Deck 6: International Business

Question 1

The European Union (EU)is a union of 27 European countries.

Answer 1

True

Question 2

Embargoes usually are imposed for political rather than economic reasons.

Answer 2

True

Question 3

A country that imports more than it exports runs a trade surplus.

Answer 3

False

Question 4

Working through a foreign intermediary saves a company the cost of setting up its own facility in a foreign country.

Question 5

The growth of international trade over the past several decades has been both a primary cause and effect of globalization.

Question 6

Exchange rates can be quoted in dollars per unit of foreign currency or units of foreign currency per dollar.

Question 7

A disadvantage of enforcing NAFTA is that American workers have lost their jobs as companies are taking advantage of the lower labor costs in Mexico.

Question 8

A quota is the difference between the value of the goods a country exports and the value of the goods it imports.

Question 9

Companies that are not willing or able to invest millions of dollars in operations abroad prefer to set up multinational corporations.

Question 10

International trade can cause economic,political,and social disruptions.

Question 11

The spread of capitalism has facilitated the growth of global economy.

Question 12

Companies that expand abroad in order to take advantage of inexpensive labor costs cannot be considered as multinational corporations.

Question 13

The purpose of a tariff is to raise the price of domestic goods in order to allow foreign manufacturers to compete.

Question 14

Embargoes are restrictions on the quantity of a good that can enter a country.

Question 15

Expansion of international trade has led to interdependencies among the nations of the world.

Question 16

The largest free trade area in the world is in China.

Question 17

A country that exports more than it imports runs a trade deficit.

Question 18

The rise of democracy in the world has hampered the growth of the global economy.

Question 19

A tariff is a tax imposed on exports.

Question 20

Protectionist measures increase the volume of international trade.

Question 21

In feminine cultures,the differences between gender roles are more dramatic than in masculine cultures.

Question 22

_____ is the business strategy which involves engaging in a variety of operations so that sluggish sales in one market can be offset by stronger sales elsewhere.

A) Diversification
B) Positioning
C) Differentiation
D) Segmentation
E) Cannibalization

Question 23

Which of the following does a country adopt to protect its own domestic industries from international trade?

A) Increase imports
B) Impose tariffs and quotas
C) Reduce exports
D) Reduce trade barriers
E) Encourage free trade

Question 24

Which of the following is true of exports and imports?

A) Businesses don't face any restrictions as exporters.
B) A country runs a trade deficit if it exports more than it imports.
C) Goods and services that are sold abroad are called imports.
D) Companies cannot import products to resell in their own countries.
E) Some countries limit the ability of exporters to take money they earn from their exports out of the country.

Question 25

In cultures that have high degree of power distance,the degree of equality is low.

Question 26

In individualism,ties between individuals are strong.

Question 27

In individualism,people are identified by characteristics of the group they belong to.

Question 28

The purpose of a coalition is to reduce import and export trade among member countries.

Question 29

Change can occur more rapidly in cultures that have a short-term orientation.

Question 30

People in cultures with high uncertainty avoidance resist change.

Question 31

The majority of expatriates view their international appointment as an opportunity for personal and professional development.

Question 32

_____ is the most suitable alternative for countries that want to import products but do not have the means to make a cash payment.

A) Diversification
B) Countertrading
C) First mover advantage
D) Protectionism
E) Embargo

Question 33

Cultures that endorse low power distance expect and accept relations that are more democratic.

Question 34

Businesses like to _____ their sales so that sluggish sales in one market can be offset by stronger sales elsewhere.

A) localize
B) recall
C) diversify
D) specialize
E) standardize

Question 35

The Organization of Petroleum Exporting Countries' (OPEC)effectiveness is limited because several member countries sell and produce at levels considerably different from official OPEC standards.

Question 36

Which of the following is true about international business at present?

A) Today nations have become increasingly independent.
B) Nations are separated by distance, time, transportation, and communications barriers.
C) International trade has put an end to all economic, political, and social disruptions.
D) Most of the countries depend on international trade to maintain their standards of living.
E) Political changes have no influence on the international business environment.

Question 37

Which of the following is true about absolute advantage?

A) It is the ability to produce more of a good than another producer with the same quantity of inputs.
B) All countries will produce the same amount of goods with the same quantity of inputs.
C) Individuals, companies, and countries should specialize in what they do best.
D) A product that might be in the mature stage in one country might be in the introductory stage in another market.
E) A business can realize higher profits by setting up operations in countries where the costs of labor and resources are lower than the costs in the domestic market.

Question 38

The law of comparative advantage states that _____.

