international business midterm 1 (quiz 1&2 questions)

When companies systematically engage in increasing the international dimension of their business activities it is known as​ ________.

A.

foreign direct investment

B.

strategic alliances

C.

international investment

D.

international portfolio investment

E.

internationalization

internationalization

​________refers to the performance of trade and investment activities by firms across national borders. A.

International investment

B.

International business

C.

Foreign direct investment

D.

Exporting

E.

Global sourcing

international business

Which type of investment is the passive ownership of foreign securities for the purpose of generating financial​ returns? A.

Global sourcing

B.

International investment

C.

Foreign direct investment

D.

International portfolio investment

E.

Globalization

international portfolio investment

Carol wants to expand her recycled toy business abroad because demand for recycled products is much higher in Europe and Asia than in the United States. She locates three suppliers in Europe and three in​ Asia, and creates one factory in Germany and one in Singapore. She seeks ways to advance her machinery to meet the needs of her production as well as her​ eco-friendly business model. In what type of international business has Carol​ engaged?

A. Exporting

B. Importing

C. Outsourcing

D. Global sourcing

E. Foreign direct investment

Foreign direct investment

A macro trend of intense economic interconnectedness among the nations of the world is called​ ________.

A. collaboration

B. globalization

C. tourism

D. outsourcing

E. exporting

globalization

Which of the following would be a​ cross-cultural risk in​ internationalization?

A.

Poor execution of strategy

B.

Different protectionism laws

C.

Different international taxation

D.

Mismanagement of the economy

E.

Different languages

different languages

If a firm is operating in a foreign​ country, what type of risk does it face from the​ country's political,​ legal, and economic​ environment?

A.

Country risk

B.

Currency risk

C.

​Cross-cultural risk

D.

Commercial risk

E.

Communication risk

country risk

In international​ business, cross-cultural risk can come from differences in language and culture. Which statement best explains why language is an important aspect of​ culture?

A.

Laws and regulations can affect company operations.

B.

Culture can be easily modified by international businesses.

C.

Cultural misunderstandings can be cleared up by using English for business transactions.

D.

Language facilitates communication and sheds light on​ people's value systems.

E.

Miscommunications are easily overcome in the business environment.

language facilitates communication and sheds light on people's value systems

Custom​ Cars, a painting and auto modification​ company, has expanded operations into South America. The first problem Custom Cars encountered was determining the applicable laws in the new country.​ Next, Custom Cars was informed by the local mayor that the firm will be shut down if it does not prepay its taxes in cash. Which risk in international business is Custom Cars​ encountering?

A.

Currency risk

B.

Global risk

C.

​Cross-cultural risk

D.

Commercial risk

E.

Country risk

country risk

A U.S. mining operation opens a mine in Canada. The owner knows that it is easier and less expensive to acquire mining equipment in the​ Klondike, an area of​ Canada, than elsewhere. The owner of the mine goes to the Klondike and meets locals who offer to partner with him. Why is this miner seeking international​ business, and what type of risk is he​ taking?

A.

To develop economics of scale in​ marketing; country risk

B.

To confront international competitors more​ directly; cultural risk

C.

To gain access to less costly factors of​ production; commercial risk

D.

To invest in a potentially rewarding relationship with a foreign​ partner; currency risk

E.

To better serve customers that have​ relocated; currency risk

to gain access to less costly factors of production; commercial risk

Education and healthcare are two examples of​ _________ in international business.

A.

nongovernmental organizations

B.

born global firms

C.

small enterprises

D.

multinational enterprises

E.

​medium-sized enterprises

nongovernmental organizations

​Yemna, a recent business school​ graduate, loves​ adventure, so she is seeking a job in a foreign country to expand her sense of the world of business. She is being recruited by a company that has 50 employees and is looking to hire additional personnel to oversee the​ firm's exporting branch in Vietnam. What type of international business is recruiting​ Yemna?

A.

Born global firm

B.

​Medium-sized enterprise

C.

Small enterprise

D.

