Practice Quiz Questions

About ____ of the value of goods and services bought in the United States comes from other countries. 15% 28% 40% 65% 70%

28%

What percentage of the U.S. population currently holds a valid U. S. passport? 30% 40% 60% 90%

30%

A manager practicing relativism would most likely ________. A) adapt to local conditions instead of implementing home country practices B) enforce home country laws on host country employees and suppliers C) refuse to change company policies and procedures to comply with local norms D) apply universal laws to each country despite local customs and traditions

A

Although English is referred to as the "international language of business,"________. a. monolingual english speakers may experience mroe difficulty in the future in communicating on a worldwide basis b. its less frequently used than french in inbu c companies hq outside english speaking countries all use their official language as their operating language

A

Ethical dilemmas tend to be ________ for MNE managers than for domestic managers. A) more complicated B) less controversial C) easier to decide D) less common

A

Firms that compete in the global marketplace typically face the asymmetric forces of pressures for ________ and ________. A) global integration; local responsiveness B) price reductions; cost reductions C) politically sensitivity; market leadership D) cost reductions; customer satisfaction

A

It is most accurate to say that within most nation's borders, people largely share such essential attributes as ________ and ________. a. values, language b. lifestyles, education level c. education level, ethnicity d. work attitudes, occupations

A

Which of the following is the most important constraint on the explanatory power of the IO paradigm? A) Many industries are imperfectly competitive. B) Many companies are locally but not internationally competitive. C) Most customers have perfect knowledge of the products they select. D) Most industries have many firms that each have small market shares.

A

Which of the following statements about approaches to political risk management is NOT true? A) Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards. B) Passive political risk management assumes that it is difficult, if not impossible, to systematically model political risk. C) Active political risk management assumes that positive and negative political events in any country are neither independent nor random events. D) Active political risk management assumes that political events unfold in observable patterns that statistical methods can detect.

A

Which of the following was a notable trend in political systems during the second half of the 20th century and beginning of the 21st century? A) A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems. B) A wave of theocratic revolutions occurred as people around the world looked to spirituality to guide them. C) Socialistic revolutions swept the world as countries aspired toward greater social justice. D) A totalitarian revolution swept the world as people looked to strong state leadership in uncertain times.

A

Zara creates, produces, and distributes most of its products from its headquarters in Spain. Zara is most likely using a ________ configuration. A) concentrated B) coordinated C) dispersed D) logical

A

The ________ clause embodied the fundamental principle of GATT—trade without discrimination. A) most-favored-nation B) nontariff barriers C) free rider D) normal trade relations

A) most-favored-nation

Under NAFTA, rules of origin ensure that ________. A) only goods produced mostly within the region are eligible for liberal tariff conditions B) only American products are shipped to Canada and Mexico duty-free C) all members import products only from member nations D) all members have the same external and internal tariffs

A.

The ________ is the European Union's ultimate decision-making body and is composed of the different ministers of the member countries. A) European Commission B) Council of the European Union C) European Parliament D) European Court of Justice

A. European Commission

A culture in which people prefer to finish one task before starting another is most accurately characterized as which of the following? a. monochronic b. pragmatic c. low context d. high power distance

A. Monochronic

What is an NGO?

An organization unaffiliated with government. Such as the Red Cross or Doctors without Boarders.

Assume a U.S. firm plans to expand into either Mexico, Germany, or Japan. Its executives are traveling to each country to meet with local businesspeople in the decision-making process. Which of the following would be LEAST beneficial when the executives make a presentation? a. conducting back translations for written work b. avoiding repetition to prevent boredom c. simplifying vocab and terminology for the audience d. requesting a translator with technical vocab knowledge

B

Assume a firm has operations in Tokyo, where there is a collectivist culture. Which of the following would most likely motivate the firm's Japanese employees? a. on the job challeneges b. good health benefits c. extensive vacation time d. employee of the month programs

B

Creolization refers to ________. A) government efforts to maintain a distinct cultural identity through legislation and language B) the process of mixing elements of an outside culture with those of a national culture C) the use of stereotypes to describe a culture D) changes as cultures evolve over time

B

Which of the following best supports the idea that MNEs should remain in countries that allow child labor? A) MNEs have a positive influence on government employment policies in most foreign countries. B) Many MNEs have substantially improved the working conditions of their foreign plants. C) MNEs are required to pay child workers more than local companies. D) Most MNEs employ local managers to handle cultural differences.

B

Which of the following is Walmart's competitive advantage in Mexico? A) Walmart purchased all Mexican retail chains and eliminated competitors. B) Walmart is able to transfer its "everyday low prices" concept to Mexico. C) Walmart offers affordable, unique products for niche markets in Mexico. D) Customers prefer to buy from American companies instead of Mexican companies.

