Ibi101 Final Exam 1

1. Which of the following is not characteristic of globalization?
A. National economies are turning into independent economic systems.

B. Material culture is starting to look similar the world over.
C. Perceived distance is shrinking due to advances in transportation and telecommunications.
D. Barriers to cross-border trade and investment are declining. A
2. Globalization has _____ the opportunities for a firm to expand its revenues by selling around the world and _____ its
costs by producing in nations where key inputs are cheap.
A. reduced, reduced
B. increased, increased
C. increased, reduced
D. reduced, increased C
3. Since the collapse of communism at the end of the 1980s, the erstwhile communist nations have transformed their
economies by encouraging all of the following except:
A. privatizing state-owned enterprises.
B. regulating markets.
C. increasing competition.
D. welcoming investment by foreign businesses. A
4. Identify the incorrect statement concerning globalization.

A. It has been blamed for unemployment in developed nations, environmental degradation and the Americanization of
popular culture.
B. It has created new threats for businesses accustomed to dominating their domestic markets.
C. It is transforming industries and is highly welcomed by those who believed their jobs were protected from foreign
competition.
D. According to most economists it is a very beneficial process where gains outweigh the losses by a wide margin. C
5. The most global markets currently are markets for:

A. services.
B. consumer goods.
C. consumer durables.
D. industrial goods. D
6. Which of the following is not an impediment that makes it difficult for firms to achieve the optimal dispersion of their
productive activities to locations around the globe?
A. Reduced transportation costs.
B. Government regulations.
C. Issues associated with economic and political risk.
D. Barriers to foreign direct investment. A
7. The ______ is primarily responsible for policing the world trading system and making sure nation-states adhere to the
rules laid down in trade treaties signed by member states.
A. International Development Association

B. World Bank
C. International Court of justice
D. World Trade Organization D
8. The _____ was created in 1944 by 44 nations that met in Breton Woods, New Hampshire to promote economic
development.
A. World Bank
B. International Trade Center
C. World Trade Organization
D. United Nations A
9. The institution, created in 1944 at Bretton Woods, responsible for maintaining order in the international monetary system
is the
A. IMF.
B. WTO.
C. UN.
D. UNESCO. A
10. _____ occur(s) when a firm exports goods or services to consumers in another country.
A. International trade
B. Foreign direct investment
C. Inward investment
D. Merger and acquisitions A
11. The _____ was established to remove barriers to the free flow of goods, services, and capital between nations.
A. UN
B. IMF
C. GATT
D. IDA C
48. At the Doha Round of the WTO in late 2001,

A. the WTO was established.
B. GATT was extended to include services.
C. world trade volume increased.
D. an agenda was established to phase out subsidies to agricultural producers. D
12. The reduction in the average tariff rates on manufactured products since 1950 implies all of the following except that
A. firms are dispersing parts of their production process to global locations to drive down production costs and increase
product quality.
B. the economies of the world's nation states are becoming more intertwined.
C. nations are becoming increasingly independent of each other for important goods and services.
D. the world has become significantly wealthier since 1950. C
13. The growing integration of the world economy is:

A. increasing the intensity of competition in a wide range of manufacturing and service industries.
B. decreasing the intensity of competition in manufacturing industries, and increasing the intensity of competition in services.
C. increasing the intensity of competition in manufacturing industries, and decreasing the intensity of competition in services.
D. narrowing the scope of competition in a wide range of service, commodity, and manufacturing industries. A
14. Which of the following statements regarding cross-border trade and investment is not true?
A. "Protection" from foreign competitors has been, at times, demanded by the United States.
B. Forecasts indicate a return to the restrictive trade policies of the 1920s and 30s.
C. If trade barriers decline no further they will put a brake upon the globalization of both markets and production.
D. It is not clear whether the political majority in the industrialized world favors further reductions in trade barriers. B
15. Identify the incorrect statement pertaining to the World Wide Web.
A. It makes it much easier for buyers and sellers to find each other.
B. Viewed globally, it is emerging as an equalizer.
C. It rolls back all of the constraints of location, scale, and time zones.
D. It allows businesses to expand their global presence at a lower cost than ever before. C
16. Since 1980, the world's containership fleet has more than _____, reflecting in part the growing volume of international
trade.
A. doubled
B. tripled
C. quadrupled
D. quintupled C
17. Technological innovations have facilitated all of the following except:

A. globalization of production.
B. globalization of markets.
C. creation of electronic global marketplaces.
D. creation of absolutely homogeneous consumer markets. D
18. According to World Bank numbers,

A. developing nations currently account for more than 60 percent of world economic activity.
B. rich nations currently account for more than 70 percent of world economic activity.
C. today's rich nations may account for 55 percent of world economic activity by 2020.
D. today's developing nations may account for more than 60 percent of world economic activity by 2020. D
19.In the 1970s, many Japanese firms invested in North America and Europe
A. to avoid a highly competitive domestic market.
B. to exploit high domestic tariff barriers.
C. as a hedge against unfavorable currency movements.
D. to take advantage of low labor costs. C
20.What is the total cumulative value of foreign investments best referred to as?
A. Accumulation of foreign shares
B. Portfolio investments
C. Stock of foreign direct investments
D. Stock market investments C
21.The share of the total FDI stock accounted for by which of the following countries increased markedly from 1980 to 2000?
A. United States
B. France
C. United Kingdom
D. Netherlands B
22.Firms based in _____ accounted for 17.5 percent of the stock of foreign direct investment in 2011, up from only 1.1
percent in 1980.
A. Asia
B. developing countries
C. United Kingdom
D. NAFTA region B
23.Which of these statements pertaining to cross-border FDI flows is true?
A. The growth of FDI resumed in 2004 and continued through 2006.
B. A surge in FDI from 1995 to 1997 was followed by a slump from 1998 to 2000.
C. Among developing nations, the largest recipient of FDI has been Russia.
D. The dramatic increase in FDI reflects the decreasing internationalization of business corporations. A
24.Which of the following countries has been the largest recipient of foreign direct investment and received about $70 billion
a year in inflows in 2005 and 2006?
A. Brazil
B. Russia
C. India
D. ChinaD
24.Identify the incorrect statement regarding the former Communist nations of Europe and Asia.
A. The economies of most of the former Communist states are very strong and developed.
B. Many of the former Communist nations of Europe and Asia share a commitment to free market economies.
C. As a result of disturbing signs of growing unrest and totalitarian tendencies, the risks involved in doing business in these
countries is very high.
D. For about half a century these countries were essentially closed to Western international business. A
25.Which of the following observations concerning Latin American countries is true?

