International Management Test 1

A _____ is comparable to a monopoly in the sense that the organization, in this case the government, has explicit control over the price and supply of a good or service.

Command Economy

_____ law comes from English law and is the foundation of the legal system in the United States, Canada, England, Australia, New Zealand and others.

Common

Over the next decade, the merging of the Internet and wireless technology will radically change the ways in which people:

Communicate

The Chinese political environment is very

Complex

The Hong Kong office of Salomon Brothers, a U.S. investment bank, estimates that to meet the expanding demand for telecommunication service in Asia, companies will need:

Considerable increase in investment

The emerging global community is becoming increasingly:

Economically interdependent

The term "e-cash" stands for:

Electronic Cash

The ultimate objective of the EU is to:

Eliminate all trade barriers among member countries

T/F: A keiretsu is a government agency in South Korea.

FALSE

T/F: As a result of some continuing problems, the international business climate in Poland has not done well.

FALSE

T/F: Collectivism emerged in Italy and France as "national socialism

FALSE

T/F: Common law is derived from Roman law and is found in the non-Islamic and non-socialist countries such as France, some countries in Latin America and even Louisiana in the United States.

FALSE

T/F: Emerging markets are developed economies that exhibit sustained economic reform and growth.

FALSE

T/F: Foreign direct investment remained strong and even grew in some regions despite the 2008-2009 global recession.

FALSE

T/F: Internationalization is the vision of creating one world unit, a single market entity.

FALSE

T/F: Like most South American economies, Brazil's economy is faced with grave economic problems. Its GDP through 2009 continued to fall and inflation and unemployment increased.

FALSE

T/F: MITI is a South Korean government agency that identifies and ranks national commercial pursuits and guides the distribution of national resources to meet these goals.

FALSE

T/F: Mexican firms cannot export goods into the European community without paying a tariff.

FALSE

T/F: Mexico believes that the United States is its most important market and that little effort should go into expanding trade with Europe and Asia at least for now.

FALSE

T/F: NAFTA is better integrated as a single market than the EU or the allied Asian countries.

FALSE

T/F: Nongovernmental organizations believe that everyone benefits from globalization, as evidenced in lower prices, greater availability of goods, better jobs and access to technology.

FALSE

T/F: Technology does not have the potential to displace employees holding positions traditionally reserved for human thinking.

FALSE

T/F: The FCPA makes it illegal to influence foreign officials through the granting of favorable tariff rates.

FALSE

T/F: The doctrine of civility holds that there must be mutual respect for the laws, institutions and government of other countries in the manner of jurisdiction over their own citizens.

FALSE

T/F: The protective principle holds that every nation has the right of jurisdiction within its legal territory.

FALSE

T/F: The territoriality principle holds that governments have the right to rule themselves as they see fit.

FALSE

T/F: Trade agreements do not require that trade benefits accorded to one nation be extended to other nations' parties to that agreement.

FALSE

T/F: United States multinationals have more foreign direct investment in Germany than any other country.

FALSE

T/F: Vietnam and Laos have moved towards a totalitarian environment due to the evolution of modern global business.

FALSE

In 2009, FDI inflows and outflows:

Fell substantially

The statute that makes it illegal to influence foreign officials through personal payment of political contributions is referred to as the:

Foreign Corrupt Practices Act

The term used to indicate the amount invested in property, plant and equipment in another country is:

Foreign direct investment

Which two countries led the effort to mobilize public and private support for Greece in 2010?

France and Germany

The case with cellular phones and networks and open-source models in software are cited to substantiate the fact that:

Global connections do not necessarily level the playing field

Which country receives the most foreign direct investment (FDI) by U.S. companies?

Great Britain

The European Union:

Has achieved the reality of a single currency and a regional central bank

Aristotle and David Hume contributed to the principle of:

Individualism

The process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political and cultural environments is:

International Management

Globalization:

Is the process of social, political, economic, cultural and technological integration among countries around the world

Despite setbacks, _____ remains a formidable international competitor and is well poised in all three major economic regions: the Pacific Rim, North America and Europe.

Japan

MITI is a _____ government agency that identifies and ranks national commercial pursuits and guides the distribution of national resources to meet these goals.

