international business exam 1 review

The system of values and norms that are shared among a group of people and that when taken together constitute a design for living best defines: a. society b. culture c. principles d. value systems

b. culture

Political scientist Samuel Huntington argues that modernization in non-Western societies can result in a retreat toward the traditional. This is exemplified by _____. a. the popularization of modern gadgets b. the doption of Western culture c. the Islamic resurgence d. the higher levels of literacy and education

c. the Islamic resurgence

Straw men approaches to business ethics offer appropriate guidelines for ethical decision making in a multinational enterprise. True or False

False

Privatization refers to the process of hiring private management consultancy firms to manage state-owned enterprises. True or False

False

The globalization of markets and production and the resulting growth of world trade, foreign direct investment, and imports all imply that firms are finding their home markets protected from foreign competitors. True or False

False

Democracy is one of the consequences of economic growth and progress. True or False

True

Friedman's arguments suggest that improving working conditions beyond the level required by the law and necessary to maximize employee productivity will reduce profits and are therefore not appropriate. True or False

True

GNI per capita can be adjusted by purchasing power to account for differences in the cost of living. True or False

True

Hofstede's study found that in masculine cultures, achievement and the effective exercise of power determined cultural ideals. True or False

True

The shift toward a more integrated and interdependent world economy is referred to as globalization. True or False

True

Which of the following statements is true about an international business? a. An international business must find ways to work within the limits imposed by government intervention. b. An international business needs to invest directly in operations in other countries. c. An international business can be managed in the same way that a domestic business is managed. d. An international business needs to have homogenous practices across countries.

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

Cultural relativism suggests that: a. a firm should adopt the ethics of the culture in which it is operating b. the only social responsibility of a firm is to increase profits c. a firm's ethical policies should remain the same in all cultures d. a multinational should follow its home-country cultural practices in all the host-countries where it has operations

A. a firm should adopt the ethics of the culture in which its operating

Which of the following is a consequence of globalization? a. Differentiation of material culture b. Decreasing interdependence between national economies c. Increasing outsourcing of services d. Increase in barriers to cross-border trade

C. Increasing outsourcing of services

An American firm that sets up production units in China is accused of releasing untreated chemical waste into water bodies. The manager of the firm defends the firm stating that, factories in China set up by French and British firms also release untreated chemical waste into water bodies. In this example, the manager is using the utilitarian approach to business ethics. True or False

False

Many states in Asia, Latin America, and Western Europe have shifted away from a mixed economy to a market-based economy. Which of the following measures is most likely to be promoted by such states? a. Deregulation of the economy b. Fixing of prices by the government c. Lowering competition d. State-ownership of enterprises

a. Deregulation of the economy

Which of the following is a consequence of the emphasis on individual performance in many Western societies? a. High degree of managerial mobility b. Increased loyalty towards an individual company c. Decreased entrepreneurship d. Executives are not exposed to different ways of doing business

a. High degree of managerial mobility

Three values central to the Confucian system of ethics have very important economic implications. Which of the following is NOT one among them? a. Rule-based law b. Reciprocal obligations c. Honesty in dealings with others d. Loyalty

a. Rule-based law

Which of the following observations about the Foreign Corrupt Practices Act is true? a. The act outlawed the paying of bribes to foreign government officials to gain business b. There is enough evidence that it put U.S. firms at a competitive disadvantage. c. The act originally allowed for "facilitating payments." d. The Nike case was the impetus for the 1977 passage of this act

a. The act outlawed the paying of bribes to foreign government officials to gain business

