International Business Exam 1

GATT (General Agreement on Tariffs and Trade)

a series of treaties that reduced barriers to trade; international agreement first signed in 1947 aimed at lowering trade barriers

Only a totalitarian regime that is committed to ________ is capable of promoting economic growth.

a strong protection of property rights

The Sullivan principles resulted from Leon Sullivan's response to

apartheid laws.

Under a civil law system, it is the responsibility of a judge only to _____ the law.

apply

Corinne has analyzed the overall attractiveness of doing business with three possible countries and has determined that Country A is the best choice based on the potential for huge economic growth that should occur there because of recent advances in technology. Which factor of overall attractiveness is Corinne basing her decision on?

benefits

What is one characteristic of a representative democracy?

citizens periodically elect individuals to act on their behalf

As a judge in France, Maurice is not allowed to interpret the law but relies on a strict set of codes to determine the outcome of a case. Which type of law is in place in France?

civil law system

A ________ economy follows the principles of collectivism as resources are allocated based on "the common good."

command

Which type of economy was found in communist countries where the government determined what would be produced and the price it would be sold for?

command

The collapse of ________ in Eastern Europe was precipitated by the growing gulf between the vibrant and wealthy economies of the West and the stagnant economies of the East.

communism

Using the information on political economy in your text and the case above, how would you characterize Venezuela's political economy under President Hugo Chávez?

communist totalitarianism

Some countries consider bribes to be

compensation for work that would otherwise not be completed by underpaid government workers.

Connor assured his foreign counterpart that the items would be shipped from St. Louis, Missouri, and arrive in about ten days to Lisbon, Portugal because the parts would stay in the same packing crate and be lifted directly from the truck onto the airplane rather than having to be repackaged. What innovation is Connor referring to?

containerization

The United Nations created CISG in response to _____ that occur in international trade.

contract disputes

With increased economic progress, cultures across the world seem to be moving toward some universally accepted values and norms. This is known as the

convergence hypothesis.

A composer can protect an original musical score from being copied and sold by someone else by acquiring a(n)

copyright

The idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences refers to

corporate social responsibility.

Apple's production presence in China

creates both low skilled and engineering level jobs.

The concept of socially responsible behavior by U.S. corporations

dates back to the late 1700s.

What political system has a government that is by the people, exercised either directly or through elected representatives?

democracy

Speed money or grease payments, are payments made to

ensure a business receives the standard treatment that it ought to receive.

According to economist Hernando de Soto, the key issue in the relationship between capitalism and property rights is the inability of owners to

establish legal title to the property they own.

Shayla is from South Africa and believes that the customs and beliefs of her culture are superior to those she has encountered during her trip to America. Shayla's attitude is an example of

ethnocentrism.

The minimum that a firm has to do to engage in international business is to

export or import products from other countries.

Apple's investment in production facilities in China to produce its iPhone can best be described as

foreign direct investment

Apple sources parts for its iPhone from around the world before assembling the phones in China. This reflects the

globalization of production.

One cost-cutting measure used by Garr Tool Corp. is sourcing the parts it uses from companies in Germany, Ireland, and Canada that are more economical than home-country sources. The choice to use these sources is an example of the

globalization of production.

West Electronic Corporation sources goods and services for its electronics products from different locations around the globe in an attempt to take advantage of differences in the cost and quality of labor and land. This practice is an example of the

globalization of production.

The merging of national markets that have historically been distinct and separate is the process of

globalization.

The biggest criticism of the righteous moralist approach to an ethical situation is that it

goes too far and not every situation can be approached relying on home-country standards.

When compared to the past, the gap between rich and poor nations today has

gotten bigger.

A common feature of many right-wing dictatorships is

governments that are made up of military officers.

Opponents to globalization believe that when U.S. companies outsource service activities, such as call centers, to a lower-cost foreign supplier, it results in

higher unemployment in wealthy advanced economies such as the United States.

When comparing the three broad types of economic systems, it can be said that

in a command economy, state-owned enterprises have little incentive to control costs and be efficient.

Technology is indicated as having a major impact on the declining share of national income enjoyed by labor. If this is the case, what is a logical solution to this problem?

increasing society's investment in education

When schools emphasize respect for others, obedience to authority, honesty, neatness, being on time, and use a grading system, they are

indirectly teaching cultural values and norms.

Daria owns 100 shares of stock in Dow Corning. She would be considered a(n)

internal stakeholder

Canadian company Yummy Snacks exports a number of products to consumers in Peru, Chile, and Argentina. According to this information, Yummy Snacks is most likely involved in

international trade.

The practices of bribery

is a normal part of business in some countries.

