CBA 300 EXAM #1 (Chapters 1-4)
Match the following external forces with the appropriate definition. Terms: 1) Competitive 2) Financial 3) Economic 4) Legal 5) Political 6) Physical Definitions: a. Variables such as interest rates, inflation rates, and taxation b. The many foreign and domestic laws governing business operations c. Elements of nature such as topography, climate, and natural resources d. Elements of nations' climates such as nationalism and forms of government e. Variables such as gross national income, unit labor cost, and personal consumption expenditure f. Kinds and number of competitors and their activities
1) Competitive: f. Kinds and number of competitors and their activities 2) Financial: a. Variables such as interest rates, inflation rates, and taxation 3) Economic: e. Variables such as gross national income, unit labor cost, and personal consumption expenditure 4) Legal: b. The many foreign and domestic laws governing business operations 5) Political: d. Elements of nations' climates such as nationalism and forms of government 6) Physical: c. Elements of nature such as topography, climate, and natural resources
Between 1991 and 2020, the United States saw an increase of nearly Blank______ in nonfarm jobs. Multiple choice question. 40% 60% 75% 80%
40%
Despite globalization, the number of people living in poverty in sub-Saharan Africa rose _____ between 1990 and 2013. Multiple choice question. 22% 78% 67% 43%
43%
What percentage of exports from developing nations went to developed countries in 2015? Multiple choice question. 90% 70% 43% 12%
43%
What percentage of global output is destined for international trade? Multiple choice question. 60% 70% 45% 25%
60%
What percentage of global output is destined for international trade? Multiple choice question. 70% 45% 60% 25%
60%
The top 10 trading partners of the United States accounted for ____ of total U.S. exports in 2017. Multiple choice question. 26% 36% 72% 66%
66%
Which of the following assumptions must be present when arguing the internalization theory? Multiple choice question. A firm must not have any competition. A firm must have superior knowledge over its competitors. A firm must be willing to import the majority of its product. A firm must not have any outstanding debt.
A firm must have superior knowledge over its competitors.
Which of the following sectors of human life were profoundly impacted by international trade? (Check all that apply.) Multiple select question. Arts Agriculture Politics Public health Ethnocentrism
Arts Agriculture Politics Public health
Current trends indicate that the world's economic center of gravity is shifting to Blank______. Multiple choice question. North America Asia Europe South America
Asia
Which of the following actions has President Trump undertaken to address U.S. trade deficits? Multiple select question. Attempted to reduce trade imbalances with China Focused on manufacturing labor-intensive goods Renegotiated trade treaties Imposed tariffs
Attempted to reduce trade imbalances with China Renegotiated trade treaties Imposed tariffs
______ is the transportation of any domestic good to a destination outside a country. _________ is the transportation of any good into a country from a foreign origination point.
BLANK #1: Exporting/Export BLANK #2: Importing/Importing
The theory of __________ ____________argues for the existence of similar preferences and demand for products and services among nations with similar levels of per capita income.
Blank #1: Overlapping Blank #2: Demand
A(n) ________________ ________________is used to convert from foreign currency to domestic currency. (Enter one word in each blank.)
Blank #1: exchange Blank #2: rate
The _____________ forces in the environment that occur outside a firm's home country are the same as those in the ______________ environment (that is, the environment of the home country).
Blank 1: foreign Blank 2: domestic
The forces in the __________ environment that occur outside a firm's home country are the same as those in the _____________ environment (that is, the environment of the home country).
Blank 1: foreign Blank 2: domestic
A(n) __________ industry has a limited number of competing firms, such as the U.S. mobile phone market.
Blank 1: oligopolistic or oligopoly
In balance-of-payments accounting, an export that brings money to the country is considered ______________ (positive/negative), while imports that cause monetary outflow are labeled ____________ (positive/negative).
Blank#1: positive Blank#2: negative
Define International Business:
Bus. that involves crossing of international boarders.
Of the countries listed below, which one supplies the United States with huge amounts of electronic products and components? Multiple choice question. China Canada France Brazil
China
Today, which country is seen by many as the "fortress of mecantilism"? Multiple choice question. Japan Brazil China Russia
China
Which country has become the world's largest exporter? Multiple choice question. United States Brazil South Korea China
China
Which country was the world's leading manufacturing country for about 1800 years until Britain became dominant in 1840? Multiple choice question. Mongolia India China Italy
China
Which nation ranks number one in exports of merchandise? Multiple choice question. India United States United Kingdom China
China
Place the stages of the international product life cycle (IPLC) in the correct order from first to last. Instructions Choice 1 of 4. Foreign competition in export markets toggle button Foreign competition in export markets Choice 2 of 4. Import competition in U.S. markets toggle button Import competition in U.S. markets Choice 3 of 4. U.S. exports toggle button U.S. exports Choice 4 of 4. Foreign production toggle button Foreign production
Choice 3 of 4. U.S. exports toggle button U.S. exports Choice 4 of 4. Foreign production toggle button Foreign production Choice 1 of 4. Foreign competition in export markets toggle button Foreign competition in export markets Choice 2 of 4. Import competition in U.S. markets toggle button Import competition in U.S. markets
Which of the following statements are true of the command-and-control approach to accounting procedures? (Check all that apply.) Multiple select question. There is loose control, suggesting high levels of trust. Controls are administered by formal institutions. There is heavy reliance on social norms. Compliance is gained through rules and sanctions.
Controls are administered by formal institutions. Compliance is gained through rules and sanctions.
Currency ______ lowers the value of a nation's currency relative to other currencies and therefore effectively lowers the prices of its exports.