B

Which of the following is the best example of a product disruption driving industry change? A) redesign of Toyota's Prius B) introduction of Apple's iPad C) AT&T's purchase of T-Mobile D) merger of United and Continental

B

Which of the following statements most accurately describes the relationship between trading groups and MNEs? A) Trading groups have no influence on the size of the regional market. B) Regional trading groups can define the rules under which companies must operate within that region. C) Companies never need to change their organizational structure to take advantage of regional trading groups. D) Regional trading groups have no influence on an MNE's strategy since they operate worldwide.

B) Regional trading groups can define the rules under which companies must operate within that region.

Which of the following types of political risks often is caused by ethnic conflict or civil disorder and includes random political developments that adversely affect the operations of all companies in a country? a. systemic b. catastrophic c. distributive d. procedural

B. Catastrophic

Members of the Andean Community (CAN) have a common external tariff. CAN is most likely a ________. A) free trade agreement B) customs union C) domestic trade zone D) free trade sovereignty

B. Customs Union

________ integration is the political and economic agreements among countries that give preference to member countries to the agreement. A) Global B) Economic C) Bilateral D) Regional

B. Economic

The approach a company takes when it bases foreign operations on an informed knowledge of its organizational culture along with home- and host-country needs, capabilities, and constraints is called ________. a. ethnocentrism b. geocentrism c. neocentrism d. polycentrism

B. Geocentrism

Which of the following was primarily responsible for establishing the euro? A) Lisbon Treaty B) Treaty of Maastricht C) European Finance Act D) Single European Act

B. Treaty of Maastricht

Hudson Manufacturing is an MNE based in the United States with operations in Asia. The firm is considering expansion into the European Union. Which of the following questions is most relevant to the decision? A) What is the primary language of most workers? B) Which country has the best production location? C) Which currency has the most favorable value of the euro? D) Which country has the lowest tariffs for manufactured products?

B. Which country has the best production location?

In the global environment, firms use an international strategy, a multidomestic strategy, a global strategy, or a ________ strategy. A) regional B) standardization C) transnational D) locational

C

The Organization of Petroleum Exporting Countries ________. A) uses import tariffs to control oil prices B) stabilizes prices based on demand C) uses quotas to control oil prices D) produces all of the world's oil

C

The belief that there are universal standards of behavior that all cultures should follow is called ________. A) humanism B) relativism C) normativism D) naturalism

C

What is the primary problem associated with Anglo American PLC's ART program? A) unknown side effects to drugs and treatment B) rising costs of medications and procedures C) poor treatment adherence by employees D) lack of sufficient insurance coverage

C

Which of the following is a common shortcoming of studies examining culture in different countries and regions? A. people are reluctant to complain about their own cultures, so they present only positive opinions to researchers B. Cultures are static, which leads researchers to draw fals conclusions from old data C) Responses are reported in averages, which can lead to a belief in unrealistic stereotypes.

C

Which of the following is a reason for an MNE to base its standards for ethical behavior on a country's laws? A) The law embodies many of a country's moral beliefs but is an inadequate guide for proper conduct. B) The law contains unenforceable rules that are impossible for society to follow. C) The law represents a consensus derived from significant deliberation. D) The law is based on precisely defined moral concepts.

C

Which of the following is most important when designing an internal code of conduct? A) requesting U.N. oversight and intervention when necessary B) communicating the code of conduct only to employees C) reporting results to external stakeholders D) forming local polices for each subsidiary

C

Which of the following is the most accurate statement about culture? a. within a culture, everyone responds to particular cultural variables in the same way b. cultural variables can easily be isolated from other factors such as economic and political conditions c) Although most cultural variables are universal, the forms these variables take differ from culture to culture.

C

Which of the following statements best describes a pluralistic society? a. various ethnic groups belong to the official political party b. two dominant political parties rule local and federal govts c. different ideologies are held by different segments of society d. multiple segments of society adhere to the same political philosophy

C

Why is the argument that "anything legal is ethical" most likely insufficient? A) Everything that is unethical is also illegal. B) The law is an extremely efficient way to solve ethical dilemmas. C) Laws are frequently based on imprecisely defined moral concepts. D) Laws can never be changed; thus, rules for all possible ethical dilemmas are found in the law.

C

Managers should be more precise in their directions to subordinates when ________. a. the company has a philosophy of geocentrism b. the society believes age equals wisdom c. uncertainty avoidance is high d. power distance is low

C.

