IBA 250 Final CHAPTER 6,7,8,11,13,16

Which best describes the effect of import​ licenses?

A.

Because of their​ cost, import licenses discriminate against smaller firms.

B.

With import​ licenses, companies can hide profits from sales in overseas markets.

C.

Import licenses allow companies to combine overseas and domestic profits.

D.

Import licenses allow companies to customize their sales to overseas customers.

E.

With import​ licenses, companies can share earnings accrued in overseas markets.

A. Because of their cost, import licenses discriminate against smaller firms

Why would a nation choose to be a member of an economic​ bloc?

A.

It is easier to reach an agreement on free trade with a few nations rather than with numerous countries.

B.

An economic bloc imposes restrictions on labor.

C.

An economic bloc imposes restrictions on the​ cross-border flow of products.

D.

Nations can pursue economic integration by reducing tariffs.

Your answer is not correct.

E.

A nation can then become part of the World Trade Organization.

A. It is easier to reach an agreement on free trade with a few nations rather than with numerous countries

​________ refer(s) to national economic policies that restrict free trade and protect domestic industries from foreign competition.

A.

Non-tariff trade barriers

B.

Tariffs

C.

Quotas

D.

Customs

E.

Protectionism

E. Protectionism

​A(n)________ is a designated location within a country that receives imported goods for assembly and then​ re-exports finished products.

A.

economic bloc

B.

regional bloc

C.

assembly zone

D.

political union

E.

foreign trade zone

E. Foreign Trade Zone

USMCA and its​ predecessor, NAFTA,​ ________.

A.

do not offer dispute settlement for labor issues

B.

ultimately have decreased market access within the​ Canada, Mexico, and the United States bloc

C.

have caused a reduction in U.S. exports to Canada and Mexico

D.

implemented tariffs for services traded in the​ bloc, although tariffs on goods were reduced

E.

established uniform customs procedures and regulations

E. Established uniform customs procedures and regulations

Regional integration leads to increased​ ________ by firms inside their economic bloc.

Question content area bottom

Part 1

A.

dumping

B.

costs

C.

localization

D.

isolation

E.

internationalization

E. Internationalization

Which of the following coordinates​ economic, social, and cultural affairs among​ Bahrain, Kuwait,​ Oman, Qatar, Saudi​ Arabia, and the United Arab​ Emirates?

A.

Association of Southeast Asian Nations​ (ASEAN)

B.

European Free Trade Association

C.

Asia Pacific Economic Cooperation​ (APEC)

D.

MERCOSUR

E.

The Gulf Cooperation Council​ (GCC)

E. The Gulf Cooperation Council (GCC)

Which of the following is an example of protectionism used to support local​ businesses?

A.

Governments advertise to their citizens to buy​ high-quality products made all over the world.

B.

Governments advertise industry products made from artisans who are from their country.

C.

Governments offer loans to local companies to produce items for sale in local markets.

D.

Governments institute trade barriers on foreign imports to let​ young, domestic firms gain market share.

E.

Governments offer discounts to citizens on surplus items that the government sells.

D. Governments institute trade barriers on foreign imports to let young, domestic firms gain market share

Which is NOT an advantage of regional​ integration?

Question content area bottom

Part 1

A.

Improve global stature for individual bloc countries

B.

Enhanced productivity

C.

The ability to attract outside direct investment

D.

Expanded market size

E.

Economies of scale

A. Improve global structure for individual bloc countries

Which type of government intervention is designed to attract foreign companies to invest in a​ host-country market?

A.

Investment incentives

B.

Countervailing duties

C.

Dumping

D.

Tariffs

E.

Currency controls

A. Investment incentitives

If a government wants to encourage manufacturers to produce in the domestic​ market, they can implement​ _____.

A.

local content requirements

B.

ownership restrictions

C.

technical standards

D.

tariffs

E.

quotas

A. Local content requirements

The second level of regional integration is​ a(n) ________.

Question content area bottom

Part 1

A.

free trade area

B.

economic union

C.

free trade zone

D.

customs union

E.

common market

D.

The United States blocks exports of nuclear and military technology to nations considered state sponsors of​ terrorism, such as Iran and Syria. This is an example of which defensive motive by the U.S.​ government?

A.

National culture

B.

National identity

C.

Protection of the​ nation's economy

D.

