international business 9

Chapter 1: The shift toward a more integrated and interdependent world economy is referred to as a) economic integration b) economic interdependency c) globalization d) internationalization The correct answer is c. The merging of historically distinct and separate national markets into one huge global marketplace is known as a) global market facilitation b) cross-border trade c) supranational market integration d) the globalization of markets

The correct answer is d. Firms that are involved in international business tend to be a) large b) small c) medium-sized d) large, small, and medium-sized The correct answer is d. Which is not a factor of production? a) trade b) land c) capital d) energy The correct answer is a. The sourcing of good and services from around the world to take advantage of national differences in the cost and quality of factors of production is called a) economies of scale b) the globalization of production c) global integration d) global sourcing The correct answer is b.

Which organization is responsible for policing the world trading system? a) the International Monetary Fund b) the United Nations c) the World Trade Organization d) the World Bank The correct answer is c. What is the single most important innovation to the globalization of markets and production? a) advances in transportation technology b) the development of the microprocessor c) advances in communication d) the Internet The correct answer is b. Which of the following trends is true? a) the United States is accounting for a greater percentage of world trade than ever before ) the United States is accounting for a greater percentage of foreign direct investment than ever before c) the share of world trade accounted for by developing countries is rising d) the share of foreign direct investment by developing countries is declining The correct answer is c. Which of these is not a concern of anti-globalization protesters? a) globalization raises consumer income b) globalization contributes to environmental degradation c) globalization is causing a loss of manufacturing jobs in developing countries d) globalization implies a loss of national sovereignty The correct answer is a. Chapter 2:

A political system that stresses the primacy of collective goals over individual goals is called a) individualism b) collectivism c) a democracy d) a market economy The answer is B. _____ believe(s) that socialism can only be achieved through violent revolution and totalitarian dictatorship. a) communists b) social democrats c) social republicans d) Plato The answer is A. A form of government in which one person or political party exercises complete control over all spheres of human life and prohibits opposing political parties is a) a democracy b) a representative democracy c) totalitarianism d) socialism The answer is C. _____ is found in states where political power is monopolized by a party according to religious principles. a) tribal totalitarianism b) right-wing totalitarianism c) theocratic totalitarianism d) communist totalitarianism The answer is C. In which type of economic system are all productive activities privately owned? a) a mixed economy b) a command economy c) a representative economy d) a market economy The answer is D. Which type of law is based on tradition, precedent, and custom? a) civil law b) common law c) theocratic law d) contract law The answer is B.

Design and names by which merchants or manufacturers designate and differentiate their products are called a) trademarks b) copyrights c) patents d) name brands The answer is A. Which is not a primary determinant of a nation’s rate of economic development? a) its political system b) its economic system c) its geography d) its currency The answer is D. b) Buddhism c) Hinduism d) Confucianism The answer is c. The most widely spoken language in the world is a) Chinese b) Spanish c) Hindi d) English The answer is d. ______ focuses on how society deals with the fact that people are unequal in physical and intellectual capabilities. a) power distance b) individualism versus collectivism c) uncertainty avoidance d) masculinity versus femininity The answer is a. Chapter 4: All of the following except ____ contribute to unethical behavior by international managers.

a) Decision-making processes b) Leadership c) Personal ethics d) National culture The answer is d. According to ________, a company’s home-country standards of ethics are the appropriate ones to follow in foreign countries. ) the righteous moralist b) the naive immoralist c) the Friedman doctrine d) cultural relativism The answer is a. ________ recognize that human beings have fundamental rights and privileges which transcend national boundaries and cultures. a) Kantian ethics b) Utilitarian approaches c) Straw men d) Rights theories The answer is d. The _____ suggests that everyone is imagined to be ignorant of all his or her particular characteristics. a) tragedy of the commons b) veil of ignorance c) code of ethics d) the Universal Declaration of Human Rights The answer is b.