A. Complete restrictions on direct investment by foreign firms.
B. Characterized by low growth, high debt, and hyperinflation.
C. Debt and inflation are up compared to previous decades.
D. Substantial opportunities exist, but are accompanied by substantial risks. D
26.Which of the following statement pertaining to changes in the global economy of the 21st century is not true?
A. Barriers to the free flow of goods, services, and capital have been coming down.
B. Volume of cross-border trade and investment has been growing more rapidly than global output.
C. National economies are becoming more independent and moving away from the global economic system.
D. As economies advance, more nations are joining the ranks of the developed world. C
27.Which of the following does not help create an economic system that is favorable to international business?
A. Decreased privatization
B. Widespread deregulation
C. Open markets
D. Falling trade and investment barriers A
28.When a company "exports jobs" overseas, the company is:

A. helping domestic workers by pushing up wage rates.
B. increasing the demand of qualified domestic workers.
C. taking advantage of lower wages in foreign markets.
D. deceiving the supporters of globalization. C
29.If the critics of globalization are correct, all of the following things must be shown except:
A. the share of national income received by labor, as opposed to the share received by the owners of capital should have
declined in advanced nations.
B. even though labor's share of the economic pie may have declined, living standards need not deteriorate if the size of the
total pie has increased sufficiently to offset the decline in labor's share.
C. the decline in labor's share of national income must be due to moving production to low-wage countries, as opposed to
improving production technology and productivity.
D. economic growth in developed nations has offset the fall in unskilled workers' share of national income, raising their living
standards. D
30. A study by the OECD, whose members include the 20 richest economies in the world, noted all of the following except:
A. the gap between the poorest and richest segments of society in some OECD countries widened.
B. in almost all countries real income levels rose over the 20-year period studied.
C. falling unemployment rates brought gains to low-wage workers and fairly broad-based wage growth.
D. the gap between rich and poor had narrowed in all OECD countries. B
31.Critics of globalization maintain that the apparent decline in real wage rates of unskilled workers
A. owes far more to a technology-induced shift within advanced economies toward jobs that require significant education and
skills.
B. is due to the migration of low-wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled
workers.
C. has been impacted most by technological change.
D. can be checked by increasing society's investment in education to reduce the supply of unskilled workers. B
32.Interdependent political, economic, and legal systems of a country make up its:

A. administrative agenda.
B. socioeconomic fabric.
C. economic environment.
D. political economy. D
33.Identify the incorrect statement pertaining to a country's political economy.

A. It is independent of the culture of a nation.
B. It is a combination of interdependent political, economic, and legal systems.
C. Its various systems interact and influence each other.
D. Its interacting systems affect the level of economic well-being. A
34.Which of the following statements about political systems and their interrelated dimensions is false?
A. Systems that emphasize collectivism tend toward totalitarianism.
B. Systems that place a high value on individualism tend to be democratic.
C. Democratic societies can emphasize a mix of collectivism and individualism.
D. It is impossible to have totalitarian societies that are not collectivist. D
35._____ is consistent with the notion that an individual's right to do something may be restricted because it runs counter to
"the good of society" or "the common good."
A. Entrepreneurship
B. Collectivism
C. Free enterprise
D. Capitalism B
36.Which of the following statements about socialism is false?

A. Modern socialists' intellectual roots can be traced to Karl Marx.
B. Elements of socialist thought can be traced to Plato.
C. Socialist ideology is split into two camps—communists and individualists.
D. Socialism advocates for state ownership of the means of production. C
37.Individualism can best be described by which of the following statements?

A. It as a philosophy suggests that an individual should have freedom over his/her economic and political pursuits.
B. It is a political system in which government control over all factors of production is in entirety.
C. It is a political system that stresses the primacy of collective goals over individual goals.
D. It is a form of government in which one person or political party exercises absolute control over all spheres of human life.
A
38. Identify the incorrect statement regarding individualism.

A. It advocates for a socialist political system
B. It promotes free market economics
C. It creates a pro-business environment
D. It translates into an advocacy for democratic political systems A
This refers to a political system in which government is by the people, exercised either directly or through elected
representatives.
A. Totalitarianism
B. Authoritarianism
C. Democracy
D. Dictatorship C
Totalitarianism:
A. is a form of government in which one person or political party exercises absolute control over all spheres of human life.
B. refers to a political system in which government is by the people, exercised either directly or through elected
representatives.
C. is based on a belief that citizens should be directly involved in decision making.
D. is based on the idea that the welfare of society is best served by letting people pursue their own economic self-interests.
A
A state where political power is monopolized by a party, group, or individual that governs according to religious principles is
best described as following:
A. theocratic totalitarianism.
B. tribal totalitarianism.
C. right-wing totalitarianism.
D. communist totalitarianism. A
Which system of government generally permits some individual economic freedom but restricts individual political freedom,
frequently on the grounds that it would lead to the rise of communism?
A. Tribal totalitarianism
B. Right-wing totalitarianism
C. Left wing totalitarianism
D. Theocratic totalitarianism B
Antitrust laws in most countires are designed to:

A. encourage business practices designed to monopolize a market.
B. discourage private ownership.
C. restrict privatization.
D. outlaw monopolies. D
In a pure market economy:

A. all productive activities are owned by the state.
B. all productive activities are privately owned.
C. the government plans the goods and services that a country produces.
D. resources are allocated for "the good of society." B
In a pure command economy:

A. all productive activities are owned by the state.
B. all productive activities are privately owned.
C. the goods and services that a country produces are not planned by anyone.
D. production is determined by the interaction of supply and demand. A
In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms while other
sectors have significant state ownership and government planning.
A. market
B. private
C. command
D. mixed D
Which of the following statements about the legal systems of countries is false?
A. They can affect the attractiveness of a country as an investment site or market.
B. They are influenced by the prevailing political system of the country.
C. They are almost the same for all countries.
D. They are of immense importance to international business. C
The common law system:

A. lacks the flexibility that other systems have.
B. is based on tradition, precedent, and custom.
C. gives judges the power only to apply the law.
D. is based on a detailed set of laws organized into codes. B
A _____ system is based on a very detailed set of laws organized into codes.
A. democratic law
B. theocratic law
C. civil law
D. common law C
A theocratic law system is:

A. one in which the law is based on religious teachings.
B. based on tradition, precedent, and custom.
C. based on a detailed set of laws organized into codes.
D. the body of law that governs contract enforcement. A
A document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the
parties involved is BEST known as a:
A. contract.
B. business letter.
C. memorandum.
D. civil code. A
Identify the United Nations body that establishes a uniform set of rules governing certain aspects of the making and
performance of everyday commercial contracts between sellers and buyers who have their places of business in different
nations.
A. IMF
B. GATT
C. WTO
D. CIGS D
Which of the following refers to the legal rights over the use to which a resource is put and over the use made of any income
that may be derived from that resource?
A. Theocratic right
B. Property right
C. Trade right
D. Financial rightB
A _____ grants the inventor of a new product or process exclusive rights for a defined period of time to the
manufacture, use, or sale of that invention.
A. copyright
B. trademark
C. contract
D. patent D
Design and names by which merchants or manufacturers designate and differentiate their products are known as:
A. patents.
B. copyrights.
C. trademarks.
D. licenses. C
Which of the following provides exclusive legal rights to authors, composers, playwrights, artists, and publishers to publish
and disperse their work as they see fit?
A. Patents
B. Copyrights
C. Trademarks
D. Licenses B
Identify the incorrect statement pertaining to intellectual property rights.

A. Its violation cost personal computer software firms revenues equal to $48 billion in 2007.
B. The protection of intellectual property rights is more or less the same in all countries.
C. The enforcement of its regulations has often been lax.
D. Its violation has been very bad in China, where the piracy rate in 2007 ran at 82 percent. B
The TRIPS agreement was designed to:

A. exclude China from all intellectual property agreements.
B. oversee a much stricter enforcement of intellectual property regulations.
C. lobby for more lax intellectual property rights for poor countries.
D. support traded software and recorded property among developed markets. B
Which of the following statements about the trade-related aspects of intellectual property rights agreement is false?
A. It was designed to oversee enforcement of much stricter intellectual property regulations, beginning in 1995.
B. It obliged WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting 50 years.
C. It directed rich countries to comply with its rules of intellectual property protection within five years.
D. It provided the very poorest countries 10 years to comply with its rules of intellectual property protection. C
Safety standards to which a product must adhere are set by:

A. safety certifications.
B. the government standards department.
C. product safety laws.
D. product liability laws. C
The HDI is based on all of the following measures except:

A. political freedom.
B. life expectancy at birth.
C. educational attainment.
D. whether average incomes are sufficient to meet the basic needs of life. A
Identify the incorrect statement pertaining to innovation and entrepreneurship.

