IB TEST BANK 2
A _____ is a closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime. A. caste system B. class system C. social system D. culture system
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In the U.S., _____ percent of firms that export are small companies employing fewer than 100 people A. 90 B. 75 C. 50 D. 30
A. 90
Which of the following statements pertaining to the changing demographics of world GDP and trade from 1963 to 2006 is not true? A. As emerging economies continue to grow, a relative decline in the share of world output and world exports accounted for by the U.S. seems unlikely. B. Forecasts predict a rapid rise in the share of world output accounted for by some developing nations. C. A decline in the share enjoyed by rich industrialized countries such as Great Britain, Germany, Japan, and the U.S. is likely. D. If current trends continue, the Chinese economy could be larger than that of the U.S. on a purchasing power parity basis.
A. As emerging economies continue to grow, a relative decline in the share of world output and world exports accounted for by the U.S. seems unlikely.
Which of the following is not true regarding culture? A. Culture is static B. Culture is evolving C. It is a system of values and norms that are shared among a group of people D. It involves the knowledge and beliefs of people
A. Culture is static
Which of the following does not help create an economic system that is favorable to international business? A. Decreased privatization B. Widespread deregulation C. Open markets D. Falling trade and investment barriers
A. Decreases Privitization
_____ are the routine conventions of everyday life. A. Folkways B. Mores C. Rites D. Beliefs
A. Folkways
During the 1960s and 1970s, class divisions in _____ raised the cost of doing business there, relative to other European countries. A. Great Britain B. Switzerland C. Norway D. Germany
A. Great Britain
The institution, created in 1944 at Bretton Woods, responsible for maintaining order in the international monetary system is the A. IMF. B. WTO. C. UN. D. UNESCO
A. IMF
_____ occur(s) when a firm exports goods or services to consumers in another country. A. International trade B. Foreign direct investment C. Inward investment D. Merger and acquisitions
A. International trade
Identify the incorrect statement regarding individualism. A. It advocates for a socialist political system B. It promotes free market economics C. It creates a pro-business environment D. It translates into an advocacy for democratic political systems
A. It advocates for a socialist political system
Individualism can best be described by which of the following statements? A. It as a philosophy suggests that an individual should have freedom over his/her economic and political pursuits. B. It is a political system in which government control over all factors of production is in entirety. C. It is a political system that stresses the primacy of collective goals over individual goals. D. It is a form of government in which one person or political party exercises absolute control over all spheres of human life
A. It as a philosophy suggests that an individual should have freedom over his/her economic and political pursuits.
Identify the incorrect statement pertaining to a country's political economy. A. It is independent of the culture of a nation. B. It is a combination of interdependent political, economic, and legal systems. C. Its various systems interact and influence each other. D. Its interacting systems affect the level of economic well-being.
A. It is independent of the culture of a nation.
Which of the following is not characteristic of globalization? A. National economies are turning into independent economic systems. B. Material culture is starting to look similar the world over. C. Perceived distance is shrinking due to advances in transportation and telecommunications. D. Barriers to cross-border trade and investment are declining
A. National economies are turning into independent economic systems.
Which of the following is not an impediment that makes it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe? A. Reduced transportation costs. B. Government regulations. C. Issues associated with economic and political risk. D. Barriers to foreign direct investment
A. Reduced transportation costs.
Identify the incorrect statement regarding the former Communist nations of Europe and Asia. A. The economies of most of the former Communist states are very strong and developed. B. Many of the former Communist nations of Europe and Asia share a commitment to free market economies. C. As a result of disturbing signs of growing unrest and totalitarian tendencies, the risks involved in doing business in these countries is very high. D. For about half a century these countries were essentially closed to Western international business.
A. The economies of most of the former Communist states are very strong and developed
Which of these statements pertaining to cross-border FDI flows is true? A. The growth of FDI resumed in 2004 and continued through 2006. B. A surge in FDI from 1995 to 1997 was followed by a slump from 1998 to 2000. C. Among developing nations, the largest recipient of FDI has been Russia. D. The dramatic increase in FDI reflects the decreasing internationalization of business corporations.
