Quizes 1-8 Web
Quizes 1-8 Web
Quizes 1-8 Web
2 CORRECT
One variable commonly used to measure where and how fast internationalization takes place is the increase in total foreign direct investment. A) True
3 INCORRECT
The forces in the foreign environment operate the same way as those in the domestic environment except that they occur in foreign nations. A) True
4 INCORRECT
An international manager has two choices on what to do with a concept or technique employed in domestic operations: (1) transfer it intact or (2) adapt it to local conditions. A) B) True False
5 INCORRECT
Financial, economic, and distributive forces are examples of controllable forces influencing the life and development of a firm. A) True
6 INCORRECT
All the following are true about a global company except that it: A) B) C) maintains a presence in key markets around the world. looks for differences among markets. integrates its operations worldwide.
standardizes operations worldwide in one or more of the firm's D) functional areas. Feedback: Page: 9 Difficulty: Medium
7 4
7 INCORRECT
The major globalization drivers include all of the following except: A) B) C) political. social. technological.
8 CORRECT
Due to the expanding importance of foreign-owned firms in local economies, host governments have made their policies toward these companies _____. more strict
B) C)
9 CORRECT
Management has no direct control over the external environment of the firm but can exert influence by: A) B) C) heavy promotion of new products to change cultural attitudes. focusing on the strategic plan. increasing the number of people.
10 INCORRECT
Unconscious reference to one's own cultural values when judging behavioral actions of others in a new and different cultural environment is called: A) B) C) self-reference culture. self-reference values. self-reference criterion.
Quiz 2
The extensive distribution system is one reason Japan sells
2 INCORRECT
The distinction between portfolio investment and direct investment has begun to increase in recent years due to the growing number of international mergers, acquisitions, and alliances. A) True
3 CORRECT
Engaging in foreign trade is typically less costly and less risky than making a direct investment into foreign markets. A) True
4 INCORRECT
Simultaneously introducing products in foreign markets and in the domestic markets reduces sales volume while also increasing the cost of goods sold. A) True
5 INCORRECT
Export processing zones and in-bond plants are bound by taxation and regulation of materials brought into the zones for processing and subsequent re-export.
A)
True
6 INCORRECT
The annual outflows of foreign direct investment means: A) level of state-owned investment funds.
value of the total outstanding stock of all foreign direct B) investment. C) the amount invested each year into other nations.
bamboo network in the level of worldwide FDI. D) Feedback: Page: 46 Difficulty: Medium
7 4
7 INCORRECT
In using GDP per capita as a basis for making comparisons of nations' economies, all of the following statements hold true except: extreme care must be exercised to avoid drawing unwarranted A) conclusions. B) C) the statistical systems in many developing countries are deficient. the reliability of the data provided is often questionable.
GDP per capita is an arithmetic mean obtained by dividing GDP by D) the total income. Feedback: Page: 53 Difficulty: Medium
8 4
8 INCORRECT
Preferential trading arrangement is: an agreement by a small group of nations to establish free trade among themselves while maintaining trade restrictions with all A) other nations. an agreement by a small group of nations to establish free trade with all other nations while maintaining trade restrictions among B) themselves. an agreement by a small group of nations to study the direction C) of trade and analyze major trading partners. an agreement that allows government designated zones to make their initial market entry with local manufacturing facilities.
9 INCORRECT
In-bond plants (maquiladoras): are government designated zones where parts and processed A) materials can be imported without import duties. requires import duty to be paid only on the value added on the B) finished product. C) do not require the imported items to be re-exported.
are located on the border between Mexico and the U.S. D) Feedback: Page: 57 Difficulty: Medium
10 4
10 INCORRECT
Increasing wage rates in Mexico have affected maquiladoras in which of the following ways? They have encouraged Mexican firms to establish U. S. plants to A) supply the Mexican market. They have encouraged higher value added work in the Mexican B) maquiladoras plants. They have encouraged high labor intensive work in the Mexican C) maquiladoras plants. They have encouraged low skill production in the Mexican D) maquiladoras plants. Feedback: Page: 58 Difficulty: Hard
The Heckscher-Ohlin theory states that differences in production costs occur because of differences in the supply of production factors. A) B) True False
2 CORRECT
An important outcome of Leontief's work was recognizing the potential for differences in the kinds of labor as well as differences in natural and capital resources. A) True
3 INCORRECT
Recent research on the first mover theory also confirms that firms moving first into a market soon dominate it. A) True
4 INCORRECT
Internalization theory suggests that to obtain a higher return on its investment, a firm should transfer its superior knowledge in the open market rather than selling it to a foreign subsidiary. A) True
5 CORRECT
The eclectic theory of international production is sometimes referred to as the OLI model. A) True
6 INCORRECT
Adam Smith claimed that: government, not market forces, should determine the direction, A) volume, and composition of international trade. a nation could trade advantageously if it had a comparative B) advantage. market forces, not government controls, should determine the C) direction, volume, and composition of international trade. customers' tastes are affected by income levels. D) Feedback: Page: 70 Difficulty: Medium
7 4
7 INCORRECT
Which of the following is not true about the international product life cycle? A) Concerns the role of innovation in trade patterns.