A. They are the engines of growth
B. They require state ownership of all means of production
C. They require a market economy
D. They require strong property rights B
All of the following are reasons that would account for the spread of democracy except:
A. totalitarian regimes failing to deliver economic progress to the vast bulk of their populations.
B. the unchallenged pressure of entrepreneurs and other business leaders for less accountable and closed governments.
C. the economic advances of the past quarter century leading to the emergence of increasingly prosperous middle and
working classes pushing for democratic reforms.
D. new information and communication technologies reducing the state's ability to control access to uncensored information.
B
_____ involves removing legal restrictions to the free play of markets, the establishment of private enterprises, and the
manner in which private enterprises operate.
A. A product law
B. Trade certification
C. Deregulation
D. A liability law C
The benefits of doing business in a country are a function of all of the following except:
A. the size of the market.
B. its past growth.
C. its present wealth.
D. its future growth prospects. B
In all of the following scenarios, the costs of doing business in a country tend to be greater, except where:
A. political payoffs are required to gain market access.
B. supporting infrastructure is lacking.
C. adhering to local laws and regulations is costly.
D. there is a highly developed infrastructural support. D
During the 1960s and 1970s, class divisions in _____ raised the cost of doing business there, relative to other European
countries.
A. Great Britain
B. Switzerland
C. Norway
D. Germany A
Which of the following is not true regarding culture?

A. Culture is static
B. Culture is evolving
C. It is a system of values and norms that are shared among a group of people
D. It involves the knowledge and beliefs of people A
_____ is/are best defined as shared assumptions about how things ought to be.
A. Norms
B. Values
C. Society
D. Culture B
The system of values and norms that are shared among a group of people and that when taken together constitute a design
for living best defines:
A. society.
B. value systems.
C. principles.
D. culture. D
Social rules and guidelines that prescribe appropriate behavior in particular situations are best described as:
A. norms.
B. values.
C. culture.
D. society. A
A group of people who share a common set of values and norms form a:
A. culture.
B. society.
C. country.
D. caste. B
_____ are the routine conventions of everyday life.

A. Folkways
B. Mores
C. Rites
D. Beliefs A
_____ are social conventions concerning things such as the appropriate dress code in a particular situation, good social
manners, eating with the correct utensils, neighborly behavior, and the like.
A. Values
B. Beliefs
C. Mores
D. Folkways D
An act, as simple as shaking hands when meeting new people is an example of:
A. values.
B. symbolic behavior.
C. mores.
D. social stratification. B
A Japanese executive's ritual of presenting a business card to a foreign business executive is an example of:
A. mores.
B. values.
C. attitudes.
D. folkways. D
Mores are:
A. the norms that are seen as central to the functioning of a society and its social life.
B. the routine conventions of everyday life.
C. abstract ideas about what a group believes to be right, good, and desirable.
D. the social rules and guidelines that prescribe appropriate behavior in particular situations. A
Which of the following statements about values and norms of a culture is not true?
A. The values and norms of a society do not emerge fully formed
B. They are the evolutionary product of a number of factors
C. They are influenced by religion
D. They do not influence social structure D
The social organization of Western society tends to emphasize on:

A. a group orientation.
B. the family.
C. individual achievement.
D. work groups. C
Emphasis on individualism results in all of the following disadvantages except:

A. managers tend to develop good general skills but lack the company-specific experience.
B. difficulty in building teams within an organization to perform collective tasks.
C. executives are not exposed to different ways of doing business.
D. difficulty to achieve cooperation both within a company and between companies.C
A central value of Japanese culture is the importance attached to:

A. the individual.
B. group membership.
C. individual achievement.
D. personal accomplishments. B
It has been argued that the success of Japanese enterprises in the global economy has been based partly on all of the
following except:
A. the diffusion of self-managing work teams.
B. the close cooperation among different functions within Japanese companies.
C. the high degree of managerial mobility between companies.
D. the cooperation between a company and its suppliers on issues such as design, quality control, and inventory reduction.
C
Which of the following refers to the extent to which individuals can move out of the strata into which they are born?
A. Caste stratification
B. Class system
C. Social mobility
D. Individual potential C
A _____ is a closed system of stratification in which social position is determined by the family into which a person is
born, and change in that position is usually not possible during an individual's lifetime.
A. caste system
B. class system
C. social system
D. culture system A
This is a less rigid form of social stratification in which social mobility is possible.
A. Social system
B. Caste system
C. Cultural system
D. Class system D
These strata are typically defined on the basis of characteristics such as family background, occupation, and income.
A. Demographic strata
B. Economic strata
C. Social strata
D. Cultural strata C
A class system:
A. is the same as a caste system.
B. is a rigid form of social stratification that does not permit social mobility.
C. allows an individual to change his/her position via personal achievements.
D. is more rigid than the caste system. C
A condition where people tend to perceive themselves in terms of their class background and this shapes their
relationships with members of other classes is known as:
A. economic classification.
B. social mobility.
C. class mobility.
D. class consciousness. D
In China, class divisions:

A. have historically been of no importance.
B. were strengthened during the high point of Communist rule.
C. increased even during reforms of the late 1970s and early 1980s.
D. were weakened because of a rigid system of household registration. B
The emergence of class consciousness in Great Britain can be attributed to:

A. the relative lack of class mobility.
B. a high degree of social mobility.
C. an extreme emphasis on individualism.
D. most of the population perceiving itself to be middle class. A
Ethical systems are:

A. a set of moral principles, or values, that are used to guide and shape behavior.
B. shared beliefs and rituals that are concerned with the realm of the sacred.
C. routine conventions of everyday life.
D. social rules that govern peoples' actions toward each other. A
Religion may be defined as:

A. routine conventions of everyday life.
B. social rules that govern peoples' actions toward each other.
C. shared beliefs and rituals that are concerned with the realm of the sacred.
D. a set of moral principles, or values, that are used to guide and shape behavior. C
According to sociologists, which of the following branches of Christianity has the most important economic implications?
A. Catholic
B. Orthodox
C. Protestant
D. Mormon C
Which of the following observations is correct?

A. None of the economic principles established in the Koran are pro-free enterprise.
B. The Koran speaks approvingly of free enterprise.
C. The Koran speaks disapprovingly of earning legitimate profit through trade and commerce.
D. Protection of the right to private property is not embedded within Islam. B
According to Islam, those who hold property are regarded as:

A. trustees.
B. owners.
C. tenants.
D. speculators. A
This is an Islamic banking method where banks lend money to a business, and rather than charging that business interest on
the loan, they take a share in the profits that are derived from the investment.
A. Mudarabah
B. Murabaha
C. Maysir
D. Mudarib A
Which Islamic banking method is the most widely used among the world's Islamic banks, primarily because it is the easiest to
implement?
A. Mudarib
B. Murabaha
C. Maysir
D. Mudarabah B
According to Max Weber:

A. principles embedded in Hinduism encourage high levels of entrepreneurial activity.
B. Hindu values emphasize that individuals should be judged by their material achievements.
C. pursuit of material well-being makes the attainment of nirvana easier.
D. devout Hindus would be less likely to engage in entrepreneurial activity than devout Protestants. D
Three values central to the Confucian system of ethics have very important economic implications. Which of the following is
not one among them?
A. Loyalty
B. Rule-based law
C. Reciprocal obligations
D. Honesty in dealings with others B
Which of the following statements about the use of spoken language is false?
A. The nature of a language structures the way we perceive the world.
B. The language of a society can direct the attention of its members to certain features of the world rather than others.
C. Countries with more than one language often have more than one culture.
D. Most people prefer to converse in English rather than their own language. D
The _____ dimension of Hofstede's study explores how a society deals with the fact that people are unequal in physical and
intellectual capabilities.
A. power distance
B. individualism vs. collectivism
C. uncertainty avoidance
D. masculinity vs. femininity A
The individualism vs. collectivism dimension of Hofstede's study explored:

A. the extent to which different cultures socialized their members into accepting ambiguous situations and tolerating
uncertainty.
B. the relationship between gender and work roles.
C. how a society deals with the fact that people are unequal in physical and intellectual capabilities.
D. the relationship between the individual and his/her fellows. D
Hofstede's uncertainty avoidance dimension considered:

uncertainty.
D. the relationship between the individual and his or her fellows. A
Hofstede's masculinity vs. femininity dimension examined:

uncertainty.
D. the relationship between the individual and his or her fellows. B
Hofstede's dimension of Confucian dynamism:

A. captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation
of gifts and favors.
B. focuses on how a society deals with the fact that people are unequal in physical and intellectual capabilities.
C. explores the relationship between the individual and his/her fellows.
D. looks at the relationship between gender and the ability to accept ambiguous situations. A
The belief in the superiority of one's own culture is known as:

A. ethnocentrism.
B. egocentrism.
C. polycentrism.
D. theocentricism. A
Identify the incorrect statement regarding ethical issues in international business.

A. They are often rooted in the fact that political systems, law, economic development, and culture of nations vary
significantly.
B. Human rights and environmental regulations are some of the common ethical issues.
C. Ethical practices of all nations are similar in nature.
D. Managers in multinational firms need to be particularly sensitive to differences in business practices because they work
across national borders. A
To guard against abuse of employment practices in other nations, multinationals should do all of the following except:
A. establish minimal acceptable standards that safeguard the basic rights and dignity of employees.
B. adhere to working conditions of the host country if they are clearly inferior to those in a multinational's home nation
C. audit foreign subsidiaries and subcontractors on a regular basis to make sure established standards are met.
D. take action to correct unacceptable behavior. B
Which of the following was designed to allow GM to operate ethically in South Africa as long as the company did not obey the
apartheid laws in its own South African operations?
A. The righteous moral system
B. Sullivan principles
C. Noblesse oblige
D. Cultural relativism B
Identify the incorrect statement pertaining to foreign multinationals doing business in countries with repressive regimes.
A. Inward investment by multinationals can be a force for economic, political, and social progress that ultimately improves the
rights of people in repressive regimes.
B. No multinational does business with nations that lack the democratic structures and human rights records of developed
nations.
C. Multinational investment cannot be justified on ethical grounds in some regimes due to their extreme human rights
violations.
D. Multinationals adopting an ethical stance can, at times, improve human rights in repressive regimes. B
Identify the incorrect statement about environmental regulations.

A. Environmental regulations are often lacking in developing nations.
B. Environmental regulations are similar across developed and developing nations.
C. Developed nations have substantial regulations governing the emission of pollutants, the dumping of toxic chemicals, etc.
D. Inferior environmental regulations in host nations, as compared to home nation, can lead to ethical issues. B
The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its
degradation.
A. tragedy of the commons
B. noblesse oblige
C. ethical dilemma
D. Friedman system A
Which of the following observations about the Foreign Corrupt Practices Act is true?
A. The act outlawed the paying of bribes to foreign government officials to gain business.
B. There is enough evidence that it put U.S. firms at a competitive disadvantage.
C. The act originally allowed for "facilitating payments."
D. The Nike case was the impetus for the 1977 passage of this act. A
Facilitating payments are:

A. permitted under the amended Foreign Corrupt Practices Act.
B. a direct violation of the Foreign Corrupt Practices Act.
C. permitted so long as they designed only to gain exclusive preferential treatment.
D. used to secure contracts that would otherwise not be secured. A
The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions excludes:
A. speed payments to secure contracts that would otherwise not be secured.
B. grease payments to gain exclusive preferential treatment
C. facilitating payments made to expedite routine
government action.
D. payments to government officials for special privileges. C
Grease payments:
A. are not the same as facilitating payments or speed money.
B. are facilitating payments made to expedite routine government action.
C. are payments to gain exclusive preferential treatments.
D. can be used to secure contracts that would otherwise not be secured. B
The idea that businesspeople should consider the social consequences of economic actions when making business decisions
and that there should be a presumption in favor of decisions that have both good economic and social consequences is known
as:
A. business ethics.
B. noblesse oblige.
C. ethical dilemma.
D. social responsibility. D
Which of the following, in a business setting, is taken to mean benevolent behavior that is the responsibility of successful
enterprises?
A. Sullivan's principles
B. Ethical dilemma
C. Tragedy of the commons
D. Noblesse oblige D
Ethical dilemmas exist because of all of the following reasons except:

A. many real-world decisions are complex and difficult to frame.
B. decisions may involve first, second, and third-order consequences that are hard to quantify.
C. doing the right thing, or knowing what the right thing might be, is often far too easy.
D. they are situations in which none of the available alternatives seem ethically acceptable. C
Which of the following refers to the values and norms that the employees of an organization share?
A. Vision statement
B. Cultural relativism
C. Organization culture
D. Power orientation C
According to _____, the social responsibility of business is to increase profits, so long as the company stays within the rules of
law.
A. the naive immoralist
B. the righteous moralist
C. cultural relativism
D. the Friedman doctrine D
According to the Friedman doctrine:

A. ethics are nothing more than the reflection of culture.
B. a multinational's home-country standards of ethics are inappropriate to follow in foreign countries.
C. businesses should not undertake social expenditures beyond those mandated by the law and required for the efficient
running of a business.
D. if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that
manager should not either. C
Cultural relativism suggests that:
A. ethics are nothing more than the reflection of culture and that a firm should adopt the ethics of the culture in which it is
operating.
B. the only social responsibility of business is to increase profits.
C. managers of a firm should not make decisions regarding social investments.
D. a multinational's home-country standards of ethics are always appropriate to follow in foreign countries. A
Child labor is permitted and widely employed in Country X. A multinational company entering Country X decides to employ
minors in its subsidiary, even though it is against the multinational's home-country ethics. Which of the following approaches
to business ethics would justify the actions of the multinational company?
A. Righteous moralist
B. Cultural relativism
C. The justice theory
D. The rights theory B
The idea that universal notions of morality transcend different cultures is implicitly rejected by:
A. the righteous moralist.
B. the naive immoralist.
C. the Friedman doctrine.
D. cultural relativism. D
The righteous moralist suggests that:

A. ethics are nothing more than the reflection of culture.
B. a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
C. the social responsibility of business is to increase profits, so long as the company stays within the rules of law.
D. if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that
manager should not either. B
According to the naive immoralist:

A. a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
B. the social responsibility of business is to increase profits, so long as the company stays within the rules of law.
C. ethics are nothing more than the reflection of a culture
D. if firms in a host nation do not follow ethical norms then the manager of a multinational should also not follow ethical
norms there. D
The utilitarian approach to business ethics suggests that:

A. people should be treated as ends and never purely as means to the ends of others.
B. the moral worth of actions or practices is determined by their consequences.
C. people have dignity and need to be treated as such.
D. human beings have fundamental rights and privileges that transcend national cultures. B
According to the _____ approach, the best decisions are those that produce the greatest good for the greatest number of
people.
A. naive immoralist
B. Friedman doctrine
C. utilitarian
D. Kantian C
The Kantian approach to ethics suggests that:

A. human beings have fundamental rights and privileges that transcend national boundaries.
B. the moral worth of actions or practices is determined by their consequences.
C. people should be treated as ends and never purely as means to the ends of others.
D. ethics are nothing more than the reflection of culture. C
Identify the correct statement about the rights theories.

