exam 2
Which of these common phrases can be used to describe the straw men approach known as cultural relativism? Multiple choice question. "Follow the yellow brick road." "A bird in the hand is worth two in the bush." "Walk softly and carry a big stick." "When in Rome, do as the Romans do."
"When in Rome, do as the Romans do."
In _____ Britain withdrew from the European Union following _____. Multiple choice question. 2018, TPP 2018, TWO 2016, NAFTA 2016, Brexit
2016, Brexit
While there were a total of 196 cases handled by GATT, records show that between 1995 and 2019, the WTO successfully handled more than _____ trade disputes. Multiple choice question. 2500 5000 10000 500
500
What two factors cause major adverse effects on a host country's balance of payments? (Check all that apply.) Multiple select question. A foreign subsidiary importing a large number of inputs from abroad The outflow of earnings from a foreign subsidiary to its parent company The inflow of earnings from a parent company to its foreign subsidiary A foreign subsidiary exporting a large number of goods and services to other countries
A foreign subsidiary importing a large number of inputs from abroad The outflow of earnings from a foreign subsidiary to its parent company
What two factors cause major adverse effects on a host country's balance of payments? (Check all that apply.) Multiple select question. The inflow of earnings from a parent company to its foreign subsidiary A foreign subsidiary exporting a large number of goods and services to other countries A foreign subsidiary importing a large number of inputs from abroad The outflow of earnings from a foreign subsidiary to its parent company
A foreign subsidiary importing a large number of inputs from abroad The outflow of earnings from a foreign subsidiary to its parent company
Which two simultaneous outcomes are implied by new trade theory? Multiple select question. A nation can increase the variety of goods available to consumers. A nation can allow other nations to compete in most product categories without incurring losses. A nation can support more than one producer of goods. A nation can lower the cost of the goods being offered to consumers.
A nation can increase the variety of goods available to consumers. A nation can lower the cost of the goods being offered to consumers.
Company ABC in Scotland exports a pound of cheese to the United States for $100. The United States places a 9 percent tax on the cheese as a proportion of its value. What type of tariff is this? Multiple choice question. Export Ad valorem Specific Spot forward
Ad valorem
Select two potential costs of FDI for host countries. Multiple select question. Positive effects on balance of payments Adverse effects on competition Gains in national sovereignty and autonomy Adverse effects on balance of payments
Adverse effects on competition Adverse effects on balance of payments
Which two actions can governments use to intervene in business with the intent of helping firms establish a competitive advantage? Multiple select question. Double taxation Labor strikes Antidumping actions Subsidies
Antidumping actions Subsidies
What are four main instruments of trade policy? Multiple select question. Antidumping duties Unions Arbitration Tariffs Import quotas Foreign direct investment Local content requirements
Antidumping duties Tariffs Import quotas Local content requirements
Identify two costs of FDI to a home country. (Check all that apply.) Multiple select question. Balance of payments are negatively impacted if foreign earnings are sent back to the home country. Balance of payments are negatively affected if FDI is a substitute for direct exports. Balance of payments are negatively affected if purpose of FDI is to develop a low-cost production location. Balance of payments are negatively affected if demand increases for home country exports.
Balance of payments are negatively affected if FDI is a substitute for direct exports. Balance of payments are negatively affected if purpose of FDI is to develop a low-cost production location.
What are two reasons countries should remain focused on opening markets? (Check all that apply.) Multiple select question. Because reducing tariffs will lead to substantial losses in global trade Because average tariffs on services remain higher than on industrial goods Because of high tariff rates on imports of selected goods from developing nations into developed nations Because average tariffs on manufactured goods remain higher than services
Because of high tariff rates on imports of selected goods from developing nations into developed nations Because average tariffs on services remain higher than on industrial goods
According to Adam Smith's theory of absolute advantage, who benefits from engaging in trade? Multiple choice question. Neither country, it is a zero-sum game The importing country The exporting country Both countries engaging in a trade process
Both countries engaging in a trade process
The first thing Brett's manager told him when he started working was that the company always considered the social consequences of any business decision. This is a reflection of _____. Multiple choice question. GNI JIT FTP CSR
CSR
The infant industry argument has what potential negative consequence? Multiple choice question. Creating the need for all infant industries to require subsidies Allowing fewer new companies to come into the market Causing infant industries to lack efficiency Making infant industries self-reliant
Causing infant industries to lack efficiency
Which country has a policy that encourages FDI? Multiple choice question. Country C encourages businesses to invest in countries which prevent the transfer of profits. Country A has a government-backed insurance program to protect against the risk of expropriation. Country B has implemented a double taxation policy on all foreign income. Country D does not allow government loans to businesses investing in developing countries.
Country A has a government-backed insurance program to protect against the risk of expropriation.
What are two drawbacks associated with the utilitarian philosophy on business ethics? Multiple select question. Based on the principle of zero-tolerance Over-emphasis on home-country beliefs and benefits Does not take justice into account Difficult to measure the benefits, costs, and risks of a course of action
Does not take justice into account Difficult to measure the benefits, costs, and risks of a course of action
Which two groups are positively impacted when an import tariff is enacted? (Check all that apply.) Multiple select question. Consumers Foreign producers Domestic producers Government
Domestic producers Government
When the German-based company Forrest Health Supply Inc. developed operations in Italy, it built a manufacturing facility there. In turn, the new facility also imported supplies and equipment from companies based in Germany. Which home country benefit of FDI does this represent? Multiple choice question. Factor effects Location effects Learning effects Employment effects
Employment effects
When the German-based company Forrest Health Supply Inc. developed operations in Italy, it built a manufacturing facility there. In turn, the new facility also imported supplies and equipment from companies based in Germany. Which home country benefit of FDI does this represent? Multiple choice question. Learning effects Employment effects Location effects Factor effects
Employment effects
Bennie is managing a call center in Italy. He is finding it difficult to motivate employees to meet their call volume using the standard tactics employed in the United States. Bennie is told by another manager that if he starts offering "daily bonuses" to employees, they will meet their targets. He is torn between doing what is right and meeting his numbers. Which type of challenge is Bennie facing? Multiple choice question. Ethical Political Social Economic
Ethical
______ are situations where none of the available alternatives seems morally acceptable. Multiple choice question. Tragedy of the Commons Facilitating payments Ethical dilemmas MNEs
Ethical dilemmas
Which aspect of international business convinced Leon Sullivan to lead the way in eliminating apartheid in South Africa? Multiple choice question. Personnel Ethics Finance Marketing
Ethics
Which statement accurately describes how personal ethics might be challenged in international transactions? Multiple choice question. Expatriate managers do not need to consider how international transactions affect their personal ethics. Expatriate managers can impose their personal ethics. Expatriate managers face less pressure to violate their personal ethics. Expatriate managers may face more pressure to violate their personal ethics.
Expatriate managers may face more pressure to violate their personal ethics.
