International Business Exam #1

Multilateral Investment Guarantee Agency (MIGA)

A subsidiary of the World Bank that provides insurance against political risks

Political Risk Assessment

A systematic analysis of the political risks a firm faces in foreign countries

Which of the following markets has the GREATEST impact on the world's current economic activity? A. U.S. B. EU C. China D. Japan

A. U.S.

Which virtue of a job candidate would most likely be perceived as valuable by a Japanese employer? A. Unity B. A competitive nature C. Individualism D. Quantifiable material goals

A. Unity

Power Orientation

Beliefs that people in a culture hold about the appropriateness of power and authority differences in hierarchies such as business organizations

Big Ten

-Another term researchers use to describe countries in the emerging markets category -Argentina, Brazil, China, India, Indonesia, Mexico, Poland, South Africa, South Korea, and Turkey

Commonwealth of Independent States (CIS)

-Organization formed from the former republics of the Soviet Union in 1991 -Consists of 12 of the NIS

Just-in-Time (JIT) System

-Suppliers are expected to deliver necessary inputs just as they are needed -Inventory management technique pioneered by the Japanese

Merchandise Exports and Imports

-Trade in goods, tangible products (i.e. clothing, computers, etc.) -Referred to as visible trade by the British

Service Exports and Imports

-Trade in services, intangible products (i.e. banking, travel, etc.) -Referred to as invisible trade by the British

About what percentage of the world's 500 largest corporations in 2010 were headquartered in the U.S.? A. 27% B. 12% C. 45% D. 19%

A

Greenfield Investment

A brand-new investment

Embargo

A comprehensive sanction against all commerce with a given country

International Licensing

A contractual arrangement in which a firm in one country licenses the use of its intellectual property to a firm in a second country in return for a royalty payment

Export Promotion

A country pursues economic growth by expanding its exports

Theocracy

A country that applied religious law to civil and criminal conduct

Core Competency

A distinctive strength or advantage that is central to a firm's operations

OECD

A group of 34 market-oriented democracies formed to promote economic growth

Social Orientation

A person's beliefs about the relative importance of the individual and the groups to which that person belongs

Under the UN Convention of the Laws of the Sea, countries are given control over navigation within _____ of the coastline. A. 12 miles B. 1 miles C. 20 miles D. 5 miles

A. 12 miles

U.S. exports of goods/services in 2012 accounted for about _____% of U.S. GDP A. 14 B. 23 C. 45 D. 30

A. 14

The countries of North America produce approximately ________% of the world's output. A. 26 B. 45 C. 18 D. 52

A. 26

Which of the following best describes the difference between the way a person from an Anglo country would define a family and the way a person from an Arab country would define family? A. A person from an Anglo country would likely include only parents and siblings; a person from an Arab country would likely include cousins, uncles, and in-laws as well B. A person from an Anglo country would likely include parents, siblings, cousins, uncles, and in-laws; a person from an Arab country would likely include only parents and siblings C. A person from an Anglo country would likely include friends as well as blood relatives; a person from an Arab country would likely include only blood relatives D. A person from an Anglo country would likely include only blood relatives; a person from an Arab country would likely be friends as well E. A person from an Anglo country would include only a spouse and children; a person from an Arab country would likely include all blood relatives

A. A person from an Anglo country would likely include only parents and siblings; a person from an Arab country would likely include cousins, uncles, and in-laws as well

Which of the following best describes the difference between a highly socially stratified country and less socially stratified country? A. A person in a highly socially stratified country would be offended to work alongside someone from a lower stratum; a person in a less socially stratified country would likely not be aware of such distinctions B. A person in a highly socially stratified country would likely associate with a workplace subordinate at home; a person in a less socially stratified country would be unlikely to associate with a coworker outside the workplace C. A person in a less socially stratified country would be happy to learn that a coworker earned a large bonus; a person in a highly socially stratified country would be offended to learn of his coworker's success D. A person in a highly socially stratified country would be unlikely to notice a person of lower social stratum in the workplace; a person in a less socially stratified country would be offended at the presence of someone from a lower social stratum E. A person in a highly socially stratified country would be offended to learn that a coworker earned a large bonus; a person in a less socially stratified country would be happy for his coworker's success

A. A person in a highly socially stratified country would be offended to work alongside someone from a lower stratum; a person in a less socially stratified country would likely not be aware of such distinctions

Which of the following is NOT a type of culture? A. Adaptive B. National C. Local D. Regional E. Corporate

A. Adaptive

Why do countries with access to advanced technology avoid selling their technology to countries with weak intellectual property laws? A. Advanced technology loses its market value if it is illegally copied and disseminated B. Weak intellectual property laws forbid companies from using FIFO accounting strategies C. These countries' courts tend to rely on common law, which is not preferred by technology firms D. These countries limit the legitimate exchange of technology in an effort to fight counterfeiting E. Weak intellectual property laws lead directly to more serious political risks, such as civil war

A. Advanced technology loses its market value if it is illegally copied and disseminated

_______ operates under bureaucratic law. A. China B. Iran C. England D. Mexico

A. China

You are an American business owner operating a steel mill in a foreign country. After a violent revolution, the country's new government determines that your mill should be nationalized. It seizes the company, but offers you fair market value in cash for its assets. In which of the following has the country engaged? A. Expropriation B. Nationalization C. Repatriation D. Privatization E. Confiscation

A. Expropriation

Which principal method of valuing inventory produces a clearer estimate of the value of the firm's existing inventories? A. FIFO B. GAAP C. FASB D. IFRS E. LIFO

A. FIFO

How would you characterize the U.S. on the Hofstede's 5 Dimensions of Social, Power, Uncertainty, Goal and Time Orientation? A. High, low, medium, medium, low B. Medium, low, low, low, low C. High, low, high, high, high D. Low, low, low, low, high E. Low, high, medium, high, low

A. High, low, medium, medium, low

The country that Extech Corp. has decided to enter in one in which long-term relationships, cultural clues, and understanding and emotions are important in doing business. The country's approach would best be described as ____________. A. High-context culture B. Interpersonal culture C. Cluster culture D. Low-context culture E. Aggressive culture

A. High-context culture

Which country below is considered socially immobile? A. India B. Canada C. Singapore D. U.S.