The common law system enjoys a degree of flexibility not found in other systems because

it is interpreted by the law courts with regard to tradition, precedent, and custom.

The mother tongue of the largest number of people is

mandarin

When an employee says no to a supervisor because what he or she was asked to do was unethical, it exhibits the employee's

moral courage.

Some contemporary moral philosophers view Kant's ethical philosophy as incomplete because his system has no place for

moral emotions and sentiments.

The term _____ can be described as standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder

moral imagination

Gigantic Games., a U.S.-based company that specializes in strategy-based board games, has production facilities in Poland and Spain. Based on this information, Gigantic Games can be classified as what type of enterprise?

multinational

Silver Fire Electric Inc., a U.S.-based company, has productive activities in more than two countries. Silver Fire Electric is what type of enterprise?

multinational

Globalization has

negatively impacted both blue-collar and white-collar jobs.

Cord Paper Corporation has developed a new type of decorative paper. Which type of legal protections can grant the company exclusive rights for a defined period to the manufacture, use, or sale of the new paper?

patent

WTO (World Trade Organization)

primarily responsible for policing world trade system; the only global international organization dealing with the rules of trade between nations

Marietta told the management team that the company would have to find a new way to produce the vitamin because the Food and Drug Administration had recently banned "nofon," the key ingredient in their product. The standard set by the FDA is a type of

product safety law.

Theocratic law systems are based on

religious teachings.

United States: Elected representatives who fail to perform adequately will be voted out of office at the next election.

representative democracy

The United Nations Convention on Contracts for the International Sale of Goods (CISG) was introduced to

resolve disputes that arise in international trade regarding which country's laws to apply.

The code of ethics of a company draws heavily upon documents such as the UN Universal Declaration of Human Rights, which itself is grounded in Kantian and rights-based theories of moral philosophy. In the context of this information, this company is most likely to

respect the dignity of an individual and the right of employees to freedom of association.

Confucianism is based on the idea that personal salvation can be achieved through

right action

It has been noted that there is a connection between individualism that is fostered by Protestantism and

the extent of entrepreneurial activity in a nation.

Why was the World Trade Organization established?

to police the international trading system

Why did many nations impose high tariffs on imports of manufactured goods prior to World War II?

to protect domestic industries from foreign competition.

An accurate description of privatization is that

when newly privatized firms are protected from foreign competition, they have little incentive to restructure their operations to become more efficient.

While it might differ in other countries, in the United States the customary distance apart that should be used in a business discussion is

5-8 feet

You have a meeting scheduled for 9:00 am in Ecuador with your new boss. You want to make a good impression. You should arrive at

9:15.

If GNI adjusted for cost of living in China is about $13,000 while GNI adjusted for cost of living is about $56,000 in the United States, then

Americans enjoy a higher standard of living.

Econometric studies show a hump-shaped relationship between income levels and pollution levels. Which of these statements reflects that relationship?

As an economy grows and income levels rise, initially pollution levels also rise.

United Nations

As much as 70 percent of its work is devoted to establishing higher standards of living, full employment, and conditions of economic and social progress and development.

_______ argued that companies "do well by doing good."

Benjamin Franklin

Which scenario best represents a mores violation?

Bribing a government official in a country where bribery is illegal.

Which scenario best demonstrates foreign direct investment?

Chivalry, a U.S.-based phone manufacturing company, has set up its own assembly plant in Japan to cater to the needs of the Asian market.

China: Continues to move toward greater free market reform; at the same time, however, the country continues to deny many basic civil liberties to its citizens.

Communist Totalitarianism

TimeForce, a U.S.-based company, is planning to expand operations to a foreign country. Considering the factors that make a country attractive as a place in which to do business, which country should TimeForce consider for entry?

Country D, which has democratic institutions and a market-based economic system.

American company Software Unlimited is planning to expand its operations to the Bangor Republic where the group is the primary unit of social organization. According to this information, what is a likely outcome for Software Unlimited from operating in the Bangor Republic?

Employees will achieve close cooperation with others.

GTO

Finance ministers and central bank governors of major economies coordinate policy on global financial crises.

Which of these companies exemplifies the globalization of markets?

Fluffy Pillows, a U.S.-based pillow company, sells the same pillows worldwide.

According to the _________, it is illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority.

Foreign Corrupt Practices Act

According to globalization opponents, what is a disadvantage of globalization?

Globalization results in companies "exporting jobs" to low-wage nations.

__________ measures the total annual income received by residents of a nation.

Gross national income

Bretton Woods Institutions

IMF and World Bank were created in 1944 by 44 nations that met to maintain order in the international monetary system and promote economic growth.

How does privatization help stimulate gains in economic efficiency?