National security

E.

Protection of an infant industry

D.

Which statement about free trade zones​ (FTZs) is​ TRUE?

A.

Firms use FTZs to manage inventory finished products only.

B.

FTZs can impose import tariffs on​ parts, components, or finished products.

C.

Firms use FTZs to manage inventory of​ parts, components, or finished products.

D.

Products in a FTZ are subject to​ duties, taxes, or quotas until they enter​ non-FTZ commercial territory.

E.

FTZs exist in fewer than 75 countries in the world.

C.

Which type of trade intervention allows early importers to enjoy a monopoly situation and enables them to charge higher​ prices?

A.

Quotas

B.

Administrative procedures

C.

Local content requirements

D.

Ownership restrictions

E.

Tariffs

A.

A government policy or procedure that restricts trade through means such as quotas is known as​ a(n) ________.

A.

import license

B.

import control

C.

nontariff trade barrier

D.

currency control

E.

export control

C. Non tariff trade barrier

TDC Industries is an American company with significant sales in Europe. Why would it be advantageous for TDC Industries to establish operations in​ Germany?

A.

TDC Industries would be able to expand its presence in a market of nearly 100 million buyers.

B.

TDC Industries could reduce its export expenses to the United States.

C.

TDC Industries could take advantage of​ EU-USMCA trade benefits.

D.

TDC Industries would gain access to a large part of the​ EU, but not all of it.

E.

TDC Industries would have free trade access to all EU markets.

E.

Which of the following was NOT a step taken by the European Union​ (EU) in becoming an economic​ union?

A.

Removal of barriers to​ cross-national investment

B.

Elimination of customs procedures and regulations

C.

Creation of rules of origin favoring​ non-EU manufacturing inputs

D.

Elimination of tariffs and most nontariff barriers

E.

Harmonization of technical​ standards, regulations, and enforcement procedures

C.

Which strategy would NOT be beneficial for a firm facing high​ tariffs?

A.

FDI

B.

Partnering with a company in the local target market

C.

Exporting

D.

Joint ventures with a local firm

E.

Licensing to a local firm

C. exporting

Which of the following statements BEST describes the European Union​ (EU)?

A.

Trade among the EU members takes place unobstructed.

B.

The EU is a political union with the same laws throughout.

C.

Labor and capital are unable to move freely among the EU members.

D.

The EU is comprised of 27 countries from Western Europe.

E.

Multiple currencies make trade easier for firms doing business within the EU.

A.

The World Bank has published an index entitled Ease of Doing Business. A country characterized by​ _____ is typically easier to do business in.

A.

limited enforcement of contracts

B.

a simplified regulatory environment

C.

currency controls

D.

severe poverty

E.

ownership restrictions

B. Simplified regulatory environment

Qatar​ Airways, Etihad​ Airways, and Emirates Airline have all received government subsidies. How do critics view these​ subsidies?

A.

They support an infant industry.

B.

They promote a more competitive business environment.

C.

They effectively raise operating costs for recipients.

D.

They give unfair advantages to recipients..

E.

They comply with free trade agreements.

D. they give unfair advantages to recipients

What ethical concerns do government intervention and trade barriers raise for developing​ economies?

A.

Trade barriers can protect jobs in born global industries.

B.

Trade barriers can create new jobs and protect​ young, domestic industries.

C.

Governments can pay to retrain workers to upgrade their job skills.

D.

Subsidies can offset the harmful consequences that affect the poor.

E.

Tariffs on poor countries are often far higher than those faced by richer countries.

E.

Which of the following statements about the General Agreement on Tariffs and Trade​ (GATT) is​ untrue?

A.

Under​ GATT, trade concessions were made on a​ country-by-country basis.

B.

The GATT introduced the concept of normal trade relations with trading partners.

C.

The GATT was succeeded by the World Trade Organization​ (WTO).

D.

The GATT was the first major attempt to reduce trade barriers globally.

E.

Under​ GATT, nations agreed to extend tariff reductions outlined in a treaty with a trading partner to all other countries.

A.

You are considering opening a maquiladora. How will this benefit your sales to your U.S.​ customers?

A.

You can bring American workers over the border to work in the plant.

B.

You can pay reduced taxes while inside the borders of the foreign country.

C.

You can avoid export quotas that Mexico would otherwise place on foreign companies.