Multinational enterprise

E.

Nongovernmental organization

small enterprise

Pioneer Systems is a young entrepreneurial company that has engaged in international business from the day it opened its doors. Pioneer is categorized as a​ ________.

A.

multinational enterprise

B.

born global firm

C.

​medium-sized enterprise

D.

nongovernmental organization

E.

franchise

born global firm

A focal firm is a company that​ ________.

A.

arranges international shipping

B.

offers logistics services

C.

offers banking services

D.

initiates international business transactions

E.

provides marketing services

initiates international business transactions

​________ include ​businesses, institutions, and governments.

A.

Facilitators

B.

Organizational buyers

C.

Retailers

D.

Focal firms

E.

Individual consumers

organizational buyers

Why would firms internationalize to earn higher margins and​ profits?

A.

Unique foreign environments expose firms to new ideas for products.

B.

Firms move to serve clients relocating for higher profits.

C.

Market growth in mature countries is often​ flat, and foreign markets may be underserved.

D.

Foreign markets can extend the marketable life of products that have reached maturity at home.

E.

Firms can access labor and managerial talent at lower costs.

market growth in mature countries is often flat, and foreign markets may be underserved

India is entering the global age and has a growing middle class. An Indian car manufacturer wants to offer a car for the average citizen of​ India, but does not have the technology available to create an inexpensive car that meets the laws that the Indian government is considering imposing. The company sets out to find a U.S. hybrid and electric car manufacturer that is willing to work with them. Why would a U.S. firm most likely​ agree?

A.

To gain access to​ lower-cost or​ better-value factors of production

B.

To be closer to supply sources

C.

To take advantage of Indian scientists

D.

To decrease demand for its products

E.

To develop a network of people and increase business in the future

to develop a network of people and increase business in the future

Companies primarily internationalize for the purpose of​ ________.

Question content area bottom

Part 1

A.

gaining a competitive advantage

B.

decentralizing the corporate structure

C.

institutionalizing corporate processes

D.

downsizing the workforce

E.

centralizing supply chain operations

gaining a competitive advantage

What is the LEAST likely motive for international​ expansion?

A.

Seeking growth opportunities through market diversification

B.

Gaining flexibility in product sourcing

C.

Learning about a new culture

D.

Identifying innovative products and services

E.

Developing economies of scale in production and​ R&D

learning about a new culture

When Nissan opened its first factory in the United​ Kingdom, many Japanese auto parts suppliers​ followed, establishing their own operations there. This is an example of​ ________.

A.

using one marketing strategy for all markets

B.

developing economies of scale

C.

accessing​ capital, technology, managerial​ talent, and labor at lower costs

D.

better serving clients that have moved into foreign markets

E.

finding innovative strategies to develop new products

better serving clients that have moved into foreign markets

A business student in Texas is considering learning a foreign language. Why might she benefit from studying a language such as Russian or​ Chinese?

A.

They are simple languages to learn.

B.

Both Russia and China feature​ fast-growing economies.

C.

MBA degrees are more valuable if from Russia or China.

D.

Most business transactions are conducted in Russian or Chinese.

E.

The U.S. is avoiding doing business in Russia and China.

both russia and china feature fast-growing economies

Which of the following is NOT a reason to study international​ business?

Question content area bottom

Part 1

A.

International business contributes to economic prosperity.

B.

Global trade is a critical engine for job creation.

C.

International business provides an opportunity to support sustainability.

D.

Global markets are decreasing.

E.

International business is changing the world.

global markets are decreasing

Starbucks sells coffee from a nonprofit organization that promotes the interests of the coffee growers. Why is this example important to you as a student of international​ business?

Question content area bottom

Part 1

A.

It creates jobs.

B.

It demonstrates social responsibility and good environmental practices.

C.

It results in greater profits.

D.

It provides experience working with a nonprofit organization.

E.

It provides a competitive advantage in the global economy.

it demonstrates social responsibility and good environmental practices

Which of the following is a critical employability​ skill?

