Global business

Today's global markets are largely industrial and material goods that really meet world demand; consumer products play a secondary role.

A.True

B.False

A.True

_____________________ is when a firm invests resources in business activities outside its home country.

A.Capital intensive investment

B.Overseas selective borrowing

C.Venture capital development

D.Foreign direct investment

D.Foreign direct investment

Large multinational companies, because of their available resources, constitute the majority of U.S. exporting firms over midsize or small companies.

A.True

B.False

B.False

Which of the following is NOT one of the four major factors that help the U.S. to continue to hold competitive advantages over other national players for global market share?

A.the reputation of U.S. graduate schools of business and management

B.the U.S. dominance in direct foreign investment

C.the dominance of U.S. multinational corporations on the international business scene

D.the U.S. dominance in trade and commercial diplomacy which few nations can compete

A.the reputation of U.S. graduate schools of business and management

Which of the following is the oldest institution to maintain order in the international monetary system?

A.United Nations (UN)

B.International Monetary Fund (IMF)

C.World Trade Organization (WTO)

D.General Agreement on Tariffs and Trade (GATT)

B.International Monetary Fund (IMF)

"Drivers of Globalization" refer to financial and innovative multinational firms seeking new markets for investment or market growth in today's world market system.

A.True

B.False

B.False

National sovereignty concerns raised by critics of globalization include:

A.

trade is becoming more complex and requires expertise and experience of market leaders like the U.S.

B.

development is so fundamentally important to poorer countries that their national sovereignty concerns cannot be allowed to stand in the way of the interests of the world business community as a whole.

C.

unelected bureaucrats now impose policies on democratically elected governments of nation-states.

D.

supranational organizations like the WTO should be given powers to enforce agreements once a majority of countries agree to the agreements.

C.

unelected bureaucrats now impose policies on democratically elected governments of nation-states.

Containerization refers to the process and packaging of goods, which has been a revolution in transportation technologies resulting in greater efficiencies and scales of economy.

A.

True

B.

False

A.

True

If China's rapid rise continues, it could soon become the world's largest economy and the world's largest exporter.

A.

True

B.

False

A.

True

Which of the following is NOT true about employment and income in the face of continuing globalization:

A.

The wage gap between developed and developing nations is closing.

B.

Recent evidence suggests that technological change had has a bigger impact on globalization on the declining share of national income enjoyed by labor.

C.

Real labor compensation has declined in most developed nations since the 1980s, including for the U.S.

D.

The solution to stagnant incomes among the unskilled is not in limiting free trade but increasing society's investment in education to reduce the supply of unskilled workers.

C.

Real labor compensation has declined in most developed nations since the 1980s, including for the U.S.

Globalization of markets recognizes the importance of historically distinct and separate national markets as being more important that one huge global marketplace.

A.

True

B.

False

B.

False

_____________________ is (are) the sourcing of goods and services from locations world-wide in seeking advantage of national differences and a form of competitive advantage.

A.

Factors of production

B.

Distribution of production

C.

Globalization of production

D.

Dominance of production

C.

Globalization of production

Which of the following reflects the trends of the global economy in the 21 st Century?

A.

Globalization is not inevitable.

B.

The skill, scope and authority of world institutions mean global financial shocks and challenges to global business systems will be mild and short-lived and will eventually disappear.

C.

There will be little change in the current leaders in world trade.

D.

The adoption of liberal economic policies will likely continue everywhere throughout the world because of their undeniable success.

A.

Globalization is not inevitable.

Some 40 countries, home to about 700 million people, produce a collective economic drag on the global economy to the point where rich nations must intervene at increasingly larger rates of economic assistance. These ________________________ share government debt equivalent to 85% of their economy's total value.

A.

deeply impoverished countries

B.

highly indebted poorer countries

C.

marginalized economic developing nations

D.

emerging struggling poorer nations

B.

highly indebted poorer countries

A number of economic studies predict that as income levels rise, so do pollution levels; this is known as a ___________________________ because of growth to resource waste ratios until greater environmental protections take hold and reverse the pollution side of the equation.

A.

hump-shaped relationship

B.

upward sloping projection

C.

cost-push demand curve

D.

evolutionary "J" curve

A.

hump-shaped relationship

Managers of firms engaged in international business must focus on increasingly complex management issues, due to:

A.

differences among countries.

B.

international protests.

C.

differences in currencies.

D.

different foreign languages.

A.

differences among countries.

Antiglobalization is resistance on the part of activists and national leaders who see "globalization" as a cultural, ecological, economic and social disaster spearheaded by aggressive multinationals and powerful foreign governments with agendas of their own.

A.

True

B.

False

A.

True

The stock of foreign direct investment has become one of the most actively traded securities in world financial markets, including the New York Stock Exchange.

A.

True

B.

False

B.

False

For approximately the last half century, two important trends have been the rise of non-U.S. multinational firms and the growth of mini-multinational enterprises.

A.

True

B.

False

A.

True

Globalization refers to the shift toward a more integrated and interdependent world economy.

A.

True

B.