A. India

A MNC wants to hire the most qualified worker for one of its branches in India, but it is concerned that her hiring will hurt morale because of her low social status. Which of the following is the basis of the corporation's concern? A. Indian culture is highly stratified B. Indian culture is materialistic C. Indian culture values the status quo D. Indian culture is deeply religious E. Indian culture is sexist

A. Indian culture is highly stratified

The Jet Group is considering moving its production to Sri Lanka, with a long-term goal of eventually entering South Asian markets. Some company executives favor the idea of contract manufacturing using local players, whereas others feel a direct investment would be better. Which of the following, if true, would MOST strengthen the argument for contract manufacturing? A. Jet does not want to assume too much risk, at least initially B. Most of Jet's competitors have opted for licensing C. This move will help promote ties with the local government D. Jet would like to have complete control over the manufacturing process E. Jet will be able to provide employment to the locals

A. Jet does not want to assume too much risk, at least initially

In Iran, the religious law is based on the teachings of the ___________. A. Koran B. Buddha C. Napoleonic Code D. Bible

A. Koran

The ___________ the society, the most possible it is for individuals to move from one stratum to another. A. Less stratified B. More populated C. Less populated D. More stratified

A. Less stratified

What is London's origin as a world financial center? A. Military power of the British Empire in the 19th century B. Prestige of the London Stock Exchange C. Influence of royalty on the city's reputation D. Rule over several former American colonies

A. Military power of the British Empire in the 19th century

Social structure is best defined as the ______________. A. Overall framework that determines the roles of individuals within a society B. Attitudes of MNEs towards corporate social responsibility on a global scale C. Means by which a society's members communicate with each other D. Behavior of and opportunities available to MNCs operating in a given society

A. Overall framework that determines the roles of individuals within a society

Gary is the president of a medium-sized company. During his workday, Gary concerns himself with the strategy and pays little attention to daily operations. This is an example of which of the following? A. Power-respecting orientation B. Tolerant power orientation C. Power-tolerant orientation D. Individualist social orientation E. Respectful power orientation

A. Power-respecting orientation

In which of the following countries is social mobility likely to be highest? A. The U.S. B. India C. The UK D. Hong Kong

A. The U.S.

Businesses in _______ discourage nepotism while in ___________ family ties are crucial to ensure the growth of a company. A. The U.S.; China B. France; the U.S. C. China; Germany D. Saudi Arabia; the UK

A. The U.S.; China

The prime market for lower-income countries that are trying to raise their living standards through exports is __________. A. U.S. B. Germany C. China D. Japan

A. U.S.

Social Mobility

Ability of individuals to move from one stratum of society to another

Accounting Reserves

Accounts created in a firm's financial reports to record forseeable future expenses that might affect its operations

Macropolitical Risk

Affects all firms in a country

Micropolitical Risk

Affects only a specific firm or firms within a specific industry

International Financial Reporting Standards (IRFS)

An alternative transparent approach to financial reporting issued by the International Accounting Standards Board (IASB)

International Management Contract

An arrangement wherein a firm in one country agrees to operate facilities or provide other management services to a firm in another country for an agreed on fee

Political Risks

Any changes in the political environment that may adversely affect the value of a firm's business activities

Host Country

Any other country in which the company operates

Power Tolerance

Attach much less significance to a person's position in the hierarchy

Which of the following companies would be MOST likely to retain control over its trademarks in a foreign market that practices both "first to file" and "use it or lose it" policies? A. A German company that begins using its trademarks in the new market while waiting for the long application process to conclude B. A Chinese company that establishes its trademark in the new market and starts a small branch office in the country immediately C. An American company that files for control of its trademarks that are technically owned by local individuals D. A French company that hopes to freely attach its trademarks to newly purchased local businesses without filing to protect it E. A Japanese firm that acts quickly and establishes its trademarks over 10 years before entering the foreign market

B. A Chinese company that establishes its trademark in the new market and starts a small branch office in the country immediately

Official accounts in companies' financial reports that record the company's foreseen future expenses are referred to as _____________. A. Goodwill B. Accounting reserves C. Standards and practices D. Generally accepted accounting principles E. "Last in, first out"

B. Accounting reserves

The process by which people not only understand a foreign culture, but also modify and adapt their behavior to make it compatible with that culture is called _____________. A. Cultural convergence B. Acculturation C. Self-reference criterion D. Cross-cultural literacy E. Time orientation

B. Acculturation

Which form of family is most emphasized in Somalia? A. Blended B. Ancestral C. Extended D. Nuclear

B. Ancestral

Point Technologies and its distributor in Singapore signed an International Distribution Agreement. In the event of a dispute, they have agreed not to rely on Singaporean or U.S. courts, but to have a third party hear the dispute and decide right and wrong. What is this process normally referred to as? A. Expropriation B. Arbitration C. Repatriation D. Privatization E. Confiscation

B. Arbitration

Which of the following describes a similarity between transfer risk and ownership risk? A. Both are considered extremely dangerous and are rarely covered by political risk insurance B. Both risks are directly related to governments either seizing businesses or their profits C. Both are created by private market forces and cannot be effectively altered by governments D. Both involve the potential loss of intellectual property rights during technology transfers E. Both are types of micropolitical risk and cannot be considered macropolitical risks

B. Both risks are directly related to governments either seizing businesses or their profits

Under which type of legal system can contracts be broken at the whim of those in power? A. Civil law B. Bureaucratic law C. Religious law D. Common law

B. Bureaucratic law

Which of the following describes a version of English taught to non-native speakers that is sufficient to conduct business? A. Verbal communication B. CFE C. Old English D. Nonverbal communication E. Pidgin English

B. CFE

In which country is nepotism valued? A. U.S. B. China C. Great Britain D. France

B. China

When a foreign government seizes a foreign company's assets in their country but does not provide any compensation in return, it is called _________. A. Expropriation B. Confiscation C. Nationalization D. Repatriation E. Privatization

B. Confiscation

What is the Central American country that has suffered the least in economic development terms? A. El Salvador B. Costa Rica C. Nicaragua D. Belize E. Honduras

B. Costa Rica

Which of the following is NOT one of Hofstede's dimensions of national culture? A. Social orientation B. Cultural orientation C. Time orientation D. Uncertainty orientation E. Goal orientation

B. Cultural orientation

Which of the following is NOT a characteristic of culture? A. Culture is adaptive B. Culture is unchanging and immutable C. Elements of culture are interrelated D. Culture is shared E. Culture reflects learned behavior

B. Culture is unchanging and immutable

Cathy is a native English speaker. Which of the following is a disadvantage to her in communicating with international business associates? A. Canadian English is difficult to learn because of French influence B. English speakers feel little need to learn a second language C. Spanish is the lingua franca of international business D. French is the lingua franca of international business E. English has many dialects, so she must learn them all