A.

Speaking a foreign language

B.

Knowledge of local currency

C.

Knowledge of local laws

D.

Cultural awareness

E.

A background in economics

cultural awareness

Faced with declining sales in the​ U.S, what strategy has Harley Davidson​ adopted?

A.

Smaller dealer networks.

B.

Support for sustainability efforts.

C.

Better skills for employees.

D.

A focus on foreign markets.

E.

A focus on domestic markets.

a focus on foreign markets

There have been five phases of globalization since the 1800s. The most current phase was triggered by​ ________.

A.

a focus on industrializing

B.

the growth of emerging markets

C.

the rise of digital technologies

D.

an increase in multinational enterprises

E.

increased steel production

rise of digital technologies

​________ refers to the gradual integration and growing interdependence of national economies.

Question content area bottom

Part 1

A.

A born global firm

B.

International investment

C.

Exporting

D.

Globalization of markets

E.

Internationalization

globalization of markets

Which of the following is a societal consequence of​ globalization?

Question content area bottom

Part 1

A.

Offshoring and the flight of jobs

B.

Integration and interdependence of national economies

C.

Worldwide reduction of barriers to trade

D.

New risks and intense rivalry from foreign competitors

E.

Growth of global investment and financial flows

offshoring and the flight of jobs

​________ is the sequence of​ value-adding activities performed to​ develop, produce,​ market, and service a product.

A.

Market reform

B.

Globalization of services

C.

A value chain

D.

A production line

E.

​Cross-border trade

a value chain

Which of the following is a likely cause of​ globalization?

Question content area bottom

Part 1

A.

Trade barriers have been added worldwide.

B.

Many emerging markets are now​ value-adding producers.

C.

The World Trade Organization has increased trade barriers.

D.

Countries have avoided adding​ free-market reforms.

E.

Developing economies lack competitive producers.

many emerging markets are now value-adding producers

Which of the following drivers of globalization has MOST helped change​ low-value-adding commodity producers to competitive​ producers?

A.

​Industrialization, economic​ development, and modernization

B.

Integration of world financial markets

C.

Advances in technology

D.

Reductions in barriers to trade

E.

Market liberalization

industrialization, economic development, and modernization

What is one reason why regional economic integration blocs have​ developed?

A.

Market liberalization

B.

​Free-market reforms

C.

Modernization

D.

Industrialization

E.

Decreased trade barriers

decreased trade barriers

​________ have opened up​ one-third of the world to increased international​ trade, including many Asian economies such as India and South Korea.

A.

Investment barriers

B.

Foreign currency transactions

C.

International commercial banks

D.

Free market reforms

E.

​Cross-border transactions

free market reforms

One of the tasks of the World Trade Organization​ (WTO) is to​ ________.

A.

raise capital

B.

liberalize markets

C.

facilitate a reduction in trade barriers

D.

integrate world financial markets

E.

advocate for advances in technology

facilitate a reduction in trade barriers

Advances in​ ________ have resulted in an expansion of the global marketplace for​ small- and​ medium-sized enterprises​ (SMEs).

A.

distribution

B.

transportation

C.

manufacturing

D.

communication technologies

E.

banking

communication technologies

​Nigeria's telecom infrastructure has increased telephone usage to over 30 million cellular subscribers. What is the most likely benefit Nigeria will realize from adding​ telephones?

A.

Improved living standards

B.

Decreased access to education and healthcare services

C.

Less fulfillment of social responsibilities

D.

Increased tourism

E.

A slowdown in productivity and commerce

improved living standards

What technology has had the greatest effect in developing​ economies?

A.

Mobile phones

B.

​Computer-assisted design of products

C.

Social media

D.

​E-mail

E.

The Internet

mobile phones

What is one reason companies use social media such as Snapchat and​ Twitter?

A.

To lessen the impact of globalization

B.

To restrict access to information

C.

To communicate with connected individuals in new markets

D.

To accelerate social movements like the Arab Spring

E.