A. The growth of FDI resumed in 2004 and continued through 2006.
The _____ was created in 1944 by 44 nations that met in Breton Woods, New Hampshire to promote economic development. A. World Bank B. International Trade Center C. World Trade Organization D. United Nations
A. World Bank
In a pure command economy: A. all productive activities are owned by the state. B. all productive activities are privately owned. C. the goods and services that a country produces are not planned by anyone. D. production is determined by the interaction of supply and demand.
A. all productive activities are owned by the state.
Social democracy: A. as an ideology may prove to be more enduring than communism. B. has perhaps had its greatest influence in a number of democratic Asian countries. C. has had no influence in any democratic Western nation. D. had greatest influence in Eastern European nations like Poland, Czechoslovakia, and Hungary.
A. as an ideology may prove to be more enduring than communism
The Cold War was essentially a war between _____, championed by the now-defunct Soviet Union, and _____, championed by the United States. A. collectivism; individualism B. democracy; socialism C. totalitarianism; socialism D. individualism; collectivism
A. collectivism; individualism
A document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved is BEST known as a: A. contract. B. business letter. C. memorandum. D. civil code.
A. contract.
The growing integration of the world economy is: A. increasing the intensity of competition in a wide range of manufacturing and service industries. B. decreasing the intensity of competition in manufacturing industries, and increasing the intensity of competition in services. C. increasing the intensity of competition in manufacturing industries, and decreasing the intensity of competition in services. D. narrowing the scope of competition in a wide range of service, commodity, and manufacturing industries
A. increasing the intensity of competition in a wide range of manufacturing and service industries.
Totalitarianism: A. is a form of government in which one person or political party exercises absolute control over all spheres of human life. B. refers to a political system in which government is by the people, exercised either directly or through elected representatives. C. is based on a belief that citizens should be directly involved in decision making. D. is based on the idea that the welfare of society is best served by letting people pursue their own economic self-interests
A. is a form of government in which one person or political party exercises absolute control over all spheres of human life.
Social rules and guidelines that prescribe appropriate behavior in particular situations are best described as: A. norms. B. values. C. culture. D. society.
A. norms.
A theocratic law system is: A. one in which the law is based on religious teachings. B. based on tradition, precedent, and custom. C. based on a detailed set of laws organized into codes. D. the body of law that governs contract enforcement.
A. one in which the law is based on religious teachings.
The HDI is based on all of the following measures except: A. political freedom. B. life expectancy at birth. C. educational attainment. D. whether average incomes are sufficient to meet the basic needs of life.
A. political freedom.
Mores are: A. the norms that are seen as central to the functioning of a society and its social life B. the routine conventions of everyday life. C. abstract ideas about what a group believes to be right, good, and desirable. D. the social rules and guidelines that prescribe appropriate behavior in particular situations
A. the norms that are seen as central to the functioning of a society and its social life
A state where political power is monopolized by a party, group, or individual that governs according to religious principles is best described as following: A. theocratic totalitarianism. B. tribal totalitarianism. C. right-wing totalitarianism. D. communist totalitarianism.
A. theocratic totalitarianism
_____ is consistent with the notion that an individual's right to do something may be restricted because it runs counter to "the good of society" or "the common good." A. Entrepreneurship B. Collectivism C. Free enterprise D. Capitalism
B. Collectivism
Which of the following provides exclusive legal rights to authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit? A. Patents B. Copyrights C. Trademarks D. Licenses
B. Copyrights
Firms based in _____ accounted for 14.7 percent of the stock of foreign direct investment in 2007, up from only 1.1 percent in 1980. A. Asia B. developing countries C. United Kingdom D. NAFTA region
B. Developing Countries
Which of the following statements regarding cross-border trade and investment is not true? A. "Protection" from foreign competitors has been, at times, demanded by the United States. B. Forecasts indicate a return to the restrictive trade policies of the 1920s and 30s. C. If trade barriers decline no further they will put a brake upon the globalization of both markets and production. D. It is not clear whether the political majority in the industrialized world favors further reductions in trade barriers
B. Forecasts indicate a return to the restrictive trade policies of the 1920s and 30s
The law that makes it illegal to bribe a foreign government official in order to maintain business over which that foreign official has authority, and requires all publicly traded companies to keep detailed records that would allow determining whether a violation of the act has occurred is the: A. CIGS. B. Foreign Corrupt Practices Act. C. Economic Cooperation Anti Corruption Act. D. Convention on Combating Bribery of Foreign Officials in International Transactions.