False

A.

True

Totalitarianism is a political system in which one person or political party exercises absolute control and prohibits other political parties. Four types are usually recognized:

A.

Left-wing, theocratic, tribal and right-wing.

B.

Communist, theocratic, industrial-military and right-wing.

C.

Communist, secular, tribal and right-wing

D.

Communist, theocratic, tribal and right-wing.

D.

Communist, theocratic, tribal and right-wing.

Which of the following is not one of the steps in a shift toward a market-based economic system?

A.

Deregulation

B.

A stable price of petroleum and other natural resources

C.

Privatization

D.

The creation of a legal system to safeguard property rights

B.

A stable price of petroleum and other natural resources

Intellectual property, for example, patents, copyrights and trademarks, are generally protected by law in the vast majority of countries, but enforcement is not uniform.

A.

True

B.

False

A.

True

Terrorism remains a significant threat and issue for governments, but it has little impact on international business.

A.

True

B.

False

B.

False

Which of the following is not true about Gross National Income (GNI)?

A.

GNI is the only reliable and accurate way to compare countries' economic.

B.

GNI measures the total annual income received by residents of a nation.

C.

GNI per person figures can be misleading because they don't consider differences in the cost of living.

D.

Different countries have different levels of economic activity, and GNI is a way to measure economic development.

A.

GNI is the only reliable and accurate way to compare countries' economic.

In Islamic countries usury or interest on money presents no problem for international banks or individuals so long as no one cheats or fails to make good on usury payments.

A.

True

B.

False

B.

False

Which of the following is not one of the three broad types of economic systems:

A.

Market economy

B.

Entrepreneurial economy

C.

Command economy

D.

Mixed economy

B.

Entrepreneurial economy

Collectivism shapes any political system regardless of democratic or totalitarian governing institutions if the primacy of collective goals is the norm over individual goals.

A.

True

B.

False

A.

True

The legal system which relies on tradition, precedent and custom is known as the:

A.

standard international system.

B.

theocratic system.

C.

common law system.

D.

civil law system.

C.

common law system.

While democracy has spread throughout the world in the past 15 years, the number of democracies actually decreased from 2006 to 2007.

A.

True

B.

False

A.

True

Early entrants to a market are called:

A.

smart businesspeople.

B.

insider traders.

C.

practicing promoters.

D.

first movers.

D.

first movers.

Economic risks are the most important basis for planning any business venture offshore because money is always at stake and must be taken into consideration.

A.

True

B.

False

B.

False

Entrepreneurs are engines of business transformation because:

A.

they invest in established, thriving businesses anywhere.

B.

they work well with lawyers and investors to promote business at home or abroad.

C.

they first commercialize innovative new products or services, thus giving any economy much of its dynamism.

D.

they manipulate markets and consumers better than economists

C.

they first commercialize innovative new products or services, thus giving any economy much of its dynamism.

The U.S. Foreign Corrupt Practices Act makes it illegal for foreign businesses to bribe American officials or executives rather than the other way around.

A.

True

B.

False

B.

False

Despite the different kinds of legal systems, the UN Convention on Contracts for the International Sale of Goods (CIGS) has created a language and terms for international trade used by companies in all countries.

A.

True

B.

False

B.

False

The UN has developed a Human Development Index (HDI) to compare the quality of life in nations, using criteria of life expectancy, education attainment and whether average incomes meet basic needs of life.

A.

True

B.

False

A.

True

Purchasing power parity refers to:

A.

adjusting gross domestic product per capita to reflect differences in the cost of living for each country.

B.

the amount of annual income the average individual makes in each country.

C.

the difference between individual's earnings within each country.

D.

the total income each country produces.

A.

adjusting gross domestic product per capita to reflect differences in the cost of living for each country.

The term "intellectual property" refers to:

A.

the leading business text on artistic creativity.

B.

the product(s) of any intellectual activity.

C.

the theory that you can invest, own, sell, or trade any material good.

D.

a patent, copyright, or trademark.

B.

the product(s) of any intellectual activity.

Managers need to be concerned with legal risks regarding outside foreign trading partners because:

A.

they can be sued for lack of due diligence by their trading partner.

B.

they might find foreign courts difficult to lodge legal complaints with for recovery and relief against their trading partner.

C.

they must hire local attorneys to protect their interests and those of their trading partners.

D.

they can face the likelihood that a trading partner will opportunistically break a contract or steal property rights.

D.

they can face the likelihood that a trading partner will opportunistically break a contract or steal property rights.

The term "political economy" refers to the interdependencies of political, economic, and legal systems of a country, and how their interactions and influences on one another affect the level of economic well-being.

A.

True

B.

False

A.

True

Cross-cultural literacy explains why people wear blue jeans, eat American fast food, drink Coca Cola and love Hollywood.

A.

True

B.

False

B.

False

The British are famous for their historically class-based definition of social membership; these divisions are only recently overcome in business between management and labor for Britain to be competitive globally. In fact, British business relations between managers and employees are less adversarial than is the case for America as "class-based" distinctions recedes.