Simple Services Corp. is considering FDI in Japan. However, Simple Services wants to keep tight control over the foreign entity to ensure it will achieve maximum earnings in Japan. Which form of FDI would be better for the company to use? Multiple choice question. Licensing Subsidies VERs Exporting
Exporting
Simple Services Corp. is considering FDI in Japan. However, Simple Services wants to keep tight control over the foreign entity to ensure it will achieve maximum earnings in Japan. Which form of FDI would be better for the company to use? Multiple choice question. VERs Licensing Exporting Subsidies
Exporting
______ refers to shipping goods and services out of the jurisdiction of a country. Multiple choice question. Exporting Importing Licensing Franchising
Exporting
What are two alternatives companies can use instead of FDI to take advantage of opportunities in foreign markets? Multiple select question. Exporting Importing Licensing Embargoes
Exporting Licensing
Choose the four national attributes that Porter theorizes shape the environment that local firms compete in. Multiple select question. Factor endowments Related and supporting industries Firm strategy, structure, and rivalry Trade surpluses and trade imbalances Demand conditions Exchange rates
Factor endowments Related and supporting industries Firm strategy, structure, and rivalry Demand conditions
Drag and drop the descriptions of the attributes in Porter's Diamond next to the corresponding attributes listed on the left. Instructions Factor endowments Demand conditions Related and supporting industries Firm strategy, structure, and rivalry The conditions governing how companies are created, organized, and managed The presence or absence of businesses that are internationally competitive The nature of home stipulations for a product or service A nation's position in areas such as skilled labor, arable land, or infrastructure
Factor endowments: A nation's position in areas such as skilled labor, arable land, or infrastructure Demand conditions: The nature of home stipulations for a product or service Related and supporting industries: The presence or absence of businesses that are internationally competitive Firm strategy, structure, and rivalry: The conditions governing how companies are created, organized, and managed
True or False: According to Adam Smith, a country should produce all goods at home that it can, even if it could buy those goods at a lower cost from other countries. True false question.TrueFalse
False
True or False: Government policies related to international trade have little effect on the success of a business. True false question.TrueFalse
False
True or false: Critics say that protectionism afforded by the infant industry argument has helped eliminate inefficient industries. True false question.TrueFalse
False
True or false: Krugman advocates that it is logical to expect the U.S. government to ignore special-interest politics when forming policy. True false question.TrueFalse
False
True or false: Porter's theory of national competitive advantage stresses a decreased commitment by companies to research and development. True false question.TrueFalse
False
True or false: Sustainable strategies adopted by a company typically only benefit upper management. True false question.TrueFalse
False
True or false: When FDI occurs through greenfield investment, it will increase competition in a market and decrease economic welfare. True false question.TrueFalse
False
Which congressional act outlaws the payment of bribes to foreign government officials to gain businesses? Multiple choice question. Foreign Corrupt Practices Act Corruption of Foreign Public Officials Act Prevention of Foreign Corruption Act Foreign Money Laundering Control Act
Foreign Corrupt Practices Act
Which two groups are negatively impacted when an import tariff is enacted? (Check all that apply.) Multiple select question. Foreign producers Consumers Government Domestic competitors
Foreign producers Consumers
When the government does not use quotas, taxes, or other means to restrict what its citizens can buy from or sell to another country, it is called ______ trade.
Free
______ trade is the economic policy of not discriminating against exports to or imports from foreign countries. Multiple choice question. Balanced Free Restricted Fair
Free
Which view of FDI is based on the classical international trade theory of Smith and Ricardo asserting that international production should be based on comparative advantage? Multiple choice question. Fair market Free market Absolute market Closed market
Free market
What were the first two service industries targeted by the WTO as part of its effort to include regulations governing foreign direct investment? (Check all that apply.) Multiple select question. Global telecommunications Healthcare Financial services Microchip manufacturing
Global telecommunications Financial services
Besides the four broad attributes of a nation that shape the environment in which local firms compete, what two additional variables did Porter discuss that can influence the national diamond? (Check all that apply.) Multiple select question. Inflation Religion Government Chance events
Government Chance events
Which two groups are positively impacted when an import tariff is enacted? (Check all that apply.) Multiple select question. Foreign producers Government Domestic producers Consumers
Government Domestic producers
What are the two components of strategic trade policy? (Check all that apply.) Multiple select question. Governments should intervene to assist firms in overcoming barriers to entry created by foreign firms due to first-mover advantages. Governments should let firms compete on their own against foreign firms who have first-mover advantages. Governments should subsidize promising domestic firms in emerging industries. Governments should not use any subsidies to promote firms in emerging markets.
Governments should intervene to assist firms in overcoming barriers to entry created by foreign firms due to first-mover advantages. Governments should subsidize promising domestic firms in emerging industries.
A low-cost, no-frills grocery store chain that began in the United States decided to open similar stores in Germany which did not have any stores like this. What type of FDI is this company using? Multiple choice question. Greenfield investment Exporting Acquisition Licensing
Greenfield investment
What is the theory that states that countries will export goods that make intensive use of the factors that are abundant in the economy? Multiple choice question. Ricardo Marx-Lenin Heckscher-Ohlin Mercantilism
Heckscher-Ohlin
What theory argues that free trade is beneficial, but that differences in factor endowments, not productivity, determine the pattern of international trade? Multiple choice question. Heckscher-Ohlin Porter-Friedman Ricardo Leontief
Heckscher-Ohlin
Which two of Hofstede's dimensions are present in countries where ethical practices are commonly practiced? Multiple select question. High in individualism High in masculinity High in uncertainty avoidance High in power distance
High in individualism High in uncertainty avoidance
An organization's code of ethics may be partially based on documents such as the United Nations Universal Declaration of____ ____(Enter one word in each blank.)
Human Rights.
What are two potential long-term effects from increased competition? Multiple select question. Increased productivity growth Product and process innovations High prices Less economic growth
Increased productivity growth Product and process innovations
Employees, directors, and stockholders are examples of ______(internal or external?) stakeholders.
Internal
What are two drawbacks of government intervention in the process of free trade? Multiple select question. It invites retaliation and trade wars. It's unlikely to be well-executed. It's a common practice. It protects efficient industries.
It invites retaliation and trade wars. It's unlikely to be well-executed.
What are two characteristics of the eclectic paradigm? (Choose all that apply.) Multiple select question. It argues that the key question of foreign direct investment is whether to choose a greenfield investment or an acquisition. It offers a good explanation of foreign direct investment in the 1980s and 1990s but is less successful at explaining more recent investment. It provides a single holistic explanation of foreign direct investment. It combines the best aspects of other theories of foreign direct investment into a single explanation.
It provides a single holistic explanation of foreign direct investment. It combines the best aspects of other theories of foreign direct investment into a single explanation.
What are two characteristics of the eclectic paradigm? (Choose all that apply.) Multiple select question. It provides a single holistic explanation of foreign direct investment. It offers a good explanation of foreign direct investment in the 1980s and 1990s but is less successful at explaining more recent investment. It combines the best aspects of other theories of foreign direct investment into a single explanation. It argues that the key question of foreign direct investment is whether to choose a greenfield investment or an acquisition.
It provides a single holistic explanation of foreign direct investment. It combines the best aspects of other theories of foreign direct investment into a single explanation.