According to Adam Smith, A country should specialize in the production of a good when it has _____. a. an absolute advantage in the production of the good b. the ability to help country increase its national output c. a strong domestic demand for the good d. the necessary raw materials for production

a. an absolute advantage in the production of the good

An upper-middle-class manager tends to have hostile relationship with the working-class employees in the firm because of his tendency to perceive himself as superior to them based on his class background. In this example, the manager exhibits: a. class consciousness b. social mobility c. group orientation d. cultural awareness

a. class consciousness

Which of the following is an example of ethnocentrism? a. A French business owner, who plans to expand his market to China, conducts a detailed cultural study of China to customize his marketing campaign. b. An American manager criticizes the cultural practices of Saudi Arabia, when he is sent there on business, because it differs from his own cultural norms c. A manager in India looks down upon his subordinates because they are from a lower caste, compared to him. d. An upper-middle-class woman talks rudely to a sales person, because she looks down upon individuals belonging to the working-class.

b. An American manager criticizes the cultural practices of Saudi Arabia, when he is sent there on business, because it differs from his own cultural norms

Country X, a poor country, invents a revolutionary electronic product. The country markets this new product in other poor countries to garner large profits. This occurrence is against the idea of _____. a. theory of comparative advantege b. Product life-cycle theory c. Ricardo's theory d. theory of absolute advantage

b. Product life-cycle theory

Which of the following observations is correct? a. Protection of the right to private property is not embedded within Islam b. The economic principles of Islam prohibit the payment or receipt of interest c. The economic principles established in the Koran are against free enterprise. d. The Koran speaks disapprovingly of earning legitimate profit through trade and commerce

b. The economic principles of Islam prohibit the payment or receipt of interest

Supporters of globalization maintain that the apparent decline in real wage rates of unskilled workers: a. is due to the migration of low-wage manufacturing jobs offshore. b. is due to technological changes that create greater demand for skilled workers. c. can be checked by limiting free trade and foreign investment. d. can be checked by increasing government ownership of enterprises.

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

The Human Development Index (HDI) is based on all of the following measures EXCEPT: a. educational attainment b. political freedom c. whether average incomes are sufficient to meet the basic needs of life d. life expectancy at birth

b. political freedom

The finance minister of a country considers several large, state-owned iron manufacturing units to be inefficient and a source of corruption. To generate resources for public expenditure and promote economic growth, the government decides to auction an entire iron manufacturing plant to sell it to a strategic investor. This process exemplifies _____. a. nationalization b. privatization c. liberalization d. industrialization

b. privatization

Which of the following factors, according to Porter's national Diamond, is most likely to give a country competitive advantage over another country? a. natural resources b. skilled labor c. climate d. demographics

b. skilled labor

Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of all of the following reasons EXCEPT: a. they are away from their ordinary social context and supporting culture b. they are psychologically and geographically closer to the parent company c. they may be based in a culture that does not place the same value on ethical norms important in the manager's home country. d. they may be surrounded by local employees who have less rigorous ethical standards

b. they are psychologically and geographically closer to the parent company

Which of the following theories emphasizes the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are needed for producing particular goods? a. Ricardo's theory b. Porter's theory c. Heckscher-Ohlin theory d. Smith's theory

c. Heckscher-Ohlin theory

Which of the following is NOT an impediment that makes it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe? a. Issues associated with economic and political risk b. Government regulations c. Reduced tariffs on imports of manufactured goods d. Barriers to foreign direct investment

c. Reduced tariffs on imports of manufactured goods

Cross-cultural literacy refers to: a. an individual's self-concept derived from perceived membership in a relevant social group. b. abstract ideas about what a group believes to be good, right, and desirable. c. an understanding of how cultural differences can affect business. d. the phenomenon of merging and converging cultures

c. an understanding of how cultural differences can affect business.

The emphasis on individualism in the United States results in all of the following disadvantages EXCEPT: a. difficulty to achieve cooperation both within a company and between companies. b. difficulty in building teams within an organization to perform collective tasks c. executives are not exposed to different ways of doing business d. managers tend to develop good general skills but lack the company-specific experience.