B. English speakers feel little need to learn a second language

From what source do cultural changes usually occur? A. Weaknesses B. External forces C. Internal forces D. Strengths

B. External forces

In a culture in which people value material possessions, money, and assertiveness, where would you place them and on what Hofstede dimension? A. High on the Power Orientation dimension B. High (aggressive) on the Goal Orientation dimension C. Low (passive) on the Goal Orientation dimension D. Low (individualism) on the Social Orientation dimension E. High (short-term outlook) on the Time Orientation dimension

B. High (aggressive) on the Goal Orientation dimension

According to Geert Hofstede, a country culture that communicates that "the whole is more important than the parts," i.e., the organization is more important than the employees, would tend to have a __________________. A. High uncertainty orientation B. High collectivist social orientation C. High individualist social orientation D. Low power orientation E. High uncertainty avoidance

B. High collectivist social orientation

You are an oil executive considering expanding your operation into South American markets. However, you are concerned that governments throughout South America have recently begun nationalizing oil industries within their borders. The governments argue that oil is a natural resource that should benefit their own countries only, rather than foreign businesses, but have allowed all other industries to remain independent. This is an example of what type of risk? A. Operating B. Micropolitical C. Transfer D. Macropolitical E. Ownership

B. Micropolitical

Which form of family is most emphasized in the U.S.? A. Extended B. Nuclear C. Blended D. Ancestral

B. Nuclear

Which of the following acronyms stands for an agency that offers companies' insurance against the political risk of foreign investments? A. NYSE B. OPIC C. MNC D. LIFO E. FIFO

B. OPIC

Why did producers of The Apprentice have problems selling the Japanese version of the show to Japanese TV networks? A. Japanese networks were offended by the show's language B. Public humiliation is avoided in the Japanese culture C. The Japanese political system supports the concept of lifetime employment D. Backtranslation tools were unavailable to the Japanese producers

B. Public humiliation is avoided in the Japanese culture

On the Fourth of July in the United States, almost all citizens have a cookout during the early evening and then attends a fireworks show. This is an example of which of the following? A. Intergenerational B. Shared C. Interrelated D. Learned E. Adaptive

B. Shared

________________ is the ability of individuals to move from one stratum of society to another. A. Hierarchical structure B. Social mobility C. Social stratification D. Socialization

B. Social mobility

Which of the following is NOT a component of social structure? A. Individual roles B. Societal dress codes within regions C. Individual mobility within society D. Stratification of society

B. Societal dress codes within regions

Civil Law

Based on a codification, or detailed listing, of what is and is not permissable

Common Law

Based on the cumulative wisdom of judges' decisions on individual cases through history

BRIC Countries

Brazil, Russia, India, and China

International Business

Business transactions between parties from more than one country

What is the general purpose for "backtranslation"? A. A reverse translation method B. A standard translation method of the International Translation Association C. A way to assure oneself that a translated phrase is correct when translated back into the original language D. Translating a phrase or sentence in the exact reverse order E. A U.S. CIA method of obtaining hidden meanings in a phrase or sentence

C. A way to assure oneself that a translated phrase is correct when translated back into the original language

Of the laws that may form the basis for a country's legal system, which one is considered the riskiest for international businesses? A. Religious law B. Common law C. Bureaucratic law D. Statutory law

C. Bureaucratic law

Social stratification refers to how people in a society are ___________________. A. Sorted for housing B. Paid for employment C. Categorized by attributes D. Identified by families

C. Categorized by attributes

A policy that encourages economic growth through export expansion is called __________. A. Export expansion B. Development stimulation C. Export promotion D. Export substitution

C. Export promotion

Historically, the rigid class system and low social mobility in the UK has led to _________________. A. More elderly people dependent on families B. Less foreign investment in manufacturing C. Fewer young people seeking higher education D. More tailored advertisements in the media

C. Fewer young people seeking higher education

Country X has 14 official languages and nearly 2,000 dialects. Which of the following is most likely a true statement? A. Nonverbal communication is unlikely to be very effective in Country X B. MNEs should avoid Country X due to costly adaptation needs C. Income and value differences exist among the citizens of Country X D. Nationhood is the defining factor of the society in Country X

C. Income and value differences exist among the citizens of Country X

Denzel's firm authorizes a firm in a second country to utilize its operating systems as well as its brand names, trademarks, and logos in return for a royalty payment. This is an example of which of the following? A. FPI B. Int. management contract C. Int. franchising D. Int. licensing E. FDI

C. Int. franchising

In which of the following countries are interest-bearing transactions not allowed? A. India B. South Korea C. Iran D. Mexico

C. Iran

Which method of valuing inventory is better for companies operating in a highly inflationary economy? A. FIFO B. FASB C. LIFO D. GAAP E. IFRS

C. LIFO

What subsidiary of the World Bank provides insurance against political risks? A. Trade Credit Insurance (TCI) B. International Union of Credit and Investment Insurers (IUCII) C. Multilateral Investment Guarantee Agency (MIGA) D. Overseas Private Investment Corporation (OPIC) E. Export Credit Guarantee Agency (ECGA)

C. Multilateral Investment Guarantee Agency (MIGA)

The Hungry Cow, a chain of American fast-food restaurants, has recently experienced a great deal of domestic growth. Now its managers are trying to decide whether to expand the company into China to tap into a brand-new market. Which of the following would indicate that this is a good decision? A. The Big Bite Burger has a higher selling price than other items on The Hungry Cow's menu, but it is not the most profitable item because of the cost of its ingredients B. Changes in exchange rates can affect the value of sales made in difference countries C. The Hungry Cow's research indicates that reaching new customers in domestic markets will be more expensive than doing so in emerging markets D. Even global brands typically choose to tailor their offerings according to the tastes of consumers in different countries E. Chinese companies tend not to pursue the franchise option when attempting to expand into other countries

C. The Hungry Cow's research indicates that reaching new customers in domestic markets will be more expensive than doing so in emerging markets

International Investments

Capital supplied by residents of one country to residents of another

Social Stratification

Categorization of people to some extent on the basis of their birth, occupation, educational achievements, or other attributes

Expropriation

Compensates the private owners for a company's losses during nationalization process

Cultural Cluster

Comprises countries that share many cultural similarities, although differences do remain

High-Context Culture

Context in which a conversation occurs is just as important as the words that are actually spoken

Import Substitution Policies

Country attempts to stimulate the development of local industry by discouraging imports via. high tariffs and nontariff barriers