Country A wants to lower trade barriers with its neighbor, Country B. While both countries support free trade, they are both reluctant to lower their barriers because they are not sure the other country will reciprocate. What obstacle is preventing the advancement of free trade between these countries? Multiple choice question. Fear of rising producer costs Fear of rising consumer costs Lack of trust Lack of resources
Lack of trust
Assume that Green Organics Ltd. based in Phoenix, Arizona has given a British-based company the right to produce and sell its products. In return for this, the British company will pay Green Organics $1 for every unit it sells. What type of investment is Green Organics using? Multiple choice question. Greenfield investment Exporting Licensing Franchising
Licensing
What are three trade barriers that can constrain a firm's ability to disperse productive activities? Multiple select question. Local content regulations Recession Labor strikes Inflation Tariffs Quotas
Local content regulations Tariffs Quotas
What are two benefits of FDI to a home country? Multiple select question. Outward flow of domestic profits MNE learns skills from exposure to foreign market Resource transfer effect where skills go to foreign subsidiary Foreign subsidiary creates demand for home-country exports
MNE learns skills from exposure to foreign market Foreign subsidiary creates demand for home-country exports
What are two benefits of FDI to a home country? Multiple select question. Resource transfer effect where skills go to foreign subsidiary MNE learns skills from exposure to foreign market Outward flow of domestic profits Foreign subsidiary creates demand for home-country exports
MNE learns skills from exposure to foreign market Foreign subsidiary creates demand for home-country exports
______ is the first theory of trade that advocated that a country should export more than it imports and should accumulate gold and silver to make up the difference and maintain a trade surplus. Multiple choice question. New Trade Isolationism Planned economy Mercantilism
Mercantilism
What helps managers walk away from a decision that is profitable, but not ethical? Multiple choice question. Moral courage Rights theory Moral ineptitude Moral suasion
Moral courage
Which theory states that for products where economies of scale are significant and that control a substantial amount of world demand, the first movers in an industry can gain a scale-based cost advantage NOT available to late entrants? Multiple choice question. Ricardo Mercantilism Product life-cycle New trade
New trade
Which trade theory has these implications: (1) nations may benefit from trade even when they do not differ in resource endowments or technology; and (2) specialization allows for scale economies and lower production costs? Multiple choice question. Ricardo Mercantilism Fair trade New trade
New trade
______ refers to the moral obligation to act in an honorable and benevolent manner. Multiple choice question. Noblesse oblige Rights theory Kantian theory Moral imagination
Noblesse oblige
What are three advantages of FDI? (Check all that apply.) Multiple select question. Has limited risk compared to other entry modes Overcomes high transportation costs Allows for tight control over the firm's operations Allows the firm to maintain control over technological know-how Limits a firm's logistics decisions.
Overcomes high transportation costs Allows for tight control over the firm's operations Allows the firm to maintain control over technological know-how
What two measures can countries employ to restrict foreign direct investment? (Check all that apply.) Multiple select question. Low-interest loans Performance requirements Tax concessions Ownership restraints
Performance requirements Ownership restraints
Which theory was based on the observation that early in the development of a commodity, all the parts and labor come from the area in which it was invented? Multiple choice question. Product life-cycle Absolute advantage theory New trade theory Comparative advantage theory
Product life-cycle
What two issues were addressed by the Uruguay Round? Multiple select question. Increasing embargoes on intellectual property Increasing technology subsidies Reducing agricultural subsidies Reducing tariffs on manufactured goods
Reducing agricultural subsidies Reducing tariffs on manufactured goods
As demonstrated by the Nike example in the text, which situation is generally MOST preferred when considering employment practices in international business? Multiple choice question. Having good working conditions in home operations, but holding foreign operations to the lower standards that are acceptable in that country Requiring good conditions in home and foreign operations even when this results in a smaller profit margin Requiring good conditions in home and foreign operations, but accepting subcontractor safety violations if it's more profitable Meeting required home standards, but permitting the use of child labor in the foreign country if it is the norm there
Requiring good conditions in home and foreign operations even when this results in a smaller profit margin
Which two theories provide the moral compass that is important when thinking through the ethical implications of decisions in a systematic way? (Check all that apply.) Multiple select question. Rights theories Rawl's theory of justice The Friedman Doctrine Straw men theories
Rights theories Rawl's theory of justice
How do facilitating payments benefit a company? Multiple choice question. Helps a business avoid tax payments Smooths the progress of services to which the business is entitled Allows a company to obtain exclusive preferential treatment Helps a business secure contracts that would not otherwise be secured
Smooths the progress of services to which the business is entitled
What are four determinants of ethical behavior? (Check all that apply.) Multiple select question. Societal culture Social behavior law Humanism Personal ethics Leadership Organizational culture
Societal culture, Personal ethics, Leadership, and Organizational culture.
Many Western countries imposed trade sanctions against ______ during the 1980s and 1990s to encourage the country to improve human rights policies by dropping its apartheid policies. Multiple choice question. South Africa South Korea Indonesia Portugal
South Africa
What are the two most common incentives governments offer to foreign firms to invest in their country? (Check all that apply.) Multiple select question. Subsidies Network air time Low-interest loans Non-profit status
Subsidies Low-interest loans
General Motors adopted the ______ principles in order to continue business operations in South Africa during the apartheid movement. Multiple choice question. Non-violence Marshall Sullivan Non-aggression
Sullivan
What two positive contributions to a host country can FDI provide? Multiple select question. Protect intellectual property Decrease any trade imbalance Supply capital, technology, and management resources Boost a country's economic growth rate
Supply capital, technology, and management resources Boost a country's economic growth rate
______ constrain a firm's ability to export its products by raising the price of the exported product, which could put the firm at a competitive disadvantage with domestic firms in that country. Multiple choice question. Interest rates Fiscal policies Inflation rates Tariff barriers
Tariff barriers
What is considered the simplest instrument of trade policy? Multiple choice question. Subsidies Tariffs Quotas Antidumping duties
Tariffs
What group worked to extend GATT rules to provide enhanced protection for intellectual property and significantly reduce barriers on trade in textiles? Multiple choice question. The World Bank The Bretton Woods System The Uruguay Round ISO 9000
The Uruguay Round
Which description of leader behavior is most likely to promote a strong ethical culture in an organization? Multiple choice question. The boss who pays little regard to social norms and values and instead succeeds by his or her own set of rules. The boss who speaks strongly about personal ethics and at the same time encourages employees to do whatever it takes to succeed. The boss who makes quick decisions without anyone's input and then places the blame for problems on others. The boss who consistently demonstrates strong personal ethics in all dealings with clients.
The boss who consistently demonstrates strong personal ethics in all dealings with clients.