A.

True

B.

False

B.

False

Culture is pervasive, and scholars agree on its definition and implications.

A.

True

B.

False

B.

False

The Confucian ethic is central to the Chinese concept of guanxi, which refers to the relationship networks supported by reciprocal obligations.

A.

True

B.

False

A.

True

One of the defining characteristics of any culture is ______________ because it is primary to acquiring that culture in the first place.

A.

history

B.

literature

C.

language

D.

religion

C.

language

_____________ may be defined as a system of shared beliefs and rituals that are concerned with the realm of the sacred.

A.

Ethical systems

B.

Culture

C.

Religion

D.

Values

C.

Religion

The connections between culture and competitive advantage are important because:

A.

culture is more important than economic, political and legal systems in explaining differing economic growth among nations.

B.

good manners and appreciation of cultural events are among the most important factors in international competition.

C.

where to locate facilities and develop markets may be profoundly affected by cultural factors and considerations.

D.

The internet has accelerated changes in culture, which will lead to reduced competition in countries with high internet usage.

C.

where to locate facilities and develop markets may be profoundly affected by cultural factors and considerations.

Class consciousness refers to a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationship with members of other classes.

A.

True

B.

False

A.

True

Hofsted's four original cultural dimensions are:

A.

Power distance, uncertainty avoidance, religious beliefs, and unspoken languages.

B.

Individualism versus collectivism, class mobility, masculinity versus femininity, and Confucian dynamism.

C.

Class consciousness, social mobility, ethical systems, and education levels.

D.

Masculinity versus femininity, uncertainty avoidance, power distance, and individualism versus collectivism.

D.

Masculinity versus femininity, uncertainty avoidance, power distance, and individualism versus collectivism.

Ethnocentrism:

A.

is also known as the "ugly American" phenomenon because individuals in other countries are not affected by it.

B.

is a belief in that one's own ethic group is superior.

C.

is a concern for anthropologists and only rarely is of concern to international businesses

D.

increases the more an individual learns about how other cultures work.

B.

is a belief in that one's own ethic group is superior.

The emphasis on wealth creation that is embedded in Protestantism is also found in Buddhism, which suggests that a Buddhist society may represent a fertile ground for entrepreneurial activity.

A.

True

B.

False

B.

False

Max Weber coined the term "Protestant work ethic" to explain why some Protestant Northern European countries were wealthier than some Catholic Southern European countries from the 16th century forward. Weber's assertions unfairly characterized highly motivated ascetic practitioners of _______________ in the world today as not having any entrepreneurial focus or work ethic because their faith was quite unlike his brand of Christianity.

A.

Buddhism

B.

Confucianism

C.

Hinduism

D.

Brahmanism

C.

Hinduism

Economists Robert Baro and Rachel McCleary argue that ______________ encourage economic growth because they sustain certain aspects of individual behaviors that lead to higher productivity:

A.

higher educational opportunities

B.

strong religious beliefs

C.

increased government investments

D.

entrepreneurial activities

B.

strong religious beliefs

Social mobility refers to individuals moving from one layer of society to another; while all societies share comparable social strata, they differ to the degree of mobility and significance attached to strata in doing business. In other words, Japan and America have their respective "ladders" and "weight" concerning stratification but differ in historical development.

A.

True

B.

False

A.

True

A society's social structure refers to its basic organization. Two important dimensions are first the primacy of the individual or group as the basic unit, and second the degree to which the society is stratified into classes or castes.

A.

True

B.

False

A.

True

Which of the following is NOT true about the impact of the emphasis on individual performance in the United States?

A.

There is a high degree of managerial mobility, which is not always a good thing.

B.

The dynamism of the US economy owes much to the philosophy of individualism.

C.

The emphasis on individuals makes team work more effective since individuals can develop effective division of labor and specialization.

D.

The emphasis on individualism may increase the costs of doing business due to the adverse impact on managerial stability and cooperation.

C.

The emphasis on individuals makes team work more effective since individuals can develop effective division of labor and specialization.

Nation-states are political creations and may contain a single culture or many different cultures.

A.

True

B.

False

A.

True

A murabaha contract is an agreement between a buyer and seller to pay for a good or service at the agreed upon price without interest. This arrangement permits extra charges for doing business like mark ups to be inserted so that both parties are satisfied with their bargain.

A.

True

B.

False

A.

True

Folkways help explain why Saudis have a different concept of time than Americans do because folkways are _________________:

A.

the norms of everyday life.

B.

the values of everyday life.

C.

the routine conventions of everyday life.

D.

the social rules of everyday life.

C.

the routine conventions of everyday life.

Which of the following is NOT true about cultural change?

A.

Most cultural change is revolutionary, based on sudden dramatic shifts and innovations.

B.

Values in the US toward women, love, sex and marriage are considerable different today than they were in the middle of the 20th century.

C.

Economic advancement and globalization may be important factors in societal change.

D.

Cultures of societies may change as they become richer.

A.

Most cultural change is revolutionary, based on sudden dramatic shifts and innovations.