Devaluation
Which explanation suggests that countries will export products requiring large amounts of their abundant production factors and import products requiring large amounts of their scarce production factors? Multiple choice question. Overlapping demand Economies of scale and the experience curve Differences in resource endowments International product life cycle
Differences in resource endowments
Which one of the following trading firms was formed to carry out colonial activities in Asia and to open ocean trade routes to the East? Multiple choice question. Roman East Trading Company Dutch East India Company Ottoman Trading Company British East India Company
Dutch East India Company
Which of the following trading firms were established in the 1600s? (Check all that apply.) Multiple select question. Roman East Trading Company Ottoman Trading Company Dutch East India Company British East India Company
Dutch East India Company British East India Company
Franz was happy to report to the management team that its larger production facility made it possible to increase the number of bicycles produced and also decrease the cost of each bicycle. Which theory explains this scenario? Multiple choice question. The demand curve theory Economies of scale The product life cycle theory Diseconomies of scale
Economies of scale
Although all regions of the world have experienced an absolute increase in the dollar volume of service exports, the proportion of world exports of commercial services from which of the following regions has declined since 1980? (Check all that apply.) Multiple select question. European Union United States Africa Middle East
European Union Africa Middle East
True or false: A nation's GNI and a company's sales are directly comparable.
FALSE Reason: A nation's GNI and a company's sales are not directly comparable because GNI is a measure of value added, not sales.
True or false: Domestic forces do not affect foreign operations.
FALSE Reason: Domestic forces can also affect foreign operations.
True or false: Importing is the transportation of any domestic good to a destination outside a country.
FALSE Reason: Exporting is the transportation of any domestic good or service to a destination outside a country or region.
True or false: Historically, foreign trade has followed foreign direct investment.
FALSE Reason: Foreign direct investment typically follows foreign trade.
True or false: Nations should import goods for which they have a comparative advantage.
FALSE Reason: Nations should import goods for which they have a comparative disadvantage.
True or false: The rise of international commerce did not affect society much.
FALSE Reason: The impact of the emerging international trading system was extensive.
True or false: The vast proportion of most U.S. companies' potential customers are located within the United States.
FALSE Reason: The vast majority of potential customers are located outside of the United States.
True or false: Two-thirds of the value of corporate investments made in the United States from abroad has been spent establishing new businesses.
FALSE Reason: Two-thirds of the value of corporate investments made in the United States from abroad has been spent acquiring existing businesses.
True or false: Doing business with a nation's major trading partner can be disadvantageous because cultural objections are still prevalent.
FALSE Reason: When doing business with a major trading partner, there should be no strong cultural objections at home to buying that nation's goods.
EXTERNAL FORCES consist of the following: 1. Competitive: kinds and numbers of competitors, their locations, and activities 2. Distributive: national and international agencies that distribute goods and services Economic: variables (such as Gross National Income (GNI), unit labor cost, and personal consumption expenditure) that influence a firm's ability to do business 3. Socioeconomic: characteristics and distribution of the human population 4. Financial: variables, such as interest rates, inflation rates, and taxation. 5. Legal: the many foreign and domestic laws governing how international firms must operate. 6. Physical: elements such as topography, climate, and natural resources 7. Political: elements of nation's political climates such as nationalism, forms of gov't, and international organizations 8. Sociocultural: elements of culture (such as attitudes, beliefs, and opinions) important to international managers. 9. Labor: composition, skills, and attitudes of workers 10. Technological: the technical skills and equipment that affect how resources are converted into products
FINISH
True or false: Decision making in a purely domestic environment is typically more complex than it is in an international environment.
False Reason: The opposite is true. Decision making in the international environment is typically more complex than it is in a purely domestic environment.
Which one of the following was a multinational company by the 1920s? Multiple choice question. Winchester Repeating Arms Company Pillsbury Baking Ford Motor Company Microsoft
Ford Motor Company
______ includes both ownership and control of real or physical assets such as plants and other facilities. Multiple choice question. Free trade Foreign direct investment Franchising Exporting
Foreign direct investment
______ is the best strategy for advancing the world's economic development. Multiple choice question. Political restraint Trade protectionism Free trade Tariffs
Free trade
Which statements are true regarding the link between free trade and jobs? (Check all that apply.) Multiple select question. Free trade promotes more jobs. Free trade can cause companies to go out of business. Free trade stifles economic growth and expansion. Free trade promotes new, better jobs.
Free trade promotes more jobs. Free trade can cause companies to go out of business. Free trade promotes new, better jobs.
Which of the following is NOT typically an argument against globalization? Multiple choice question. Globalization produces uneven results across people. Globalization has a negative impact on labor. Globalization has decreased efficiency. Globalization has been linked to a decline in health conditions.
Globalization has decreased efficiency.
Which of the following are typical arguments against globalization? (check all that apply) Multiple select question. Globalization produces uneven results across nations. Globalization has worsened labor standards. Globalization has been linked to a decline in environmental conditions. Globalization produces friction between nations.
Globalization produces uneven results across nations. Globalization has worsened labor standards. Globalization has been linked to a decline in environmental conditions.
A investment is the __________ establishment of new facilities from the ground up.
Greenfield
Which statement is true regarding gross national income? Multiple choice question. Gross national income is a measure of value added, not sales. Gross national income and total annual sales are directly comparable. Gross national income is a measure of a nation's total sales. A nation's total sales always equal its gross national income.
Gross national income is a measure of value added, not sales.
Which of the following is the oldest of the major world religions?
Hinduism
Which of the following statements are true regarding the growth in exports? (Check all that apply.) Multiple select question. In 2017, the total value of exported services was $5.3 trillion. Exports in 2017 were nine times larger than they were in 1980. Merchandise exports have grown faster than world output in nearly each of the past 60 years. World merchandise exports grew from $2 million to $25.5 million between 1980 and 2017.
In 2017, the total value of exported services was $5.3 trillion. Exports in 2017 were nine times larger than they were in 1980. Merchandise exports have grown faster than world output in nearly each of the past 60 years.
Which human conditions have been attributed to the liberalization of trade? (Check all that apply.) Multiple select question. Increase in life expectancy Increase in child labor Decrease in infant mortality Increase in literacy rate
Increase in life expectancy Decrease in infant mortality Increase in literacy rate
Economic globalization refers to the tendency toward an international integration and interdependency of which of the following? [GLITC(Hx)] Multiple select question. Governments Information Technology Capital Labor Goods
Information Technology Capital Labor Goods GLITC(Hx)
Which of the following statements are accurate regarding an oligopolistic industry? (Check all that apply.) Multiple select question. Interdependence among firms increases the likelihood that firms will imitate their competition. It is an industry where the actions of one firm have no effect on any other firms. The actions of one firm can strongly affect the performance of others in the industry. It is an industry with a limited number of competing firms.