Which two factors would reveal that a company has little bargaining power when considering FDI? Multiple select question. Company is competing with multiple other firms The company has a short period of time to complete negotiations Host government knows there are few alternatives to what the company is offering Host government does not value what the firm has to offer
The company has a short period of time to complete negotiations Host government does not value what the firm has to offer
Which two factors would reveal that a company has little bargaining power when considering FDI? Multiple select question. The company has a short period of time to complete negotiations Host government knows there are few alternatives to what the company is offering Host government does not value what the firm has to offer Company is competing with multiple other firms
The company has a short period of time to complete negotiations Host government does not value what the firm has to offer
Which theory of foreign direct investment attempts to combine (1) the theories that focus on favoring direct investment when exporting and licensing are available and (2) theories that say certain locations are favored over others for FDI? Multiple choice question. Mercantilism Product life-cycle The theory of comparative advantage The eclectic paradigm
The eclectic paradigm
Which theory of foreign direct investment attempts to combine (1) the theories that focus on favoring direct investment when exporting and licensing are available and (2) theories that say certain locations are favored over others for FDI? Multiple choice question. The theory of comparative advantage Product life-cycle Mercantilism The eclectic paradigm
The eclectic paradigm
What are three reasons that caused the global trading system erected under GATT to be strained during the 1980s and early 1990s? (Check all that apply.) Multiple select question. The economic success of Japan A wave of economic recession throughout Europe The persistent trade deficit in the United States The economic distress of many African countries Countries found ways to get around GATT regulations
The economic success of Japan The persistent trade deficit in the United States Countries found ways to get around GATT regulations
What is a bound tariff rate? Multiple choice question. The lowest tariff rate that can be charged The tariff rate associated with dumped goods The highest tariff rate that can be charged The tariff rate associated with exports to underdeveloped nations
The highest tariff rate that can be charged
What two factors cause major adverse effects on a host country's balance of payments? (Check all that apply.) Multiple select question. The outflow of earnings from a foreign subsidiary to its parent company The inflow of earnings from a parent company to its foreign subsidiary A foreign subsidiary importing a large number of inputs from abroad A foreign subsidiary exporting a large number of goods and services to other countries
The outflow of earnings from a foreign subsidiary to its parent company A foreign subsidiary importing a large number of inputs from abroad
What are two characteristics of countervailing duties? Multiple select question. They only hold for 90 days. They are a special tariff. They are equivalent to a "slap on the wrist." They can be substantial and stay in place for five years.
They are a special tariff. They can be substantial and stay in place for five years.
What is an accurate description of developed nations with regard to the environment? Multiple choice question. They have more substantive environmental regulations. They lack environmental laws and rules. They import toxic chemicals from developing nations. They have a pollution free environment.
They have more substantive environmental regulations.
What are two ways trade barriers hamper a firm's productive activities? (Check all that apply.) Multiple select question. They allow access to the imports a firm may need. They raise the cost of exporting products. They increase the ability to operate at full capacity. Quotas limit the ability to serve a country from outside locales.
They raise the cost of exporting products. Quotas limit the ability to serve a country from outside locales.
Why do exporting countries agree to impose voluntary export restraints? Multiple choice question. To limit production of additional output To allocate labor to a different industry To avoid subsidizing their domestic producers To avoid damaging tariffs and import quotas on their products
To avoid damaging tariffs and import quotas on their products
What's the main reason a country would use export tariffs? Multiple choice question. To foster competition and ultimately lower costs to the consumer To achieve economies of scale To take advantage of lower production costs To ensure sufficient supply of a good within the country
To ensure sufficient supply of a good within the country
In what two ways can a government use intervention in trade as a foreign policy instrument? (Check all that apply.) Multiple select question. To grant preferential trading terms to countries it wants to build relations with To grant preferential trade terms to countries that don't abide by trade laws To pressure or punish countries that produce most efficiently To pressure or punish "rogue states"
To grant preferential trading terms to countries it wants to build relations with To pressure or punish "rogue states"
What are the two reasons that export tariffs are levied? (Check all that apply.) Multiple select question. To reduce exports from an industry sector, often for political reasons To lower the price for foreign consumers To raise revenue for domestic producers To raise revenue for the government
To reduce exports from an industry sector, often for political reasons To raise revenue for the government
What are two limitations on exporting? Multiple select question. Licensing fees Trade barriers Transportation costs Design costs
Trade barriers Transportation costs
FDI theory suggests that exporting is preferable to licensing and FDI as long as what two things are in place? Multiple select question. Trade barriers are low. Transportation costs are low. Distribution costs are low. Production costs are high.
Trade barriers are low. Transportation costs are low.
Following Brexit, Great Britain withdrew from the European Union in 2016. True false question.TrueFalse
True
True or False: Government can detract or improve a country's advantage by choice of policies. True false question.TrueFalse
True
True or False: The United States has imposed trade sanctions on other countries as a way to protect and promote human rights in those nations. True false question.TrueFalse
True
True or false: A company would favor FDI over exporting when trade barriers are in place. True false question.TrueFalse
True
True or false: According to cultural relativism, all ethics are culturally determined. True false question.TrueFalse
True
True or false: Business people may behave unethically simply because they forget to ask whether the decision or action they are making is ethical. True false question.TrueFalse
True
True or false: First-mover advantages are especially important in industries where the global market can profitably support only a limited number of firms. True false question.TrueFalse
True
True or false: Government-imposed import quotas can limit a company's ability to serve a country from a foreign location. True false question.TrueFalse
True
True or false: Tax concessions can be used by a government to encourage foreign firms to do business in that country. True false question.TrueFalse
True
True or false: The decision-making process is one of the determinants of ethical behavior. True false question.TrueFalse
True
True or false: The fact that countries are using the WTO represents an important vote of confidence in the WTO's dispute resolution procedures. True false question.TrueFalse
True
______ ethics measure actions on a cost-benefit scale. Multiple choice question. Utilitarian Rights theories Assimilation Justice
Utilitarian
Which ethical theory emphasizes that the best actions are those that benefit the most number of people and harm the least number of people? Multiple choice question. Kantian Protestantism Utilitarianism Evangelism
Utilitarianism
Which company is contributing to the global tragedy of the commons? Multiple choice question. Wood Form Corp. implemented a waste disposal system that complies with government regulations. Perfect Paint Supply plans to open a manufacturing plant in Italy since 40 percent of its sales are in Europe. Top Line Appliance imports parts from an eastern nation that uses child labor. Virtual-Day Inc. moved production to a South American country with lower environmental regulations and sends pollutants freely into the air.
Virtual-Day Inc. moved production to a South American country with lower environmental regulations and sends pollutants freely into the air.
Japan imposed a limit on auto exports to the United States as a result of pressure by the U.S. government. What instrument of trade policy does this represent? Multiple choice question. Ad valorem tariff Tariff rate quota Subsidy Voluntary export restraint
Voluntary export restraint
Which three practices would be considered acceptable according to the concept of cultural relativism? (Check all that apply.) Multiple select question. You should adopt the culture of the country that you are doing business in, no matter what. If a culture supports slavery, it is okay to use slave labor. A firm should only conform to home country ethical standards and ignore cultural differences. There is a rejection of universal notions of morality. The home country's standards of ethics are the only and appropriate ones.
You should adopt the culture of the country that you are doing business in, no matter what. If a culture supports slavery, it is okay to use slave labor. There is a rejection of universal notions of morality.
A payment which ensures that a business receives the standard treatment that it ought to receive from a foreign government is known as Multiple choice question. an embargo. a tax. a grease payment. an import tariff.
a grease payment.
