IB Final

Which BEST describes a multinational corporation? a. A body that establishes and enforces guidelines governing the interactions of individuals, businesses, and governments in a globalized world b. company with operations in more than one country c. combination of separate national markets to create one big market d. virtual or physical setting where people exchange goods and services

A company with operations in more than one country

Which BEST describes an emerging market? a: virtual or physical setting where people exchange goods and services b: global company with lower staffing costs, greater access to talent and expertise, and a wider choice of markets than they might find at home c: country moving toward open-trade and free-market policies d:combination of separate national markets to create one big market

A country moving toward open-trade and free-market policies

Which of the following BEST defines "total factor productivity"?

A measure of the efficiency with which labor and capital come together

Which is MOST applicable to the Consumer Price Index?

A measure that tracks the price of a specific set of consumer goods across time

Which of the following BEST defines the term "recession"?

A period of GDP contraction lasting for at least two consecutive quarters

Which BEST describes a democracy?

A political system characterized by citizen participation in the political process

In the United States, the _____ regulates all forms of online advertising, data collection, and sales, and imposes penalties for companies making false claims or violating customers' rights.

Federal Trade Commission

The _____ is a law signed by President Jimmy Carter in 1977 that made it illegal to pay foreign government officials for their assistance in obtaining or retaining business.

Foreign Corrupt Practices Act

Political liberty is measured by a number of factors. Some international organizations collect and compile data for the measurements and release annual reports. Which are the two MOST important organizations that publish such reports?

Freedom House and Heritage Foundation

Which of the following is a difference between the work culture of France and the work culture of the United States?

Full-time work in France consists of 35 hours a week, whereas full-time work in the United States consists of 40 hours a week.

An executive with strong understanding in IT, finance, and marketing and how these relate to each other demonstrates which of the four specific competencies for global leaders' success?

Functional excellence

Different economies attract various levels of foreign investment. One nation has supported foreign investment through tax cuts for many decades, which has ultimately increased the net-payment outflows, and decreased net-income receipts. When measuring national output, which economic indicator BEST reflects these changes?

GNP

Coca-Cola relied on the global convergence of markets to expand to other countries. What does global convergence mean?

Global convergence represents the spread of common preferences across country borders

The United States has several computer manufacturers. These manufacturers buy the chipsets, processors, ram memory, exterior cases and other components from factories in Asia, and then they assemble the final products in America. This increases the output of the U.S., and it is an element of which economic indicator?

Gross Domestic Product

Of the following, which is an area of common ethical issues facing international businesses?

Human rights

Which of the following is a general rise in prices in an economy?

Inflation

What pressures push countries towards balanced trade? (select all that apply)

Inflation in countries with a trade surplus and deflation in countries with trade deficits Foreign exchange rates pushing the price of a currency of countries with trade surpluses up and the price of a currency of countries with trade deficits down

How does globalization affect you as a consumer of products and services?

It allows you to have access to more types of products made outside your domestic market

Which of the following statements is true of sustainability?

It describes a way of doing business that supports the long-term ecological balance of the environment.

Which of the following lists the different modes of entry in the order of their commitment for the two parties, from greatest to least?

Joint ventures, franchising, licensing, exporting and importing

Which of the following is NOT one of the three main types of international laws?

Maritime law

Which of the following is the suggestion that trade generates wealth for a country that exported more than it imports?

Mercantilism

Which is a manipulation of interest rates, banking rules, or the volume of currency in a country?

Monetary policy

Which of the following is an institution that borrows from and lends to governments, other banks, and corporations?

Money center bank

Unrefined commodities such as copper, lithium, aluminum, and iron are all examples of which of the following?

Raw materials

What are the three Rs of managing cultural differences which can provide a leader or company with the steps necessary to managing a diverse group?

Recognition, Respect, Reconciliation

The rule of law promotes international business in which of the following ways?

Reduces risks such as fraud, negligence, and bad debts

Which of the following is NOT one of the three different levels of law?

Regulatory law

_______ refers to the limit on the availability of such factors as materials, equipment, food, and fuel that reduce a company's ability to produce goods and services.

Resource constraint

Which of the following is not a factor in helping International businesses better assess the technology level of a country?

Social infrastructure

A company desires to enter a country where their brand name is a clever play on words that may not translate correctly. Which external factor relates to this circumstance? Select the best answer.

Socio-cultural

Nation Q wants to support its struggling industries from other countries that make the same products cheaper. Nation Q is giving domestic peanut farmers income tax breaks, zero percent loans, and other incentives to continue operation under their cost structure. Nation Q's actions are an example of which protective strategy?

Subsidies

Which description best fits the definition of globalization? a.The search for deals on production factors across geographic boundaries b. The process of sourcing land, labor, and capital from different nations rather than obtaining everything locally c. The evolution of an integrated and interdependent world economy d.The idea that only about one-tenth of activity is conducted globally while the remaining activity is domestic

The evolution of an integrated and interdependent world economy

Which of the following BEST describes balance of trade?