Interdependence among firms increases the likelihood that firms will imitate their competition. The actions of one firm can strongly affect the performance of others in the industry. It is an industry with a limited number of competing firms.
_____________ business is business that is carried out across national borders.
International
________________ business is business that is carried out across national borders.
International Business
Which of the following are true regarding foreign direct investment? (Check all that apply.) Multiple select question. It includes the ownership of real or physical assets. It includes the ownership of plants and other facilities. It includes the control of real or physical assets. It includes investments such as portfolios, stocks, and bonds.
It includes the ownership of real or physical assets. It includes the ownership of plants and other facilities. It includes the control of real or physical assets.
Which of the following statements are accurate regarding an oligopolistic industry? (Check all that apply.) Multiple select question. It is an industry with a limited number of competing firms. The actions of one firm can strongly affect the performance of others in the industry. It is an industry where the actions of one firm have no effect on any other firms. Interdependence among firms increases the likelihood that firms will imitate their competition.
It is an industry with a limited number of competing firms. The actions of one firm can strongly affect the performance of others in the industry. Interdependence among firms increases the likelihood that firms will imitate their competition.
Which of the following statements are true regarding a transnational corporation? (Check all that apply) Multiple select question. It operates under a decision making system that allows a common strategy. It is composed of entities in more than one nation. It is made up of only one entity in a foreign nation. It operates under a decision making system that allows coherent policies.
It operates under a decision making system that allows a common strategy. It is composed of entities in more than one nation. It operates under a decision making system that allows coherent policies.
Which statements are accurate regarding mercantilism? (Check all that apply.) Multiple select question. It viewed precious metals such as gold and silver as the only source of wealth. It tended to create a trade surplus. It caused governments to increase imports and decrease exports. It is a complex political and economic theory.
It viewed precious metals such as gold and silver as the only source of wealth. It tended to create a trade surplus. It is a complex political and economic theory.
Which of the following statements reflect workers' fears regarding the impact of globalization on labor? (Check all that apply.) Multiple select question. Companies are experiencing difficulties divesting their interest in one country and moving to another. Jobs migrate to developing nations where labor costs are lower. U.S. companies have moved abroad to avoid unionization. Globalization reduces wages in the United States.
Jobs migrate to developing nations where labor costs are lower. U.S. companies have moved abroad to avoid unionization. Globalization reduces wages in the United States.
______ have grown faster than world output in nearly each of the past 60 years. Multiple choice question. Merchandise exports Financial imports Service exports Outward foreign direct investment
Merchandise exports
Although trade has increased globally, the proportion of world trade coming from which of the following regions has actually decreased since 1980? (Check all that apply.) North America China Middle East Africa
North America Middle East Africa
Which empire raised the cost of Asian trade for Europeans and drove the search for sea routes to Asia? Multiple choice question. Mongolian Greek Ottoman Roman
Ottoman
_________________ competition is the market situation in which there is a sufficiently large number of well-informed buyers and sellers of a homogeneous product such that no individual participant has enough power to determine the price of the product.
PERFECT
What are the five major drivers of internationalization listed in the text? (Check all that apply.) Multiple select question. technological time cost political competitive market
PTMCC 1. political* 2. technological* 3. market* 4. cost* 5. competitive*
The Black Death is an example of trade affecting __. agriculture politics economics public health
Public Health
Which of the following are benefits of doing business with major trading partners? (Check all that apply.) Multiple select question. Satisfactory transportation facilities are already established. Currency from the foreign country is available to pay for the exports. No pressure is applied by the government of a trading partner. The business climate is already relatively favorable.
Satisfactory transportation facilities are already established. Currency from the foreign country is available to pay for the exports. The business climate is already relatively favorable.
Which of the following are reasons why Mexico and Canada are major trading partners with the United States? (Check all that apply.) Multiple select question. Expensive contacts between buyers and sellers Shorter delivery times Lower freight charges Membership in NAFTA
Shorter delivery times Lower freight charges Membership in NAFTA
Which of the following was one of the first U.S. companies to own foreign production facilities, have worldwide distribution networks, and market its products under global brands? Multiple choice question. Ford Motor Company Singer Sewing Machine Winchester Repeating Arms Company General Motors
Singer Sewing Machine
Which of the following are negative affects of the North American Free Trade Agreement? (Check all that apply.) Multiple select question. Substantial increases in environmental standards along the U.S.-Mexican border Substantial increases in population along the U.S.-Mexican border Substantial increases in ground water pollution along the U.S.-Mexican border Substantial increases in air pollution along the U.S.-Mexican border
Substantial increases in population along the U.S.-Mexican border Substantial increases in ground water pollution along the U.S.-Mexican border Substantial increases in air pollution along the U.S.-Mexican border
True or false: The international product life cycle theory is demonstrated by the fact that personal computers were initially introduced in the United States but over time their production has moved overseas and they are now imported into the United States.
TRUE Reason: This theory states that products originally exported will eventually be imported.
True or False: To ensure a continuous supply of raw materials, industrialized companies are sometimes forced to invest in the developing nations where most new deposits are being discovered.
TRUE Reason: To ensure a continuous supply of raw materials and to maintain their competitiveness, industrialized companies are sometimes forced to invest in the nations where new deposits are being discovered.
Which statements are true regarding the Ottoman Empire? (Check all that apply.) The empire spanned Europe, North Africa, and the Middle East. The empire influenced the emerging trade routes for people, goods, and money that spanned from England to China. The empire drove the search for sea routes to Asia, including the expeditions that discovered the Americas. Its central location had the effect of lowering the cost of Asian trade for European countries.
The empire spanned Europe, North Africa, and the Middle East. The empire influenced the emerging trade routes for people, goods, and money that spanned from England to China. The empire drove the search for sea routes to Asia, including the expeditions that discovered the Americas.