A person who follows the idea of _____ says that the multinational's home-country standards of ethics are the appropriate approach to follow in foreign countries. Multiple choice question. a righteous moralist the Friedman doctrine cultural relativism a naive immoralist
a righteous moralist
The theory of ______ advantage was the first to attack the tenet of mercantilism, which implied that trade is a zero-sum game. Multiple choice question. absolute social political comparative
absolute
When a country is more efficient at producing a product than any other country, the country has a(n) ______ advantage in the production of that product. Multiple choice question. social political absolute comparative
absolute
The stock of foreign direct investment refers to the total Multiple choice question. amount of imports into a country. accumulated value of foreign-owned assets at a given point in time. amount of foreign investment made in manufacturing. amount of FDI undertaken over a year.
accumulated value of foreign-owned assets at a given point in time.
A(n)______ tariff is a tax that is levied on a good on the basis of its value, not on the basis of its weight or quantity. Multiple choice question. fixed ad valorem flexible specific
ad valorem
The Japanese government is used in the text as an example of how governments have effectively used ______ to limit imports of vehicle parts through bureaucratic rules. Multiple choice question. countervailing duties tariff rate quotas voluntary export restraints administrative trade policies
administrative trade policies
A country might create safety standards for certain products that other nations can't comply with. As a result, these nations can't be involved with exporting parts for those goods and trade does not exist. These safety standards are a form of _____. Multiple choice question. quota rent administrative trade policy voluntary export restraint antidumping policy
administrative trade policy
Some ethics experts have proposed practical guides or ethical ______ to make ethical decisions in a systematic way. Multiple choice question. etiquette algorithms patterns modus operandi
algorithms
Governments develop ______ policies to punish foreign companies that sell their products at below fair market value. Multiple choice question. embargo administrative antidumping subsidy
antidumping
A country's ___________ accounts track expenditures and receipts from other countries. Multiple choice question. balance-of-financing balance-of-payments balance-of-debt balance-of-trade
balance-of-payments
In a business setting, noblesse oblige refers to _____ behavior considered to be the responsibility of successful enterprises. Multiple choice question. benevolent powerful courageous unethical
benevolent
Companies participating in international trade _____ exert strong influences on government trading policies. Multiple choice question. can cannot
can
When a firm invests in plant, equipment, and R&D as a result of increased competition, this is referred to as a(n) ______ investment. Multiple choice question. capital float equity dividend
capital
Earnings from a foreign subsidiary to the parent company are recorded as ______ on the balance-of-payments accounts. Multiple choice question. capital inflow current account inflow capital outflow current account outflow
capital outflow
Earnings from a foreign subsidiary to the parent company are recorded as ______ on the balance-of-payments accounts. Multiple choice question. current account outflow capital outflow capital inflow current account inflow
capital outflow
Many companies develop a formal statement of primary values and ethical standards for employees and managers to follow. This is called a Multiple choice question. code of grievances. code of ethics. code of conduct. code of honor.
code of ethics.
Heckscher and Ohlin identified differences in national factor endowments as the root of ______. Multiple choice question. entrepreneurship absolute advantage comparative advantage deregulation
comparative advantage
Ricardo's theory of comparative advantage assumes ______ returns to scale. Multiple choice question. increasing evolving decreasing constant
constant
According to new trade theory, first movers in an industry can gain a scale-based _____ advantage that later entrants find almost impossible to match. Multiple choice question. production cost marketing geographic
cost
According to product life-cycle theory, as products mature, ______ considerations become far more important in the competitive process. Multiple choice question. cultural cost late-mover political
cost
Countries can use ______ duties on an offending import to offset dumping. Multiple choice question. voluntary countervailing exchange rate excise
countervailing
Maria's boss asked her to do whatever it takes to secure a contract. Maria knows that paying a bribe would ensure that the contract would be signed, but walks away because she knows that while paying the bribe would ensure large profits, doing so would be unethical. Maria is demonstrating moral ______. Multiple choice question. courage accommodation mission imagination
courage
According to new trade theory, the first mover's ability to benefit from increasing returns ______ for other firms. Multiple choice question. creates a barrier to entry fosters the competitive spirit accelerates the demand
creates a barrier to entry
The belief that ethics are culturally determined and a firm should adopt the ethics of the country it is doing business in is Multiple choice question. cultural change. cultural disruption. cultural purification. cultural relativism.
cultural relativism.
A company's organizational _____ reflects the values and norms that are shared among employees of an organization. Multiple choice question. hierarchy endowment vision culture
culture
The _____ account tracks goods and services exports and imports in balance-of-payments accounting. Multiple choice question. payments production exchange rate current
current
Tracking exports and imports of goods and services is measured by the ______ account in balance-of-payments accounting.
current
A government would be concerned when the country is running a ______ on the current account of their balance of payments. Multiple choice question. deficit dividend credit surplus
deficit
The concern that an MNE could drive local firms out of business, monopolize the market, and raise prices above those that would prevail in competitive markets is more of a worry for ______ economies. (Choose developing or advanced.)
developing
The 2,000 employees working in Toyota's factory in France are an example of the ______ effect of FDI on employment, while the 2,000 new jobs that were created in support industries are an example of the ______ effect of FDI on employment. Multiple choice question. indirect, direct indirect, positive direct, indirect direct, negative
direct, indirect
The 2,000 employees working in Toyota's factory in France are an example of the ______ effect of FDI on employment, while the 2,000 new jobs that were created in support industries are an example of the ______ effect of FDI on employment. Multiple choice question. indirect, positive indirect, direct direct, indirect direct, negative
direct, indirect
The ______ effects of FDI come when a multinational enterprise hires host-country citizens and ______ effects come when local suppliers hire workers as a result of the FDI. Multiple choice question. direct; indirect indirect; negative indirect; positive indirect; direct
direct; indirect
The ______ effects of FDI come when a multinational enterprise hires host-country citizens and ______ effects come when local suppliers hire workers as a result of the FDI. Multiple choice question. indirect; positive indirect; direct direct; indirect indirect; negative
direct; indirect
According to the strategic trade policy argument, a government can help raise national income if it can somehow ensure that the firms that gain a first-mover advantage in an industry are_____. Multiple choice question. foreign enterprises service providers domestic firms entrepreneurs
domestic firms
Porter argues that achieving international success in a certain industry is a function of factor endowments, domestic demand conditions, related and supported industries, and ______. Multiple choice question. domestic rivalry host-country norms social hierarchies government intervention
domestic rivalry
Porter argues that achieving international success in a certain industry is a function of factor endowments, domestic demand conditions, related and supported industries, and ______. Multiple choice question. government intervention domestic rivalry host-country norms social hierarchies
domestic rivalry
To encourage FDI, many countries have eliminated ______ taxation of foreign income. Multiple choice question. export direct indirect double
double
To encourage FDI, many countries have eliminated ______ taxation of foreign income. Multiple choice question. indirect export direct double
double
FDI has a positive ______ impact on host countries as a result of technology transfers. Multiple choice question. brand political economic geographic
economic
Sanjay told his staff that the company didn't care if the components came from a company using sweatshop labor, the parts were needed to meet the order and the company needed the order to make the sales quota. In this situation, the company makes this decision based on purely _____ terms. Multiple choice question. social political economic ethical
economic
The argument for strategic trade policy suggests a(n) ______ justification for government intervention in trade. Multiple choice question. social cultural economic political
economic
Based on new trade theory, as the size of markets increases, companies may be able to attain better ______. Multiple choice question. economies of scale factor endowments product life-cycles tariff barriers
economies of scale
Ethical issues arise in international business when Multiple choice question. there are multiple companies producing the same product at different consumer costs. all nations follow similar business practices. basic human rights are respected in all nations. environmental regulations in host nations are less stringent than those in the home country.
environmental regulations in host nations are less stringent than those in the home country.