c. executives are not exposed to different ways of doing business

Interdependent political, economic, and legal systems of a country make up its: a. socioeconomic fabric b. cultual environment c. administrative agenda d. political economy

d. political economy

An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a _____. a. command economy b. planned economy c. market economy d. closed economy

c. market economy

An international business, unlike a multinational enterprise, _____. a. needs to have manufacturing units in at least two foreign nations b. needs to manufacture products or provide services that target a global market c. need not invest directly in operations in other countries d. need not customize its products to the requirements of national markets

c. need not invest directly in operations in other countries

The United Nations Universal Declaration of Human Rights, related to employment, upholds all of the following EXCEPT: a. just and favorable work conditions b. equal pay for equal work c. prohibition of trade unions d. protection against unemployment

c. prohibition of trade unions

Hofstede's uncertainty avoidance dimension considered: a. how a society deals with the fact that people are unequal in physical and intellectual capabilities. b. the relationship between gender and work roles c. the extent to which different cultures socialized their members into accepting ambiguous situations and tolerating uncertainty d. the relationship between the individual and his or her fellows

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

Globalization is criticized because it increases the power of _____. a. unskilled labor to form labor unions b. governments to own enterprises c. nation-states to regulate markets and reduce competition d. supranational organizations over nation-states

d. supranational organizations over nation-states

Identify the theory that supports the view that in some cases countries export for the reason that the world market can support only a limited number of firms. a. Smith's theory b. Ricardo's theory c. Heckscher-Ohlin theory d. New trade theory

d. New trade theory

What will happen, according to Paul Samuelson's critique, if a rich country enters into a free trade agreement with a poor country? a. The productivity of the poor country will decline rapidly b. Both the countries will incur losses due to the exchanges between them c. Both the countries will garner benefits from the exchanges between them d. The poor country will rapidly improve its productivity

d. The poor country will rapidly improve its productivity

The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation. a. Friedman effect b. Noblesse Oblige c. Inequity aversion d. Tragedy of the Commons

d. Tragedy of the Commons

The products of Carmen Stores, an international sports apparel chain, are manufactured in sweat factories in China. According to the company president, using sweatshop labor offers a means of livelihood to children and young adults, as well as supplies good quality apparel to customers at a lower cost. She asserts that the actions of the company are justified because it results in the benefit of the maximum number of people. The company president's argument is based on which of the following ethical viewpoints? a. The righteous moralist b. The Friedman doctrine c. Kantian approach to business ethics d. Utilitarian approach to business ethics

d. Utilitarian approach to business ethics

The ______ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states. a. International Development Association b. World Bank c. International Court of Justice d. World Trade Organization

d. World Trade Organization

A market economy encourages innovation because ____. a. the prices of goods and services, including new products, are fixed by government b. government-owned and funded research centers become hubs of innovation c. state ownership of enterprises reduces risks of innovation d. economic freedom leads to greater incentives for innovation

d. economic freedom leads to greater incentives for innovation

Which of the following terms refers to the unit cost reductions associated with large sized outputs? a. constant marginal returns b. absolute advantage of production c. diminishing marginal returns d. economies of scale

d. economies of scale

Which of the following is one of the four attributes present in Porter's diamond? a. structural innovation b. procedural innovation c. economies of scale d. factor endowments

d. factor endowments

Company A entered the production of office software before its competitors. Because of this, the company's products are more familiar among and favored by customers. This situation exemplifies the _____. a. constant marginal returns b. diminishing marginal returns c. economies of scale d. first mover advantage

d. first mover advantage

A multinational enterprise (MNE) is a firm that _____. a. lists its securities on a public exchange b. does most of its business on the Internet c. exports its products to multiple countries d. has production units in more than two countries

d. has production units in more than two countries

According to John Rawls's difference principle, a. certain people or institutions are obligated to provide benefits or services that secure the rights of others b. fundamental human rights should transcend national borders and cultures c. the best decisions are those that produce the greatest good for the greatest number of people d. inequalities are justified if they benefit the position of the least-advantaged person

d. inequalities are justified if they benefit the position of the least-advantaged person

David Ricardo's theory of comparative advantage explains global trade in terms of the _____. a. first mover advantage that certain countries and firms enjoy b. geographical differences between various countries c. late mover advantage that certain countries and firms possess d. international differences in labor productivity

d. international differences in labor productivity