Which of the following are political drivers that are leading firms to internationalize their operations? (Check all that apply.) Multiple select question. The increase in the number of foreign suppliers The formation of the European Union The rapid increase in the number of markets in developing countries Preferential trade agreements like NAFTA
The formation of the European Union Preferential trade agreements like NAFTA
Which of the following factors are contributing to the globalization of business operations? (Check all that apply.) Multiple select question. The progressive reduction of barriers to trade and foreign investment by governments The privatization of much of the industry in formerly communist nations The increase in the political barriers to entry in the form of quotas and tariffs The rapid increase of trade restrictions that limit foreign competition
The progressive reduction of barriers to trade and foreign investment by governments The privatization of much of the industry in formerly communist nations
Which statement is accurate regarding the effects of culture on leadership? Multiple choice question. The role, function, and traits of leaders vary by culture. The role and traits of leaders vary by culture, but functions remain constant. The traits and function of leaders vary by culture, but roles remain constant. The role and function of leaders vary by culture, but traits remain constant.
The role, function, and traits of leaders vary by culture.
Which of the following are reasons why many Asian countries are both import and export partners of the United States? (Check all that apply.) Multiple select question. They are exporting an excessive amount of raw materials primarily to the United States for assembly or finished goods. Their rising standards of living enable their people to afford more imported products. Their governments have been pressured by the U.S. government to lower their trade surplus. They are purchasing large amounts of capital goods to further their industrial expansion.
Their rising standards of living enable their people to afford more imported products. Their governments have been pressured by the U.S. government to lower their trade surplus. They are purchasing large amounts of capital goods to further their industrial expansion.
Which of the following are true of state-owned transnational corporations? (Check all that apply.) Multiple select question. There is a minimum of 650 state-owned transnationals. State-owned transnationals come from both developing and developed countries. State-owned transnationals account for more than 30% of the world's foreign direct investment. State-owned transnationals collectively have assets exceeding $2 trillion.
There is a minimum of 650 state-owned transnationals. State-owned transnationals come from both developing and developed countries. State-owned transnationals collectively have assets exceeding $2 trillion.
Which of the following statements are true of transnational corporations? (Check all that apply.) Multiple select question. Transnationals have approximately 900,000 foreign affiliates. Most transnational corporations are owned by governments. Transnationals collectively account for 10% of world gross domestic product. Transnationals account for about half of world trade.
Transnationals have approximately 900,000 foreign affiliates. Transnationals collectively account for 10% of world gross domestic product. Transnationals account for about half of world trade.
What amount of exports from developed economies go to other industrialized nations? Multiple choice question. One-quarter Two-thirds One-half One-third
Two-thirds
The external forces are commonly called __________ forces. (Enter one word in the blank.)
Uncontrollable
Which of the following countries have consistently remained on the list of top 15 nations from which the United States imports for the past 45 years? (Check all that apply.) Multiple select question. United Kingdom Germany Japan China Italy
United Kingdom Germany Japan Italy
In which country does transparency and price drive the procurement process? Multiple choice question. China South Korea Japan United States
United States
Which of the following is an example of a domestic force affecting foreign operations? (Select all that apply) a. A home country suffers a shortage of foreign currency, so its government restricts overseas investment. b. A union decides to call a strike at a domestic company, and the strike causes disruptions in the supply of parts to a company in another country. c. A union decides to strike at a foreign supplier, resulting in a shortage of supplies in the home country. d. A foreign country prohibits a foreign company from producing in its country.
a. A home country suffers a shortage of foreign currency, so its government restricts overseas investment. b. A union decides to call a strike at a domestic company, and the strike causes disruptions in the supply of parts to a company in another country.
In international business, which of the following is typically NOT a choice international managers have in deciding what to do with a concept employed in domestic operations? a. Change the national culture. b. Do not use it overseas. c. Transfer it intact. d. Adapt it to local conditions.
a. Change the national culture.
In international business, what are the three choices international managers have in deciding what to do with a concept employed in domestic operations? (Check three.) a. Do not use it overseas. b. Change the national culture. c. Adapt it to local conditions. d. Transfer it intact.
a. Do not use it overseas. c. Adapt it to local conditions. d. Transfer it intact.
How does the foreign environment operate differently than the domestic environment? (Check all that apply.) a. Forces in the foreign environment have different values. b. Forces in the foreign environment are interrelated. c. Forces in the foreign environment are difficult to assess. d. Forces in the foreign environment are more easily controlled.
a. Forces in the foreign environment have different values. b. Forces in the foreign environment are interrelated. c. Forces in the foreign environment are difficult to assess.
Which of the following statements are true regarding the international environment? (Check all that apply.) a. It consists of the interactions between the domestic environmental forces and the foreign environmental forces. b. It consists of interactions between two or more domestic environmental forces. c. It involves only those activities that take place within a nation's borders. d. It consists of interactions between the foreign environmental forces of two countries.
a. It consists of the interactions between the domestic environmental forces and the foreign environmental forces. d. It consists of interactions between the foreign environmental forces of two countries.