Japanese

An organizational arrangement in Japan in which a large group of vertically integrated companies bound together by cross-ownership, interlocking directorates and social ties provide goods and services to end users is:

Keiretsus

Some observers have noted that technology already has eliminated much and in the future will eliminate even more of the work now being done by:

Middle managers and white-collar staff

Emerging information technology has made work:

More portable

_____ has placed pressure on MNCs to outsource production.

Mounting cost pressure and profit expectations

A free-trade agreement between the United States, Canada and Mexico that has removed most barriers to trade and investment is:

NAFTA

The _____ principle holds that every country has jurisdiction (authority or power) over its citizens no matter where they are located.

Nationality

International law includes the following types of jurisdictional principles:

Nationality, territoriality and protective

The United States, Canada and Mexico make up the _____, which in essence has removed all barriers to trade between these countries and created a huge North American market.

North American Free Trade Agreement

Agreements like NAFTA and CAFTA:

Not only reduce barriers to trade but also require additional domestic legal and business reforms in developing nations to protect property rights.

The process by which companies undertake some activities at offshore locations instead of in their countries of origin is:

Offshoring

MNCs are unwilling to put up high investments unless they are assured of:

Operating control on their investment in telecommunications

The subcontracting or contracting out of activities to endogenous organizations that had previously been performed by the firm is called:

Outsourcing

The former communist countries that have become most visible in the international arena include:

Poland, Hungary and the Czech Republic

One of the biggest impediments to attracting more foreign investment in Russia is:

Political corruption

The _____ holds that governments have the right to rule themselves as they see fit

Principle of sovereignty

U.S. laws require equality in the workplace for all employees, U.S. citizens who take a job in Japan cannot sue their Japanese employer under the provisions of U.S. law for failure to provide equal opportunity for them. This is in line with the:

Principle of sovereignty

Communism as an economic system has failed due to the tendency of common goals to stunt:

Progression and Individual creativity

The _____ principle holds that every country has jurisdiction over behavior that adversely affects its national security, even if that conduct occurred outside the country.

Protective

A method which adjusts GDP to account for different prices in countries is called

Purchasing power parity

The NAFTA agreement and the DR-CAFTA agreement are examples of:

Regional trade agreements

The Goldman Sachs global economics team:

Reports that the economic potential of Brazil, Russia, India and China is such that they may become among the four most dominant economies by the year 2050

_____ law comes from the Marxist socialist system and continues to influence regulations in former communist countries, especially those from the former Soviet Union, as well as present-day China, Vietnam, North Korea and Cuba.

Socialist

Chaebols are large, family-held conglomerates in:

South Korea

The four other widely recognized powerhouses in Asia, in addition to Japan and China are:

South Korea, Hong Kong, Singapore and Taiwan

T/F: According to the text, Russia presents the extreme example of how the political environment impacts on international management.

TRUE

T/F: Chaebols are very large, family held Korean conglomerates that have considerable political and economic power.

TRUE

T/F: Embedded learning technology will allow thinking to occur in machines.

TRUE

T/F: Government policies toward the dissemination of information that can be viewed as a threat to national security are common.

TRUE

T/F: Great Britain's Labour Party practices "democratic socialism".

TRUE

T/F: In recent years, Canadian firms have begun investing heavily in the United States

TRUE

T/F: Many firms try to work collaboratively with governments as new laws, policies, and regulations are introduced.

TRUE

T/F: Multinational corporations can be defined as firms having operations in more than one country, international sales and a nationality mix of managers and owners

TRUE

T/F: NAFTA is a free trade agreement between the United States, Canada and Mexico that has in essence removed all barriers to trade and investment between the three nations.

TRUE

T/F: One of the ways that Russia is attempting to get its economy going is by removing many administered prices and subsidies and letting free market forces take over.

TRUE

T/F: One reason for the rapid increase in telecommunications services is that many countries believe that without an efficient communications system, their economic growth may stall.

TRUE

T/F: Socialist law comes from the Marxist socialist system and continues to influence regulations in former communist countries.

TRUE

T/F: The current move toward privatization by an increasing number of countries is an example of the changing international regulatory environment.

