International Business 300 exam 1

The three largest markets for American exports of goods in 2017 were

Canada, Mexico, and China.

Which country currently exports the most to the United States?

China

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

China

During the trial, the judge openly questioned the defendant and her lawyers and often challenged the presented evidence. There wasn't a jury and the judge made the final decision. Which type of legal system would include this scenario?

Civil

At the end of the trial, the judge stated that his decision for the case was based on a decision made in a similar case twenty years ago. Which form of law is indicated by the use of previous cases?

Common

A major portion of the exports from developing countries go to ________ countries, and this proportion has been ________.

Developed; increasing

A government nationalizes a firm when it shifts the ownership from public to private.

False

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

False

In high-context cultures, nonverbal language plays a minor role. Business professionals rely more on the spoken word.

False

Incoterms are established by the UN Commission on International Trade.

False

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

False

The World Bank is made up of one large institution, the International Development Association, and three smaller institutions.

False

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

False

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

False

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

False

Uncontrollable Forces

Hamlin Millworks is frustrated with the lobbyists who are currently trying to influence Congress to raise taxes for all corporations in the wood products industry. In the environment of Hamlin Millworks, these lobbyists are an example of

True

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

What effect has the FCPA had on American business?

It has brought the discussion of bribery into the open, which has, overall, been positive.

The Qur'an is associated with Islam and indicates the presence of which form of law?

Religious

What is one of the reasons suggested by Alfred Marshall for why firms tend to cluster together on a geographic basis?

Technological information can be readily shared.

Civil law is the most widespread system in use globally.

True

Customary international law draws on practices that have been followed often for centuries.

True

International institutions provide nations the opportunity to build multilateral solutions through collaborative communication.

True

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

True

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

True

The U.S. enforcement of Equal Employment Opportunity Commission (EEOC) law in U.S. companies operating abroad is an example of extraterritoriality.

True

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

True

Understanding how religion affects cultural attitudes is important for marketing professionals to know.

True

Unfair international competition for a company can be minimized through the enaction of national laws.

True

True

When a manager unconsciously imparts his or her own cultural values on a situation without taking into account the possibility that the culture might vary in a foreign environment, that manager is exhibiting a self-reference criterion.

Mercantilists believed that

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

An international manager has three choices when deciding how to employ a technique used in domestic operations to an international operation: transfer it intact, not use it, or

adapt it to local conditions.

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

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

Some countries impose both an ad valorem duty and a specific duty on a single import. What type of duty are these countries using?

compound

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

controllable and uncontrollable

Since 1983, the proportion of world trade coming from the United States has

decreased overall

A nation that is struggling to remain competitive in the world market may decide to reduce the value of the country's currency relative to other currencies. This process is called currency

devaluation

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

discrimination

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

domestic capital markets

Tariffs often are set to

encourage local input.

A patent gives the inventor

exclusive right to manufacture, exploit, use, and sell the invention for a given time period.

Which of the elements in Porter's diamond model of national advantage takes into consideration the sophistication of a company's customers?

export conditions

In a low power distance culture,

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

Harrison Manufacturing, based in Toledo, recently purchased a new manufacturing facility and production equipment in Germany that it will use to produce component parts. This purchase is an example of

foreign direct investment (FDI)

Among the cybercrimes that most often target businesses are

hacking and data espionage.

Hofstede's individualism-collectivism measures

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

A business would obtain KRE insurance to cover losses associated with

kidnapping situations associated with a foreign involvement.

Material culture includes

manufactured goods

The Bali Package, proposed in 2013, focuses in part on

market access for goods from the least-developed countries

The 17th and 18th centuries have frequently been termed the "Age of Mercantilism" because

national power depended on the sponsorship and control of merchant capital

A basic cultural concept is

our way is not the only way.

Culture frameworks are helpful, but their use may

oversimplify and limit our understanding and learning after a point.

The Foreign Corrupt Practices Act (FCPA) is U.S. legislation that

prohibits bribery by American companies abroad.

The rise of the Ottoman Empire before 1300 influenced trade as it

promoted a search for sea routes from Europe to Asia.

Governments provide stability by

protecting business from unfair competition and from attacks and theft.

Arbitration is often preferred when the contract stipulates U.S. law and one of the litigants is foreign because it is

quicker, cheaper, and more private than litigation.

Smaller nations would like patent protection to be

reduced, so that they can make money sooner.

An achievement culture is one in which members are

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

In high-context cultures, direct conversations that "tell it like it is" would be viewed as

rude

An argument against using sanctions to punish an offending nation is that

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

Kendall was recently assigned to a management role in his company's overseas operation. He has been taken off guard several times when his employees responded negatively because they said he didn't take their culture into consideration when he made decisions. His employees are referring to a

self-reference criterion.

The EU's impact on international business is

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

When the value of imports into a nation exceeds the value of its exports, that nation is experiencing a(n)

trade deficit

One of the problems associated with the "cheap foreign labor" argument for restricting trade is that

wages don't account for all production costs.

International business really began

when Phoenician and Greek merchants sent representatives abroad to sell goods

Does the IMF lend money?

yes, but as a last resort

What is the role of the home country in risk assessment?

It is a significant consideration

Which statement describes economies of scale?

They are the predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases.

How do the dimensions of Kluckhohn and Strodtbeck's framework help us to better understand other cultures?

They help us to further understand beliefs and actions in other cultures.

Mexico and Canada are major U.S. trading partners because they have the benefit of lower freight charges and shorter delivery times. Why do these benefits exist for these two nations?

They share a border with the United States.

According to the theory of comparative advantage, international trade can still be a positive-sum game that benefits both countries having an absolute advantage over one another.

True

Aesthetics is

an area of philosophy that deals with beauty.

Intellectual property includes

anything that is the result of creative work that can be protected by legal means.

The most important sources of international law are

bilateral and multilateral treaties, along with customary law.

An informal cognitive institution is

collection of shared ideas that define reality.

Trompenaars's specific-diffuse dimension has to do with

patterns for public and private life.

A 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, resulting in a marketplace that is efficient in production and allocation of products is known as

perfect competition.

Honest Yogurt Company of Denver, Colorado, was relieved when trade barriers on dairy products were lifted in Europe and the company could sell its products there. Which type of driver was affecting the company's ability to do business in Europe?

political

The trend toward unification and socialization of the global community is illustrated by which of the following?

preferential trading arrangements that group several nations into a single market

A manager from a U.S. company is negotiating with a Japanese company for goods. What is most likely to be the American's most important criteria in the purchasing decision?

price

Rapid urbanization of populations combined with industrialization in the emerging markets is quickly shifting the world's economic center of gravity from

the Americas and Europe to Asia

Examples of expropriation without compensation involve the following governments

the Unite States confiscated Iranian property in the United States and Cuba confiscated property during the Cuban revolution of the 1950s, and Zimbabwe confiscated land owned by white Zimbabwean citizens.

The legal system of a country is composed of

the collection of governing principles, and the legislation and regulations enacted to provide for the welfare of the country.

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

the context carries much of the communication

Unlike quotas, voluntary export restraints (VERs) are imposed by

the exporting country's government.

Foreign environmental forces often operate differently than domestic environmental forces because

the forces are interrelated

International Development Association's purpose is to loan to

the poorest nations

Some nontariff barriers are difficult to discourage because

they consist of government subsidies and standards.