Which of the following are regional economic groupings of nations? (Check all that apply.) a. Mercosur b. The World Bank c. OPEC d. The North American Free Trade Agreement e. The European Union
a. Mercosur d. The North American Free Trade Agreement e. The European Union
Which of the following sectors of human life were profoundly impacted by international trade? (Check all that apply.) a. Politics b. Agriculture c. Arts d. Public health e. Ethnocentrism
a. Politics b. Agriculture c. Arts d. Public health
Which of the following international organizations affect the international market? (Check all that apply.) a. The World Bank b. The Commerce Bank c. The OPEC d. The European Union
a. The World Bank c. The OPEC d. The European Union
Barriers to the free movement of a nation's people, such as mountain ranges, help maintain pockets of distinct cultures within a country, thus affecting a company's decision making. This scenario is an example of foreign forces Blank______. a. being interrelated b. being difficult to assess c. having different values d. being controllable
a. being interrelated
A company's managers tend to be most familiar with the forces in the _______. a. domestic environment b. foreign regulatory environment c. uncontrollable category d. international environment
a. domestic environment
Which environment refers to all the uncontrollable forces originating outside the home country that surround and influence the firm? a. foreign b. domestic c. multinational d. international
a. foreign
GOT WRONG TRY AGAIN International businesses differ from domestic businesses in that international businesses must deal with the forces from which three of the following environments? (Check all that apply)* a. foreign b. interstate c. domestic d. international
a. foreign c. domestic d. international
The dynamic capability theory suggests that in order for an international foreign direct investment to be successful, the firm must Blank______. (Check all that apply.) Multiple select question. a. have ownership of unique knowledge and resources b. have the ability to transfer the capability to international environments in order to produce a competitive advantage c. have the ability to dynamically create, sustain, and exploit the capability over time d. have the ability to create a global strategy to fit every market in the same manner
a. have ownership of unique knowledge and resources b. have the ability to transfer the capability to international environments in order to produce a competitive advantage c. have the ability to dynamically create, sustain, and exploit the capability over time
The forces influencing the life and development of the firm are classified into which two categories? (Check all that apply) a. internal b. multilateral c. external d. unilateral
a. internal c. external
International businesses differ from domestic businesses in that international businesses must deal with the forces from which three of the following environments? (Check all that apply) (GOT WRONG TRY AGAIN) a. international b. domestic c. interstate d. foreign
a. international b. domestic d. foreign
The definition of international business includes: (check all that apply) a. international trade b. foreign manufacturing c. domestic trade d. service industries
a. international trade b. foreign manufacturing
The forces in the foreign environments are often Blank______; that is, they are connected to one another. a. interrelated b. controlled c. exploited d. assessable
a. interrelated
What is the unconscious reference to your own values when judging behaviors of others in a new and different environment? a. self-reference criterion b. self-inference bias c. cultural stereotype d. social bias
a. self-reference criterion
Management has no direct control over _____ _____, although it can exert influence over them. a. uncontrollable forces b. domestic forces c. internal forces d. unchangeable forces
a. uncontrollable forces
If Indonesia can produce more clothing products than the United States and can do so for a lower cost, then Indonesia is said to have a(n) ________ advantage.
absolute
If Indonesia can produce more clothing products than the United States and can do so for a lower cost, then Indonesia is said to have a(n) _________ advantage
absolute
What situation exists when a nation can produce more of a good or service than another country for the same or lower cost of inputs? Multiple choice question. comparative advantage absolute advantage mercantilist advantage selective advantage
absolute advantage
The amount invested each year into other countries is referred to as ______. Multiple choice question. annual FDI inflow annual FDI outflow positive balance-of-trade trade surplus
annual FDI outflow
The amount invested each year into other countries is referred to as ______. Multiple choice question. annual FDI outflow positive balance-of-trade annual FDI inflow trade surplus
annual FDI outflow
Natalie planned to purchase Belgian chocolate during her visit to Brussels because Belgian chocolate has a worldwide reputation for quality. The chocolate Natalie plans to purchase is an example of a(n)
artifact
Which one of the worst natural disasters in history is associated with international trade? a. malaria b. Black Death c. smallpox d. typhoid
b. Black Death
Which of following are considered external forces? (check all that apply) a. Physical b. Competitive c. Distributive d. Economic e. Production f. Technological
b. Competitive d. Economic c. Distributive f. Technological
Which of the following statements are true regarding the international environment? (Check all that apply.) a. It consists of interactions between two or more domestic environmental forces. b. It consists of the interactions between the domestic environmental forces and the foreign environmental forces. c. It consists of interactions between the foreign environmental forces of two countries. d. It involves only those activities that take place within a nation's borders.
b. It consists of the interactions between the domestic environmental forces and the foreign environmental forces. c. It consists of interactions between the foreign environmental forces of two countries.
A manager's unfamiliarity with other cultures adds to the ______ of foreign environments. a. value b. complexity c. accessibility d. controllability
b. complexity
Which environment refers to all the uncontrollable forces originating outside the home country that surround and influence the firm? (GOT WRONG TRY AGAIN) a. international b. foreign c. multinational d. domestic
b. foreign
A(n) ______ company is a company with operations in multiple nations. a. late-mover b. international c. first-mover d. domestic
b. international
Which of the following foreign forces are especially difficult to assess? (check all that apply) (GOT WRONG TRY AGAIN) a. physical b. legal c. technological d. political
b. legal d. political
What three elements are included in an anthropologist's definition of culture? Multiple select question. individual psychology beliefs interpersonal dynamics rules artifacts
beliefs rules artifacts
Economist David Ricardo's idea of a comparative advantage is based on the idea that when two countries are involved in trade, ______. Multiple choice question. both countries can benefit from trade neither country will benefit from trade the trade can only result in a negative-sum outcome one of the countries will benefit more from trade
both countries can benefit from trade
Which of the following adds complexity to foreign environments? a. Laws that are similar to those in the home environment b. Friendly relations between countries c. Unfamiliarity with other cultures d. Controllability of values
c. Unfamiliarity with other cultures
Foreign business denotes the operations of a company Blank______. MC Q? a. with its domestic business partners b. with a company in a related line of business c. within a foreign country d. within its borders
c. within a foreign country
When one nation is less efficient than another nation in the production of two goods, the less efficient nation has a(n) ___________ advantage in the production of that good for which its absolute disadvantage is less.
comparative
When one nation is less efficient than another nation in the production of two goods, the less efficient nation has a(n) ____________ advantage in the production of that good for which its absolute disadvantage is less.
comparative
A company defending its home market by entering the competitor's home market is an example of a Blank______ driver. Multiple choice question. cost competitive production political
competitive
A company defending its home market by entering the competitor's home market is an example of a ______ driver. Multiple choice question. production political competitive cost
competitive
A company investing in a downstream market as a way to protect its existing international business is an example of a Blank______ driver. Multiple choice question. technological competitive political market
competitive
An OPEC nation investing in filling stations in a foreign country to guarantee a market for its crude oil at a more favorable price is an example of a Blank______ driver. Multiple choice question. technological political competitive market
competitive
Companies internationalizing their operations to guarantee a supply of key raw materials is an example of a ______ driver. political cost market competitive
competitive
New firms, mainly from newly industrialized countries, entering the world markets in computers and electronics is an example of a Blank______ driver. Multiple choice question. technological political competitive cost
competitive
Internal forces are also called ______ forces.
controllable
Management moving production or other parts of the company's value chain to countries where wages are lower is an example of Blank______ drivers. Multiple choice question. political competitive cost market
cost
The self-reference ___________ is the unconscious reference to the one's own cultural values.