D.

You can capitalize on​ Mexico's lower cost labor.

E.

You can capitalize on special trade credits offered by the United States.

D.

A(n) ________ is a group of official institutions that constitute a government.

A.

political system

B.

mixed economy

C.

market economy

D.

extraterritoriality

E.

legal system

A. political system

Which of the following is NOT a key strategy to combat export price escalation​ abroad?

A.

Qualifying for lower tariffs by reclassifying products and components

B.

Outsourcing production to a country with a higher standard of living and higher wages

C.

Transporting unassembled products to​ free-trade zones where import costs are lower

D.

Using a shorter distribution channel to avoid the cost of multiple intermediaries

E.

Removing costly features of a product through redesign for developing countries

B. outsourcing production to a country with a higher standard of living and higher wages

An international technology company is deciding how to utilize its advertising budget for the year. Which of the following is the best​ option?

A.

Spend the budget on transit ads

B.

Focus on Internet and radio ads

C.

Hire a global advertising agency

D.

Use the same campaign as in their home country

E.

Spend the budget on television and print ads

C.

The strength of a global brand is measured by​ ________.

A.

brand standardization

B.

market segmentation

C.

global positioning

D.

a global marketing strategy

E.

brand equity

E. brand equity

Which of the following are environmental conditions that influence a​ firm's product​ development?

A.

Internal distribution factors

B.

International marketing communication factors

C.

Global branding factors

D.

Cultural and financial factors

E.

Target customer segments and positioning factors

D. Cultural and financial factors

Which statement about international promotional activities is​ TRUE?

A.

Promotions are intended to stimulate​ first-time purchases.

B.

Promotions are​ long-term marketing efforts to improve profitability.

C.

The distribution of coupons is legal in all countries.

D.

Greece restricts all promotional activities.

E.

Norway has no restrictions on promotional activities.

A. Promotions are intended to stimulate​ first-time

Which of the following is NOT a benefit of​ standardization?

A.

Global brand establishment

B.

Cost savings

C.

More control over​ value-added products

D.

Compliance with local regulations

E.

Improved ability to plan

D. Compliance with local regulations

​________ refers to making the marketing program elements uniform with a view to targeting entire​ regions, or even the global​ marketplace, with the same product or service.

A.

International pricing

B.

Product development

C.

Standardization

D.

Global branding

E.

Adaptation

C. Standardization

​________ refer(s) to the legal importation of genuine products into a country by intermediaries other than authorized distributors.

A.

Global account management

B.

Market segmentation

C.

Vertical integration

D.

Gray market activity

E.

Horizontal importation

D. Gray Market Activity

________ means serving a key international customer in a consistent and standardized​ manner, regardless of where in the world it operates.

A.

Positioning

B.

Marketing promotion

C.

Global account management

D.

Global retailing

E.

Product adaptation

C. Global account management

Taylor is looking for a hotel in England. While a frequent traveler in the United​ States, this is​ Taylor's first trip outside the country. Taylor is most likely to choose​ _______.

A.

a youth hostel

B.

a large American chain hotel

C.

a local boutique hotel with just two other locations in the country

D.

a European branded hotel with locations elsewhere in Europe

E.

a cute bed​ & breakfast

B. a large American chain hotel

A U.S. liquor company is establishing a distribution chain for stores across several international markets. The company wants to ensure close control over marketing activities. Which of the following is best for this company and​ why?

A.

It should use independent intermediaries because this allows monitoring of employee performance.

B.

It should use direct marketing because this allows the firm to stay close to the market.

C.

It should use independent intermediaries because they move the product through customs and foreign distribution.

D.

It should use foreign direct investment because this allows the firm to stay close to the market.

E.

It should use foreign direct investment because it is the most​ cost-effective.

D. It should use foreign direct investment because this allows the firm to stay close to the market.

A large cosmetics company is looking to break into international markets. What strategy should the company pursue to achieve this​ goal?

A.

It should have various national brands.

B.

It should spend as much on advertising as possible.

C.

It should establish an inexpensive distribution chain.

D.

It should imitate its​ competitors' strategy.

E.

It should develop a global brand.

E. It should develop a global brand.

What is the main disadvantage of foreign direct​ investment?

A.

Being unable to monitor employee performance

B.

