International Business Chapter 1-4 test

___________ refers to a political system where the needs of society as a whole are seen as more important than individual freedoms.

Collectivism

In Seattle, during December 1999, massive protests against globalization captured the attention of the world. Which of the following was not an issue the protesters raised?

Environmental standards that were too strict

Which of the following is NOT one of drivers that has made the globalization of production feasible?

New applications for social media

Which of the following is not one of the major forms of totalitarianism?

Plutocratic totalitarianism

Which of the following is not one of the three measures used to calculate the Human Development Index developed by the UN based on work of Amartya Sen?

Quality of air and water

Which of the following best describes the technological change that has been a driver of globalization?

The microprocessor may be the single most important innovation.

One of the criticisms of the WTO is the concern that the organization will undermine the sovereignty of member nations. Which of the following is not a criticism in this area?

The power of the organization rests largely on the ability to persuade member states to follow a certain action.

_________________________ is primarily responsible for policing the world trading system and making sure nation states adhere to the rules laid down in treaties the nation states have signed.

The world trade organization

Other things being equal, a nation with ___________________________, democratic political institutions, and a strong legal system that protects property rights and limits corruption is a more attractive as a place in which to business than countries without these factors.

a market based economic system

Medium-size and small multinationals (mini-multinationals):

are becoming increasingly involved in international business.

Data about the volume of exports and world GDP suggest among other things that the economies of the world's nation-states _________________________________.

are becoming more intertwined and dependent on each other for goods and services

Consistent with the collectivist ideology, the objective of a __________________ economy is for the government to allocate resources for the good of society.

command

___________ involves removing legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate

deregulation

The process by which state-owned enterprises are sold to private investors is known as ________________________.

privatization

Official measurements of a country's economic development are essential elements international businesses need for assessment but these official figures

do not include unrecorded cash transactions or barter, which could be substantial

The likelihood that economic mismanagement will cause drastic changes in a country's business environment that hurt the profit and other goals of a particular business enterprise is an example of

economic risk

In addition to competitiveness, country differences in product safety and liability laws raise an important ____________ issue for firms doing business abroad if there significant differences in the toughness of product safety laws in the home country and the foreign company in which the firm is doing business.

ethical

In the early 1960s, the United States was by far the world's dominant industrial power, and:

even with the relative decline, it is still the largest industrial power.

Successful managers in international business:

face issues more complex than the issues managers face in strictly domestic business

One of the most frequently voiced concerns raised by opponents of globalization is that ___________________________.

falling barriers to international trade have destroyed manufacturing jobs in the wealthy advanced countries such as the United States and Western Europe

By identifying and investing early in country that will become an economic star in the future, an international firm may build brand loyalty and gain experience in that country's business practices. This is known as the pioneer advantages.

false

In the high-technology "knowledge" economy of the twenty-first century, intellectual property is becoming less important than creating open access to information.

false

Most global markets are for consumer goods despite the national differences in tastes and preferences.

false

A nation may _______ as a means of encouraging business owners to seek gains in economic efficiency

privatize

The purchasing power parity adjustment (PPP)

is based on the cost of living in the United States

Political risk

is the likelihood that political forces will cause drastic changes in country's business environment that adversely affect the profit and goals of a business enterprise

In the early 20th century, the socialist ideology split into two broad camps, communists and _________________.

maoists

The three general types of economic systems are:

market, command and mixed.

The economic transformation that has been spreading since the 1980s was, in general, a result of the fact that _______________________________ failed to deliver the sustained economic performance that was achieved by countries adopting ____________________

mixed and command economies; market-based economies

A country's political, economic, and legal system constitutes its:

political economy

After the collapse of Communism, many former Communist countries lacked the legal structure required to ____________

protect property rights as all property had been held by the state

Property rights refer 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. Property rights can be violated in two ways - through private action and through ____________

public action

Latin America has become a more attractive market for exports and a site for foreign direct investment for all the following reasons EXCEPT:

state involvement in the economies has almost completely disappeared throughout Latin America.

Without __________________________, businesses and individuals run the risk that profits they might earn from their innovative ideas might be appropriated by the state, other companies, or criminal elements.

strong property rights protections

The two main components of globalization are:

the globalization of markets and the globalization of production.

Generally, the long-term monetary benefits of doing business in a country are a function of the size of the market, the present purchasing power of consumers in that market, and _________________

the likely future wealth of consumers

The collapse of totalitarian and communist states, new information and communications technologies, and economic advances in many countries have led to:

the spread of democracy.

In mixed economies:

the state may take over companies in danger of collapsing.

Although democracy may not always be the cause of initial economic progress, it seems to be one consequence of that process.

true

Both U.S. law and OECD conventions condemn all forms of bribery with the exception of grease payments, which expedite the performance of routine government action.

true

Foreign direct investment occurs when a firm invests resources in business activities outside its home country.

true

In the 1980s and 90s two trends characterized the world's nation-states - a wave of democratic revolutions and a strong move away from planned economies

true

In the purest market economy, all productive activities are privately owned

true

Service workers, who once thought globalization would not affect their jobs, are discovering that more and more service jobs are being outsourced to foreign countries

true

Contracts drafted under a common law framework tend to be ______________

very detailed with all contingencies spelled out