It provides incentives to new private owners to search for increases in productivity and to enter new markets.

Sharron purchased a computer for $500 in 2018. Compared to the $900 computer that she purchased in 2011, the new one seems better in terms of the price she has paid and the power of the microprocessor technology. This is best explained by

Moore's law.

Russia: These states lie between pure democracies and complete totalitarian systems of government.

Pseudo Democracy

Germany in the 1930s: In retreat since the early 1980s, a common feature of this type of regime is an overt hostility to socialist or communist ideas.

Right-Wing Totalitarianism

Which of these employees is facing an ethical dilemma?

Salena is responsible for deciding whether she should upgrade the manufacturing unit with new machines and reduce costs or retain the impoverished manual labor force.

GreenPlace is a manufacturing company that makes plant fertilizers. It has customers, investors, vendors, and competitors from all across the globe. Which of these GreenPlace business associates would be an internal stakeholder?

Selena, a prominent member of the top management of GreenPlace

Rapid Removal Inc. operates in three different countries, and the CEO believes that the best approach to ethics is cultural relativism. How will this ethical approach affect the actions of Rapid Removal Inc.?

The business units of Rapid Removal Inc. will be empowered to adopt the standards of ethics followed in their respective host nations.

Which is not an accurate depiction of globalization?

The number of people living on farms has increased.

What occurs according to Moore's law?

The power of microprocessor technology doubles and its cost of production falls in half every 18 months.

What is one criticism regarding Geert Hofstede's research on cultural dimensions?

The research team consisted of only Europeans and Americans.

Which statement is true about most Western societies?

The value systems of many Western societies emphasize individual achievement.

Saudi Arabia: Found in states where political power is monopolized by a party, group, or individual that governs according to religious principles.

Theocratic Totalitarianism

Based on the information on political economy in the text and the case on Venezuela above, which statement best characterizes the situation in Venezuela?

There is probably a high level of corruption within the government.

Kenya: Politicians from the Kikuyu tribe have long dominated the political system.

Tribal Totalitarianism

In the United States, the Foreign Corrupt Practices Act was passed during the 1970s following revelations that

U.S. companies had bribed government officials in foreign countries in an attempt to win lucrative contracts.

Which institution was established as a result of the Uruguay Round of GATT?

WTO

A country with ________ is more likely to attain high and sustained economic growth rates and is a more attractive location for international business.

a democratic regime

Which company is contributing to the global tragedy of the commons?

a firm dumping its chemical wastes directly into an ocean

A righteous moralist is most likely to claim that

a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

The more flexible approach to time that has emerged in parts of Miami where there are large immigrant populations suggests that

a nation's culture is not static.

What is a key factor contributing to the feeling that some people have been left behind by globalization?

advances in technology

John, an American executive, learns that a foreign subsidiary hired a 12-year-old orphan girl to work on the factory floor. He knows that using child labor is in direct violation of the company's own ethical code. At the same time, he does not think that denying the child her only source of income is right. John is facing

an ethical dilemma

A multinational corporation that adopts the naive immoralist approach to ethics will most likely

believe that, in a host country, any action is ethically justified if everyone is doing it.

Jerome knew it was wrong for his company to continue ignoring environmental standards set down by the state. Jerome is able to determine this based on

business ethics

Grossman and Krueger's study revealed the relationship between pollution levels and income. Which pollutant was the exception to their study?

carbon dioxide

In many of the world's nation-states, there has been a move away from ________ since the late 1980s.

centrally planned command economies

To reduce the negative impact of globalization, people need to

change their skill set to match advances in technology.

In the country of Doran, all businesses are owned by the state. The government plans production, fixes commodity prices, and also directs investments to ensure they benefit the nation as a whole and not only a few individuals. What type of economy has the country of Doran adopted?

command

The system of values and norms that are shared among a group of people and together create a design for living is known as a

culture

Steve has been preparing for his trip to Sweden. He has learned that in Sweden a tradition called Academic Quarter helps to define the acceptable time for arriving for meetings. Steve is

demonstrating cross-cultural literacy.

The main reason that gross national income figures can be misleading is because they

don't consider differences in the cost of living.

What does Porter point to as the reason for Japan's success in the post-World War II economy?

education system

Which of the following BEST increases a country's competitive advantage and its attractiveness as a location for international business?

education system that is well developed

The labor, energy, land, and capital that a company has access to are known as

factors of production.

A country that has lax intellectual property laws will find that

firms will be reluctant to enter into such a country.

MaryAnne is always late to meetings and she knows she needs to be better about being on time because it is expected by almost everyone living in the United States. This attitude toward time is an example of a

folkway

Knowing what time to show up for a meeting in a foreign country reflects which part of culture?

folkways

A nation based on individualism would agree that

free market ideologies should be followed for achieving better standards of living.