A. Human beings have fundamental rights and privileges that transcend national boundaries.
B. The moral worth of actions or practices is determined by their consequences.
C. People should be treated as ends never purely as means to the ends of others.
D. Minimum levels of morally acceptable behavior should be established. A
The United Nations' Universal Declaration of Human Rights, related to employment, upholds all of the following except:
A. just and favorable work conditions.
B. equal pay for equal work.
C. prohibition of trade unions.
D. protection against unemployment. C
Article 1 of the United Nations' Universal Declaration of Human Rights states: "All human beings are born free and equal in
dignity and rights." This best echoes:
A. cultural relativism.
B. Friedman doctrine.
C. the righteous moralist approach.
D. Kantian ethics. D
Any person or institution that is capable of moral action such as a government or corporation is a(n):
A. moral agent.
B. utilitarian.
C. righteous moralist.
D. naive immoralist. A
Justice theories of business ethics focus on:

A. the moral worth of actions or practices.
B. minimum levels of morally acceptable behavior.
C. fundamental rights and privileges that transcend national boundaries.
D. the attainment of a just distribution of economic goods and services. D
Under the veil of ignorance, everyone is imagined to be ignorant of:

A. all of his/her particular characteristics.
B. fundamental rights and privileges.
C. the moral worth of actions or practices.
D. the minimum levels of morally acceptable behavior. A
According to John Rawls:

A. each person should be permitted the maximum amount of basic liberty compatible with a similar liberty for others.
B. freedom of speech and assembly is the single most important component in a justice system.
C. equal basic liberty is only possible in a pure market economy.
D. inequalities in a justice system are not to be tolerated under any circumstance. A
Rawls' philosophy that inequalities are justified if they benefit the position of the least-advantaged person is known as the:
A. inequality principle.
B. equity principle.
C. difference principle.
D. indifference principle. C
Managers of international business can do all of the following to make sure ethical issues are considered in business decisions
except:
A. favor hiring and promoting people with a well-grounded sense of personal ethics.
B. build an organizational culture that places a high value on ethical behavior.
C. make sure that leaders within the business do not articulate the rhetoric of ethical behavior.
D. develop moral courage. C
External stakeholders:
A. are individuals or groups who own the business.
B. include all employees, the board of directors, and stockholders.
C. typically comprise customers, suppliers, lenders, etc.
D. are individuals or groups who work for the business. C
Internal stakeholders:
A. are individuals or groups who work for or own the business.
B. do not have any claim on a firm or its activities.
C. typically comprise customers, suppliers, lenders, governments, unions, etc.
D. are individuals, except employees, board of directors, and stockholders that have some claim on the firm. A
_____ means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder.
A. Veil of ignorance
B. Difference principle
C. Moral imagination
D. Noblesse oblige C
(站在利益者的角度，詢問擬議的決策如何影響利益者)
Establishing _____ involves a business' resolve to place moral concerns ahead of other concerns in cases where either the
fundamental rights of stakeholders or key moral principles have been violated.
A. a veil of ignorance
B. a difference principle
C. moral imagination
D. moral intent D
Which of the following enables managers to walk away from a decision that is profitable, but unethical?
A. Noblesse oblige
B. Moral courage
C. The difference principle
D. The Friedman doctrine B
41. Which of the following is not one of the main instruments of trade policy?
A. Tariffs
B. Credit portfolios
C. Local content requirements
D. Administrative policies B
42. Specific tariffs are:

A. levied as a proportion of the value of the imported good.
B. levied as a fixed charge for each unit of a good imported.
C. in the form of manufacturing or production requirements of goods.
D. government payment to domestic producers. B
43. Tariffs do not benefit:

A. consumers.
B. domestic producers.
C. governments.
D. domestic firms. A
44. Import tariffs:

A. reduce the price of foreign goods.
B. reduce the overall efficiency of the world economy.
C. create efficient utilization of resources.
D. are unambiguously pro-consumer and anti-producer. B
45. All of the following are true of tariffs except:

A. they reduce the revenue for the government.
B. they can be levied as a proportion of the value of the imported good.
C. they can be levied as a fixed charge for each unit of a good imported.
D. they impose significant costs on domestic consumers. A
46. By lowering production costs, help domestic producers compete against foreign imports.
A. tariffs
B. duties
C. quotas
D. subsidies D
47. Which of the following observations about subsidies is false?

A. Government subsidies must be paid for, typically by taxing individuals and corporations.
B. They mainly benefit domestic producers, whose international competitiveness is increased.
C. Whether they generate national benefits that exceed their national costs is debatable.
D. They help foreign producers gain a competitive advantage over domestic producers. D
48. Agricultural subsidies have been criticized for all of the following reasons except:
A. they allow inefficient farmers stay in business.
B. they discourage countries to overproduce heavily subsidized agricultural products.
C. they encourage countries to produce products that could be grown more cheaply elsewhere and imported.
D. they reduce international trade in agricultural products. B
49. According to the policy, subsidies can help a firm achieve a first-mover advantage in an emerging industry.
A. strategic trade
B. antidumping
C. tariff quota
D. free trade A
50. This is a direct restriction on the quantity of some good that may be imported into a country.
A. Specific tariff
B. Import quota
C. Subsidy
D. Ad valorem tariff B
51. In the United States, the only firms allowed to import cheese are certain trading companies, each of which is allocated the
right to import a maximum number of pounds of cheese each year. Identify the trade restriction being imposed by the United
States.
A. Import quota
B. Subsidy
C. Ad valorem tariff
D. Specific tariff A
52. A common hybrid of a quota and a tariff is known as a(n):

A. quota rent.
B. voluntary export restraint.
C. ad valorem tariff.
D. tariff rate quota. D
53. A quota on trade imposed by the exporting country, typically at the request of the importing country's government is
referred to as a(n):
A. voluntary export restraint.
B. specific tariff quota.
C. trade reconciliation.
D. ad valorem tariff. A
54. A quota rent is:

A. a quota on trade imposed by the exporting country.
B. levied as a fixed charge for each unit of a good imported.
C. levied as a proportion of the value of the imported good.
D. the extra profit producers make when supply is artificially limited by an import quota. D
55. Foreign producers typically agree to voluntary export restrictions because:

A. their manufacturing capacity is limited.
B. they can divert their exports to other countries and charge more for their products.
C. they fear far more damaging punitive tariffs or import quotas might follow if they do not.
D. they are required to by the World Trade Organization. C
56. Which of the following statements concerning a voluntary export restraint is false?
A. It benefits domestic producers by limiting import competition
B. In most cases, it benefits consumers
C. It raises the domestic price of an imported good
D. It is a variant of the import quota B
57. These are requirements that some specific fraction of a good be produced domestically.
A. Import quotas
B. Voluntary export restraints
C. Local content requirements
D. Antidumping duties C
58. The specifies that government agencies must give preference to American products when putting contracts for equipment
out to bid unless the foreign products have a significant price advantage.
A. Buy America Act
B. Anti-Dumping Act
C. Helms-Burton Act
D. D'Amato Act A
59. Administrative trade policies are:

A. requirements that some specific fraction of a good be produced domestically.
B. quotas on trade imposed by the exporting country.
C. bureaucratic rules designed to make it difficult for imports to enter a country.
D. designed to punish foreign firms that engage in dumping. C
60. Which of the following is variously defined as selling goods in a foreign market at below their costs of production or as
selling goods in a foreign market at below their "fair" market value?
A. Export restraint
B. Dumping
C. Local content requirement
D. Ad valorem B
61. Antidumping duties are often called:

A. special circumstance duties.
B. positive duties.
C. retroactive duties.
D. countervailing duties. D
62. The U.S. government using the threat of punitive trade sanctions to try to get the Chinese government to enforce its
intellectual property laws is an example of government intervention based on:
A. human rights protection.
B. national security.
C. consumer protection.
D. retaliation. D
63. If a government grants preferential trade terms to a country it wants to build strong relations with, the government is
employing a policy:
A. of retaliation.
B. of human rights protection.
C. to protect national security.
D. to further foreign policy objectives. D
64. This act allows Americans to sue foreign firms that use property in Cuba confiscated from them after the 1959 revolution.
A. The Buy America Act
B. The Anti-Dumping Act
C. The Helms-Burton Act
D. The D'Amato Act C
65. According to the argument, governments should temporarily support new industries until they have grown strong enough
to meet international competition.
A. retaliatory action
B. human rights
C. infant industry
D. anti-dumping C
66.Suggests that a government should use subsidies to support promising firms that are active in newly emerging industries.
A. The infant industry argument
B. Strategic trade policy
C. Retaliation policy
D. The national security argument B
67. The EU's Common Agricultural Policy is an example of a tax policy designed to benefit:
A. consumers.
B. taxpayers.
C. special-interest politics.
D. free trade in developed countries. C
68. Economic problems during the Great Depression were compounded in 1930 when the U.S. Congress passed the , aimed at
avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products.
A. Smoot-Hawley Act
B. Anti-Dumping Act
C. Helms-Burton Act
D. D'Amato Act A
69. Which of the following is not a reason for the pressure for greater protectionism that occurred during the 1980s and early
1990s?
A. The growing U.S. trade surplus with Japan strained the world trading system.
B. Japanese economic success strained the world trading system.
C. The persistent trade deficit in the United States strained the world trading system.
D. Many countries found ways to get around GATT regulations. A
70. In the 1986 Uruguay Round, GATT members sought to write rules for promoting all of the following except:
A. intellectual property protection.
B. agricultural subsidies.
C. GATT's monitoring and enforcement mechanisms.
D. GATT rules to cover trade in services. B
71. Until 1995, GATT rules applied to all of the following except:
A. manufactured goods.
B. services.
C. textiles.
D. agricultural products. B
72. According to the 1986 Uruguay Round, the was to be created to implement the GATT agreement.
A. World Trade Organization
B. International Monetary Fund
C. United Nations
D. World Bank A
73. After the Uruguay Round of GATT extended global trading rules to cover trade in services, the first two industries targeted
for reform by the WTO were:
A. textiles and technology.
B. telecommunications and financial services.
C. automotives and aerospace.
D. agriculture and consulting services. B
74. The "millennium round" ended in 1999 with:

A. a successful record on agricultural products.
B. a new agenda for the next round focusing on financial services.
C. no agreement on the reduction of barriers to cross-border trade and investment.
D. a decision to avoid FDI. C
75. Which of the following is not a reason why WTO is being criticized by those opposing free trade?
A. Its trade laws allow imports from low-wage countries and result in a loss of jobs in high-wage countries.
B. Its rules outlawing the ability of nations to stop imports from countries where working conditions are hazardous.
C. The adverse impact that some of its rulings have had on environmental policies.
D. Its lack of ability to force any member nation to take an action to which it is opposed. D
76. The WTO argues that by removing all tariff barriers and subsidies to agriculture, all of the following would occur except:
A. the overall level of trade would increase.
B. there would be overproduction of products that are heavily subsidized.
C. prices would fall for consumers.
D. global economic growth would rise. B
77. The TRIPS regulations established at the 1995 Uruguay Round:
A. established regulations on patents and copyrights.
B. set a new level of agriculture subsidies.
C. organized OECD countries to eliminate tariffs on textiles.
D. established new tariff levels on technology. A
78. TRIPS regulations oblige WTO members to all of the following except:
A. grant and enforce patents lasting at least 20 years.
B. grant and enforce copyrights lasting 50 years.
C. comply with the rules within five years in the case of rich countries.
D. comply with the rules within 10 years in the case of the poorest countries. C
79. are the highest rate that can be charged, which is often, but not always, the rate that is charged.
A. Ad valorem tariff rates
B. Tariff rents
C. Specific tariff rates
D. Bound tariff rates D
80. Identify the incorrect statement about trade barriers.

A. They raise the costs of exporting products to a country.
B. They may put a firm at a competitive advantage to indigenous competitors.
C. They may limit a firm's ability to serve a country from locations outside of that country.
D To conform to local content regulations, a firm may have to locate more production activities in a given
. market than it would otherwise. B
41. An agreement between countries in a geographic region to reduce tariff and nontariff barriers to the free flow of goods,
services, and factors of production between each other is referred to as:
A. regional economic integration.
B. socioeconomic integration.
C. political integration.
D. economic-political integration. A
42. The movement toward regional economic integration has been most successful in:
A. Latin America.
B. North America_
C. Europe.
D. Asia_ C
43. Identify the incorrect statement pertaining to the European Union.

A. In 1993, it formally removed many bathers to doing business across borders within the EU
B. Its member states have launched a single currency, the elm°.
C. It was joined by two countries Switzerland and Norway, in 2007.
D. It has expanded to 27 countries in 2007. C
44. On January 1, 1993 ______ moved toward a single market with 340 million consumers.
A. the European Union
B. MERCOSUR
C. the Andean community
D. NAFTA A
45. In 1991, Argentina, Brazil, Paraguay, and Uruguay implemented an agreement known as:
A. NAFTA
B. MERCOSUR
C. APEC
D. FTAA B
46. These are the most popular form of regional economic integration, accounting for almost 90% of regional agreements
A. Free trade areas
B. Customs unions
C. Common markets
D. Economic unions A
47. Which of the following selections accurately depicts the levels of economic integration from least integrated to most
integrated?
A. Economic union, common market, customs union, free trade area, and full political union.
B. Common market, economic union, full political union, free trade area, and customs union.
C. Free trade area, customs union, common market, economic union, and full political union
D. Full political union, free trade area, common market, customs union, and economic union. C
48. In a free trade area:

A. barriers to the trade of goods and services among member nations are removed.
B. a common currency is adopted
C. a single parliament determines political and foreign policy.
D. a common external trade policy is adopted. A
49. In a(n)____, no discriminatory tariffs, quotas, subsidies, or administrative impediments are allowed to distort trade
between member nations; however, each country is allowed to determine its own trade policies with regard to nonmembers.
A. common market
B. economic union
C. political union
D. free trade area D
50. The most enduring free trade area in the world is the:
A. Asia Pacific Economic Cooperation
B. MERCOSUR
C. European Free Trade Association
D. North American Free Trade Association C
51. Which of the following statements best defines a common market?

A. All barriers to trade of goods and services among member countries are removed and each country maintains its own policy
toward nonmember countries.
B. It involves the free flow of products and factors of production between member countries and adoption of individual
external trade policies
C. It has no barriers to trade between member countries, includes a common external trade policy, and allows factors of
production to move freely between members
D. It eliminates trade between member countries and adopts a common external trade policy. C
52. Which of the following statements best defines a customs union?