criterion
The purchase of an existing business in another nation is called ______. Multiple choice question. greenfield investment strategic alliance joint venture cross-border acquisition
cross-border acquisition
Which of the following is NOT a major driver of internationalization? Multiple choice question. competitive drivers cultural drivers technological drivers market drivers Define what all is associated with all the drivers??***
cultural drivers
A vast expansion of agricultural and industrial production in Blank______ stimulated the emergence of an internationally integrated trading system stretching from Asia to the Mediterranean and Africa. a. Egypt b. India c. Persia d. China
d. China
______ business denotes the operations of a company outside its home market. a. Domicile b. Domestic c. International d. Foreign
d. Foreign
Foreign forces are frequently difficult to ______. a. normalize b. relate c. value d. assess
d. assess
Production, finance, and marketing are all examples of: a. uncontrollable b. external c. foreign d. controllable
d. controllable
Sanctions being placed on Russia and Russian companies in response to Russia's actions in Ukraine is an example of: (GOT WRONG TRY AGAIN) a. forces in the foreign environment being difficult to assess. b. forces in the foreign environment being interrelated. c. forces in the foreign environment being easily controlled. d. forces in the foreign environment having different values.
d. forces in the foreign environment having different values.
In which of the following environments is decision making most complex? a. domestic b. national c. interstate d. international
d. international
A company with operations in multiple nations is referred to as a(n) a. intranational company b. foreign business c. domestic company d. international company
d. international company
The world development indicators from the World Bank show that the number of people living in extreme poverty has: Multiple choice question. declined from 35 percent of the world's population in 1990 to 10.7 percent in 2013. risen from 10 percent of the world's population in 1990 to only 50 percent in 2013. risen from 25 percent of the world's population in 1990 to only 70 percent in 2013. declined from 70 percent of the world's population in 1990 to 10.2 percent in 2013.
declined from 35 percent of the world's population in 1990 to 10.7 percent in 2013.
A trade ___________ is the amount by which the value of imports into a nation exceeds the value of its exports.
deficit
Which of the following are the four variables in Michael Porter's diamond model of national advantage? Multiple select question. demand conditions foreign direct investment conditions factor conditions firm strategy, structure, and rivalry government intervention related and supporting industries
demand conditions factor conditions firm strategy, structure, and rivalry related and supporting industries
A nation can attempt to regain competitiveness in world markets through currency _______________, which lowers the value of a nation's currency relative to other currencies and, as a result, lowers the prices of its exports.
devaluation
The annual FDI investments going into (developed/developing) countries has been decreasing.
developed
The idea that a denim manufacturer in the United States can export its products to China while at the same time a Chinese manufacturer in the denim market can export to the United States because each of the product lines has unique qualities demonstrates the idea of product ____________
differentiation
The idea that a denim manufacturer in the United States can export its products to China while at the same time a Chinese manufacturer in the denim market can export to the United States because each of the product lines has unique qualities demonstrates the idea of product ______________
differentiation
The foreign investment component known as ______ requires investors to participate in the management of the firm. Multiple choice question. direct investment strategic investment debenture investment portfolio investment
direct investment
The ____________ environment is all the _____________ forces originating in the home country that surround and influence the development of the company. (Enter one word in each blank.)
domestic external/uncontrollable
The ______ theory suggests that for a firm to be successful overseas, it must have ownership of unique knowledge or resources and be able to sustain them over time. Multiple choice question. direct investment absolute advantage dynamic capability comparative advantage
dynamic capability
Which theory is currently the most widely cited and accepted theory of foreign direct investment?
eclectic theory of international production
Which theory is currently the most widely cited and accepted theory of foreign direct investment? Multiple choice question. comparative advantage theory monopolistic advantage theory internalization theory eclectic theory of international production
eclectic theory of international production
Which theory of FDI proposes an overall framework for explaining why firms choose to engage in FDI rather than serve foreign markets through alternatives such as exporting, licensing, or strategic alliances? Multiple choice question. eclectic theory of international production comparative advantage theory internationalization theory monopolistic advantage theory
eclectic theory of international production
Which theory of FDI proposes an overall framework for explaining why firms choose to engage in FDI rather than serve foreign markets through alternatives such as exporting, licensing, or strategic alliances? Multiple choice question. internationalization theory monopolistic advantage theory comparative advantage theory eclectic theory of international production
eclectic theory of international production
Free trade enhances ______ development. Multiple choice question. political economic physical cultural
economic
The tendency toward international integration and interdependency of goods, technology, information, labor, and capital is called Blank______. Multiple choice question. international business domestication economic globalization free trade
economic globalization
Which term means the predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases? Multiple choice question. product life cycle demand curve theory economies of scale experience curve
economies of scale
Data suggest that the liberation of trade has improved ______. (check all that apply) Multiple select question. education crime rate health poverty rate life expectancy
education health poverty rate life expectancy
Perfect competition results in Blank______. (Select all that apply.) Multiple select question. efficient allocation of products strong advertising campaigns artificially high prices efficient production
efficient allocation of products efficient production
The term _______________ means all the forces influencing the life and development of the firm. (GOT WRONG TRY AGAIN)
environment
The price of one currency stated in term of another currency is called the ______. Multiple choice question. positive balance-of-payment exchange rate inflation rate negative balance-of-payment
exchange rate
After its first two years in business, Lennart's company realized that by purchasing component parts from Indonesia, it could save 12% in the final cost of goods. Lennart's company was able to improve its efficiency based on the knowledge it gained during its first two years in business. This example demonstrates the idea of the ______. Multiple choice question. product life cycle economy of scale supply-and-demand model experience curve
experience curve
The Blank______ refers to the rising scale on which efficiency improves as a result of cumulative experience and learning. Multiple choice question. supply-and-demand model product life cycle experience curve economy of scale
experience curve
Which variable in Michael Porter's diamond model distinguishes between land, location, or natural resources and transportation systems or university research institutes? Multiple choice question. demand conditions firm strategy, structure, and rivalry related and supporting industries factor conditions
factor conditions
Which of the following are the four variables in Michael Porter's diamond model of national advantage? Multiple select question. government intervention factor conditions firm strategy, structure, and rivalry demand conditions related and supporting industries foreign direct investment conditions
factor conditions firm strategy, structure, and rivalry demand conditions related and supporting industries
What should a cultural learning program for international managers include? (Check all that apply.) Multiple select question. factual knowledge about the other culture a simple briefing on a country's customs anticipating that other cultures may be ethnocentric training in sensitivity to cultural differences
factual knowledge about the other culture anticipating that other cultures may be ethnocentric training in sensitivity to cultural differences
True or false: The levels of foreign direct investment and exporting have been decreasing rapidly in recent years.
false
True or false: Domestic firms are entirely free from foreign or international environmental forces.
false Reason: Many domestic companies face competition from foreign imports and foreign competitors.