What is a company’s formal statement of ethical priorities called? a) Mission statement b) Code of ethics Chapter 3: Abstract ideas about what a group believes to be good, right, and desirable are called a) norms b) values c) folkways d) mores The answer is b. The basic social organization of a society is its a) culture b) social strata c) social structure d) caste system The answer is c. The group is the primary unit of social organization in a) Japan b) the United States c) Switzerland d) Mexico The answer is a.

Which of the following is not characteristic of individualism? a) individual achievement b) low managerial mobility c) low company loyalty d) entrepreneurial behavior The answer is b. Which religion promotes the notion that a moral force in society requires the acceptance of certain responsibilities called dharma? a) Islam c) Code of values d) Organizational culture The answer is b. Which is not an area where multinational firms are concerned about ethics? a) Human rights b) Trade regulations c) Environmental regulations d) Corruption The answer is b.

D) Related and supporting industries The answer is a. Chapter 6: When tariffs are levied as a fixed charge for each unit of a good imported, they are called a) Specific tariffs b) Ad valorem tariffs c) Tariff rate quotas d) Transit tariffs The answer is a. A ________ demands that some specific fraction of a good be produced domestically a) subsidy b) quota rent c) voluntary export requirement d) local content requirement The answer is d. Which of the following is not a political argument for government intervention? ) protecting jobs b) protecting infant industries c) protecting industries deemed important for national security d) protecting consumers from “dangerous” products

The answer is b. All of the following except _____ are key issues on the table at the Doha Round. a) Anti-dumping policies b) Protectionism in agriculture c) Intellectual property rights d) Infant industry protection The answer is d. Which theory suggests that in cases where there may be important first mover advantages, governments can help firms from their countries attain these advantages? ) The infant industry argument b) Strategic trade theory c) Comparative advantage theory d) The Leontief paradox The answer is b. What is the most common political reason for trade barriers? a) To protect infant industries b) Strategic trade policy c) To protect jobs d) To protect industries that are important for national security The answer is c. Chapter 5: All of the following theories advocated free trade except a) Mercantilism b) Comparative Advantage c) Absolute Advantage d) Hecksher-Ohlin The answer is a.

Which theory suggested that comparative advantage arises from differences in national factor endowments? a) mercantilism b) absolute advantage c) Heckscher-Ohlin d) comparative advantage The answer is c. Which theory suggests that as products mature the optimal production location will change? a) Mercantilism b) Comparative Advantage c) Absolute Advantage d) Product life-cycle The answer is d. Economies of scale and first mover advantages are important to which trade theory? a) Mercantilism b) Product life cycle c) New trade theory d) Comparative advantage The answer is c.

Porter’s diamond of competitive advantage includes all of the following except a) Factor endowments b) Demand conditions c) First-mover advantages d) Firm strategy, structure, and rivalry The answer is c. _________ refer to the nature of home demand for the industry’s product or service. a) Demand conditions b) Factor endowments c) Firm strategy, structure, and rivalry Chapter 7: The establishment of a wholly new operation in a foreign country is called A) an acquisition B) a merger C) a greenfield investment D) a multinational venture The answer is c.

The amount of FDI undertaken over a given time period is known as A) the flow of FDI B) the stock of FDI C) FDI outflow D) FDI inflow The answer is a. Most FDI is direct toward a) developed countries b) emerging economies c) the United States d) China The answer is a. Advantages that arise from using resource endowments or assets that are tied to a particular location and that a firm finds valuable to combine with its own unique assets are a) First mover advantages b) Location advantages c) Externalities d) Proprietary advantages The answer is b.

Benefits of FDI include all of the following except a) The resource transfer effect b) The employment effect c) The balance of payments effect d) National sovereignty and autonomy The answer is d. Which of the following is not a cost of outward FDI for host countries? a) the initial capital outflow required to finance the FDI b) when FDI is a substitute for direct exports c) gains from learning valuable skills from foreign markets d) the effect on employment is FDI is a substitute for domestic production The answer is c.

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