Lacks control over distribution activities

C.

Requires costly investments

D.

Having little contact with the market

E.

Lacks control over marketing activities

C. requires costly investments

An Italian exporter of designer clothes who sells products in the United States has gained a price advantage because the euro is weakening in relation to the dollar. What is a good strategy for dealing with this​ situation?

A.

Accentuate competitive strengths in​ non-price elements of the​ exporter's marketing​ program, such as delivery

B.

Maintain​ foreign-earned income in the​ customer's currency and delay collection of foreign accounts receivable

C.

Consider lowering prices by improving productivity or eliminating costly product features

D.

Maintain normal price​ levels, expand the product​ line, or add more costly features

E.

Concentrate exporting to those countries whose currencies have not weakened in relation to that of the exporter

D. Maintain normal price​ levels, expand the product​ line, or add more costly features

Which of the following BEST describes the role of an​ intermediary?

Question content area bottom

Part 1

A.

Creates a sales outlet in a domestic market

B.

Establishes marketing subsidiaries in target markets

C.

Moves products through a distribution channel to a retailer

D.

Establishes business overseas using FDI

E.

Exports products abroad

C. Moves products through a distribution channel to a retailer

When​ Coca-Cola began to sell beverages in​ Japan, research showed that products labeled​ "diet" were unappealing to the​ Japanese, a population not considered obese. The company changed the name to Coke Light. This is an example of positioning according to​ ________.

A.

market size

B.

attributes that consumers associate with a product

C.

a global market segment

D.

global standardization

E.

gray market activities

B. attributes that consumers associate with a product

Which of the following​ determine(s) the nature of international marketing​ communications?

A.

Distribution chains

B.

Transfer pricing

C.

Promotional activity

D.

Gray market activity

E.

Media availability and quality

E. Media availability and quality

An upscale hotel chain is developing a global marketing strategy to expand into foreign markets. Which market segment should be​ targeted?

Question content area bottom

Part 1

A.

Frequent business travelers

B.

Young people

C.

Entire Asian and European countries

D.

Senior citizens

E.

​Middle-class families

A. Frequent business travelers

When entering international​ markets, managers should pursue a strategy that​ ________.

Question content area bottom

Part 1

A.

seeks local responsiveness and international integration

B.

modifies all products for local markets

C.

avoids adapted products in order to reduce costs

D.

uses English in standard advertising

E.

offers the same product features worldwide

A. seeks local responsiveness and international integration

________ is a group of customers who share similar characteristics across many national markets.

A.

global market segment

B.

An industrial cluster

C.

A nonhomogenous cluster

D.

A collaboration

E.

A partnership

A. global market segment

An international supermarket chain is opening stores in foreign markets. Which adaptation could be made to accommodate national​ preferences?

Question content area bottom

Part 1

A.

Using standardized promotions

B.

Adjusting the distribution chain

\\

D.

Adjusting prices for living standards

E.

Using advertisements written in English

C. Stocking local produce

Which of the following determines buyer attitudes toward​ advertising?

A.

Advertising budgets

B.

Media availability

C.

Culture

D.

Demographic research

E.

Laws

C. Culture

Which of the following is an internal factor that affects international​ pricing?

A.

​Management's market share expectations

B.

Competitor products

C.

Customer expectations

D.

Competitor prices

E.

Taxes and tariffs

A. Management's market share expectations

A firm can bypass traditional distribution channels by using​ ________.

A.

intermediaries

B.

fewer employees

C.

shorter channels of distribution

D.

direct marketing

E.

retail outlets

D. direct marketing

Which is NOT true of strong global​ brands?

A.

They enhance the​ firm's competitive advantage in global markets.

B.

They increase the efficiency of marketing programs.

C.

They enhance the​ firm's leverage with suppliers.

D.

They stimulate brand loyalty.

E.

They force the firm to lower prices.

E. They force the firm to lower prices.

Which of the following is a regional trade​ organization?

A.

International Monetary Fund​ (IMF)

B.

World Bank

C.

Organisation for Economic​ Co-operation and Development​ (OECD)

D.

United Nations Conference on Trade and Development​ (UNCTAD)

E.

European Union​ (EU)

E. European Union (EU)

Which of the following statements BEST describes​ socialism?

A.

Collective welfare outweighs individual welfare

B.

