IBA 250 Exam #2

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

A. Sanctions

B. Boycotts

C. Embargoes

D. Confiscation

E. Expropriation

E. Expropriation

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

A. SIGs do not represent small businesses.

B. SIGs limit intellectual property protection.

C. SIGs represent only one side of the political arena.

D. SIGs exercise control over activities to prevent terrorism.

E. SIGs influence elected officials who can change policy.

E. SIGs influence elected officials who can change policy

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. Mixed system

B. Religious law

C. Common law

D. Rule of law

E. Civil law

D. Rule of law

Firms that engage in environmental scanning​ _______.

A. participate in a regional trading bloc

B. reduce research and development costs

C. improve intellectual property protection

D. assess potential threats to the firm

E. evaluate accounting practices

D. assess potential threats to the firm

What is the basis of common​ law?

A. ​Tradition, previous​ cases, and legal precedents

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

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

D. Religious​ beliefs, ethical​ codes, and moral values

E. Two or more legal systems operating together

A. ​Tradition, previous​ cases, and legal precedents

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

A. initiate special interest groups

B. adjudicate civil and commercial disputes

C. ensure stability based on laws

D. protect intellectual property

E. establish norms and customs

C. ensure stability based on laws

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

A. Bribes are an accepted way of doing business overseas.

B. FCPA criminal and civil penalties are minimal.

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

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

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

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

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. ​Cross-border risk

B. Social risk

C. Country risk

D. Financial risk

E. International risk

C. Country Risk

Which of the following BEST characterizes a​ democracy?

A planned economy

B. Collectivism

C. Lack of economic freedom

D. State regulation of public and private behavior

E. Private property rights

E. Private property rights

Which of the following statements BEST describes​ socialism?

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

B. Emphasis is placed on individual accomplishment and innovations.

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

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

E. Collective welfare outweighs individual welfare.

E. Collective welfare outweighs individual welfare

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

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

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

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

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

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

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

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

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

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

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

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

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

B. The EU is comprised of 27 countries from Western Europe.

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

D. Trade among the EU members takes place unobstructed.

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

D. Trade among the EU members takes place unobstructed

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

A. internationalization

B. isolation

C. dumping

D. costs

E. localization

A. internationalization

Which is NOT an advantage of regional​ integration?

A. Expanded market size

B. Improve global stature for individual bloc countries

C. The ability to attract outside direct investment

D. Enhanced productivity

E. Economies of scale

B. Improve global stature for individual bloc countries

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

A. regional bloc

B. economic bloc

C. foreign trade zone

D. political union

E. assembly zone

C. foreign trade zone

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

A. Licensing to a local firm

B. Partnering with a company in the local target market

C. Exporting

D. FDI

E. Joint ventures with a local firm

C. Exporting

USMCA and its​ predecessor, NAFTA,​ ________.

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

B. established uniform customs procedures and regulations

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

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

E. do not offer dispute settlement for labor issues

B. established uniform customs procedures and regulations

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

A. Protectionism

B. Customs

C. Tariffs

D. Nontariff trade barriers

E. Quotas

A. Protectionism

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. Protection of the​ nation's economy

B. National culture

C. National identity

D. Protection of an infant industry

E. National security

E. National Security

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

A. Outsourcing

B. Modernization

C. Privatization

D. Global sourcing

E. Transition economy

C. Privatization

Which statement about emerging markets is​ TRUE?

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

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

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

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

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

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

Emerging markets have become target markets because​ ________.

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

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

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

D. the majority of individuals in emerging economies live in poverty

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

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

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

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

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

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

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

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

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

________ 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. Global sourcing

B. Outsourcing

C. Onshoring

D. Privatization

E. Purchasing power parity

A. Global Sourcing

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

A. Debt levels that exceed GDP

B. High infant mortality

C. Limited industrialization

D. Stagnant productivity in many areas

E. Few restrictions on international trade and investment

E. Few restrictions on international trade and investment

In​ Argentina, authorities attempt to stop shipments of pirated​ merchandise, but inadequate resources and slow court procedures hamper enforcement. This example shows that​ ________.

A. counterfeiting is strongly discouraged

B. Argentina lacks strong laws that protect intellectual property

C. bureaucratic practices show favor to domestic firms

D. a lack of transparency has resulted in extensive government intervention

E. a lack of infrastructure in Argentina slows capital projects

B. Argentina lacks strong laws that protect intellectual property

Which of the following BEST describes a transition​ economy?