Marietta is visiting her company's manufacturing subcontractor in Pakistan. She notices children working on the machinery with no air conditioning and little access to water. But she also knows these children are probably supporting their families. Marietta can't decide if children working in the factory is appropriate or inappropriate. This is an example of a(n) ______. Multiple choice question. ethical dilemma Sullivan principle facilitating payment tragedy of the commons
ethical dilemma
The Plume and Fabric manufacturing company abides by a strict code of providing the best in equipment, lighting, and overall working conditions for its 350 employees who create costumes for Broadway shows. While the company could save money by hiring less-skilled or underage labor to do the job, it knows that decision is not acceptable. This scenario demonstrates how a(n) _____ plays a role in the company's decisions. Multiple choice question. marketing plan vision statement ethical strategy mission statement
ethical strategy
The accepted principles of right and wrong that guide a person's decisions are called _____. Multiple choice question. beliefs attitudes ethics contexts
ethics
A basic message of Ricardo's theory of comparative advantage is that: (Check the two that apply.) Multiple select question. even if countries lack an absolute advantage in the production of any good, consumers can still consume more if there are no restrictions on trade. potential world production is greater with unrestricted free trade than it is with restricted trade. by strategically using subsidies, a government would increase the chances of its domestic firms becoming first movers in newly emerging industries. trade is a zero-sum game that creates clear winners and losers.
even if countries lack an absolute advantage in the production of any good, consumers can still consume more if there are no restrictions on trade. potential world production is greater with unrestricted free trade than it is with restricted trade.
If a country places a 20 percent tax on dairy products exported to other nations in order to limit exports and have sufficient supplies of dairy products for the home country, it is using a(n) ______. Multiple choice question. export tariff subsidy embargo import quota
export tariff
Producing a good at home and then shipping it to another country for sale is called _______. Multiple choice question. exporting offshoring franchising outsourcing
exporting
Instead of FDI, a company could choose ______, which involves producing goods at home and shipping them overseas, or ______, which is granting a foreign firm the right to produce and sell a product in return for a royalty fee. Multiple choice question. acquisitions; exporting licensing; exporting licensing; acquisitions exporting; licensing
exporting; licensing
Customers, suppliers, and unions are all examples of ________(internal or external?) stakeholders
external
An amendment to the Foreign Corrupt Practices Act allowed for the use of ______ in which a business is ensured that it will receive the standard treatment it ought to receive from a foreign government. Multiple choice question. facilitating payments trade sanctions isolationism deregulation
facilitating payments
The Foreign Corrupt Practices Act was amended to include _____ because some U.S. businesses complained the act would put U.S. firms at a competitive disadvantage. Multiple choice question. technological innovation facilitating payments agriculture production services
facilitating payments
According to Heckscher and Ohlin, each country has certain ______, such as land, labor, and capital. Multiple choice question. wealth sources output endowments economic principles factor endowments
factor endowments
It is in the best interest of a company to seek out a country that has _ (restrictive or favorable?) policies toward FDI.
favorable
The idea that an MNE could come into a country and monopolize a market tends to be a greater concern in countries that have Multiple choice question. numerous existing firms in that market. only large firms and no mid-size firms. few large firms of their own. no small business considerations.
few large firms of their own.
Global telecommunications and _____ have been targeted by the WTO as industries that need expanded trade agreements. Multiple choice question. computer components financial services intellectual property agriculture
financial services
Since the global market can only support one producer of superjumbo aircraft, Airbus had the benefit of a(n) _____. Multiple choice question. offshoring application factor endowment first-mover advantage small-scale entry
first-mover advantage
The development of the superjumbo jet by Airbus, which basically shuts out other producers of this type of aircraft, demonstrates the idea of a(n) ______ based on scale economies because the global market can probably only support one producer of superjumbo aircraft. Multiple choice question. tragedy of the commons Sullivan principle first-mover advantage Leontief paradox
first-mover advantage
Preempting demand, gaining volume cost advantages, building the brand, and establishing a long-term competitive advantage are associated with Multiple choice question. segmenting, targeting, and positioning. secondary-mover advantages. brand equity. first-mover advantages.
first-mover advantages.
The ______ of FDI is the amount of FDI attempted over a period of time (usually one year).
flow
Porter developed ______ broad attributes of a nation that shape the environment in which local firms compete. Multiple choice question. four five six two
four
The ______ view of FDI states that international production should be allocated based on the theory of comparative advantage. Multiple choice question. radical free market pragmatic nationalism laissez faire
free market
The ______ view of FDI states that international production should be allocated based on the theory of comparative advantage. Multiple choice question. radical pragmatic nationalism laissez faire free market
free market
Ricardo's theory encourages ______ because it suggests that trade is a positive-sum game where all participating countries realize economic gains. Multiple choice question. a planned economy restricted trade free trade isolationism
free trade
A consequence of subsidies paid to companies during difficult economic times—for example, the Japanese farm subsidies—is Multiple choice question. making it more difficult for recipient companies to find buyers. making it more difficult for recipient companies to attract suppliers. giving recipients an unfair competitive advantage. raising costs for recipients.
giving recipients an unfair competitive advantage.
Generon Inc. has moved its production to a new nation. It freely dumps its harmful waste in the rivers and causes environmental degradation there. In this case, Generon has contributed to the Multiple choice question. Sullivan principle. the difference principle. noblesse oblige. global tragedy of the commons.
global tragedy of the commons.
Porter states that ______ can influence each of the four components of the diamond through subsidies, education policies, and policies toward capital markets. Multiple choice question. government competition society big business
government
Porter's theory stresses the advantages of businesses working with ______ to promote strong competition within domestic markets. Multiple choice question. competitors educators marketers government
government
The Winston Sporting Goods Company is lobbying members of Congress to encourage them to open a trading agreement with South America. The company believes it can triple its sales by accessing this market which will benefit the United States in export tariffs. This demonstrates how _____ affects/affect trade. Multiple choice question. factor endowments the supply chain government policy first-mover advantages
government policy
Foreign direct investment can be in the form of a(n) ______, which occurs when a firm establishes a new operation in a foreign market. Multiple choice question. acquisition greenfield investment licensing agreement franchise operation
greenfield investment
According to Vernon's product life-cycle theory, while demand for a product is starting to grow rapidly in the United States, demand for the product in other countries is limited to _____. Multiple choice question. distributors and wholesalers direct competitors government offices high-income groups
high-income groups
American car makers promote the idea that Japan makes it difficult for others to compete in the industry because the country has Multiple choice question. created low-emission vehicles that surpass the standards set by other countries. implemented vehicle parts standards that no other country uses. developed a pricing standard that other nations cannot match. the only manufacturing facility in the world for specific steel parts.
implemented vehicle parts standards that no other country uses.