Individualism

Cultural belief that the person comes first

Invoicing Currency

Currency in which the sale of goods and services is denominated

Which of the following is an example of a company exercising the accounting concept "goodwill"? A. A German car company establishes a reserve account to pay for lawsuits it predicts will be filed in the future B. An American accounting firm uses the last in, first out method to make a company appear less profitable C. A French steel company operating in Venezuela is nationalized by the government without any compensation D. A Japanese media company purchases a competitor form ore than its book value and writes off the excess payment E. The English government turns over its public transportation agencies to private contractors to improve efficiency

D. A Japanese media company purchases a competitor form ore than its book value and writes off the excess payment

Which of the following best describes a culture that changes in response to external factors? A. Intergenerational B. Learned C. Interrelated D. Adaptive E. Shared

D. Adaptive

The Hungry Cow, a chain of American fast-food restaurants, has recently experienced a great deal of domestic growth. Now its managers are trying to decide whether to expand the company into China to tap into a brand-new market. Which of the following would indicate that The Hungry Cow should NOT expand into China? A. When choosing a restaurant, Chinese consumers seek benefits beyond simple food quality B. Expanding into every market within China would require more resources than The Hungry Cow has at its disposal C. Studies show that modern Chinese consumers are more likely than previous generations to dine outside the home D. Chinese authorities impose lengthy delays on businesses seeking food licenses and often deny those licenses completely E. An American fast food chain found that the time to recoup its investments in China was the same whether the franchise model or the corporate chain store model was used

D. Chinese authorities impose lengthy delays on businesses seeking food licenses and often deny those licenses completely

________ law is based on a codification of what is and is not permissible. A. Statutory B. Common C. Religious D. Civil

D. Civil

Which of the following describes a principal difference between common law and civil law systems? A. Common law is based on religious traditions and writings, whereas civil law is strictly secular B. Common law allows the government to have greater freedom, whereas civil law protects the rights of individuals C. Civil law is based on the cumulative wisdom of judges' decisions on individual cases through history, whereas common law is not based upon judges' decisions on individual cases D. Common law grows out of a collection of court rulings, whereas civil law is based on detail written codes of law E. In a civil law system, the judges serve as national referees ruling on various motions by the opposing parties' lawyers, and in a common law system, the judge takes on many of the tasks of the lawyers

D. Common law grows out of a collection of court rulings, whereas civil law is based on detail written codes of law

What term refers to the collection of values, beliefs, behaviors, customs, and attitudes that distinguish one society from another? A. History B. Norms C. Politics D. Culture

D. Culture

Regarding registration and protection, many countries adhere to the principle known as ___________. A. Best-known mark B. First to exercise C. Internationally recognized D. First to file E. Most filed internationally

D. First to file

Which of the following country environments can MNCs NOT influence? A. Economic B. Political C. Cultural D. Historical E. Technological

D. Historical

You are an advisor helping to resolve a dispute between a French company and a German company. You have determined that the dispute should be resolved through litigation in France using French law. What question must still be asked before you can conclude that the dispute will be resolved fairly? A. Will the German government attempt to nationalize either company? B. Does France use common or civil law in its litigation? C. What are the political risks of litigation to both parties? D. How can you be sure that both sides will abide by the agreement? E. Is either France or Germany imposing sanctions on one another?

D. How can you be sure that both sides will abide by the agreement?

A policy that attempts to stimulate development of local industry by discouraging imports through tariffs and nontariff barriers is called _________. A. Export substitution B. Development stimulation C. Protectionism D. Import substitution

D. Import substitution

Which of the following is one of the benefits to host countries of encouraging FDI? A. A closer political link with the investing country's government B. An increase in foreign exchange in the banking system C. Improved education for host country workers D. Increased technology transfer E. Improved protection of intellectual property

D. Increased technology transfer

Which country listed below is a group-focused society? A. Ireland B. Germany C. Canada D. Japan

D. Japan

Which of the following best illustrates the difference between the Japanese negotiating style and the Latin American negotiating style? A. Japanese negotiators make impulsive decisions; Latin American negotiators make deliberate decisions B. Japanese negotiators are likely to exploit weaknesses. Latin American negotiators are likely to make subtle power plays C. Japanese negotiators are demonstrative; Latin American negotiators are quiet and hide emotions D. Japanese negotiators are likely to make subtle power plays; Latin American negotiators are likely to exploit weaknesses E. Japanese negotiators are argumentative; Latin American negotiators are quiet when they have the upper hand

D. Japanese negotiators are likely to make subtle power plays; Latin American negotiators are likely to exploit weaknesses

Which of the following has allowed people to learn about other cultures firsthand? A. Movies B. Internet C. Radio programs D. Low airfares E. TV programs

D. Low airfares

The third major source of motion pictures is ____________. A. Bollywood B. Dollywood C. Hollywood D. Nollywood

D. Nollywood

Religious law is primarily based on ___________. A. Legislative actions B. Judges' court decisions C. Codifications on permissible acts D. Officially established rules governing a faith

D. Officially established rules governing a faith

A legal system that lacks due process, lacks appeal procedures, and prohibits banks from charging interest on loans is most likely based on ___________ law. A. Civil B. Bureaucractic C. Common D. Religious

D. Religious

Dawson Enterprises, a U.S. firm, conducts business in Saudi Arabia. The MNE recently experienced a business dispute with a local firm and was forced to meet the demand of the local firm without going through due process. Dawson's experience most likely occurred because Saudi Arabia relies on _________ law. A. Common B. Civil C. Bureaucratic D. Religious

D. Religious

XYZ S.A., a Chilean subsidiary of a U.S. company operating in Chile, has been denied the right to send some of its profits back to home office. What is this restriction called? A. Privatization B. Nationalization C. Confiscation D. Repatration E. Expropriation

D. Repatration

Business people from which of the following countries are most likely to hide their emotions? A. United States B. Chile C. Canada D. Taiwan E. Venezuela

D. Taiwan

What is meant by the term "lingua franca," which is used in international business? A. The favorite language used in a particular country B. A business language taught in graduate schools C. The French language used in international business D. The predominant language used in international business E. Latin used in international business in the Middle Ages

D. The predominant language used in international business

Which of the following describes a key difference between U.S. and German accounting practices? A. U.S. firms rely on a few large banks for capital, whereas German firms borrow from many small sources B. German firms report financial data directly to shareholders, whereas U.S. firms report that data to the government C. German accounting standards are developed by independent groups, whereas the U.S. policy is developed in the courts D. U.S. firms' financial record are more transparent and reliable than German firms' records E. German firms may use lat in, first out accounting, whereas U.S. firms are forbidden from using it