Can be applied to new product introduction by firms in any of the B) industrialized nations. Views a product as going through a full life cycle from the C) standardization stage to internationalization. The initial innovation stage of the cycle borrows from the Linder D) theory. Feedback: Page: 78 Difficulty: Hard
8 4
8 INCORRECT
Economies of scale and the experience curve effect are important for international trade because: most manufacturing, mining, and transportation industries are A) subject to economies of scale. they allow a nation's industries to become low-cost producers without requiring that the nation have an abundance of a certain B) class of production factors. they justify efforts at being a first-mover in order to become an C) international leader. they do not allow the spread of very high fixed costs over sales D) within foreign and home markets. Feedback: Page: 81 Difficulty: Hard
9 4
9 INCORRECT
To sum up international trade theory, we can say that the primary reason for trade is: similarities in endowments of the factors of production.
A) differences in interest rates for investments. the existence of price differentials among nations.
B) C)
10 INCORRECT
Dunning's Eclectic Theory of International Production states that if a firm is going to invest in production facilities abroad, it must have the following kinds of advantages: A) B) C) D) ownership-specific, location-specific, and internationalization. strategic, location-specific, and technological. ownership-specific, location-specific, and internalization. technological, financial, and ownership-specific.
The United Nations institution addresses issues that require global or regional solutions. A) True
2 INCORRECT
The GATT and the WTO work in tandem to support trade liberalization. A) True
3 INCORRECT
The OECD, the "rich man's club," was formed to keep trade within the developed nation markets. A) True
4 INCORRECT
The North American Free Trade Agreement integrates the nations of North America to ensure free trade and free movement of labor. A) True
5 CORRECT
On EU matters, the European Court of Justice has authority that supersedes that of the member-nations' national courts. A) True
6 CORRECT
The IMF has had many successes. Which of the following point to one of the current IMF challenges? A) Develop a way for global financial markets to spread risks.
Develop and maintain a system of currency exchange that makes B) global trade possible. Support governments in their noninflationary monetary C) management. Help the world trading system avoid financial disasters. D) Feedback: Pages: 102-103 Difficulty: Hard
7 4
7 INCORRECT
All of the following are fundamental principles of ASEAN except: A) B) noninterference by members in the internal affairs of one another. renunciation of the threat or use of force.
enlargement of the organization's activities to include a C) peacekeeping force. effective cooperation among members. D) Feedback: Page: 111 Difficulty: Easy
8 4
8 INCORRECT
including protectionist barriers in all sectors that protect domestic B) products. fostering democracy, protecting human rights, strengthening C) security, and fighting corruption. serving as a regional vehicle for promoting open trade and practical D) economic cooperation. Feedback: Page: 122 Difficulty: Medium
9 4
9 INCORRECT
Which of the following is not included in the membership criteria for the European Union? A) B) Adherence to principles of liberty. The country must show evidence of respect for democracy.
The country must show respect for human rights and fundamental C) freedoms. The country must have a rising GDP. D) Feedback: Page: 123 Difficulty: Medium
10 4
10 INCORRECT
What is the role of the Council of the European Union? A) Pass European laws.
B)
Act as a policy-setting institution of the EU and the voice of the C) member-states. Focus on financial and social issues. D) Feedback: Page: 125 Difficulty: Hard The national culture is a key determinant for the evaluation of managers. A) True
2 INCORRECT
3 INCORRECT
The demonstration effect is a result of the backward-bending labor supply curve. A) True
4 INCORRECT
Generally, the greater the difference between an old and a new method or product, the easier it is for the firm to gain acceptance of a change. A) True False
5 CORRECT
According to Hofstede, power distance is the extent to which members of a society accept the unequal distribution of power among individuals. A) True
6 INCORRECT
The first step international business managers can take in order to learn to live with other cultures is to: A) B) C) learn the language. visit the country. realize that other cultures exist which are different from their own.
make friends with natives of the country. D) Feedback: Page: 139 Difficulty: Easy
7 4
7 INCORRECT
All of the following indicate the importance of technological superiority to international companies except: A) it can be embodied in the company's products.
it gives a firm confidence to enter a foreign market even when other B) companies are already established there. it enables the firm to obtain better-than-usual conditions for a C) foreign market investment. it keeps the international division of labor constant. D) Feedback: Pages: 150-151 Difficulty: Medium
8 4
8 CORRECT
using external technology to complement rather than substitute for A) internal technology. obtaining more efficiency from technology by increasing capital B) investment. C) using technology to improve a firm's strategy.
forming blocs to prevent the poaching of technological ideas and D) innovations. Feedback: Page: 151 Difficulty: Easy
9 4
9 INCORRECT
Social units based on free associations may be formed by all of the following except: A) B) C) Age. Family. Common interest.
10 CORRECT
____ is the degree to which the members of a society feel threatened by ambiguity and are rule-oriented. A) B) C) D) Uncertainty avoidance Power distance Individualism Short-term orientation