Which of these is not used to determine culture?

geography

Economist Robert Reich advocates that the outsourcing of productive activities to different suppliers results in the creation of

global products.

Some economists support the practice of paying small bribes based on the argument that they

help promote economic growth.

Within the context of the individual as the basic unit of a social organization, what is an implication of the emphasis on individualism in many Western societies?

high degree of managerial mobility between companies

In the Republic of Nabu, natives are resistant to change and do not like to take risks. They value job security and retirement benefits. In addition, they have a strong need for rules and regulations. Based on this information, the Republic of Nabu demonstrates which cultural dimension identified by Hofstede?

high uncertainty avoidance

According to the video, the standard of living in the United States is _____ as compared to that of China.

higher

The development of new products, processes, organizations, management practices, and strategies is called

innovation

Purchasing power parity is used to adjust gross national income in order to make a more direct comparison of ________ in various countries.

living standards

A country where "saving face" is valued is an example of which of Hofstede's dimensions?

long-term versus short-term orientation

According to Geert Hofstede, what dimension captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors?

long-term versus short-term orientation

Totalitarian states usually have

media that are heavily censored.

When considering globalization, what is considered the single most important innovation since World War II?

microprocessor

Before Hugo Chavez took power in 1999, what type of economic system was in place in in Venezuela?

mixed

How can Venezuela's economic system best be described during Hugo Chavez's years as president?

mixed

Hugo Chavez's move to nationalize troubled firms is consistent with a

mixed economy.

Your U.S.-based company wants permission to build a factory in a foreign country. You have been asked to pay a bribe in order to get the paperwork approved. You should

not pay because doing so is prohibited by the Foreign Corrupt Practices Act.

If gross national income per capita adjusted for differences in the cost of living is about $13,000 in China, a developing country, and is about $56,000 in the United States, a developed country, then

on average, Americans can afford more goods and services than their Chinese counterparts.

BrandLine Corp. has decided not to do business in a country after learning that many citizens are violently protesting recent government embargoes on food resources. BrandLine is concerned with the ________ risk associated with the country.

political

Amartya Sen believed that ________ should also be a factor in the human development index.

political freedom

Moral philosophers argue that companies have a responsibility to give back to society as a means of offsetting the ____ they have as a result of their control over resources and ability to move production from one country to another.

power

In what type of economy are all businesses state-owned, the rationale being that the government can then direct them to make investments that are in the best interests of the nation as a whole rather than in the interests of private individuals?

pure command

The main goal of GATT was to

reduce trade barriers.

An unfavorable environment for innovations and entrepreneurship is the result of

state monopoly in production.

GNI figures are helpful in understanding an economy because they

tell us how poor a country is relative to another.

The primary reason Apple established production facilities in China for its iPhone was to capitalize on

the ability of subcontractors to rapidly respond to changes in demand.

While the lowering of trade barriers made globalization of markets and production a theoretical possibility, what has made it a tangible reality?

the advances in communication, information processing, and transportation technologies

In contemporary Japanese society, a group is associated with

the company a person works for.

When considering the economic prospects of a country, it can be said that

the economic system and property rights regime are reasonably good predictors of economic prospects of a country.

Collectivist-inclined totalitarian states tend to enact laws that severely restrict private enterprises, while laws enacted by governments in democratic states, where individualism is the dominant political philosophy, tend to be pro-private enterprise and pro-consumer. This indicates that the

the legal framework of a country reflects the rulers' dominant political ideology.

Who benefits from corporate social responsibility?

the local community

Intellectual property laws protect

the originator of a new invention.

A country that has ________ lowers the risk of doing business in that country.

the presence of a strong legal system

A number of employees at Sports Plus Inc., which is headquartered in a country where masculinity and power distance are high, do not behave in an ethical manner. In this context, the roots of unethical behavior can be traced to

the societal culture

The _____ approach to ethics holds that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences.

utilitarian

The _____ supports the idea that everyone is imagined to be oblivious to all of his or her particular characteristics, such as, race, sex, intelligence, nationality, family background, and special talents.

veil of ignorance

AllSpice Incorporated plans to do business with a company located in the Leone Republic, a common law country. The companies have agreed to draft the business contract in the Leone Republic. Since the contract will be drafted under a common law framework, what best characterizes the contract?

very detailed with all contingencies spelled out

Ruth is meeting her counterpart at her company's subsidiary in Brazil. Her meeting was scheduled for 2:00 pm, but because of her late flight, Ruth arrives at 2:30 pm. Her host

will probably be unfazed by the time of her arrival.