D. U.S. firms' financial record are more transparent and reliable than German firms' records

Principle of Comity

Determines whether a foreign court order is enforced or not

Uncertainty Avoidance

Dislike ambiguity and will avoid it whenever possible

Which of the following best defines "tariff"? A. A tax on income B. A tax on luxury items C. A tax on capital gains D. A tax on domestic goods E. A tax on imported goods

E. A tax on imported goods

Dual-use technologies have applications that can be used for which of the following? A. Common law and civil proceedings B. Nationalization and privatization C. Intra-territorial and extra-territorial purposes D. Foreign and domestic consumption E. Civilian and military purposes

E. Civilian and military purposes

If a country attempts to control or regulate business activities outside its borders, it is called ____________. A. Nationalization B. Embargo C. Privatization D. Sanctions E. Extra-territoriality

E. Extra-territoriality

ABC Medical Products acquires 51% of XYZ Productos Medicos, a Mexican corporation. Which of the following is this an example of? A. Importing B. Exporting C. Int. licensing D. FPI E. FDI

E. FDI

Which of the following is a type of international investment that involves the purchase of foreign financial assets for a purpose other than control? A. International franchising B. International management contract C. International licensing D. Foreign direct investment E. Foreign portfolio investment

E. Foreign portfolio investment

Which of the following countries was the third largest exporter of goods in 2011? A. China B. France C. Japan D. U.S. E. Germany

E. Germany

The Jet Group is considering moving its production to Sri Lanka, with a long-term goal of eventually entering South Asian markets. Some company executives favor the idea of contract manufacturing using local players, whereas others feel a direct investment would be better. Which of the following is the LEAST relevant question company managers need to examine? A. Will the local manufacturer be able to meet the company's stringent quality standards? B. Do members of the local workforce have the prerequisite skills? C. Will the move lead to significant cost savings? D. How are our customers likely to perceive our brand if we shift production to Sri Lanka? E. How will government investment incentives affect our bottom line?

E. How will government investment incentives affect our bottom line?

Buying products made in other countries for use or resale in one's own country is known as which of the following? A. Service imports and exports B. Transporting C. E-commerce D. Exporting E. Importing

E. Importing

The potential for a government-imposed restriction on a company's capability to move funds between countries is known as __________ risk. A. Macropolitical B. Ownership C. Operating D. Micropolitical E. Repatriation

E. Repatriation

Saudi Arabia's legal system is based largely on the teachings of the Koran. This type of government is known as which of the following? A. Democracy B. Oligarchy C. Plutocracy D. Meritocracy E. Theocracy

E. Theocracy

The principles and standards accepted by members of a society are known as which of the following? A. Language B. Religion C. Social structure D. Individualism E. Values

E. Values

Time Orientation

Extent to which members of a culture adopt a long-term vs. a short-term outlook on work, life, and other aspects of society

Britain's legal system is based on religious law. T or F?

F

Canada's legal system is based on bureaucratic law. T or F?

F

Culture is permanent; it does not change. T or F?

F

Family is more important to business in the U.S. than it is in China. T or F?

F

Int. businesses prefer the common law system because its laws affect business the same way in every country. T or F?

F

Social mobility tends to be lower in less stratified societies. T or F?

F

The Japanese concept of wa encourages individual achievement as a way to achieve social harmony. T or F?

F

Uncertainty Orientation

Feeling people have regarding uncertain and ambiguous situations

Multinational Organization (MNO)

Firms that can classify as not-for-profit or profit-seeking organizations

Multinational Corporation (MNC)

Firms that have extensive involvement in international business

Cultural Convergence

For better or worse

Mullahs

Holy men in Iran

Confiscation

Host government offers no compensation for a company's losses during nationalization process

Reexporting

Import foreign goods and then reexport them to other countries

Overseas Private Investment Corporation (OPIC)

Insures U.S. overseas investments against nationalization, insurrections or revolutions, and foreign-exchange inconvertibility

Foreign Direct Investment (FDI)

Investments made for the purpose of actively controlling property, assets, or companies located in host countries

Multinational Enterprise (MNE)

Large MNC's that are not true corporations

Chaebol

Large, privately owned, and family-centered conglomerates

Statutory Law

Laws enacted by legislative action

Goal Orientation

Manner in which people are motivated to work toward different kinds of goals

Flight Capital

Money sent out of a politically or economically unstable country to one perceived as a safe haven

Cross-Cultural Literacy

Obtaining knowledge about other cultures

Backtranslation

One person translates a document, then a second person translates the translated version back into the original language

Operating Risk

Ongoing operations of a firm or the safety of its employees are threatened through changes in laws, environmental standards, tax codes, terrorism, armed insurrection, and so forth

Power Respect

People in a culture tend to accept the power and authority of their superiors on the basis of the superiors' positions in the hierarchy

Lingua Franca

Predominant common language

Acculturation

Process by which people not only understand a foreign culture but also modify and adapt their behavior to make it compatible with that culture

Dual-use

Products that may be used for both civilian and military purposes

Ownership Risk

Property of a firm is threatened through confiscation or expropriation

Foreign Sovereign Immunities Act of 1976

Provides that the actions of foreign government against U.S. firms are generally beyond the jurisdiction of the U.S.

Foreign Portfolio Investment (FPI)

Purchases of foreign financial assets for a purpose other than control

Newly Independent States (NIS)

Refers to the 15 independent countries created as a result of the breakup of the Soviet Union

Extraterritoriality

Regulating business activities that are conducted outside your country's borders

Sanctions

Restraints against commerce with that country

Repatriate

Return to own home country

Forum Shopping

Seek to have the case heard in the court system most favorable to own interests

The Four Tigers

South Korea, Taiwan, Singapore, and Hong Kong

Uncertainty Acceptance

Stimulated by change and thrive on new opportunities

Protestant Ethic

Stresses individual hard work, frugality, and achievement as means of glorifying God

In highly stratified societies, MNCs must consider class differences among workers when making decisions about promotions. T or F?

T

Individuals with a shared culture are members of a society. T or F?

T

Language can provide important clues about the cultural values of a society. T or F?

T

Personal characteristics are more important than personal accomplishments in group-focused societies. T or F?

T

The U.S. uses a legal system based on common law. T or F?

T

The first Harry Potter book had a difference title in the United States than the one released in England. T or F?