B. Foreign Corrupt Practices Act.
The share of the total FDI stock accounted for by which of the following countries increased markedly from 1980 to 2005? A. United States B. France C. United Kingdom D. Netherlands
B. France
Which of the following refers to the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource? A. Theocratic right B. Property right C. Trade right D. Financial right
B. Property right
Which system of government generally permits some individual economic freedom but restricts individual political freedom, frequently on the grounds that it would lead to the rise of communism? A. Tribal totalitarianism B. Right-wing totalitarianism C. Left wing totalitarianism D. Theocratic totalitarianism
B. Right-wing totalitarianism
Identify the incorrect statement pertaining to intellectual property rights. A. Its violation cost personal computer software firms revenues equal to $48 billion in 2007. B. The protection of intellectual property rights is more or less the same in all countries. C. The enforcement of its regulations has often been lax. D. Its violation has been very bad in China, where the piracy rate in 2007 ran at 82 percent
B. The protection of intellectual property rights is more or less the same in all countries.
Identify the incorrect statement pertaining to innovation and entrepreneurship. A. They are the engines of growth Identify the incorrect statement pertaining to innovation and entrepreneurship. A. They are the engines of growth B. They require state ownership of all means of production C. They require a market economy D. They require strong property rights
B. They require state ownership of all means of production
Which of the following countries has had the maximum relative decline in its share of world output since 1963? A. Canada B. United States C. Japan D. Germany
B. United States
_____ is/are best defined as shared assumptions about how things ought to be. A. Norms B. Values C. Society D. Culture
B. Values
In a pure market economy: A. all productive activities are owned by the state. B. all productive activities are privately owned. C. the government plans the goods and services that a country produces. D. resources are allocated for "the good of society."
B. all productive activities are privately owned.
According to _____, socialism can only be achieved through violent revolution. A. capitalists B. communists C. social democrats D. democrats
B. communists
A central value of Japanese culture is the importance attached to: A. the individual. B. group membership. C. individual achievement. D. personal accomplishments.
B. group membership.
The common law system: A. lacks the flexibility that other systems have. B. is based on tradition, precedent, and custom. C. gives judges the power only to apply the law. D. is based on a detailed set of laws organized into codes.
B. is based on tradition, precedent, and custom
Critics of globalization maintain that the apparent decline in real wage rates of unskilled workers A. owes far more to a technology-induced shift within advanced economies toward jobs that require significant education and skills. B. is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers. C. has been impacted most by technological change. D. can be checked by increasing society's investment in education to reduce the supply of unskilled workers
B. is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers.
The benefits of doing business in a country are a function of all of the following except: A. the size of the market. B. its past growth. C. its present wealth. D. its future growth prospects.
B. its past growth
The TRIPS agreement was designed to: A. exclude China from all intellectual property agreements. B. oversee a much stricter enforcement of intellectual property regulations. C. lobby for more lax intellectual property rights for poor countries. D. support traded software and recorded property among developed markets.
B. oversee a much stricter enforcement of intellectual property regulations
Since the collapse of communism at the end of the 1980s, the erstwhile communist nations have transformed their economies by encouraging all of the following except: A. privatizing state-owned enterprises. B. regulating markets. C. increasing competition. D. welcoming investment by foreign businesses.
B. regulating markets
Although the characteristics of the global economy have changed dramatically over the past 30 years, as late as the 1960s all of the following demographic characteristics were true, except: A. the U.S. dominated the world economy. B. small, U.S. entrepreneurial firms dominated the international business scene. C. the U.S. dominated the world foreign direct investment picture. D. roughly half the world was governed by centrally planned economies of the Communist world
B. small, U.S. entrepreneurial firms dominated the international business scene
A group of people who share a common set of values and norms form a: A. culture. B. society. C. country. D. caste.
