true

Interface, the manufacturer of Flor, is an example of a petroleum-based business that has developed a sustainable model.

true

Internal environmental forces are commonly referred to as controllable.

true

International business managers need to be able to communicate across cultural borders, even if they don't speak foreign languages.

true

International institutions provide nations the opportunity to build multilateral solutions, and thus make significant contributions to international stability.

true

Limits, interdependence, and equity are characteristics of sustainable business practices.

true

Low-context cultures such as the United States have explicit communication patterns.

true

Material culture describes how people make things, who makes what, and why.

true

Material culture includes all human-made objects.

true

Mountain barriers found in the area of the Pakistan-Afghanistan border impede travel and separate populations.

true

Mountains tend to impede trade, whereas flat areas tend to facilitate trade relationships.

true

New institutional theory suggests that institutions be understood as collections of rules and codes of conduct that limit behavior.

true

New types of dumping include tax dumping.

true

Nuclear power is a leading contributor to the French energy grid.

true

Nuisance tariffs require importers to go through the administrative paperwork connected to paying tariffs, even though the payment itself might be quite small.

true

One of the significant differences between formal and informal institutions is how they gain compliance.

true

One variable commonly used to measure where and how fast internationalization takes place is the increase in total foreign direct investment.

true

Opponents of free trade point out that globalization has contributed to a decline in environmental and health conditions.

true

Policy continuity and government stability are more important to a business than the type of political system.

true

Porter suggests that adverse conditions can motivate innovation, which may lead to the development of a competitive advantage.

true

Porter's diamond can be used to explain the importance of the environment and natural resources.

true

Saudi Arabia and Canada have the largest proven oil reserves.

true

Some think that renewed focus on exchange rates would be a good path forward for the IMF, which is struggling with core issues related to its purpose.

true

Subsidies that confer a benefit may well evoke countervailing duties.

true

Supporters of globalization generally argue that it is the best strategy for advancing the world's economic development.

true

Sustainable business practices have three characteristics: limits, interdependence, and equity.

true

Switzerland, China, and Colombia are nations that present topographic challenges to marketers because their markets are divided by mountain ranges.

true

Tariff barriers may be used to protect domestic industry from foreign, lower-cost producers.

true

That free trade is the best strategy for advancing the world's economic development is one of the few propositions on which almost all economists agree.

true

The EU is a supranational body that has become, essentially, a regional government.

true

The International Finance Corporation (IFC) acts as an investment banker, arranging private risk ventures in developing countries.

true

The Multi-Fiber Arrangement (MFA) was an orderly marketing arrangement to regulate textiles and clothing exports.

true

The Ottoman Empire's powerful location raised the cost of Asian trade for the Europeans and resulted in a search for sea routes to Asia.

true

The UN Environment Programme laid the groundwork for the Climate Change Convention, which led to the Kyoto Protocol.

true

The UN International Court of Justice hears cases that involve disputes between national governments.

true

The United Nations operates with voluntary agreements, so it is essentially an informal institution.

true

The United Nations uses the term transnational to describe an enterprise doing business in more than one country.

true

The United States and Canada are small power distance countries because they expect a level playing field, socially, at least at the ideal level.

true

The WTO has negotiated a TRIPS agreement whereby property rights do not take precedence over public health.

true

The largest portion of proven oil reserves can be categorized as being at the highest level of investment risk.

true

The national defense argument for trade restrictions suggests that some industries, even if they are not competitive, need protection from imports

true

The tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is referred to as economic globalization.

true

The term international company refers to both global and multidomestic companies.

true

The world stock of outward foreign direct investment was $19 trillion at the beginning of 2010, which was more than nine times what it was in 1990.

true

There are five major kinds of globalization drivers, all based on changes that are leading international firms to the globalization of their operations.

true

There are many outstanding international career opportunities for people with desirable interpersonal and language skills that are not in mainstream business but may require basic business expertise.

true

Through 2035, fossil fuels are expected to remain the world's dominant energy source.

true

To hedge the terrorism risk, there are insurance, antiterrorist schools, and even companies to handle negotiations.

true

To protect an infant industry, trade restrictions might be effective

true

Trade restrictions violate the spirit of the WTO.

true

Triple-bottom-line accounting is an example of sustainability with economic, social, and environmental accountability.

true

U.S. ocean shipping companies are benefiting from U.S. government subsidies.

true

When the U.S. military contracts out security details in war zones, it is engaged in privatization.

true

When we use cultural frameworks to build our understanding of another culture, we use our own culture as an implicit reference point.

true

While international business as a discipline is relatively new, international business as a business practice is not.