Wealth should be used primarily for profit rather than as a means of production.

C.

The government controls the​ attitudes, values, and beliefs of the citizens.

D.

Capital and wealth should be vested in the hands of individuals.

E.

Emphasis is placed on individual accomplishment and innovations.

A. Collective welfare outweighs individual welfare

Which of the following is NOT a strategy managers employ to manage country​ risk?

A.

Using protective legal contracts.

B.

Forming alliances with qualified local partners.

C.

Strictly adhering to ethical standards.

D.

Being transparent in financial reporting.

E.

Being proactive about environmental scanning

D. Being transparent in financial reporting.

​________ refers to the possibility of loss or adverse effects on company operations and profitability as a result of changes in a​ country's political​ and/or legal environment.

A.

Financial risk

B.

Country risk

C.

Social risk

D.

​Cross-border risk

E.

International risk

B. Country risk

Which of the following reflects the Foreign Corrupt Practices Act​ (FCPA)?

A.

FCPA criminal and civil penalties are minimal.

B.

Companies with securities listed in the United States are exempt from U.S. accounting provisions.

C.

Foreign firms can make payments to American firms while doing business in the United States.

D.

Bribes are an accepted way of doing business overseas.

E.

Firms are prohibited from offering bribes to foreign firms to obtain business.

E. Firms are prohibited from offering bribes to foreign firms to obtain business.

China's requirement that foreign telecommunications companies form joint ventures with local​ companies, rather than wholly own their investments in the​ country, is an example of​ _______.

A.

marketing and distribution laws

B.

a law on income repatriation

C.

contract law

D.

​e-commerce regulation

E.

controls on operating forms and practices

E. controls on operating forms and practices

Activists organized​ a(n) ________ of petroleum company BP following the oil spill in the Gulf of Mexico.

A.

boycott

B.

nationalization

C.

embargo

D.

sanction

E.

expropriation

A. boycott

What kind of government seizure compensates​ foreign-owned businesses?

A.

Boycotts

B.

Expropriation

C.

Embargoes

D.

Confiscation

E.

Sanctions

B. expropriation

​China's efforts to increase commercial activity by implementing land reforms and opening its​ markets, features typically associated with​ democracies, is an example of​ ________.

A.

stability within the social and economic hierarchy

B.

the growing movement toward socialism

C.

market forces determining economic activity

D.

an authoritarian regime evolving toward democracy and capitalism

E.

individual initiative and ambition

D. an authoritarian regime evolving toward democracy and capitalism

Which of the following participants is LEAST likely to transform a​ nation's political and legal​ system?

A.

Special interest groups that serve specific​ countries, industries, or causes

B.

The government or the public sector

C.

Supranational​ agencies, including the World Trade​ Organization, the United​ Nations, and the World Bank

D.

Regional trade​ organizations, including the European Union​ (EU), the North American Free Trade Agreement​ (NAFTA), and the Association of Southeast Asian Nations​ (ASEAN)

E.

Foreign MNEs

E. Foreign MNEs

Which of the following characterizes​ extraterritoriality?

A.

Limiting foreign investment that may affect national security

B.

Applying​ home-country laws to persons outside national borders

C.

Restricting the amount of net income firms can remit to home countries

D.

Revealing significant information about a​ firm's financial condition

E.

Requiring foreign investors to seek joint ventures with local firms

B. Applying​ home-country laws to persons outside national borders

Why should companies be concerned with special interest​ groups' (SIGs) access to government​ officials?

A.

SIGs limit intellectual property protection.

B.

SIGs influence elected officials who can change policy.

C.

SIGs exercise control over activities to prevent terrorism.

D.

SIGs do not represent small businesses.

E.

SIGs represent only one side of the political arena.

B. SIGs influence elected officials who can change policy.

Which of the following BEST characterizes a​ democracy?

A.

Collectivism

B.

State regulation of public and private behavior

C.

A planned economy

D.

Private property rights

E.

Lack of economic freedom

D. Private property rights

________ occurs when one party files a lawsuit against another.

A.

Arbitration

B.

Conciliation

C.

Mediation

D.

Litigation

E.

Reconciliation

D. Litigation

A political system can best be described as a set of formal institutions that​ _________.