T

Aggressive Goal Behavior

Tend to place a high premium on material possessions, money, and assertiveness

Collectivism

The belief that the group comes first; opposite of individualism

Culture

The collection of beliefs, behaviors, customs, and attitudes that distinguish one society from another

Privatization

The conversion of state-owned property to privately owned property

Home Country

The country in which the parent company's headquarters is located

Goodwill

The excess payment when a firm pays more than the book value of an acquired firm's stock

Globalization

The inexorable integration of markets, nation-states, and technologies in a way that is enabling individuals, corporations and nation-states to reach around the world father, faster, deeper, and cheaper than ever before

Bureaucratic Law

The law of the country is whatever the bureaucrats say it is

Arbitration

The process by which both parties to a conflict agree to submit their cases to a private individual or body whose decision they will honor

Nationalization

To transfer ownership of resources from the private to the public sector

Technology Transfer

Transmittal of technology from one country to another

Self-Reference Criterion

Unconscious use of one's own culture to help assess new surroundings

Low-Context Culture

Words used by the speaker explicitly convey the speaker's message to the listener

U.S. firms' first exporting efforts often focus on _________. A. Norway B. Denmark C. Mexico D. Canada

D. Canada

Religious Law

Established rules governing the faith and practice of a particular religion

Transfer Risk

Government interferes with a firm's ability to shift funds into and out of the country

Passive Goal Behavior

Place a higher value on social relationships, quality of life, and concern for others

Culture is a learned behavior that is passed from one society member to another. T or F?

T

Kkoran

The holy book of Islam

The foundation of the legal system in China is ________ law. A. Bureaucratic B. Religious C. Common D. Civil

A. Bureaucratic

__________ is based on the cumulative wisdom of judges' decisions on individual cases through history. A. Common law B. Bureaucratic law C. Statutory law D. Civil law

A. Common law

____________ is the foundation of legal systems in the UK and its former colonies. A. Common law B. Civil law C. Bureaucractic law D. Religious law

A. Common law

Your company wants to do business with both Taiwan and China, but you realize that the governments of these two countries do not get along and will not work well with each other. Which of the following could best help your company moderate these problems? A. Hong Kong B. South Korea C. UK D. Japan E. New Zealand

A. Hong Kong

Jose's company agrees to operate a facilities to a firm in another country for an agreed-upon fee. This is an example of which of the following? A. Int. management contract B. FPI C. Int. licensing D. FDI E. Int. franchising

A. Int. management contract

Stephanie works for a company that has branches in more than 50 countries. Her company can best be described as which of the following? A. Multinational corporation B. Domestic corporation C. Franchising corporation D. Foreign portfolio investing corporation E. Licensing corporation

A. Multinational corporation

You are a natural resource importer looking for a large country that has as great deal of diamond, natural gas, and minerals available for the market. Which of the following countries would be the BEST one to choose? A. Russia B. UK C. Australia D. Saudi Arabia E. Japan

A. Russia

__________ law is enacted by legislative action. A. Statutory B. Civil C. Bureaucratic D. Common

A. Statutory

Which of the following is a primary source of revenue for the IOC during the Olympics? A. Television coverage B. Public donations C. Real estate sales D. International loans

A. Television coverage

Common law is primarily based on ___________. A. The cumulative wisdom of judges' decisions on individual cases through history B. The officially established rules governing the faith and practice of a particular religion C. A codification of what is and is not permissible D. Actions taken by government legislatures

A. The cumulative wisdom of judges' decisions on individual cases through history

Which country has the highest per capita income in North America? A. U.S. B. Mexico C. Central America D. Canada

A. U.S.

Which of the following enjoys the highest per-capita income? A. U.S. B. Canada C. Jamaica D. Panama E. Mexico

A. U.S.

Which currency serves at the invoicing currency for about half of all int. transactions? A. U.S. dollar B. Zloty C. Krona D. Krone E. Pound sterling

A. U.S. dollar

Which of the following is NOT one of the countries of North America that is responsible for 26% of the world's output? A. Canada B. Argentina C. U.S. D. Mexico E. Greenland

B. Argentina

Which of the following countries in South America accounts for nearly half of the continent's GDP? A. Costa Rica B. Brazil C. Argentina D. Chile E. Colombia

B. Brazil

What are the BRIC countries? A. Brazil, Rwanda, Indonesia, and China B. Brazil, Russia, India, and China C. Belgium, Russia, Italy, and Canada D. Brazil, Russia, Indonesia, and Canada E. Botswana, Russia, Italy, and Croatia

B. Brazil, Russia, India, and China

Chinese leaders are trying to identify the challenges that will be the hardest for China to face. Which of the following would you identify as the most important challenge for China to face? A. Encouraging foreign investment in China B. Bridging the gap between urban and rural residents C. Increasing exports from China to foreign markets D. Increasing the political authority of local officials E. Increasing production of cheap consumer goods

B. Bridging the gap between urban and rural residents

Which country is an undeveloped nation? A. Somalia B. Cambodia C. India D. Costa Rica

B. Cambodia

The foundation of the legal system in India is ____________. A. Religious law B. Common law C. Bureaucratic law D. Civil law

B. Common law

Which of the following has most likely triggered the increase of small businesses involved in international business? A. Economic recession B. E-commerce C. Increased cultural literacy D. Foreign-made materials

B. E-commerce

Which of the following BEST describes the difference between a First World nation and a Third World nation during the 20th century? A. First World nations were poor and were mostly in Africa, Asia, and Latin America; Third World nations were allied with the Soviet Union B. First World nations were wealthy and usually had political and economic ties to the U.S.; Third World nations were poor and were primarily located in Africa, Asia, and Latin America C. First World nations were poor and were mostly in Africa, Asia, and Latin America; Third World nations were wealthy and had political ties to the U.S. D. First World nations were allied with the Soviet Union; Third World nations were poor and were mostly in Africa, Asia, and Latin America E. First World nations were wealthy and had political and economic ties to the United States; Third World nations were allied with the Soviet Union

B. First World nations were wealthy and usually had political and economic ties to the U.S.; Third World nations were poor and were primarily located in Africa, Asia, and Latin America

Walmart is based in the U.S. Walmart opens a store in Alberta, Canada. Which of the following best describes Canada's relationship with Walmart? A. International franchisor B. Host country C. Home country D. Foreign portfolio investing corporation E. Licensing corporation

B. Host country

For much of the post World War II period, many South American countries followed what economic development policy? A. Export promotion B. Import substitution C. FDI tax holidays D. Duty free imports E. Profit repatriation denial

B. Import substitution

Jason's company sells the rights to use its logo to a foreign company. This is an example of which of the following? A. International franchising B. International licensing C. Foreign portfolio investment D. International management contract E. Foreign direct investment