Although the mercantilist era ended, we still define a(n) ______ trade balance to mean that a nation exports more goods and services than it imports. Multiple choice question. negative mercantile unfavorable favorable
favorable
Which of the following are contributing to increases in foreign direct investment? (Check all that apply.) Multiple select question. fewer international trade agreements fewer government barriers to trade increased competition from globalizing firms new production and communication technologies
fewer government barriers to trade increased competition from globalizing firms new production and communication technologies
Of the following, which is NOT contributing to increases in foreign direct investment? Multiple choice question. fewer government barriers to trade fewer international trade agreements increased competition from globalizing firms new production and communication technologies
fewer international trade agreements
Which environment refers to all the uncontrollable forces originating outside the home country that surround and influence the firm? foreign international multinational domestic
foreign
What commonly used variable measures where and how fast internationalization is taking place? Multiple choice question. foreign direct investment gross domestic product total annual sales gross national income
foreign direct investment
What term refers to direct investments in equipment, structures, and organizations in a foreign country at a level sufficient to obtain significant management control? Multiple choice question. international monetary fund foreign direct investment gross national income gross national investment
foreign direct investment
According to Theodore Levitt, Blank______ means selling the same thing in the same way everywhere in the world. Multiple choice question. multidomestication globalization interantionalization domestication
globalization
The greatest usefulness of the international product life cycle theory in explaining trade comes when companies introduce their new products into _________________ (international/home) markets first.
home
As a result of their continued economic development, developing countries have dramatically _____________ (increased/decreased) their share of FDI stock.
increased
The proportion of service exports from the United States has ___________ (increased/decreased) in the past three decades.
increased
Which of the following are liabilities associated with being a foreign company in an international investment? (Check all that apply.) Multiple select question. increased costs of doing business at a distance lack of knowledge about local market conditions increased customer interest differences in cultures and language
increased costs of doing business at a distance lack of knowledge about local market conditions differences in cultures and language
The liberalization of trade has been responsible for: Multiple select question. increased spending on public education. greater levels of civil liberties. an increase in infant mortality. greater levels of political rights.
increased spending on public education. greater levels of civil liberties. greater levels of political rights.
The volume of FDI flowing into developing countries has been _____________ (increasing/decreasing).
increasing
The initial stage of the international product life cycle is Blank______. Multiple choice question. innovation import defusion exchange
innovation
The ______ advantage of the eclectic theory of international production suggests that it is in a firm's best interest to exploit its ownership-specific advantages by retaining ownership and control.
internalization
Which FDI theory suggests that due to high transaction costs, a firm may obtain a better price by using the superior knowledge itself than by selling the knowledge on the open market? Multiple choice question. monopolistic advantage theory strategic behavior theory internalization theory absolute advantage theory
internalization theory
The _____________ environment consists of interactions between the domestic environmental forces and the foreign environmental forces.
international
After analyzing which nations account for the most exports and imports, it is evident that international trade Blank______. Multiple choice question. is used mostly by underdeveloped countries is used mostly by developing countries is unevenly distributed across the world is evenly distributed across the world
is unevenly distributed across the world
Which of the following reasons explain why companies start with foreign trade prior to foreign direct investment? Foreign trade is _______. (Check all that apply.) Multiple select question. more expensive less costly less risky more profitable
less costly less risky
An accounting firm establishing foreign operations in markets in which their principal accounts are located to prevent competitors from gaining access to this accounts is an example of a Blank______ driver. Multiple choice question. market competitive cost political
market
A supplier that moves locations to be closer to an original equipment manufacturer is an example of a ______ driver. (GOT WRONG TRY AGAIN) Multiple choice question. market political competitive production
market Why is this?
Which of the following markets are appealing to managers who face a mature, saturated market at home? (Check all that apply.) Multiple select question. markets with a rising gross domestic product per capita markets whose economies are growing rapidly markets with a rising population markets with governments that are hostile to foreign companies
markets with a rising gross domestic product per capita markets whose economies are growing rapidly markets with a rising population
The _______________ advantage theory suggests that foreign direct investment is made by firms in industries with relatively few competitors, due to their possession of technical and other advantages over indigenous firms.