B. society.
An act, as simple as shaking hands when meeting new people is an example of: A. values. B. symbolic behavior. C. mores. D. social stratification.
B. symbolic behavior.
All of the following are reasons that would account for the spread of democracy except: A. totalitarian regimes failing to deliver economic progress to the vast bulk of their populations. B. the unchallenged pressure of entrepreneurs and other business leaders for less accountable and closed governments. C. the economic advances of the past quarter century leading to the emergence of increasingly prosperous middle and working classes pushing for democratic reforms. D. new information and communication technologies reducing the state's ability to control access to uncensored information.
B. the unchallenged pressure of entrepreneurs and other business leaders for less accountable and closed governments.
This refers to a political system in which government is by the people, exercised either directly or through elected representatives. A. Totalitarianism B. Authoritarianism C. Democracy D. Dictatorship
C. Democracy
_____ involves removing legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate. A. A product law B. Trade certification C. Deregulation D. A liability law
C. Deregulation
The _____ was established to remove barriers to the free flow of goods, services, and capital between nations A. UN B. IMF C. GATT D. IDA
C. GATT
Which of the following statements about the trade-related aspects of intellectual property rights agreement is false? A. It was designed to oversee enforcement of much stricter intellectual property regulations, beginning in 1995. B. It obliged WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting 50 years. C. It directed rich countries to comply with its rules of intellectual property protection within five years. D. It provided the very poorest countries 10 years to comply with its rules of intellectual property protection.
C. It directed rich countries to comply with its rules of intellectual property protection within five years.
Identify the incorrect statement concerning globalization. A. It has been blamed for unemployment in developed nations, environmental degradation and the Americanization of popular culture. B. It has created new threats for businesses accustomed to dominating their domestic markets. C. It is transforming industries and is highly welcomed by those who believed their jobs were protected from foreign competition. D. According to most economists it is a very beneficial process where gains outweigh the losses by a wide margin
C. It is transforming industries and is highly welcomed by those who believed their jobs were protected from foreign competition.
Identify the incorrect statement pertaining to the World Wide Web. A. It makes it much easier for buyers and sellers to find each other. B. Viewed globally, it is emerging as an equalizer. C. It rolls back all of the constraints of location, scale, and time zones. D. It allows businesses to expand their global presence at a lower cost than ever before.
C. It rolls back all of the constraints of location, scale, and time zones
Before NAFTA was passed A. Mexico agreed to establish a higher minimum wage. B. the U.S. agreed to limit the number of jobs that could be exported to Mexico. C. Mexico committed to tougher enforcement of environmental protection regulations. D. Canada committed to establish new limits of FDI
C. Mexico committed to tougher enforcement of environmental protection regulations
Which of the following statement pertaining to changes in the global economy of the 21st century is not true? A. Barriers to the free flow of goods, services, and capital have been coming down. B. Volume of cross-border trade and investment has been growing more rapidly than global output. C. National economies are becoming more independent and moving away from the global economic system. D. As economies advance, more nations are joining the ranks of the developed world
C. National economies are becoming more independent and moving away from the global economic system.
Which of the following refers to the extent to which individuals can move out of the strata into which they are born? A. Caste stratification B. Class system C. Social mobility D. Individual potential
C. Social mobility
Which of the following statements about socialism is false? A. Modern socialists' intellectual roots can be traced to Karl Marx. B. Elements of socialist thought can be traced to Plato. C. Socialist ideology is split into two camps—communists and individualists. D. Socialism advocates for state ownership of the means of production
C. Socialist ideology is split into two camps—communists and individualists.
What is the total cumulative value of foreign investments best referred to as? A. Accumulation of foreign shares B. Portfolio investments C. Stock of foreign direct investments D. Stock market investments
C. Stock of foreign direct investments
Which of the following statements about the legal systems of countries is false? A. They can affect the attractiveness of a country as an investment site or market. B. They are influenced by the prevailing political system of the country. C. They are almost the same for all countries. D. They are of immense importance to international business
C. They are almost the same for all countries.
By 2006 some 24 of the world's 100 largest non-financial multinationals were: A. Chinese enterprises. B. British enterprises. C. U.S. enterprises. D. Japanese enterprises.