A) individuals, companies, and countries should be self-sufficient by domestically producing all the goods they require
B) producers should produce the goods they are least efficient at producing to allow scope for improvement
C) when introducing products to international markets, firms must decide whether the product should be modified to meet the needs of the local culture
D) producers should produce the goods they are most efficient at producing and purchase from others the goods they are less efficient at producing
E) to protect their own domestic industries, countries impose tariffs through taxes or fees on imported goods

Question 39

When should a company ideally enter a foreign market?

A) When the foreign market is saturated
B) When the costs of labor and resources are higher than the domestic costs
C) When the demand for the product declines in the domestic market
D) When competition in the domestic market is the least
E) When protectionism is promoted

Question 40

According to the law of _____,individuals,companies,and countries should specialize in what they do best.

A) producers' surplus
B) absolute advantage
C) comparative advantage
D) trade surplus
E) imperfect competition

Question 41

Which of the following is true of foreign intermediaries?

A) They are agents who manufacture products for companies that want to do business abroad.
B) They reduce a company's expense of setting up facilities in a foreign country.
C) They work for a single foreign company at a time.
D) They devote as much time to a single company's products as the company's own sales force would.
E) They are unfamiliar with local conditions of the place where the company wants to do business.

Question 42

What term denotes tax on imports?

A) Quota
B) Embargo
C) Tariff
D) Penalty
E) Royalty

Question 43

Under the terms of _____,businesses in the United States,Mexico,and Canada can sell their products anywhere in North America without facing major trade restrictions.

A) CAFTA-DR
B) TAFTA
C) NAFTA
D) GATT
E) CEFTA

Question 44

Protectionist measures,such as tariffs,quotas,and other types of restrictions are taken to protect _____ companies.

A) foreign
B) domestic
C) international
D) multinational
E) transnational

Question 45

Which of the following is true of trade surplus?

A) It is a negative balance.
B) It involves exporting more than importing.
C) It is also known as trade gap.
D) It is an unfavorable condition for a country.
E) It involves making payments to other countries that it imports from.

Question 46

Imposing quotas on a particular import is favorable to the _____.

A) consumers of that product in the domestic country
B) foreign companies that export the product
C) domestic companies that manufacture the same product
D) domestic companies that consume the product
E) government of the countries that export the product

Question 47

Which of the following is true of protectionist measures?

A) It hinders the growth of domestic companies.
B) WTO works in favor of these measures.
C) These measures increase the volume of international trade.
D) It involves reducing tariffs, quotas, and other types of restrictions.
E) Embargo is an example of a protectionist measure a country can adopt.

Question 48

Which of the following had a negative impact with the enforcement of NAFTA?

A) Businesses in the United States
B) Consumers in the U.S., Mexico, and Canada
C) Businesses in Mexico and Canada
D) Producers within North America
E) Workers in the U.S.

Question 49

_____ establishes the maximum quantity of a product that can be imported or exported during a given period.

A) Embargo
B) Tariff
C) Foreign exchange rate
D) Quota
E) Customs duty

Question 50

If the value of the goods and services a country buys from other countries exceed the value of the goods and services it sells to other countries,then the country runs a _____.

A) trade surplus
B) trade deficit
C) budget surplus
D) budget deficit
E) surplus value

Question 51

To help domestic manufacturers compete against foreign companies,governments _____.

A) impose high tariffs on domestic companies
B) impose trade restrictions on foreign companies
C) discourage embargoes
D) discourage protectionist measures
E) create free trade areas

Question 52

Which of the following best describes a barter agreement?

A) It is an agreement between the exporter and importer to trade goods and services in exchange for other goods and services.
B) It is an agreement where the issuer makes an unconditional promise in writing to pay a certain amount of money, at a certain time or on demand of the payee.
C) It is an agreement which permits the sale of securities and also permits the seller to buy back the securities.
D) It is a document issued by a carrier to another party which provides details about the shipment of merchandise.
E) It is an agreement for the hiring of a vessel that excludes the technical or maintenance aspects of the vessel.

Question 53

Which of the following best describes an embargo?

A) It is a total ban on the import of a good from a particular country.
B) It is a restriction on the quantity of a good that can enter a country.
C) It refers to taxes imposed on imports.
D) It refers to taxes imposed on exports.
E) It refers to a region within which trade restrictions are reduced or eliminated.

Question 54

Which of the following is true of exchange rates and foreign currency?

A) Companies that purchase goods or services from foreign countries must pay for them with local currency.
B) Companies purchase foreign currency from banks, which convert each currency into dollars.
C) Exchange rates remain constant.
D) Exchange rates do not have any effect on profits.
E) Exchange rate is of no prominence to businesses.

Question 55

Which of the following term denotes the value of one currency in terms of another?

A) Foreign interest rate
B) Foreign exchange rate
C) Balance of payment
D) Cash reserve ratio
E) Foreign stock exchange

Question 56

Which of the following hampers the growth of global economy?