monopolistic
Which theory suggests that foreign direct investment is made by firms in industries with relatively few competitors, due to their possession of technical and other advantages over indigenous firms? Multiple choice question. absolute advantage theory strategic behavior theory comparative advantage theory monopolistic advantage theory
monopolistic advantage theory
Which of the following three are the basic types of tangible and intangible ownership-specific advantages? (Check three.) Multiple select question. monopolistic advantages knowledge or technology cultural advantage economies of scale or scope
monopolistic advantages knowledge or technology economies of scale or scope
Labor standards in developed nations tend to be Blank______ than in developing nations. Multiple choice question. about the same less rigorous more rigorous
more rigorous
A nation's ability to design, produce, distribute, or service products within an international trading context while earning increasing returns on its resources is known as Blank______. Multiple choice question. free trade absolute advantage national competitiveness resource endowments
national competitiveness
According to economist Alfred Marshall, firms that cluster together on a geographic basis can achieve ___________ ____________
national competitiveness
The strategic behavior theory suggests that strategic rivalry between firms in a(n) ______ industry will result in firms closely following and imitating each other's international investments in order to keep a competitor from gaining an advantage. Multiple choice question. individualistic geopolitical oligopolistic monopolistic
oligopolistic
Annual FDI ______ is the amount invested each year into other nations. Multiple choice question. outflow inflow
outflow
Which theory argues for the existence of similar preferences and demand for products and services among nations with similar levels of per capita income? Multiple choice question. resource endowments overlapping demand experience curve economies of scale
overlapping demand
Which advantage of the eclectic theory of international production suggests that a firm has or can develop a firm-specific advantage through ownership of tangible and intangible assets that are not available to other firms and that can be transferred abroad? Multiple choice question. ownership-specific advantage absolute advantage location-specific advantage comparative advantage
ownership-specific advantage
What were some of the largest categories of exports to China from the United States in 2016? (Select all that apply.) Multiple select question. passenger cars civilian aircraft soybeans computers
passenger cars civilian aircraft soybeans
Preferential trading arrangements such as NAFTA and the European Union are ______ drivers. market competitive political cost
political
The trend toward the unification and socialization of the global community is considered a Blank______ driver. Multiple choice question. political market competitive cost
political
Which foreign investment component refers to the purchase of stocks and bonds solely for the purpose of obtaining a return on the funds invested? Multiple choice question. strategic investment portfolio investment direct investment debenture investment
portfolio investment
According to the economic theory of mercantilism, the only source of wealth was Blank______. Multiple choice question. gas and oil farmland wealth and knowledge precious metals
precious metals
The unique differences that producers build into their products with the intention of influencing demand is called _______. Multiple choice question. product differentiation perfect competition comparative advantage absolute advantage
product differentiation
Which of the following are reasons why foreign direct investment in the United States has focused on the acquisition of existing companies rather than new ones? rapid access to U.S. technology decreased international competitive pressure corporate restructuring greater success with a known brand name
rapid access to U.S. technology corporate restructuring greater success with a known brand name
Which of the following are contributing to the shift of the world's economic center of gravity back to Asia? (Check all that apply.) Multiple select question. increased value of the yen rapid urbanization of populations industrialization in the emerging markets underdeveloped markets in undeveloped nations
rapid urbanization of populations industrialization in the emerging markets
Which of the following are benefits of a globalized product line? (Check all that apply.) Multiple select question. reduced gross national income reduced inventory costs reduced production costs reduced development costs
reduced inventory costs reduced production costs reduced development costs
The EU and ASEAN have reinforced the ______________ increasing (regionalization/globalization) of trade.
regionalization
The EU and ASEAN have reinforced the _________________ increasing (regionalization/globalization) of trade.
regionalization************* regional trade associations and agreements
The land, labor, capital, and related production factors that a nation possesses are called Blank______. Multiple choice question. resource endowments gross national product economies of scale natural resources
resource endowments
The land, labor, capital, and related production factors that a nation possesses are called ______. Multiple choice question. economies of scale gross national product resource endowments natural resources
resource endowments
Which of the following statements reflects Theodore Levitt's definition of globalization? (Check all that apply.) Multiple select question. selling the same things in the same way everywhere adopting strategies that operate as if the entire world is a single entity catering and tailoring a product to local differences in taste creating worldwide markets for standardized products
selling the same things in the same way everywhere adopting strategies that operate as if the entire world is a single entity creating worldwide markets for standardized products
For the past 20 years, international trade in _____________ (merchandise or services?) has seen the fastest growth.
service/services
Which of the following is NOT a liability associated with being a foreign company in an international investment? Multiple choice question. similarities in culture and language differences in rules and regulations lack of knowledge about local market conditions increased cost of doing business at a distance
similarities in culture and language
Which of the following industries are examples of the monopolistic advantage theory? (Check all that apply.) Multiple select question. smartphones fashion accessories breakfast cereal commercial aircraft manufacturers
smartphones commercial aircraft manufacturers
For a firm to have a location-specific advantage overseas, the foreign market must have specific Blank______ characteristics. (Check all that apply.) Multiple select question. social competitive political economic
social political economic
Which theory suggests that strategic rivalry between firms in an oligopolistic industry will result in firms closely following and imitating each other's international investments in order to keep a competitor from gaining an advantage? Multiple choice question. comparative advantage theory strategic behavior theory oligopolistic advantage theory internationalization theory
strategic behavior theory
Which of the following regions have not experienced economic success despite efforts to liberalize and privatize their economies? (Check all that apply.) Multiple select question. sub-Saharan Africa Asia Eastern Europe Latin America
sub-Saharan Africa Latin America
Which of the following is NOT a negative effect of the North American Free Trade Agreement? Multiple choice question. substantial increases in air pollution along the U.S.-Mexican border substantial increases in ground water pollution along the U.S.-Mexican border substantial decrease in production facilities along the U.S.-Mexican border substantial increases in population along the U.S.-Mexican border
substantial decrease in production facilities along the U.S.-Mexican border
A trade ____________ is the amount by which the value of a nation's exports exceeds the value of its imports.
surplus
Cable and satellite TV systems in Europe and Asia that allow an advertiser to reach numerous countries is an example of a Blank______ driver. Multiple choice question. political technological competitive market
technological
Global communications networks that enable manufacturing workers to coordinate production and design functions worldwide are an example of a(n) _____________ driver.
technological/technology
Which of the following were among the largest categories of imports from China to the United States in 2016? (Select all that apply.) Multiple select question. toys electrical machinery footwear passenger cars
toys electrical machinery footwear
A ______ corporation is an enterprise made up of entities in more than one nation, operating under a decision making system that allows a common strategy and coherent policies.
transnational
E. T. Hall suggests that the only two ways managers can learn the characteristics of a culture are to ______. Multiple select question. take an international business course obtain a briefing on a country's customs undergo an extensive training program spend a lifetime in a culture
undergo an extensive training program spend a lifetime in a culture
Which of the following mercantilist policies are currently being practiced in China, thus giving price advantages to Chinese companies? (Check all that apply.) Multiple select question. overvalued currency undervalued currency lax regulatory oversight export subsidies
undervalued currency lax regulatory oversight export subsidies
World trade tends to be dominated by exchanges Blank______ geographic regions. Multiple choice question. within outside
within
World trade tends to be dominated by exchanges ______ geographic regions. Multiple choice question. outside within
within