true

Your neighbor's business is cutting down an acre of first-growth, virgin forest and planting a lawn and garden beds at its HQ. You are likely to be in an Anglo culture, where domination of nature seems normal.

true

Zimbabwe's government offers an example of government instability.

true

Government stability is understood to refer to a government's: A. policies—their ability to endure over time. B. ability to keep itself in power. C. two of A, B, and D. D. ability to adjust to sudden changes by making radical policy changes. E. all of A, B, and D.

two of A B C

With privatization: A. assets are transferred from the public sector to the private sector. B. stock is bought back so that the company no longer has public shareholders. C. state activities are moved into private management through contracts. D. all of the above. E. two of A, B, and C.

two of A B and C

A specific example of a sustainable business is Patagonia, as evidenced in its: A. Footprint Chronicles program that addresses the trade-offs global sourcing creates and evaluates the impact of sourcing decisions. B. ecosystem model of sustainability that relies on the synergies between financial, environmental, and social elements. C. product lines and credit policies. D. A and B.

two of A, B, and C

Renewable energy sources: A. will replace fossil fuels, due to price, depletion, or carbon emissions. B. are growing at greater rates than the nonrenewables in the United States and Europe. C. A and B. D. are all available everywhere.

two of A, B, and C

Coal pollutes heavily: A. so its use has declined markedly in the past 15 years. B. yet its consumption has increased and is projected to continue on this trend, especially in China and India. C. and contributes to greenhouse gas emissions, especially in China, India, and the United States. D. B and C.

two of A,B,C

Kidnapping: A. two of B, C, and D. B. is a weapon used by some terrorists to extract ransom. C. can result in counterproductive results if ransom is paid for hostages. D. can be insured against by obtaining kidnapping, ransom, and extraction (KRE) insurance. E. all of B, C, and D.

two of B C D

According to the text, the type of information a firm will need to judge country risks: A. none of B, C, and D. B. varies according to the nature of its business. C. varies according to its size. D. varies according to the length of time required to yield a satisfactory return. E. two of B, C, and D.

two of the above

Among the external businesses that conduct country risk assessment are: A. the Economist Intelligence Unit, Euromoney, the Harvard Business Review B. Moody's, Standard and Poor's, STRATFOR C. The New York Times, Wilson Quarterly, Forum D. two of the above. E. all of A, B, and C.

two of the above

Counterarguments to the "protect domestic jobs from cheap foreign labor" argument include: A. the labor rate is not all of the labor cost or the production cost. B. productivity per worker is what matters. C. cheap foreign labor is a natural occurrence. D. two of the above. E. all of A, B, and C.

two of the above

Cultural dumping is found in: A. Japan's past refusal to import American skis because Japanese snow is different, so the skis should meet different standards. B. Saudi Arabia's refusal to import Playboy magazine. C. The small town of Orleans, Massachusetts, decision to prohibit franchised stores from operating in the town. D. two of the above. E. all of A, B, and C.

two of the above

In the United States, the Smoot-Hawley Tariff Act: A. outlawed tariffs for U.S. imports. B. led to the Wall Street crash of 1929. C. established some of the highest tariffs the United States has known. D. two of the above. E. all of A, B, and C.

two of the above

Official prices ensure that: A. imported goods will be sold at minimum prices, to avoid dumping. B. a black market will be healthy and available for imported goods. C. low-priced invoices to avoid tariffs will not be successful. D. two of the above. E. none of A, B, and C.

two of the above

Hofstede's measure of the amount of effort a society puts into ordering the environment and avoiding ambiguity is termed:

uncertainty avoidance

The Trompenaars dimension that describes a society whose rules regulate behaviors for all members and are applied evenly is:

universalist

Monochronic time is best illustrated by:

university scheduling patterns

Understanding the religious beliefs of foreign markets is:

useful, because religions affect attitudes and beliefs across cultures

One danger of using the culture frameworks introduced in Chapter 4 is that if we apply them prescriptively:

we'll limit rather than enrich our perceptions & our perceptions will become stereotypes, however sophisticated

Climate is probably the most important element of the physical forces, as it sets the limits on: A. annual rainfall, and thus water supply. B. population growth patterns. C. what people can do physically and economically. D. expected FDI.

what people can do physically and economically

Climate influences: A. intelligence and energy levels, per the North-South divide. B. what people can do, physically and economically. C. levels of emotional well-being. D. adjustment and motivation.

what people can do, physically and economically

Material culture includes:

what people in the culture make, such as tools, art, and everything material

In low-context cultures:

what you say tends to be what you mean, in that communication tends to be explicit