The United States has placed a limit on the amount of tuna in airtight containers that can be imported into this country. This is an example of a(n) _____. Multiple choice question. import quota subsidy voluntary export restraint export tariff
import quota
Government intervention is said to be self-defeating because it tends to protect _____. Multiple choice question. inefficient firms the service industry competitors consumers
inefficient firms
The ______ argument for trade intervention states that developing countries need to support new industries until they are strong enough to compete globally. Multiple choice question. balance sheet purchasing power parity infant industry tragedy of the commons
infant industry
The oldest argument for government intervention in trade in which developing nations must protect their domestic industries until they are ready to compete globally is the ______ argument. Multiple choice question. infant industry local content national security voluntary export restraint
infant industry
The European Union's support for the Common Agricultural Policy illustrates why strategic trade policy is problematic. In this instance, the government was influenced by ______ to the detriment of consumers. Multiple choice question. interest groups foreign producers election fraud start-ups
interest groups
The market imperfections approach is also known as the ______ theory. Multiple choice question. balance sheet internalization purchasing power parity supply and demand
internalization
A country is said to have an absolute advantage in the production of an item when the country Multiple choice question. exports more of the item to other nations than any other country. is more efficient than any other country at producing the item. promotes the idea of importing but downplays the idea of exporting. is able to import the item at a lower cost than producing it themselves.
is more efficient than any other country at producing the item.
When governments intervene in foreign trade, they often claim they are protecting ______ from unfair foreign competition. Multiple choice question. jobs products stock prices dividends
jobs
One important drawback to the utilitarian philosophy to business ethics is that it does not consider _____. Multiple choice question. class evidence rank justice
justice
One important drawback to the utilitarian philosophy to business ethics is that it does not consider _____. Multiple choice question. evidence justice class rank
justice
The Hewlett-Packard example discussed in this chapter suggests that one cause of unethical behavior in a company can stem from _____. Multiple choice question. broad performance goals government demand leadership culture
leadership
Export tariffs are (more or less?) common than import tariffs.
less
Allowing a foreign firm to produce and sell your product for a royalty fee is called ______. Multiple choice question. licensing franchising exporting offshoring
licensing
Internalization theory is used to explain why a firm would prefer foreign direct investment over ______ as a strategy to enter a foreign market. Multiple choice question. an acquisition franchising licensing a greenfield investment
licensing
Two major limits of ______ include giving away valuable know-how to competitors and losing control over marketing, production, and strategy. Multiple choice question. acquisitions exporting importing licensing
licensing
Two major limits of ______ include giving away valuable know-how to competitors and losing control over marketing, production, and strategy. Multiple choice question. acquisitions licensing importing exporting
licensing
A(n) ______ states that some percentage of a good must be produced domestically. Multiple choice question. voluntary export restraint antidumping policy local content requirement quota rent
local content requirement
In order to win a contract in Mexico, QVB Auto Manufacturing must make 65 percent of the component parts of their vehicles in Mexico. This is an example of a(n) Multiple choice question. local supplier requirement. local distribution requirement. local content requirement. international content requirement.
local content requirement.
Developing countries use ______ to move their manufacturing base from simply assembling component parts to the manufacturing of those parts by requiring that a specific fraction of a good be produced domestically. Multiple choice question. voluntary export restraints embargoes local content requirements government subsidies
local content requirements
A company decides to outsource all product designs to Singapore because it has been found to have the most efficient design companies. In this situation, the ______ implication for international business is being considered. Multiple choice question. policy trade first-mover location
location
The factor that impacts all the theories of trade because companies should produce where it is most efficient is Multiple choice question. product positioning. location. demographics. government regulation.
location
To achieve the highest efficiencies, a U.S. company decides to manufacture its products in Thailand, but does all final assembly of the products in China. The company is focusing on the ______ implication for international business. Multiple choice question. political location tariff marketing
location
One cost to a host country related to FDI would be the _______ (gain or loss?) of sovereignty and autonomy.
loss
Exporting strategy does not work for a (low or high?) value-to-weight ratio product that can be produced anywhere.
low
Exporting strategy does not work for a ______ (low or high?) value-to-weight ratio product that can be produced anywhere.
low
ABC Co. should choose exporting over licensing as a form of FDI if it has ______ transportation costs and is facing ______ trade barriers. Multiple choice question. high; low low; low high; high low; high
low; low
Greenfield investing spurs competition by increasing the number of players in a market and this will tend to _____ prices and ______ economic welfare. Multiple choice question. increase, lower lower, increase lower, lower increase, increase
lower, increase
A government would impose administrative trade policies in order to Multiple choice question. make it difficult for imports to enter a country. limit the amount of exports going out of a country. foster goodwill among trading nations. ensure that there is sufficient supply of a good within a country.
make it difficult for imports to enter a country.
When a government intervenes to achieve a surplus in the nation's balance of trade, this action is consistent with the main tenet of ______. Multiple choice question. expansionism an open economy free trade mercantilism
mercantilism
According to Hofstede's theory, cultures high in masculinity and power distance are _____ (more or less?) likely to engage in unethical behavior. Multiple choice question. more less
more
Reciprocal trade agreements between two or more partners are called _____ trade agreements. Multiple choice question. monopolistic multilateral mutual mass
multilateral
Reciprocal trade agreements between two or more partners are called _____ trade agreements. Multiple choice question. multilateral monopolistic mutual mass
multilateral
The stalled Doha Round has caused many nations to use _____ to foster trade. Multiple choice question. multilateral trade agreements strict quota rents voluntary export restraints local content requirements
multilateral trade agreements
The stalled Doha Round has caused many nations to use _____ to foster trade. Multiple choice question. voluntary export restraints local content requirements multilateral trade agreements strict quota rents
multilateral trade agreements
Governments occasionally protect certain industries, like defense-related industries, for ______ reasons. Multiple choice question. national security currency stabilization quality control competitive advantage
national security
Trevor told his foreign-born roommate that it was socially acceptable in the United States to question a professor if you believed he or she was saying something that was not true. This example of a social rule that governs behavior demonstrates the idea of a Multiple choice question. norm. policy. standard. value.
norm.
The social rules and guidelines used to determine appropriate behavior in a particular setting are known as ______. Multiple choice question. values folkways norms attitudes
norms
When making ethical decisions, ______ factors are stressed in Japan, while ______ factors are more important in the United States. Multiple choice question. organizational; opportunity opportunity; individual or personal organizational; individual or personal individual or personal; opportunity
organizational; individual or personal.