TRUE

T/F: The domestic and international political environment has a major impact on multinational corporations.

TRUE

T/F: The objectives of the FCPA were to stop U.S. MNCs from initiating or perpetuating corruption in foreign governments and to upgrade the image of both the United States and its businesses abroad.

TRUE

T/F: The process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political and cultural environments is called international management.

TRUE

T/F: Under the act of state doctrine, all acts of other governments are considered to be valid by U.S. courts, even if such acts are inappropriate in the United States.

TRUE

The countries of the Association of Southeast Asian nations are challenging China's position as destinations for low cost production and export.

TRUE

The most obvious dimension of the technological environment facing international managers today is:

Telecommunications

The _____ principle holds that every nation has the right of jurisdiction within its legal territory.

Territoriality

The United States holds a dominant position in all of the following industries except:

Textiles

A major development in South America is:

The growth of inter-country trade, spurred on by the progress toward free-market policies

The following are characteristics of the BRIC economies except: A. Demand for higher priced goods is expected to continue to be low in the future B. The BRIC economies share of world growth is expected to rise to about 40 percent by 2025 C. Per capita income in the BRIC countries is rising D. Demand for basic goods will be strong

A. Demand for higher priced goods is expected to continue to be low in the future

The Central and Eastern European republics:

Are attempting to make a shift from centrally planned economies to market based economies

Antiglobalization activists:

Assert that if corporations are free to locate anywhere in the world, the world's poorest countries will relax or eliminate environmental standards and social services in order to attract first-world investment and the jobs and wealth that come with it

The Asian economic block, made up of Indonesia, Malaysia, the Philippines, Singapore, Brunei, Thailand, Cambodia, Myanmar and Vietnam is referred to as:

Association of Southeast Asian Nations (ASEAN)

Which of the following are characteristics of fascism? A. Anticollectivism B. Anticommunism C. Opposition only to political liberalism D. Antinationalism

B. Anticommunism

75. (p. 28) According to the projections for 2010, which of the following countries has the best commercial infrastructure? A. China B. Hong Kong C. India

B. Hong Kong

Identify the correct statement on cellular infrastructure. A. It is expensive to install B. It is quick and relatively inexpensive to install C. It is relatively inexpensive to install but takes time D. It cannot be installed easily and cheaply in rural areas

B. It is quick and relatively inexpensive to install

Identify the statement that is false of globalization. A. It can be defined as the process of social, political, economic, cultural and technological integration among countries around the world B. It is the process of a business crossing national and cultural borders C. Evidence of globalization can be seen in increased levels of trade, capital flows and migration D. It has been facilitated by technological advances in transnational communications, transport and travel

B. It is the process of a business crossing national and cultural borders

According to the text, NYNEX holds a stake in: A. Telecom New Zealand B. Thailand's Telecom Asia C. Australia's Optus D. Thailand's Globe Telecom

B. Thailand's Telecom Asia

According to the text, the most popular form of e-business is:

B2B dealings

Multinational corporations in China are faced with a multitude of problems except: A. Government regulations B. Questionable treatment C. Market growth opportunities D. Understanding what is needed from investors

C. Market growth opportunities

A recent survey (reported in our textbook) of businesspeople from Argentina, Brazil, Chile, Columbia and Venezuela found that the _____ market, on average, was more important to their economic well being than any other.

U.S.

It was reported that since the passage of the Foreign Corrupt Practices Act (FCPA):

U.S. exports to "bribe prone" countries actually increased

According to the text, _____ is one of the biggest problems facing MNCs.

Very restrictive foreign bureaucracies

The totalitarian form of government is to be seen in:

Vietnam, Cuba and North Korea

The global organization of countries that oversees rules and regulations for international trade and investment, including agriculture, intellectual property, services, competition and subsidies is the:

WTO

The World Trade Organization (WTO) meeting in Doha in November of 2001 was referred to as:

the "Development Round"

The World Trade Organization (WTO) meeting in Cancun in September of 2003 was led by:

India and Brazil

In the early 1990s, _____ had recovered from its economic problems of the previous decade and become the strongest economy in Latin America.