B. International licensing

In the UK, service exports and imports such as banking, travel, and accounting activities are known as _________ trade. A. Visible B. Invisible C. Non-merchandise D. Cloaked E. Merchandise

B. Invisible

The firms in which country pioneered just-in-time inventory management techniques? A. U.S. B. Japan C. Germany D. France E. Great Britain

B. Japan

The system used in Japan that is a family or large companies centered around a bank or trading company is A. Konishiroku B. Keiretsu C. Chaebol D. Sogo Shosha E. Koito

B. Keiretsu

Melanie works in the U.S. selling computer hardware to a company in Germany. This is known as which of the following? A. Domestic trade B. Merchandise export C. Merchandise import D. Service import E. Service export

B. Merchandise export

Which of the following countries is a small market with a high-income World Bank status? A. Bosnia B. Mona C. Macedonia D. Albania E. Serbia

B. Mona

More than half of which country's exports are attributable to its extensive pasture lands? A. Denmark B. New Zealand C. China D. Australia E. Finland

B. New Zealand

The Internet has helped small businesses compete in global markets because it _________. A. Allows them to establish a physical presence in each country B. Reduces entry costs C. Eliminates price controls D. Avoids transactions involving foreign exchange

B. Reduces entry costs

Which of the following would be considered an international business transaction? A. Borrowing money from a major bank to finance capital improvements B. Shipping finished products from one country to another for retail sale C. Purchasing products in one country and assembling them in the same country D. Recruiting employees internationally

B. Shipping finished products from one country to another for retail sale

Which of the following countries has most closely tried to to emulate the economic path taken by post-World War II Japan? A. North Korea B. South Korea C. China D. Vietnam E. Hong Kong

B. South Korea

Companies doing int. business are more likely to successful when they __________. A. Rely on experienced expatriates B. Understand local market characteristics C. Conduct frequent performance appraisals D. Employ primarily local managers

B. Understand local market characteristics

Trade between nations can be traced back as far as _______. A. 1200 B. 500 BC C. 2000 BC D. 1600

C. 2000 BC

Approximately _______ of the world's current economic activity is concentration in North America, the EU, and Japan. A. 72% B. 24% C. 57% D. 46%

C. 57%

Walton Enterprises, a U.S. firm, has a facility in China. Walton managers in China frequently complain about the arbitrary rules and decisions implemented by Chinese government authorities. Such legal unpredictability suggests that China has a system based on _________ law. A. Common B. Civil C. Bureaucratic D. Theocratic

C. Bureaucratic

Which of the following is the world's most populous country? A. U.S. B. Malaysia C. China D. India E. Germany

C. China

Which of the following is a foundation for legal systems? A. The principles of comity B. Regulatory law C. Common law D. Administrative law

C. Common law

Which of the following describes a difference between international and domestic business? A. Domestic business involves transactions between corporations; international business involves transactions within one corporation B. Domestic business involves transactions that use two currencies; international business involves transactions that use more than two currencies C. Domestic business involves transactions that use one currency; international business involves transactions that use multiple currencies D. Domestic business involves transactions within one corporation; international business involves transactions between corporations E. Domestic business involves importing only; international business involves both importing and exporting

C. Domestic business involves transactions that use one currency; international business involves transactions that use multiple currencies

Which of the following is a member of the Artic Council? A. Mexico B. France C. Finland D. Singapore

C. Finland

_________ is the money sent out of a politically or economically unstable country to one perceived as a safe haven. A. Foreign currency B. Capital substituion C. Flight capital D. Invoicing currency

C. Flight capital

Which of the following describes a primary difference between int. licensing and int. franchising? A. Int. licensing involves only operating systems; int. franchising involves operating systems, intellectual property such as patents, trademarks, brand names, and copyrights as well. B. Int. licensing involves the sale of operator licenses to companies in other countries; int. franchising involves the sale of merchandise to companies in other countries C. Int. licensing involves only intellectual property such as patents, trademarks, brand names, and copyrights; int. franchising involves operating systems as well D. Int. licensing involves lending executives to another company in another country; int. franchising involves lending employees to another company in another country E. Int. franchising involves the sale of merchandise to companies in other countries; int. franchising involves the sale of merchandise to companies in other countries

C. Int. licensing involves only intellectual property such as patents, trademarks, brand names, and copyrights; int. franchising involves operating systems as well

____________ is the currency in which the sale of goods and services is denominated. A. Flight capital B. Capital substitution C. Invoicing currency D. Euro currency

C. Invoicing currency

Which of the following is true of Mexico? A. It has refused to sign free trade pacts with El Salvador, Guatemala, and Honduras B. It is the world's third-largest Spanish-speaking nation C. It has been promoting the privatization of multiple industries D. It has increased its protectionist in recent years

C. It has been promoting the privatization of multiple industries

Statutory law is primarily based on ___________ A. Moral judgments B. Religious beliefs C. Legislative actions D. Historic precedents

C. Legislative actions

An international corporation is looking at the former Soviet bloc members to determine the safest country to work with as it adjusts to a free market economy. Which of the following countries would be the BEST option for the corporation to choose? A. Lithuania B. Bulgaria C. Slovenia D. Romania E. Latvia

C. Slovenia

Which of the following countries is considered to be one of the "Four Tigers" and has relied on close cooperation between government and several large conglomerates (Chaebol), which in some ways are similar to the Japanese keiretsu? A. Taiwan B. Singapore C. South Korea D. China E. Hong Kong

C. South Korea

What Asian countries are known as the "Four Tigers"? A. Russia, Uzbekistan, China, and India B. China, Thailand, Vietnam, and South Korea C. South Korea, Taiwan, Singapore, and Hong Kong D. Japan, Taiwan, South Korea, and Hong Kong E. Indonesia, Kazakhstan, Philippines, and Vietnam

C. South Korea, Taiwan, Singapore, and Hong Kong

The U.S. Freedom of Information Act is an example of _________ law. A. Civil B. Common C. Statutory D. Bureaucratic

C. Statutory

__________ is the dominant market for Canadian goods. A. The EU B. China C. The U.S. D. Mexico

C. The U.S.

Which of the following is FALSE in regard to emerging markets? A. Some researchers use the term to describe the so-called Big Ten B. They are defined as countries whose recent growth or prospects for future growth exceed that of traditional markets C. There is a universally accepted definition of the countries to be included in the emerging markets category D. Just two of the emerging markets together account for more than one-third of the world's population E. Some scholars limit the term to the BRIC economies

C. There is a universally accepted definition of the countries to be included in the emerging markets category

Which of the following is NOT a reason that has compelled firms to become more global? A. To acquire resources and supplies B. To better compete with rivals C. To improve the probability of being acquired D. To leverage core competencies E. To seek new markets

C. To improve the probability of being acquired

Who was the president of Russia when the country was forced to devalue the ruble in 1998? A. Gorbachev B. Putin C. Yeltsin D. Lenin E. Stalin

C. Yeltsin

Civil law is primarily based on _________. A. The officially established rules governing the faith and practice of a particular religion B. The cumulative wisdom of judges' decisions on individual cases through history C. Actions taken by local governments D. A codification of what is and is not permissible

D. A codification of what is and is not permissible

Which North American country has the world's second largest land mass, a population of 34 million, and a 2011 GDP of $1,736 billion? A. Central America and the Caribbean B. France C. Japan D. Canda E. U.S.