The measure that looks at the difference between exports and imports and factors in the amount of net income received from investments abroad

Which BEST describes the theory of overlapping demand?

The suggestion that trade is the result of customer demand and that customers of similar wealth are likely to demand similar products and services

What is the general relationship between freedom and income?

They are positively correlated.

Identify a true statement about political systems. a. They do not influence the opportunities available to international businesses. b. They are solely shaped by the political ideologies that support the system. c.They include the principles, laws, and procedures relating to a particular industry. d.They influence the economic, sociocultural, and technological climate in a given country.

They include the principles, laws, and procedures relating to a particular industry.

What is the purpose of the WTO?

To ensure that international trade runs fairly and freely across countries

Which of the following is the goal of PEST? a. To create a manufacturing system that will work in any country without adjustments b.To manipulate external factors c.To avoid entering markets with PEST factors d.To get a picture of the competitive landscape in a country

To get a picture of the competitive landscape in a country

Why are multilateral agencies needed?

To promote greater economic and political cooperation

Which BEST defines "free trade"?

Trade without government intervention or restrictions

In the context of international businesses, which of the following statements is true of the physical infrastructure in a given country?

Transportation networks need to be taken into consideration when assessing the physical infrastructure of a market

There is a positive correlation between education spending and economic output.

True

In the context of social stratification, which of the following is a difference between U.S. culture and Japanese culture?

U.S. culture values accomplishment and achievement regardless of age, whereas Japanese culture values the wisdom and experience of age.

Which of the following is a difference between high power distance and low power distance?

Unlike high power distance, low power distance results in a more collaborative environment.

Which of the following would NOT be considered a visible aspect of culture?

Values

Which of the following is true of regulations governing international business?

When countries improve their laws, they likely open up more opportunities for business in the country.

What does the 10% Presumption mean?

You can presume that 90 percent of all U.S. economic activity is domestic

An absolute advantage is

a favorable position obtained by countries who are better at producing a specific good or service than any rival.

The rule of the individual is

a legal system in which one individual is the ultimate authority and has discretion to set and enforce laws.

An open account agreement is

a method of payment where the importer doesn't pay for the goods until after they have been received.

Jade owns a car that he rarely uses. He prefers using public transportation for his daily commuting needs. Jade decides to use the service provided by BestRentals, a car-sharing service, to rent his car to people looking to hire a car. BestRentals helps Jade connect with prospective renters. This scenario best exemplifies the system of _____.

a shared economy

A norm is

a social rule that governs people's interactions in a culture.

When the value of a currency increases relative to other currencies, it is said to have

appreciated

A _____ is an economy that produces goods and services with environmental benefit.

clean economy

All of the following are associated with low levels of human infrastructure EXCEPT a. low output per person per hour. b.limited availability of training. c.collaboration between universities and companies. d.limited levels of education.

collaboration between universities and companies.

In a recent speech, a political candidate talked about democracy and human rights. The candidate said that the "average citizen knows what's best for him...the government doesn't need to design or plan his life..." These musings are MOST likely indicative of which political ideology?

invidualsims.

If the Mexican peso is considered undervalued relative to the U.S. dollar, shoes produced in the United States and exported to Mexico are MOST likely to be a.more expensive than they should be if the currency was appropriately valued. b.appropriately valued. c. about the same, in terms of valuation. d. less expensive than they should be if the currency was appropriately valued.

more expensive than they should be if the currency was appropriately valued.

In an effort to reassure the market and foreign investors, the Hong Kong government "fixes it currency," or holds the price steady in relation to the U.S. dollar. This is referred to as a

peg

Which of the following is the risk that host-country political conditions might change, causing negative impacts on foreign businesses?

political risk

In the context of managing cultural differences, the term _____ refers to finding or creating shared ground, or areas of overlap between old and new behaviors and understanding.

recentering

What are the reasons a company may decide to engage in international business? (select all that apply)

reduce risk, obtain access to resources, increase sales

Deregulation affects international business by _______.

removing a regulatory burden

Quotas and tariffs:

restrict imports

Which of the following is NOT a common foreign market entry mode? a. exporting/ importing b. licensing c. distributing d. joint venture

distributing

When a country abandons its own currency and instead adopts another currency, this practice is MOST likely referred to as

dollarization

__________ exposure is defined as a company's exposure to unexpected changes in foreign exchange rates.

economic

A PEST analysis is a tool used to

help manage a company's external environment

All of the following are resources that a company can gain from foreign sources EXCEPT : a.higher-quality goods and services. b. lower costs for labor. c.higher land costs. d. new knowledge about how to do something.

higher land costs

The Boston Consulting Group is a premier global consulting firm providing research, analysis, and guidance to some of the most powerful companies and influential leaders in governments around the world. This consulting firm has been able to succeed due to their collective level of ability, skills, experience, and knowledge held by its employees—all of which are transferred through their projects with clients. This is an example of a company that has benefitted from

human capital.