Mexico

Which of the following statements is true of the economic system of North America? A. The free-market-based economy of this region allows for more freedom in decision-making processes of private firms B. The command economy of this region allows for greater flexibility with decisions and low barriers for other countries to establish business C. The free-market-based economy of this region results in lowering barriers when attempting to move into other countries D. The command economy of this region allows competition to strive while the government can extend assistance to individuals or companies

A. The free-market-based economy of this region allows for more freedom in decision-making processes of private firms

The following statements are true about the United States and Canada except: A. The legal and business environments of the two countries are very different B. Both countries are participants in NAFTA C. Canada is the largest trading partner of the U.S D. In recent years, Canadian firms have begun investing heavily in the U.S

A. The legal and business environments of the two countries are very different

Which country does not rank high on the ease-of-doing-business index? A. the Philippines B. Singapore C. Japan D. the United States

A. the Philippines

Under the _____, all acts of other governments are considered to be valid by U.S. courts, even if such acts are inappropriate in the United States.

Act of State Doctrine

Due to the stalled progress with the WTO and FTAA, the United States has pursued _____ with a range of countries, including, Australia, Bahrain, Chile, Colombia, Israel, Jordan, Malaysia, Morocco, Oman, Panama, Peru, Malaysia and Singapore.

Bilateral trade agreements

Critics of the Foreign Corrupt Practices Act feared the loss of sales to foreign competitors, especially in those countries where:

Bribery is an accepted means

Japanese companies are aware that their dependency on the world market for many goods and services is negatively impacted by _____, resulting in local consumers paying the price.

Bureaucratization

Which of the following statements is not true of Hungary's economic reform measures? A. In Hungary, state-owned hotels have been privatized B. Western firms have been entering into joint ventures with local companies in Hungary, attracted by the low cost of highly skilled, professional labor C. Hungary had a head start on the other former communist-bloc countries in terms of adopting economic reform measures D. MNCs have been making direct investments in Hungary, as in the case of General Electric's purchase of Tungsram

C. Hungary had a head start on the other former communist-bloc countries in terms of adopting economic reform measures

Which of the following is true of India today? A. It has a relatively small middle class B. Education levels tend to be low C. It is attractive to MNCs D. There is a distinct lack of government funds for economic development

C. It is attractive to MNCs

Identify from the following the correct statement on civil law. A. It comes from English law and is found in nonsocialist countries B. It is to be found in countries of Central Asia C. It is derived from Roman law and is found in nonsocialist countries D. It is the foundation of the legal system in the United States, Canada, England, Australia, New Zealand and other nations

C. It is derived from Roman law and is found in nonsocialist countries

Which of the following observations about NAFTA is incorrect? A. Mexican businesses are finding themselves able to take advantage of the U.S. market by replacing goods that were previously purchased from Asia B. Mexican firms are now able to produce products at highly competitive prices thanks to lower-cost labor and proximity to the American market C. Mexican firms can now export goods into the European community only by paying a heavy tariff D. Mexico's trade with Asia is on the rise which is important to the country as it wants to reduce its overreliance on the U.S. market

C. Mexican firms can now export goods into the European community only by paying a heavy tariff

Identify the statement which is not true of Mexico. A. When it joined NAFTA, Mexico was on the verge of becoming the major economic power in Latin America B. Mexico has free-trade agreements with more than 50 countries C. Mexico's trade with Asia is declining D. Mexico's government are probusiness

C. Mexico's trade with Asia is declining

Countries have the legal right to refuse admission of foreign citizens and to impose special restrictions on the following except: A. Conduct B. Right of travel C. Spending D. What business they may conduct

C. Spending

Identify the statement false of China's economic condition. A. China's GDP has remained strong, maintaining at 11.5 percent growth in 2009 B. In the first quarter of 2010, China's GDP grew at a blistering 11.7 percent causing some concerns that the Chinese government has been unable to tap the breaks on this rapid growth C. Trade relations between China and developed countries and regions, such as the United States and the EU, are lax D. Massive savings glut in the corporate sector, the globalization of manufacturing networks are major challenges faced by China