D. Canda

In the 21st century, growth rates in __________ have outpaced those in __________. A. China and Japan; Germany and U.S. B. Japan and India; China and Canada C. The U.S. and China; India and Japan D. China and India; Germany and Japan

D. China and India; Germany and Japan

A core competency is a(n) ______________. A. Goal set by the upper management of a firm B. Quality control program exercised by many global companies C. Important belief central to the culture of a multinational organization D. Distinctive strength or advantage that is central to a firm's operations E. National cultural characteristic passed on from generation to generation

D. Distinctive strength or advantage that is central to a firm's operations

According to the CAGE Model, which of the following refers to the physical, communications, and transportation links between countries? A. Administrative distance B. Economic distance C. Cultural distance D. Geographic distance

D. Geographic distance

What is the dominant religion of India? A. Sufism B. Sikhism C. Islam D. Hinduism E. Buddhism

D. Hinduism

Which country was a significant focal point for international business during the Middle Ages? A. Russia B. China C. England D. Italy

D. Italy

Which of the following cities holds importance as a major international financial center in today's financial world? A. Baghdad B. Rome C. Jerusalem D. London E. Detroit

D. London

A boundary-less economy is one in which _________. A. Regional borders are significant B. Exported goods are predominant C. Trade laws are strictly enforced D. National borders are irrelevant

D. National borders are irrelevant

Individuals should most likely study international business to __________. A. Obtain bilingual business experience B. Comply with graduate school certification requirements C. Ensure that an employer has a global online presence D. Remain current on the latest business methods

D. Remain current on the latest business methods

Civil law originated in biblical times with the _________. A. French B. Greeks C. Jews D. Romans

D. Romans

Which Middle East country had the largest economy in 2011 as measured by total GDP? A. Israel B. Egypt C. Iraq D. Saudi Arabia E. Iran

D. Saudi Arabia

One likely consequence of the diminishing Artic ice cap is _______. A. Less war B. More affordable utility rates for lesser-developed nations C. An increase in regional tourism D. The creation of the Northwest Passage

D. The creation of the Northwest Passage

When a firm makes a sale of good denominated in Japanese yen, the yen is referred to as __________. A. Export capital B. Flight capital C. The transaction currency D. The invoicing currency

D. The invoicing currency

Which country listed below commonly attracts flight capital? A. Canada B. Singapore C. Germany D. U.S.

D. U.S.

Which of the following BEST describes the difference between an MNC and an MNO? A. A MNO is a for-profit org. that has involvement in multiple countries; a MNC is an org. that has involvement in multiple countries and may be for-profit or not-for-profit org. B. A MNO is an org. that has involvement in one country and may be for-profit or not-for-profit; a MNC is a for-profit org. that has involvement in one country C. A MNO is an org. that as involvement in one country and may be for-profit or not-for-profit; a MNC is a for-profit org. that has involvement in multiple countries D. A MNO is an org. that has involvement in multiple countries and may be for-profit or not-for-profit; a MNC is a for-profit org. that has involvement in one country E. A MNO is an org. that has involvement in multiple countries and may be for-profit or not-for-profit; a MNC is a for-profit org. that has involvement in many countries

E. A MNO is an org. that has involvement in multiple countries and may be for-profit or not-for-profit; a MNC is a for-profit org. that has involvement in many countries

You are thinking about setting up an int. business. In which of the following countries would you be LEAST likely to encounter high tariffs, trade barriers, and an enormous amount of red tape and regulations in order to set up a business? A. North Korea B. Russia C. Iran D. Cuba E. Chile

E. Chile

A country who recent growth or prospects for future growth exceed that of traditional markets is known as which of the following? A. Domestic market B. Traditional market C. Global market D. Int. market E. Emerging market

E. Emerging market

Which of the following is TRUE regarding int. business expansion? A. Improvements in transportation will slow the growth of int. business B. Improvements in communication technology will slow the growth of int. business C. Increases in computer processing speeds will slow the growth of int. business D. Emerging markets are limiting the growth of int. business E. Int. business expansion has led to an expansion of business activity into new markets previously insulated from the int. marketplace

E. Int. business expansion has led to an expansion of business activity into new markets previously insulated from the int. marketplace

Which of the following BEST describes the difference between merchandise import and service import? A. Merchandise import involves selling tangible items to a foreign company; service import involves selling tangible products to a foreign company B. Merchandise import involves purchasing tangible items from a domestic company; service import involves purchasing intangible products from a domestic country C. Merchandise import involves purchasing intangible items from a foreign company; service import involves purchasing tangible products from a foreign company D. Merchandise import involves selling tangible items to a foreign company; service import involves selling intangible products to a foreign company E. Merchandise import involves purchasing tangible items from a foreign company; service import involves purchasing intangible products from a foreign country

E. Merchandise import involves purchasing tangible items from a foreign company; service import involves purchasing intangible products from a foreign country

Which country is NOT a member of the EU and has NOT adopted the Euro as its currency? A. UK B. France C. Germany D. Austria E. Switzerland

E. Switzerland

Which of the following saved the Lee Hung Fat Garment Factory between 15% and 20% in design costs? A. Shipping fees B. Overhead C. Overtime D. Labor cuts E. Technology

E. Technology

Small businesses are usually not involved in international business given the cost restrictions. T or F?

F

Business transactions between parties from more than one country are known as international business. T or F?

T

By evaluating the income level of a nation, a firm can assess the purchasing power of citizens and the status of the public infrastructure. T or F?

T

International business is more complex than domestic business. T or F?

T

Over 30 OECD's members are all classified as high-income countries. T or F?

T

The growth of FDI and MNCs first started during the American colonial period. T or F?

T