Ian, a financial manager, is preparing to transfer to Germany where he will serve as an expatriate manager of his employer's European office. With which type of legal system will Ian most likely have to deal with in Germany? A) mixed B) common C) civil D) theocratic

C. Civil

Coca-Cola spends an enormous amount of money on advertising to distinguish, and create a unique image for, their products. Coca-Cola pursuing a ______________ strategy. a.Diversification b.Focused low-cost c.Differentiation d.Low-cost e.Market development

C. Differentiation

The three major responsibilities of the ________ are legislative power, control over the budget, and supervision of executive decisions. A) European Commission B) European Council C) European Parliament D) European Court of Justice

C. European Parliament

Since production has shifted to more efficient producers due to comparative advantage, consumers in Country X have had access to more goods at lower prices. Which of the following most likely exists? A) trade specialization B) trade diversion C) trade creation D) trade internalization

C.)Trade Creation

Political systems based on the ________ paradigm, such as those of Japan and China, accept the principle that government may intervene to ensure that business practices benefit society. a. pluralistic b. collectivistic c. individualistic d. laissez fair

Collectivistic

A differentiation strategy works well when ________. A) a company designs a universal product for a broad market B) buyers believe minor product differences are irrelevant to price C) buyers are highly sensitive to price shifts and quality control D) a company can continually develop products that have unique features

D

A useful way to understanding the purpose of strategy is to think of the firm as a(n) ________, composed of a series of distinct activities, including production, marketing, materials management, R & D, human resources, information systems, and the firm infrastructure. A) activity network B) value constellation C) task succession D) value chain

D

Countries with a ________ legal system tend to encourage precise, detailed contracts, whereas countries with a ________ legal system tend to encourage shorter and less specific contracts. a. civil, customary b. theocratic, mixed c. customary, common d. common, civil

D

The industry organization (IO) paradigm reports that, on average, the best predictor of firm strategy is the ________. A) company's stockpile of assets, skills, and capabilities B) aggressiveness of a company's marketing objectives C) link between a company's products and processes D) structure of the industry in which it competes

D

The pushback against democracy has powered a rise in totalitarianism, a situation that is likely to include which of the following? a. increasing adoption of the principles of the rule of law b. suppression of state control in the direction of legal activities c. growing demands worldwide for greater fairness and justice in legal proceedings d. increasing adoption of the principles of the rule of man

D

The term "________ culture" describes a country in which the norm is a money-and-things orientation and a belief that it's better to "live to work" than to "work to live." a. high femininity b. physiological c. non fatalistic d. high masculinity

D

When the pressure for global integration is high and the pressure for local responsiveness is low, a company is most likely to pursue a(n) ________ strategy. A) global B) transnational C) multidomestic D) international

D

Which of the following is NOT affected by the Foreign Corrupt Practices Act? A) companies registered in the U.S. B) foreign firms operating in U.S. territory C) foreign firms quoted on a U.S. stock exchange D) foreign companies managed by U.S. expatriates

D

Which of the following is permitted by the Foreign Corrupt Practices Act? A) a bribe paid by foreign firms operating in U.S. territories B) a bribe paid by U.S. firms operating in a foreign country that permits bribes to be paid C) a payment to a foreign government official to influence a customs official D) a payment to a customs official to clear legitimate merchandise

D

Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the most attention? A) safe and hygienic working conditions B) reasonable living wages C) inhumane treatment D) child labor

D

_______ are the two basic strategies for creating value and attaining a competitive advantage in an industry. A) Diversification and niche marketing B) Industry leadership and market dominance C) Customer satisfaction and product innovation D) Cost leadership and differentiation

D

Which of the following accurately identifies a difference between GATT and the WTO? A) GATT could enforce member compliance with agreements, but the WTO cannot. B) At its inception, GATT had more member nations than the WTO currently has. C) GATT withdrew the most-favored-nation clause, but the WTO reinstated it. D) GATT rules did not cover trade in services, but the rules of the WTO do.

D) GATT rules did not cover trade in services, but the rules of the WTO do.

Country A and Country B make an agreement to cooperate more closely and implement tariff reductions. Which of the following best describes this agreement? A) double commodity integration B) multilateral integration C) regional integration D) bilateral integration

D. Bilateral integration

______ political risks arise from political actions, such as public corruption or a partisan judicial system, that interfere with transaction between sellers and buyers and that can significantly raise the costs of getting things done. a. systemic b. catastrophic c. distributive d. procedural

D. Procedural

The distinguishing feature of political ideologies along the political spectrum is ________, with some emphasizing its primacy and others opposing it. a. capitalism b. socialism c. liberalism d. freedom

D. freedom

Why do organizations engage in international business? All of the following apply except _________ -Expanding sales when domestic market isn't enough. -Acquiring resources such as products, services, components. -Getting rid of unwanted manufacturing byproducts. -Risk reduction.

Getting rid of unwanted mfctg byproducts

What is UNCTAD?

The UN Conference on Trade and Development - focus on brings developing countries into the world economy through trade, investment, transfer of knowledge.

In a(n) ________ culture, people tend to regard seemingly peripheral information as pertinent to decision making and infer meanings from things that people say either indirectly or casually. a. high context b. idealistic c. pragmatic d. fatalistic

a. high context

Recently, the Economist Intelligence Unit investigated the status of democracies around the globe. Relying on 60 indicators that focus on the performance of free elections, civil liberties, government functioning, political participation, and political culture in a country, the study found that ________.

nearly half of the worlds democracies qualify as full or flawed