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

B. A country in which private entities are rapidly being nationalized.

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

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

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

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

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

A. Tax incentives that attract foreign investment

B. National laws that protect intellectual property

C. Political instability that is associated with weak legal frameworks

D. Simplified processes for licenses

E. Administrative rules that facilitate business activities

C. Political instability that is associated with weak legal frameworks

Outsourcing occurs when companies​ ________.

A. procure products or services from suppliers located abroad

B. transfer​ state-owned holdings to private concerns

C. develop from emerging markets into global competitors

D. target the​ fast-growing middle class of emerging markets

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

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

Which of the following represents a​ low-control strategy?

A. Exporting

B. Franchising

C. Foreign direct investment

D. Equity joint ventures

E. Licensing

A. Exporting

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

A. multinational strategy

B. global strategy

C. multidomestic strategy

D. home replication strategy

E. transnational strategy

D. home replication strategy

________ is a planned set of actions that managers employ to make best use of the​ firm's resources and core competencies to gain competitive advantage.

A. Organizational process

B. Countertrade

C. Strategy

D. Visionary leadership

E. International business

C. Strategy

________ is a quality of executive management that provides inspirational guidance and motivation to​ personnel, leading the firm to a better future.

A. Efficiency leadership

B. Learning

C. Visionary leadership

D. Flexibility

E. Openness

C. Visionary Leadership

A coordinated approach to internationalization in which a firm strives to be relatively responsive to local needs while retaining sufficient central control of operations is a​ ________ strategy.

A. vision

B. home replication

C. transnational

D. global

E. multidomestic

C. transnational

A firm most likely opts for global integration in order to take advantage of which of the following​ factors?

A. Customized products

B. Economies of scale

C. Leveraged natural resources

D. Responsiveness to local competitors

E. Adaptation to different distribution channels

B. Economies of scale

​McDonald's varies its menu to cater to the tastes of local markets.​ McDonald's can best be described as​ _______

A. a follower

B. globally integrated

C. pursuing a home replication strategy

D. being part of a multidomestic industry

E. being in a global industry

D. being part of a multidomestic industry

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

A. Global sourcing

B. Local responsiveness

C. Global integration

D. Globalization

E. Collaboration

C. Global Integration

The Korean automobile firm Hyundai emphasizes the importance of science and technology throughout its organization and allocates funds for the research and development of innovative automobile features and using technology to improve every step in the production process. This illustrates​ _____ at Hyundai.

A. organizational processes

B. organizational structure

C. organizational culture

D. flexibility

E. visionary leadership

C. Organizational culture

​________ refers to an international business transaction in which full or partial payments are made in kind rather than in cash.

A. Global sourcing

B. Exporting

C. Importing

D. Global procurement

E. Countertrade

E. Countertrade

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

A. Market segmentation

B. Horizontal importation

C. Global account management

D. Gray market activity

E. Vertical integration

D. Gray Market Activity

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 television and print ads

B. Hire a global advertising agency

C. Spend the budget on transit ads

D. Focus on Internet and radio ads

E. Use the same campaign as in their home country

B. Hire a global advertising agency

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

A. A partnership

B. A collaboration

C. A global market segment

D. An industrial cluster

E. A nonhomogenous cluster

C. A global market segment

Which is NOT true of strong global​ brands?

A. They increase the efficiency of marketing programs.

B. They stimulate brand loyalty.

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

D. They force the firm to lower prices.

E. They enhance the​ firm's leverage with suppliers.

D. They force the firm to lower prices

Which of the following determines buyer attitudes toward​ advertising?

A. Demographic research

B. Media availability

C. Laws

D. Advertising budgets

E. Culture

E. Culture

________ 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. Adaptation

B. Product development

C. Global branding

D. International pricing

E. Standardization

E. Standardization

What is the main disadvantage of foreign direct​ investment?

A. Lacks control over marketing activities

B. Requires costly investments

C. Lacks control over distribution activities

D. Having little contact with the market

E. Being unable to monitor employee performance

B. Requires costly investments

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

A. ​Management's market share expectations

B. Competitor prices

C. Customer expectations

D. Taxes and tariffs

E. Competitor products

A. ​Management's market share expectations

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

A. direct marketing

B. intermediaries

C. retail outlets

D. shorter channels of distribution

E. fewer employees

A. direct marketing

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

A. offers the same product features worldwide

B. modifies all products for local markets

C. uses English in standard advertising

D. seeks local responsiveness and international integration

E. avoids adapted products in order to reduce costs

D. seeks local responsiveness and international integration