A) Rise of democracy
B) Spread of capitalism around the world
C) Encouraging protectionism
D) Development of the Internet
E) Terms and conditions of NAFTA

Question 57

The _____ is the difference between the value of the goods a country exports and the value of the goods it imports.

A) balance of trade
B) trade deficit
C) trade surplus
D) balance of payments
E) deferred balance

Question 58

_____ economy is an economy in which companies compete actively with businesses from around the world.

A) Closed
B) Global
C) Informal
D) Autarky
E) Micro

Question 59

Which of the following is a protectionist measure that a country can adopt?

A) Imposing high tariffs on foreign companies
B) Decreasing import quotas
C) Supporting free trade agreements
D) Promoting free trade areas
E) Imposing high tariff on domestic companies

Question 60

A country runs a _____,if the value of exports exceeds the value of imports.

A) trade surplus
B) trade deficit
C) surplus value
D) deferred liability
E) trade gap

Question 61

What are the measures that a company needs to adopt to ensure successful international assignments?

Question 62

The purpose of the EU is to _____.

A) increase tariffs on goods sold among member countries
B) promote the fiscal, technical, and border barriers between member countries
C) increase the costs of goods and services in Europe
D) reduce the international competitiveness of European companies
E) establish Europe as a single market with exciting potential for multinational corporations

Question 63

How should companies identify and evaluate possible export markets?

Question 64

Outline the different ways in which companies sell their products or services in foreign countries.

Question 65

A(n)_____ is a citizen of one country who is working in another country,usually in one of her or his company's subsidiaries.

A) foreign affairs manager
B) international relations manager
C) expatriate manager
D) domicile manager
E) external manager

Question 66

Which of the following is of high value in feminine cultures?

A) Power
B) Ambition
C) Cooperation
D) Competitiveness
E) Material success

Question 67

Which of the following is true about collectivism?

A) Ties between individuals are not strong.
B) People are expected to take care of themselves.
C) It is believed that if each person takes care of his or her personal interest, then everyone will be well off.
D) People are identified by characteristics of the group they belong to.
E) It is believed that people should be free to seek autonomy, pleasure, and security through their own efforts.

Question 68

List out the reasons for companies to expand into international markets.

Question 69

Explain how managers can handle cultural differences in international trade.

Question 70

Explain the various protectionist measures that a country can adopt.

Question 71

Explain what is meant by "coalitions of cooperating countries" with the help of examples.

Question 72

Which of the following statements is true about expatriate managers?

A) Organizations must ensure that the expatriate managers are inflexible.
B) Spouse's inability to adapt to the new work environment has no impact on the expatriate's adaptability.
C) Expatriate managers must not be tolerant or open to other cultures.
D) Cross-cultural and language training is of no significance to an expatriate.
E) Social and legal systems in the host country have an impact on the expatriate's success.

Question 73

Which of the following is true of a licensing agreement?

A) It is not applicable to international businesses or foreign markets.
B) It restricts a company's entry into a foreign market.
C) It permits one company to sell another company's products abroad.
D) It involves dividing resources and skills between companies in order to achieve different goals.
E) It involves expanding abroad in order to take advantage of inexpensive labor costs.

Question 74

How have the North American countries benefited from NAFTA?

Question 75

Which of the following is a value associated with short-term orientation?

A) Persistence in achieving goals
B) Ensuring respect for tradition
C) Protecting one's "face"
D) Fulfilling social obligations
E) Maintaining personal stability

Question 76

Companies that are willing or able to invest millions of dollars in operations abroad should ideally operate through _____.

A) franchising agreements
B) multinational corporations
C) licensing agreements
D) foreign intermediaries
E) shell corporations

Question 77

Differentiate individualism from collectivism.

Question 78

What are some of the challenges a manager working for a multinational corporation might face?

Question 79

Which of the following is true of power distance?

A) Cultures that endorse low power distance expect and accept relations that are more authoritative.
B) In cultures that endorse low power distance, the more powerful feel that they are entitled to special rights and privileges.
C) In high power distance cultures, subordinates are more comfortable with demanding the right to contribute to and critique the decision making of those in power.
D) In high power distance cultures, superiors and subordinates view each other as different kinds of people.
E) People hold the belief that superiors should be readily accessible to subordinates in cultures that endorse high power distance.

Question 80

Which of the following is true of uncertainty avoidance?

A) People in cultures with high uncertainty avoidance are comfortable with unknown and uncommon situations.
B) Low uncertainty avoidance cultures try to have as many rules as possible.
C) Low uncertainty avoidance cultures tend to resist change.
D) People in cultures with high uncertainty avoidance tend to place a premium on job security.
E) People in low uncertainty avoidance cultures are less willing to take risk.