A key cost of FDI for the home country is when the balance of payments is adversely affected by the initial capital ______ required to finance the FDI. (Choose inflow or outflow.)
outflow
A key cost of FDI for the home country is when the balance of payments is adversely affected by the initial capital required to finance the FDI. (Choose inflow or outflow.)
outflow
A foreign nation is concerned that all jobs in the computer manufacturing industry will be lost to another country. The government decides to step in and prevent this from happening and implements tariffs on certain imports. The leader is praised for this action and reminds voters of this during the next election. In this situation, government intervention is based on a _____ argument. Multiple choice question. physical economic social political
political
The ______ theory predicts that mature industries tend to shift production out of advanced nations and into low-cost assembly locations. Multiple choice question. absolute advantage Ricardian new trade product life-cycle
product life-cycle
The main objective of antidumping policies is to Multiple choice question. protect domestic producers from unfair foreign competition. satisfy local content requirements. subsidize components made by foreign producers. support tariff rate quotas.
protect domestic producers from unfair foreign competition.
Developed countries use local content requirements to Multiple choice question. protect local jobs from foreign competition. outsource jobs. encourage overseas investment. allow local industries to export more product.
protect local jobs from foreign competition.
Countries base the decision for intervention on ______ when safeguarding aerospace and semiconductor industries. Multiple choice question. protecting national security protecting industries saving jobs protecting consumer interest
protecting national security
An import _____ is a type of trade restriction that sets a physical limit on the quantity of a product that can be imported into the country in a set period of time. Multiple choice question. tariff arbitration quota subsidy
quota
Sometimes governments pay subsidies to help companies survive challenging economic climates. In effect, these companies have Multiple choice question. received an unfair competitive advantage. created a brand identity. implemented diseconomies of scale. benefitted from economies of scale.
received an unfair competitive advantage.
A(n) ______ effect has occurred when a company's FDI of capital, technology, and management resources creates a positive contribution to a host country that might not otherwise be available. Multiple choice question. multipoint competition resource transfer offshore production surplus account
resource transfer
Ownership restraints and performance requirements are two ways in which governments can ______ FDI. (Choose encourage or restrict.)
restrict
James is an expatriate from Nebraska managing a tech support center in India. He is a firm believer in the minimum wage and treating employees fairly. Yet he sees his assistant manager firing an employee and hiring his neighbor to do the job at a lower rate. Knowing this would never be accepted in the United States, James confronts his assistant manager, claiming this behavior isn't right. He is displaying the ______ approach to ethics. Multiple choice question. naive immoralist Friedman doctrine naive moralist righteous moralist
righteous moralist
If we accept that the tenets of strategic trade policy are correct, then the government _____ intervene in international trade. Multiple choice question. should not should
should
The idea that business people should favor decisions that have both good economic and social consequences is called corporate Multiple choice question. social responsibility. social imagination. moral courage. moral compass.
social responsibility.
A tax on imports that is designated as a fixed monetary amount per unit of import is called a(n) ______ tariff. Multiple choice question. specific spot forward ad valorem fixed
specific
If a country assesses a fixed charge of $5 per unit of rice that's imported, it is using a(n) ______ tariff. Multiple choice question. spot ad valorem specific forward
specific
According to strategic trade policy, governments should use ______ to support development work aimed at commercializing target technologies. Multiple choice question. embargoes quotas subsidies tariffs
subsidies
A(n) ______ is a payment by the government to a domestic producer to help lower production costs so they are better able to compete with foreign imports. Multiple choice question. tariff voluntary export restraint import quota subsidy
subsidy
The nationwide company, Nightingale Health Systems, received a tax break from the government when it was faltering and ready to declare bankruptcy. This subsidy helped the company with production costs and allowed it to have a stronger presence in the competitive health industry. This tax break is a type of _____. Multiple choice question. tariff embargo quota subsidy
subsidy
Critics argue that not all new jobs created by FDI represent net additions in employment. This is due to the _____ effect where some jobs created are offset by jobs lost elsewhere. Multiple choice question. substitution marginal context segmenting
substitution
Critics argue that FDI by Japanese auto makers does not make up for the jobs lost in U.S.-based auto manufacturers. These critics are concerned with the Multiple choice question. Sullivan principle. substitution effect. greenfield investment difference principle.
substitution effect.
Starbucks' ethical sourcing policies are an example of a(n) ______ that benefits multiple stakeholders including shareholders, the environment, local communities, and customers. Multiple choice question. Sullivan principle difference principle sustainable strategy noblesse oblige
sustainable strategy
Unrealistic performance goals can often only be attained by Multiple choice question. following all the rules. taking shortcuts or behaving in an unethical manner. bringing on additional support staff. working with a team.
taking shortcuts or behaving in an unethical manner.
A tax on goods coming into or leaving a country is called a(n) ______. Multiple choice question. embargo subsidy tariff arbitrator
tariff
Taxes placed on imports to protect domestic producers from foreign competition and to produce revenue for the government are called Multiple choice question. tariffs. embargoes. quotas. income.
tariffs
During the 1980s and 1990s, the world trading system was strained by the persistent trade deficit in the world's largest economy, which was: Multiple choice question. the United States. China. Japan. the United Kingdom.
the United States.
Raymond Vernon's product life-cycle theory was based on the observation that for most of the 1900s the majority of the world's new products were developed in Multiple choice question. the United Kingdom. Japan. Germany. the United States.
the United States.
According to the theory of international trade, it makes sense for a company to disperse its production to those countries where Multiple choice question. offshoring service is available. factors of endowment are lacking. they can barter and trade goods. they can be performed most efficiently.
they can be performed most efficiently.
Research shows that multinational companies ______ technology when they invest in a foreign country. (Choose transfer or deplete.)
transfer
In the real world, it costs money to move products from one country to another, but Ricardo's model does not address these ______ costs. Multiple choice question. transportation manufacturing production sales
transportation
Unilateral lowering of trade barriers has not occurred mostly due to a lack of _____ among governments. Multiple choice question. parity ethnocentrism trust production
trust
TimeTurner Corp. is a company based in the United States that manufactures luxury wrist watches. By western standards, if the company uses sweatshop labor to make these watches, it is most likely to be considered Multiple choice question. disorganized. moral. acceptable. unethical.
unethical
The managers of Simple Sound Manufacturing are struggling to meet their quota that was recently increased by upper management. They decide to eliminate two quality control steps in the manufacturing process. This is unethical behavior that was a result of Multiple choice question. the need to establish high quality standards. fraudulent accounting practices. unrealistic performance goals. following a strict codes of ethics.
unrealistic performance goals.
Paul Krugman would agree that while strategic trade policy seems appealing in theory, in reality, strategic trade policy is _____. Multiple choice question. best for the service industry unavoidable unworkable only beneficial to the agricultural industry
unworkable
The trade sanctions on Iraq that were imposed in 1991 after the Gulf War are an example of Multiple choice question. using economic sanctions to direct organizational policy. using trade policy to punish rogue states. encouraging domestic firms to increase their production. implementing export barriers to improve domestic production.
using trade policy to punish rogue states.
A self-imposed trade restriction on the quantity of a good that the exporting country is allowed to export to another country is called a(n) Multiple choice question. voluntary export restraint. tariff rate quota. voluntary import restriction. ad valorem tariff.
voluntary export restraint.
In 2012, Brazil was concerned about a surge of vehicles coming in from Mexico and considering protectionist measures. Mexico decided to be proactive and imposed _____ to limit the shipments of vehicles to Brazil. Multiple choice question. subsidies an embargo voluntary export restraints local content requirements
voluntary export restraints