_____ is also known as a market-based economy because it is regulated by the market forces of supply and demand.

Capitalism

KetMart, a retailing corporation, aims to be sustainable. Which of the following strategies would help KetMart become a sustainable company?

Collaborating with suppliers who are willing to make products that are better for the environment

A company is opening channels of communication with clients, employees, civic society leaders, investors, and environment experts to increase sustainability and reduce the company's carbon footprint. These actions are examples of which business change methodology?

Combating short termism by engaging stakeholders.

A group of business leaders across industries meet to discuss economic development goals for their country. The executives decide that a collective approach to decision-making will be good for society as long as members regularly report on their firms' use of natural resources and environmental impact. In which element of collaboration is the group engaging?

Creating entrance strategies

What is the knowledge to function effectively across cultural contexts?

Cultural intelligence

Which of the following continents has the most spoken languages of any continental area?

Asia

Tesla has embraced direct-to-consumer car sales, which are not typical of the industry. Which of the four stages of innovating for sustainability is Tesla engaged in?

Develop new business models

Which of the following is a step used to successfully engage in collaborative initiatives for sustainability?

Developing shared language

A country's Ministry of Finance is trying to update the data on prices of goods and services in the economy. The ministry already conducted the research and is now comparing these prices to the prices in the U.S. for the same goods and services. The ministry research process is an example of what economic measurement model?

Purchasing power parity

Which of the following is NOT one of the three major objectives that motivates companies to engage in international business? a. Acquire new resources and knowledge b. Increase sales c.Avoid external factors in their domestic market d.Reduce the risk of operating in just one market

avoid external factors in their domestic market

Which BEST defines transaction exposure? a. The process by which countries and companies swap one nation's currency for that of another b.The extent to which income from foreign transactions is exposed to currency fluctuations before payment is made c.The simultaneous purchase and sale of a given amount of currency at two different rates d.The process of currency falling in value relative to other currencies

b. The extent to which income from foreign transactions is exposed to currency fluctuations before payment is made

After years of being closed economies, Bolonasia and Craebanzo, two African nations, finally open their borders to trade with each other. In this case, the two countries are most likely to sign a _____.

bilateral trade agreement

Which of the following BEST explains what a tax haven is? a.An institution that borrows from and lends to governments, other banks, and corporations b.A global telecommunications company that facilitates secure international payment transfers from one bank to another c.A country that collects little to no corporate income tax d.A group of banks that combine their resources and share their risks

c.A country that collects little to no corporate income tax

Which of the following BEST describes totalitarianism? a.A political system in which the workers collectively own the factors of production and appropriate back the production outputs to be allocated to workers based on their needs b. The belief that preference should be given to individual freedoms, liberties, and rights c.An extreme form of autocratic political system in which the government regulates every aspect of public and private life d. The belief that all government or organization of society should only exist on a voluntary basis and that individuals should be self-governed

c.An extreme form of autocratic political system in which the government regulates every aspect of public and private life

What term is BEST described as an abuse of public office for personal gain? A. Expropriation b.Arbitration c.Corruption d.licensing

corruption

Which of the following is the process of removing government regulations, oversight, and involvement in an industry?

deregulation

What term is BEST described as a government's seizure of assets as a result of political action?

exprorpiation

In the context of transportation networks, unlike shipping by sea, transportation of goods by air:

faster

Which global barrier did the Internet eliminate for people and businesses alike?

geography

A nation with a market-based economy reports that its real per capita income will double in the next year, all things being equal. This indicator suggests ________ for the country.

increased product consumption

Global internet usage has _______ resulting in a _______ cost associated with gathering and using information.

increased; decreased

R&D around the world is experiencing which of the following trends?

increasing in every market

Because of the high costs and risks of failure involved in oil exploration, drilling and production, Saudi Aramco often creates separate companies with foreign partners to engage in these activities. This is an example of which foreign market entry mode?

joint venture

In Kiseria, a country in South Asia, labor laws require laborers to work in factories for 12 hours a day. Atlas Inc., a mining company, is planning to open its operations in Kiseria. However, Atlas Inc. feels that laborers are being exploited by making them work for unusually long hours. This scenario illustrates that Kiseria's labor practices are:

legal but unethical

The Jordanian government typically delays most of the imported goods in customs citing various administrative reasons. Although Jordania does not completely support free trade, it also does not openly implement antidumping actions for reasons of diplomacy. In this case, through administrative delays, Jordania is trying to:

limit the inflow of foreign goods.

In contrast to undervalued currencies, overvalued currencies:

make it easier for a country to pay down foreign debts.

What term is best described as a virtual or physical setting where people exchange goods and services?

market

Motivational cultural intelligence quotient (CQ) measures an individual's:

sense of desire to function effectively in different cultural settings.

Company investors negatively reacted to the news that the CEO had approved considerable funds for a new product line currently in the development stage but believed to have a high potential for profitability. The investors' reactions represent an example of which way of thinking?

short-termism

Unilever is fighting short termism by focusing more on its __________ and less on its ____________.

stakeholders; shareholders