Exam 1: Introduction: What Is International Business

International Trade Summit (Scenario) An international trade summit is held in Geneva, Switzerland. The purpose of the summit is to cooperatively develop policies that promote international trade. Representatives from 50 different countries attend the summit. -One summit attendee pointed out that the total value of her country's products trade typically accounted for more than 100 percent of her nation's GDP. This attendee most likely represents ________.

The two primary types of international investment are portfolio investment and foreign direct investment.

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. -One shareholder wanted clarification about a research effort that investigated the possibility of setting up a plant in China. The CEO explained that serving China's rapidly growing middle class population would enable Sterling to increase the size of its customer base dramatically. In China, the CEO was most likely interested in ________.

Increases in international trade and investment are accompanied by increases in all of the following EXCEPT ________.

A restaurant chain based in Hong Kong plans to open a series of restaurants in the United States to gain access to low-cost capital for its expansion efforts. Which of the following, if true, would most strongly support the claim that establishing U.S. operations would NOT be the best choice for providing the chain access to the low-cost capital it seeks?

International business is defined as the performance of ________ activities by firms across national borders.

In a short essay, explain the main differences between international portfolio investment and foreign direct investment.

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. -In discussing the expansion effort to India, the CEO reminded shareholders of Black and Decker's move to partner with the Indian auto retailer Bajaj. The CEO was most likely attempting to justify which of the following?

Since the 1980s, emerging market countries have experienced substantial market liberalization and privatization.

In a short essay, explain the four trends that provide evidence for the globalization of markets. Provide an example to illustrate one of the trends.

What is a born global firm? Explain one strategic or reactive reason why an SME might choose to start as a born global.

Which of the following is NOT an example of a cross-cultural risk factor?

In a short essay, explain why non-profit organizations might conduct cross-border activities.

For internationalizing firms, the consequences of poor business management decisions are usually more costly when mistakes occur abroad than when they occur at home.

In a short essay, explain the cross-cultural risk faced by internationalizing firms. What causes this type of risk? Why might it pose a problem for internationalizing firms?

International Trade Summit (Scenario) An international trade summit is held in Geneva, Switzerland. The purpose of the summit is to cooperatively develop policies that promote international trade. Representatives from 50 different countries attend the summit. -One of the attendees represents a leading nation in the international services trade. This attendee is most likely from which of the following countries?

Which of the following best explains why the Japanese firm Canon relocated much of its production to China?

Calexor is a telecommunications SME that has been highly successful despite its limited resources. Stakeholders attribute Calexor's success to its ability to serve niche markets. Which of the following, if true, would most strongly support the claim that Calexor's growth can be attributed to niche market sales?

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. -The CEO justified one of the company's moves by pointing out that it not only enabled Sterling to benefit from global sourcing advantages, but it also provided access to new ideas about business methods. The shareholders viewed this justification positively most likely because they understood which of the following?

In a short essay, describe the major trends in the growth of foreign direct investment (FDI) since the 1980s.