A.

ensure stability based on laws

B.

initiate special interest groups

C.

establish norms and customs

D.

adjudicate civil and commercial disputes

E.

protect intellectual property

A. ensure stability based on laws

Your company currently does business in a foreign​ country, whose next leader could be an individual with much greater nationalistic views than the current leader. Why should your company be concerned about political events in the foreign​ country?

A.

Unfavorable developments in the domestic economy could lead to new conditions that require the company to protect its intellectual property.

B.

Shifting priorities in political parties might cause unfavorable government interference with domestic firms.

C.

Changes in the political climate might influence government interference in business​ practices, potentially putting existing trade agreements in jeopardy.

D.

Initiatives developed by local special interest groups could lead to domestic companies experiencing supply chain issues.

E.

Changes in the legal environment might influence the government to encourage​ cross-border collaborations.

C. Changes in the political climate might influence government interference in business​ practices, potentially putting existing trade agreements in jeopardy.

The United States has implemented trade sanctions on Iran and Syria. What is the purpose of​ sanctions?

A.

Sanctions show a voluntary refusal to engage in commercial dealings with a nation.

B.

Sanctions punish unwanted activities by foreign countries.

C.

Sanctions terminate contracts and create new laws that favor local firms.

D.

Sanctions typically lower prices for consumers.

E.

Sanctions involve the confiscation of property with no compensation.

B. Sanctions punish unwanted activities by foreign countries.

What is the basis of civil​ law?

A.

Codified rules

B.

Shariah law

C.

Rule of law

D.

Tradition

E.

Common law

A. Codified rules

Which of the following describes a legal system with clear rules that are publicly​ disclosed, enforced​ fairly, and respected by​ individuals, organizations, and the​ government?

A.

Religious law

B.

Civil law

C.

Mixed system

D.

Common law

E.

Rule of law

E. Rule of law

Firms that engage in environmental scanning​ _______.

A.

improve intellectual property protection

B.

reduce research and development costs

C.

evaluate accounting practices

D.

assess potential threats to the firm

E.

participate in a regional trading bloc

D. assess potential threats to the firm

Which of the following does NOT describe Islamic​ law, also known as shariah​ law?

A.

To comply with shariah​ law, financial institutions use a variant of international banking called Islamic finance.

B.

Islamic law is found principally in the Middle East and North Africa.

C.

The origins of Islamic law date back to Roman law and the Napoleonic Code.

D.

Followers of Islamic law are unlikely to differentiate between religious and secular life.

E.

Islamic law governs personal​ relationships, those between citizens and the government and those between people and a supreme being.

C. The origins of Islamic law date back to Roman law and the Napoleonic Code.

A huge MNE was the victim of creeping expropriation from a foreign government. Why is creeping expropriation ethically​ wrong?

A.

It takes place when MNEs decide to invest.

B.

It goes into effect while the MNE is planning to expand its operations in a country.

C.

It takes effect after the MNE improves product distribution throughout the country.

D.

It occurs before the MNE agrees to move its operations overseas.

E.

It occurs after an MNE makes large investments in a​ country's property and facilities.

E. It occurs after an MNE makes large investments in a​ country's property and facilities.

Which type of economic system is associated with​ authoritarianism?

A.

Mixed economy

B.

​Supply-and-demand economy

C.

Market economy

D.

Global economy

E.

Command economy

E. Command economy

​Asterix, a French theme​ park, spoke out against the French​ government's support for the creation of Disneyland Paris because Disney is an American company. This example shows that​ ________.

A.

the United Nations Conference on Trade and Development​ (UNCTAD) develops trade

B.

​host-country governments solicit foreign businesses

C.

foreign companies do not require government support when doing business in France

D.

rival domestic firms complain to their government when foreign firms receive governmental support

E.

governments regulate international business activity

D. rival domestic firms complain to their government when foreign firms receive governmental support

What is the basis of common​ law?

A.

Two or more legal systems operating together

B.

An​ all-inclusive system of laws that have been codified

C.

Religious​ beliefs, ethical​ codes, and moral values

D.

Three separate​ codes: commercial,​ civil, and criminal

E.

​Tradition, previous​ cases, and legal precedents

E. Tradition, previous​ cases, and legal precedents

Why is the middle class a good indicator of market potential in advanced​ countries?

A.

The job market is strong for middle class job seekers.

B.

​Middle-class households in advanced economies have little disposable income.