C. Trade relations between China and developed countries and regions, such as the United States and the EU, are lax

Which of the following countries was not amongst the world's 10 most competitive nations in 2010? A. United States B. Singapore C. United Kingdom D. Norway

C. United Kingdom

_____ is the United States' largest trading partner, a position it has held for many years.

Canada

In a business context, individualism is synonymous with:

Capitalism

Governments are accepting the belief that the only way to attract foreign investment and know-how in telecommunications is to:

Cede control to private industry

MNCs have moved certain production activities overseas to capitalize on:

Cheap Labor

Identify the emerging market which is projected to have the largest market size in 2010. A. China B. India C. Mexico D. Argentina

China

Which of the following statements is false with regard to a mixed economy? A. Regulations concerning minimum wage standards, social security, environmental protection and the advancement of civil rights may raise the standard of living B. Ownership of organizations seen as imperative to the nation may be transferred to the state to subsidize costs and allow the firm to flourish C. Regulations concerning minimum wage standards, social security, environmental protection and the advancement of civil rights ensure that those who are elderly, sick or have limited skills are taken care of D. Businesses in this model are owned by the state to ensure that investments and practices are done in the best interest of the nation despite the often opposing outcomes

D. Businesses in this model are owned by the state to ensure that investments and practices are done in the best interest of the nation despite the often opposing outcomes

Low-paid workers in India and Asian countries now are being given subcontracted work such as: A. Insurance jobs B. Auto industry jobs C. Labor-intensive hardware development D. Code-writing jobs

D. Code-writing jobs

Identify the option that would constitute white-collar service industries. A. Steel and autos B. Agriculture C. Insurance only D. Insurance and banks

D. Insurance and banks

Which of the following statements is not true of Japan? A. During the 1970s and 1980s, Japan's economic success had been without precedent B. During the 1970s and 1980s, the country had a huge positive trade balance, the yen was strong and they recognized as the world leaders in manufacturing and consumer goods C. Assumptions about the Japanese workforce have turned out to be more myth than reality and some of the former strengths have become weaknesses in the new economy D. Japan's consensus decision making system turns out to be very efficient and effective in the new speed-based economy

D. Japan's consensus decision making system turns out to be very efficient and effective in the new speed-based economy

Which of the following statements is true with regard to the economy of Poland? A. The consensus decision making system of Poland turns out to be too time-consuming in the new speed-based economy B. During the 1970s and 1980s, Poland's economic success had been without precedent C. Poland is among the largest of the former communist countries which receives the least media coverage D. Political instability and risk, large external debts, a deteriorating infrastructure and only modest education levels have led to continuing economic problems in Poland

D. Political instability and risk, large external debts, a deteriorating infrastructure and only modest education levels have led to continuing economic problems in Poland

To qualify as a multinational corporation, a firm must meet all of the following criteria except: A. Operations in more than one country B. International sales C. A nationality mix of managers and owners D. Sales of at least one million dollars per year

D. Sales of at least one million dollars per year

According to the text, a positive side of the opportunities that technology offers would be:

Decline in the cost of doing business worldwide

In 2009, global merchandise exports and global commercial services exports:

Declined for the first time since 1983

The _____ holds that there must be mutual respect for the laws, institutions and government of other countries in the matter of jurisdiction over their own citizens.

Doctrine of comity

The area of e-business that will most affect global customers is:

E-retailing and financial services

One analysis, cited in the text, reported that since the passage of the Foreign Corrupt Practices act, U.S. exports to "bribe prone" countries:

Increased

A factory, located in a Mexican border town, that imports materials and equipment on a duty and tariff-free basis for assembly or manufacturing and re-exports is called a:

Maquiladora

A _____ exists when private enterprise reserves the right to own property and monitor the production and distribution of goods and services while the state simply supports competition and efficient practices.

Market economy

The term "maquiladora" is used to describe a specific kind of _____ industry

Mexican

Sentiments regarding the war in Iraq have primarily affected business relationships in:

The Middle East

U.S. MNCs always assumed that bribes were required to ensure contracts in:

The Middle East

Governmental power in a democracy is limited by:

The accountability of the elected representatives to the general public

Political repression and denial of rights and civil liberties are dominant ideals of:

Totalitarianism