C. U.S. enterprises.
In the 1970s, many Japanese firms invested in North America and Europe A. to avoid a highly competitive domestic market. B. to exploit high domestic tariff barriers. C. as a hedge against unfavorable currency movements. D. to take advantage of low labor costs
C. as a hedge against unfavorable currency movements.
A _____ system is based on a very detailed set of laws organized into codes. A. democratic law B. theocratic law C. civil law D. common law
C. civil law
The emphasis on individualism in the United States results in all of the following disadvantages except: A. managers tend to develop good general skills but lack the company-specific experience. B. difficulty in building teams within an organization to perform collective tasks. C. executives are not exposed to different ways of doing business. D. difficulty to achieve cooperation both within a company and between companies.
C. executives are not exposed to different ways of doing business.
Globalization has _____ the opportunities for a firm to expand its revenues by selling around the world and _____ its costs by producing in nations where key inputs are cheap A. reduced, reduced B. increased, increased C. increased, reduced D. reduced, increased
C. increased, reduced
The social organization of Western society tends to emphasize on: A. a group orientation. B. the family. C. individual achievement. D. work groups.
C. individual achievement.
The reduction in the average tariff rates on manufactured products since 1950 implies all of the following except that A. firms are dispersing parts of their production process to global locations to drive down production costs and increase product quality. B. the economies of the world's nation states are becoming more intertwined. C. nations are becoming increasingly independent of each other for important goods and services. D. the world has become significantly wealthier since 1950
C. nations are becoming increasingly independent of each other for important goods and services.
Safety standards to which a product must adhere are set by: A. safety certifications. B. the government standards department. C. product safety laws. D. product liability laws.
C. product safety laws.
Since 1980, the world's containership fleet has more than _____, reflecting in part the growing volume of international trade. A. doubled B. tripled C. quadrupled D. quintupled
C. quadrupled
When a company "exports jobs" overseas, the company is: A. helping domestic workers by pushing up wage rates. B. increasing the demand of qualified domestic workers. C. taking advantage of lower wages in foreign markets. D. deceiving the supporters of globalization.
C. taking advantage of lower wages in foreign markets.
It has been argued that the success of Japanese enterprises in the global economy has been based partly on all of the following except: A. the diffusion of self-managing work teams. B. the close cooperation among different functions within Japanese companies. C. the high degree of managerial mobility between companies. D. the cooperation between a company and its suppliers on issues such as design, quality control, and inventory reduction.
C. the high degree of managerial mobility between companies.
Design and names by which merchants or manufacturers designate and differentiate their products are known as: A. patents. B. copyrights. C. trademarks. D. licenses.
C. trademarks.
Which of the following nation's world output has declined the least over the last 40 years? A. France B. United States C. United Kingdom D. Canada
Canada
Identify the United Nations body that establishes a uniform set of rules governing certain aspects of the making and performance of everyday commercial contracts between sellers and buyers who have their places of business in different nations. A. IMF B. GATT C. WTO D. CIGS
D. CIGS
Which of the following countries has been the largest recipient of foreign direct investment and received about $70 billion a year in inflows in 2005 and 2006? A. Brazil B. Russia C. India D. China
D. China
_____ are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils, neighborly behavior, and the like. A. Values B. Beliefs C. Mores D. Folkways
D. Folkways
The most global markets currently are markets for: A. services. B. consumer goods. C. consumer durables. D. industrial goods.