To develop infrastructure

To communicate with connected individuals in new markets

Which of the following is NOT an economic integration​ bloc?

A.

North American Free Trade Agreement​ (NAFTA)

B.

European Union​ (EU)

C.

World Trade Organization​ (WTO)

D.

Mercosur

E.

Asia Pacific Economic Cooperation zone​ (APEC)

world trade organization

Globalization of services can be seen in the international expansion of​ ________.

A.

capital

B.

standardized parts and components

C.

the bond market

D.

the​ banking, hospitality, and retailing industries

E.

offshore manufacturing

banking, hospitality, and retailing industries

Why can many global products and services be​ standardized?

A.

Institutions such as the World Bank and the International Monetary Fund have reduced trade barriers.

B.

Consumers want products and services that fit their values.

C.

Global consumers can communicate about products using social media.

D.

Consumers want goods tailored to their local needs.

E.

There is a convergence of consumer lifestyles and preferences worldwide.

There is a convergence of consumer lifestyles and preferences worldwide.

Globalization has created rivalry between U.S. firms and foreign​ competitors, which has resulted in​ ________.

A.

more money in circulation in the United States

B.

price increases in the United States

C.

increased unemployment in the United States

D.

the quality of goods declining in the United States

E.

foreign cars outselling domestic cars in the United States

foreign cars outselling domestic cars in the United States

​________ takes place when a company delegates performance of a​ value-adding activity to a firm located abroad.

A.

Research and product development

B.

​After-sales service

C.

​Pricing, promotion, and selling

D.

Global outsourcing

E.

Distribution of the product in targeted markets

global outsourcing

What is one of the most typical reason for locating​ value-chain activities​ abroad?

A.

To be socially responsible

B.

To reduce the costs of​ R&D and production

C.

To develop new markets

D.

To raise the standard of living in developing nations

E.

To reduce globalization

to reduce the costs of r&d and production

In South​ Carolina, Jackson​ Mills, a longstanding textile​ plant, shut down and thousands of workers lost their jobs. Jackson Mills learned that it could source textiles of equal quality at a lower price from suppliers in Asia. This is an example of​ ________.

A.

conducting​ cross-border transactions

B.

accessing customers abroad

C.

relocating​ value-adding activities to achieve cost advantages

D.

establishing a factory abroad

E.

relocating to attract global customers

relocating value-adding activities to achieve cost advantages

Which of the following is NOT a​ firm-level consequence of market​ globalization?

A.

Greater emphasis on proactive internationalization

B.

Countless new opportunities for business

C.

New risks from foreign competition

D.

Internationalization of the value chain

E.

Offshoring and the loss of jobs

offshoring and loss of jobs

Contagion is​ ________.

A.

creating countless new jobs and opportunities around the world

B.

a major cause of​ pollution, habitat​ destruction, and deterioration of the ozone layer

C.

often criticized for generating low wages and exploiting workers

D.

the ability of a nation to govern its own affairs in global relation

E.

the tendency of a financial crisis in one country to spread quickly to other countries

the tendency of a financial crisis in one country to spread quickly to other countries

What is the effect of globalization on national​ culture?

A.

The prices of new products decline.

B.

Local values change to reflect global concepts.

C.

Local merchants experience a loss of business.

D.

Local consumers become familiar with global brands and previously unknown products.

E.

Global customers buy products over the Internet.

Local consumers become familiar with global brands and previously unknown products.

Globalization can threaten national sovereignty by interfering with a​ country's ________.

A.

values

B.

religious beliefs

C.

political system

D.

ability to enforce laws

E.

ability to control its own economy

ability to control its own economy

In​ Africa, the majority of people live on less than​ $5 a day. According to the author of the​ text, what is one of the most effective ways to reduce African​ poverty?

A.

Reduce the level of illiteracy

B.

Gain access to foreign capital

C.

Fight government corruption

D.

Develop more​ business-based models of development

E.

Develop commercial infrastructure

Develop more​ business-based models of development