C.

The middle class is largely a stagnant group in advanced economies.

D.

​Middle-class individuals represent the largest proportion of households in advanced economies.

E.

The number of​ middle-class households in advanced economies is expected to surge.

D. Middle-class individuals represent the largest proportion of households in advanced economies.

Aggro Enterprises has been successful in Europe and is now attempting to enter emerging​ markets, notably in India and Indonesia. The company offers an​ easy-to-use website interface translated by experts into the local language and uses a customized interface for mobile phones.​ Nevertheless, sales have been flat. Which of the following characterizes the problem with​ Aggro's strategy?

A.

Fewer people in emerging markets have Internet access.

B.

Aggro has not received any local tenders to win consumer trust.

C.

Government restrictions prevent people from buying online.

D.

Emerging markets are mistrustful of mobile Internet strategies.

E.

Emerging markets already have competitive online businesses.

A. Fewer people in emerging markets have Internet access

By the year​ 2023, half of the​ world's middle class lived in​ ________.

A.

North America

B.

Australia

C.

South America

D.

Asia

E.

Europe

D. Asia

Which statement BEST explains why Unilever and​ P&G sell shampoo for 2 cents per​ mini-sachet in​ India?

A.

The firms can inexpensively test new product ideas in​ low-income countries.

B.

The firms realize that poverty weakens national governments.

C.

The firms can earn profits in emerging markets by offering products that meet local needs.

D.

Unrelenting poverty is present in emerging markets despite increased growth.

E.

Local entrepreneurs get just enough funding to start successful businesses.

C. The firms can earn profits in emerging markets by offering products that meet local needs.

How does a foreign firm benefit from partnering with a family​ conglomerate?

A.

A foreign firm can form close relationships with the local government.

B.

A firm can seek out local lobby groups to deal with infrastructure issues.

C.

A foreign firm can achieve economies of scale and avoid customizing products.

D.

A foreign firm can use standardized products.

E.

A foreign firm can increase the capital requirements needed for international transactions.

A. foreign firm can form close relationships with the local government.

Which statement about emerging markets is​ TRUE?

A.

It is estimated that the very little growth in world GDP will come from emerging markets.

B.

Emerging markets receive less than​ one-third of world FDI.

C.

Emerging markets represent less than​ one-third of world exports.

D.

Emerging markets now account for less than half of world GDP.

E.

Inexpensive labor and government support have spurred the growth of emerging markets.

E. inexpensive labor and government support have spurred the growth of emerging markets.

Which of the following is a risk associated with emerging​ markets?

A.

Tax incentives that attract foreign investment

B.

Political instability that is associated with weak legal frameworks

C.

National laws that protect intellectual property

D.

Simplified processes for licenses

E.

Administrative rules that facilitate business activities

B. Political instability that is associated with weak legal frameworks

Which of the following statements BEST describes economic progress in​ Africa?

A.

Trade and investment have remained stagnant in Africa.

B.

African unemployment is very low across the entire continent.

C.

Nigeria has faced a decline in oil revenue.

D.

Annual GDP is approaching 5 percent per year in some nations in Africa.

E.

There has been an outflow of foreign investment from Africa.

D. Annual GDP is approaching 5 percent per year in some nations in Africa.

Russell Steel is a contracting company with a focus on steel buildings. The company wants to transition from commercial work into more​ international, government-oriented projects. Which of the following is the best approach for Russell Steel to consider when pursuing projects for​ fast-growing international​ governments?

A.

New global challengers

B.

Family conglomerates

C.

Tenders

D.

Microloans

E.

Outsourcing

C. Tenders

Which of the following BEST describes a transition​ economy?

A.

A​ low-income country that has limited industrialization and low growth.

B.

A​ post-industrial country that has a high GDP.

C.

A market that has evolved from being centrally planned to being more liberalized.

D.

A​ post-industrial country that has a high​ per-capita income.

E.

A country in which private entities are rapidly being nationalized

C. A market that has evolved from being centrally planned to being more liberalized.

A large and highly diversified company that is privately owned is known as​ a(n) ________.

A.

outsourcing company

B.

global sourcing company

C.

emerging competitor

D.

family conglomerate

E.

new global challenger

D. family conglomerate

________ refers to the procurement of products or services from independent suppliers or​ company-owned subsidiaries located abroad for consumption in the home country or a third country.