D. Industrial Goods
Which of the following statements about political systems and their interrelated dimensions is false? A. Systems that emphasize collectivism tend toward totalitarianism. B. Systems that place a high value on individualism tend to be democratic. C. Democratic societies can emphasize a mix of collectivism and individualism. D. It is impossible to have totalitarian societies that are not collectivist
D. It is impossible to have totalitarian societies that are not collectivist.
A _____ grants the inventor of a new product or process exclusive rights for a defined period of time to the manufacture, use, or sale of that invention. A. copyright B. trademark C. contract D. patent
D. Patent
Which of the following observations concerning Latin American countries is true? A. Complete restrictions on direct investment by foreign firms. B. Characterized by low growth, high debt, and hyperinflation. C. Debt and inflation are up compared to previous decades. D. Substantial opportunities exist, but are accompanied by substantial risks.
D. Substantial opportunities exist, but are accompanied by substantial risks.
Which of the following statements about values and norms of a culture is not true? A. The values and norms of a society do not emerge fully formed B. They are the evolutionary product of a number of factors C. They are influenced by religion D. They do not influence social structure
D. They do not influence social structure
The ______ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states. A. International Development Association B. World Bank C. International Court of justice D. World Trade Organization
D. World Trade Organization
At the Doha Round of the WTO in late 2001, A. the WTO was established. B. GATT was extended to include services. C. world trade volume increased. D. an agenda was established to phase out subsidies to agricultural producers
D. an agenda was established to phase out subsidies to agricultural producers
Technological innovations have facilitated all of the following except: A. globalization of production. B. globalization of markets. C. creation of electronic global marketplaces. D. creation of absolutely homogeneous consumer markets
D. creation of absolutely homogeneous consumer markets
The system of values and norms that are shared among a group of people and that when taken together constitute a design for living best defines: A. society. B. value systems. C. principles. D. culture.
D. culture.
) If the critics of globalization are correct, all of the following things must be shown except: A. the share of national income received by labor, as opposed to the share received by the owners of capital should have declined in advanced nations. B. even though labor's share of the economic pie may have declined, living standards need not deteriorate if the size of the total pie has increased sufficiently to offset the decline in labor's share. C. the decline in labor's share of national income must be due to moving production to low-wage countries, as opposed to improving production technology and productivity. D. economic growth in developed nations has offset the fall in unskilled workers' share of national income, raising their living standards.
D. economic growth in developed nations has offset the fall in unskilled workers' share of national income, raising their living standards
A Japanese executive's ritual of presenting a business card to a foreign business executive is an example of: A. mores. B. values. C. attitudes. D. folkways.
D. folkways.
In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning. A. market B. private C. command D. mixed
D. mixed
The political economy of many of the world's nation-states has changed radically since the late 1980s. All of the following are trends that have been evident except: A. a wave of democratic revolutions has swept the world. B. totalitarian governments collapsed and have been replaced by democratically elected governments. C. there has been a strong move away from centrally planned economies toward free market economic models. D. mixed economies are fast replacing market economies
D. mixed economies are fast replacing market economies
Antitrust laws in the United States are designed to: A. encourage business practices designed to monopolize a market. B. discourage private ownership. C. restrict privatization. D. outlaw monopolies
D. outlaw monopolies.
Interdependent political, economic, and legal systems of a country make up its: A. administrative agenda. B. socioeconomic fabric. C. economic environment. D. political economy
D. political economy
A study by the OECD, whose members include the 20 richest economies in the world, noted all of the following except: A. the gap between the poorest and richest segments of society in some OECD countries widened. B. in almost all countries real income levels rose over the 20-year period studied. C. falling unemployment rates brought gains to low-wage workers and fairly broad-based wage growth. D. the gap between rich and poor had narrowed in all OECD countries
D. the gap between rich and poor had narrowed in all OECD countries.
In all of the following scenarios, the costs of doing business in a country tend to be greater, except where: A. political payoffs are required to gain market access. B. supporting infrastructure is lacking. C. adhering to local laws and regulations is costly. D. there is a highly developed infrastructural support.
D. there is a highly developed infrastructural support.
According to World Bank numbers, A. developing nations currently account for more than 60 percent of world economic activity. B. rich nations currently account for more than 70 percent of world economic activity. C. today's rich nations may account for 55 percent of world economic activity by 2020. D. today's developing nations may account for more than 60 percent of world economic activity by 2020.
D. today's developing nations may account for more than 60 percent of world economic activity by 2020