A.

Outsourcing

B.

Onshoring

C.

Purchasing power parity

D.

Global sourcing

E.

Privatization

D. Global sourcing

________ is the transfer of industries from state ownership to​ non-public entities.

A.

Privatization

B.

Global sourcing

C.

Transition economy

D.

Modernization

E.

Outsourcing

A. Privatization

​________ provides​ small-scale financial services such as credit and loans that assist entrepreneurs in starting businesses in poor countries.

A.

The World Bank

B.

Purchasing power parity

C.

Privatization

D.

Microfinance

E.

A tender

D. Microfinance

Which of the following is NOT an advantage of forming an alliance with a​ well-qualified local company in a country that lacks a strong legal and political​ framework?

A.

Access to local market knowledge

B.

Access to key government contacts

C.

Opportunity to develop distributor networks

D.

Access to foreign market knowledge

E.

Opportunity to develop supplier networks

D. Access to foreign market knowledge

Which of the following is a characteristic of an advanced​ economy?

A.

Limited industrialization

B.

High infant mortality

C.

Stagnant productivity in many areas

D.

Debt levels that exceed GDP

E.

Few restrictions on international trade and investment

E. Few restrictions on international trade and investment

Toyota manufactures new models of cars that sell for​ $7,000 in​ low-income nations. For the Indian​ market, Toyota constructed a factory to achieve a 10 percent share of the Indian car market. These two examples illustrate that​ ________.

A.

Toyota lacked sufficient information about the Indian market

B.

Toyota standardizes its cars for advanced and emerging markets

C.

family conglomerates often have political influence

D.

family conglomerates play a huge role in emerging markets

E.

global firms must create innovative strategies to find success in emerging markets

E. global firms must create innovative strategies to find success in emerging markets

Outsourcing occurs when companies​ ________.

A.

transfer​ state-owned holdings to private concerns

B.

procure products or services from suppliers located abroad

C.

target the​ fast-growing middle class of emerging markets

D.

develop from emerging markets into global competitors

E.

use independent suppliers to complete​ value-chain activities

E. use independent suppliers to complete​ value-chain activities

A U.S.​ e-bike maker is switching to a supplier in Mexico. The​ e-bike maker thinks the switch will lead to significant cost savings and give the company an advantage over competitors. This is an example of​ _______.

A.

purchasing power parity

B.

targeting markets

C.

microfinancing

D.

submitting tenders

E.

global sourcing

E. global sourcing

Purchasing power parity​ (PPP) adjusts prices to​ ________.

A.

demonstrate how much of a good one can buy in a particular​ currency, such as the U.S. dollar

B.

take into account emerging markets that have recently doubled in share of world imports

C.

help procure products and services from suppliers or subsidiaries that operate abroad

D.

reflect the goods consumers can​ buy, as well as account for their currency and standard of living

E.

show how much income is held by an​ economy's middle class compared with its size

D. reflect the goods consumers can​ buy, as well as account for their currency and standard of living

Emerging markets have become target markets because​ ________.

A.

of rising growing demand from a newly affluent middle class

B.

the majority of individuals in emerging economies live in poverty

C.

the shrinking middle class in emerging markets implies a lower demand for consumer products

D.

the largest emerging markets have reduced their share of world imports in the last few years

E.

in some product​ categories, there is little demand in emerging markets

A. of rising growing demand from a newly affluent middle class

Which of the following characterizes the international division​ structure?

A.

Local managers handle operations in their geographic regions.

B.

A unit has the task of managing exports.

C.

The coordination of international operations is centralized.

D.

Decision making is organized according to functional​ activity, such as marketing.

E.

Operations are organized according to product lin

C. The coordination of international operations is centralized.

The​ ________ refers to an approach in which a firm views international business as separate​ from, and secondary​ to, its domestic business.

A.

multidomestic strategy

B.

multinational strategy

C.

home replication strategy

D.

global strategy

E.

transnational strategy

C. home replication strategy

________ is defined as the coordination of a​ firm's worldwide​ value-chain activities to obtain​ synergy, efficiency, and​ cross-fertilization.

A.

Global sourcing

B.

Global integration

C.

Collaboration

D.

Globalization

E.

Local responsiveness

B. Global integration