A. All barriers to trade of goods and services among member countries are removed and each country maintains its own policy
toward nonmember countries.
B. It involves the free flow of products and factors of production between member countries and adoption of individual
external trade policies
C. It has no barriers to trade between member countries, includes a common external trade policy, and allows factors of
production to move freely between members
D. It eliminates trade between member countries and adopts a common external trade policy. D
53. The Andean Pact is an example of a(n):

A. economic union
B. customs union
C. common market
D. political unionB
54. Identify the incorrect statement about a common market

A. It has no barriers to trade between member countries
B. It includes a common external trade policy
C. It establishes a central political apparatus coordinating the economic, social, and foreign policy of the member states.
D. It allows factors of production to move freely between members C
55. A(n) _____ involves the free flow of products and factors of production between member countries and the adoption of a
common external trade policy, along with a common currency, harmonization of members' tax rates, and a common
monetary and fiscal policy.
A. free trade area
B. economic union
C. common market
D. customs union B
56. A political benefits of economic integration is that:

A. It enables participants to achieve gains from the free flow of trade
B. it enables participants to achieve gains from the free flow of investment
C. it allow countries to specialize in the production of goods and services that they can produce most efficiently.
D. linking neighboring economies creates incentives for cooperation between the neighboring states and reduces the
potential for violent conflict. D
57. All of the following are reasons why economic integration has never been easy to achieve or sustain except:
A. even though it aids the majority, it has its costs.
B. a nation as a whole may benefit significantly, but certain groups may lose.
C. There are concerns over loss of national soverignty
D. Linking neighboring economies makes them increasingly dependent on each other D
58. ___ occurs when high-cost domestic producers are replaced low-cost domestic producers within the free trade area.
A. A free trade zone
B. Trade diversion
C. Trade creation
D. Trade interpretation C
59. Trade diversion occurs when:

A. low-cost producers within the free trade replace high-cost domestic producers.
B. lower-cost suppliers replace higher-cost external suppliers within the free trade area
C. higher-cost external suppliers replace lower-cost domestic producers within the free trade area.
D. higher-cost suppliers replace lower-cost external suppliers within the free trade area. D
60. The European Community was established by:

A. The Treaty of Rome signed in 1957
B. The Maastricht Treaty signed in 1991
C. The Maastricht Treaty of 1994
D. The Single European Act of 1987 A
61. The European Coal and Steel Community, formed in 1951, was a forerunner of:
A. EFTA
B. EU
C. MERCOSUR
D. APEC B
62. Which of the following is not a main institution in the political structure of the EU?
A. The European Parliament
B. The European Central Bank
C. The European Commision
D. Council of the European Union B
63. The _____ is responsible for proposing EU legislation, implementing it, and monitoring compliance with EU laws by
member states.
A. European Parliament
B. European Commission
C. Council of the European Union
D. Court of Justice B
64. The______ represents the interests of member states and is clearly the ultimate controlling authority within the EU.
A. European Parliament
B. European Commission
C. European Council
D. Court of Justice C
65. Which of the following is directly elected by the populations of the member states and is primarily a consultative rather
than legislative body?
A. The European Parliament
B. The European Commission
C. The Council of the European Union
D. The Court of Justice A
66. Identify the incorrect statement pertaining to the EU's Court of Justice
A. It is comprised of one judge from each country
B. It is the supreme appeals court for EU law
C. Its judges are required to act as representatives of national interests
D. A member country can bring other members to the court for failing to meet EU treaty obligations C
67. The ___ , adopted by the member nations of the European Community in 1987, committed member countries to work
toward the establishment of a single market by December 31, 1992
A. Maastricht Treaty
B. Treaty of Rome
C. Single European Act
D. Delores Commission C
68. All of the following are true of the euro except:

A. its notes and coins were first issued on January 1, 1999
B. It required participating countries to give up their own currencies
C. countries lost control of monetary policy when it was establish
D. it created the second largest currency zone in the world A
69. In December 1991, EC members signed this treaty that committed them to adopting a common currency by January 1,
1999.
A. The Treaty of Rome
B. The Delores Commission
C. The Maastricht Treaty
D. The Single European Act C
70. Which of the following is seen as a disadvantage of the euro?

A. Higher foreign exchange and hedging costs
B. National authorities losing control over monetary policy
C. It becomes difficult to compare prices across Europe
D. Undermines the development of a pan-European capital market.B
71. Bolivia, Peru, Ecuador, Columbia, and Venezuela are all members of:
a. the EU
B. NAFTA
C. APEC
D. the Andean Pact D
72. MERCOSUR originated as a(n)_____ between Brazil and Argentina in 1988

A. open market
B. free trade pact
C. customs union
D. free trade zone B
73. According to Alexander Yeats:

A. The trade diversion effects of MERCOSUR outweigh its trade creation effects.
B. The faster growing items in intra-MERCOSUR trade were capital-intensive goods produced efficiently in the member
countries.
C. MERCOSUR countries will be able to compete globally once the group's external trade barriers come down
D. Countries with more efficient manufacturing enterprises are getting a level playing field because of MERCOSUR's reduction
in trade barriers.A
74. In early 2006, six CARICOM members abd the United States established the_____, which was modeled on the EU's single
market.
A. Central American Common Market
B. Central America Free Trade Agreement
C. Caribbean Single Market and Economy.
D. North American Free Trade Area C
75. All of the following are seen as stumbling blocks towards the establishment of the Free Trade Area of he Americas
exeption
A. Brazil and Argentina want the United State to reduce its subsidies to U.S agricultural producers
B. The United State wants its southern neighbors to agree to tougher enforcement of intellectual property rights
C. Brazil and Argentina want the United State to scrap tariffs on agricultural imports
D. The United States want its southern neighbors to increase manufacturing tariffs D
76. Which of the following is not true of ASEAN?

A. Cambodia, Laos, Myanmar, and singapore are among its members.
B. Its basic objective is to foster freer trade between member countries and to achieve cooperation in their industrial policies.
C. It has been highly successful in achieving cooperation in its industrial policies.
D. It is punishing for free trade agreement with China, Japan, and South Korea. C
77. Which of the following is true of the Asia-Pacific Economic Cooperation (APEC)?
A. It was founded in 2001
B. It currently has 57 member states
C. United States and japan are not members of this body
D. Collectively, the member states account for much of the growth in the world economy D
78. Collectively, the _______ member states account for about 55 percent of the world's GNP and 49 percent of world trade.
A. APEC
B. EU
C. NAFTA
D. MERCOSU A
79. For international business, regional economic integration such as the EU:
A. Raise the cost of doing business in the region.
B. Eliminates differences in culture, allowing companies to standardize marketing activities.
C. Opens markets that had formerly been protected.
D. Standardizes competitive practics, enabling companies to realize substantial cost economies C
80. Which of the following is not a threat that emerges for international business as a result of regional economic integration?
A. The business environment within each grouping becomes morecompetetive
B. There is a risk of being shut out of the single market by the creation of a "trade fortress"
C. It limits the ability of firms to pursue the corporate strategy of their choice.
D. The cost of doing business in a single market may fall. D
41. The rate at which one currency is converted into another is the:
A. replacement percentage.
B. resale rate.
C. exchange rate.
D. interchange ratio. C
42. The risks that arise from volatile changes in exchange rates are commonly referred to as:
A. interest rate risks.
B. basis risks.
C. operational risks.
D. foreign exchange risks. D
43. The foreign exchange market serves two main functions. These are:
A. collect duties on imported products and convert the currency of one country into the currency of another.
B. insure companies against foreign exchange risk and set interest rates charged to foreign investors.
C. collect duties on imported products and set interest rates charged to foreign investors.
D. convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk.
D
44. A pair of shoes costs ≤30 in Britain. The identical pair costs $45 in the United States. The exchange rate is ≤1 = $1.80. In
terms of cost of the shoes:
A. the U.S. offers a better deal.
B. the deal is the same in both countries.
C. Britain offers a better deal.
D. the U.S. deal is comparatively worse. A
45. An exchange rate of €1 = $1.30 indicates that:

A. $1 is worth 1.30 euros.
B. one could sell 1.30 euros for $1.
C. one euro buys $1.30.
D. there are 1.30 euros for every dollar. C
46. The helps us to compare the relative prices of goods and services in different countries.
A. interest rate
B. customs rate
C. exchange rate
D. tariff rate C
47. International businesses use foreign exchange markets for all of the following reasons except:
A. to receive payments from foreign investments that may be in foreign currencies.
B. to pay a foreign company for its products or services in its country's currency.
C. to invest for short terms in money markets when they have spare cash.
D. to cover themselves from all risks involved in currency speculation. D
48. The short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates is
known as:
A. currency arbitrage.
B. currency speculation.
C. currency supposition.
D. short selling. B
49. One function of the foreign exchange market is to provide some insurance against the risks that arise from changes in
exchange rates, commonly referred to as:
A. foreign market hazard.
B. global jeopardy.
C. foreign exchange risk.
D. commerce uncertainty. C
50. When two parties agree to exchange currency and execute the deal immediately, the transaction is a:
A. point-in-time exchange.
B. temporal exchange.
C. spot exchange.
D. forward exchange. C
51. If lots of people want euros and euros are in short supply, and a few people want Japanese yen and yen are in plentiful
supply, the euro is likely to against the yen.
A. depreciate
B. appreciate
C. devalue
D. stabilize B
52._______are exchange rates governing some specific future date foreign exchange transactions.
A. Spot exchange rates
B. Forward exchange rates
C. Future exchange rates
D. Currency swaps B
53. Assuming the 30-day forward exchange rate were $1 = ×130 and the spot exchange rate were $1 = ×120, the dollar is
selling at a on the 30-day forward market.
A. premium
B. margin
C. discount
D. subsidy A
54. The simultaneous purchase and sale of a given amount of foreign exchange for two different value dates is referred to as
a:
A. fiscal barter.
B. liquid trade.
C. currency exchange.
D. currency swap. D
55. Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is ×120 = $1, and the New York yen/dollar
exchange rate at the same time is ×125 = $1. A dealer makes a profit by buying a currency low and selling it high. The dealer
has engaged in a(n):
A. currency swap.
B. arbitrage.
C. backwardation.
D. straddle. B
56. If the demand for dollars outstrips its supply and if the supply of Japanese yen is greater than the demand for it, what will
happen?
A. The dollar will appreciate against the yen
B. The dollar will depreciate against the yen
C. The exchange rates will remain the same
D. The yen will appreciate against the dollar A
57. According to the , in competitive markets free of transportation costs and barriers to trade, identical products sold in
different countries must sell for the same price when their price is expressed in terms of the same currency.
A. law of one price
B. principle of consistent pricing
C. model of fair pricing
D. principle of equitable pricing A
58. According to the law of one price, if the exchange rate between the British pound and the dollar is ≤1 =
$1.50, a jacket that retails for $75 in New York should sell for in London.
A. ≤40
B. ≤50
C. ≤60
D. ≤75 B
59. The suggests that given relatively efficient markets, the price of a "basket of goods" should be roughly equivalent in each
country.
A. theory of efficient markets
B. law of one price
C. theory of price inflation
D. PPP theory D
60. Suppose the price of a Big Mac in New York is $3.00 and the price of a Big Mac in Paris is $3.75 at the prevailing
euro/dollar exchange rate, then according to PPP the euro is:
A. undervalued by 25 percent against the dollar.
B. overvalued by 25 percent against the dollar.
C. appreciating relative to the dollar.
D. depreciating relative to the dollar. B
61. Identify the incorrect statement about the PPP theory.

A. It predicts that exchange rates are determined by relative prices.
B. It yields accurate predictions in the short run.
C. It best predicts exchange rate changes for countries with high rates of inflation.
D. It assumes away transportation costs and barriers to trade. B
62. involves dominant enterprises setting different prices in different markets to reflect varying demand conditions.
A. Conditional pricing
B. Dual pricing
C. Price discrimination
D. Foreign market pricingC
63. The states that a country's "nominal" interest rate is the sum of the required "real" rate of interest and the expected rate
of inflation over the period for which the funds are to be lent.
A. PPP theory
B. efficient market theory
C. inefficient market theory
D. Fisher Effect D
64. Economic theory suggests that when inflation is expected to be high:

A. interest rates will be low.
B. exchange rates will be high.
C. the International Fisher Effect does not hold.
D. interest rates will be high. D
65.______states that for any two countries, the spot exchange rate should change in an equal amount but in the opposite
direction to the difference in nominal interest rates between the two countries.
A. The Fisher Effect
B. The International Fisher Effect
C. The efficient market theory
D. The inefficient market theory B
66. When traders move as a herd in the same direction at the same time such as what occurred when George Soros betted
against the British pound in 1992, a(n) occurs.
A. efficient market
B. inefficient market
C. bandwagon effect
D. Fisher Effect C
67. The argues that forward exchange rates do the best possible job of forecasting future spot rates and therefore investing in
forecasting services would be a waste of money.
A. inefficient market school
B. efficient market school
C. Fisher Effect
D. international Fisher Effect B
68._____draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.
A. Efficient market theory
B. Inefficient market theory
C. Fundamental analysis
D. Technical analysis C
69._____uses price and volume data to determine past trends, which are expected to continue into the future.
A. Technical analysis
B. Fundamental analysis
C. The Fisher Effect
D. The International Fisher Effect A
70. A currency is said to be freely convertible when:

A. the country's government allows both residents and nonresidents to purchase unlimited amounts of a foreign currency
with it.
B. only nonresidents may convert it into a foreign currency without any limitations.
C. neither residents nor nonresidents are allowed to convert it into a foreign currency.
D. only residents may convert it internally into a foreign currency. A
71. A currency is said to be externally convertible when:

with it.
D. only residents may convert it internally into a foreign currency. B
72. When a currency is nonconvertible:

with it.
D. only residents may convert it internally into a foreign currency. C
73.______is most likely to occur when the value of the domestic currency is depreciating rapidly because of hyperinflation or
when a country's economic prospects are shaky in other respects.
A. The bandwagon effect
B. The Fisher Effect
C. The International Fisher Effect
D. Capital flight D
74. A range of barter-like agreements by which goods and services can be traded for other goods and services is known as:
A. countertrade.
B. protracted trade.
C. intermediate sales.
D. countersale. A
75. Countries might be forced to use countertrade when a currency is:

A. freely convertible.
B. externally convertible.
C. internally convertible.
D. nonconvertible. D
76. The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is
known as:
A. economic exposure.
B. financial exposure.
C. translation exposure.
D. transaction exposure. D
77._____is the impact of currency exchange rates changes on the reported financial statements of a company.
A. Economic exposure
B. Financial exposure
C. Translation exposure
D. Transaction exposure C
78. The extent to which a firm's future international earning power is affected by changes in exchange rates is known as:
A. translation exposure.
B. financial exposure.
C. economic exposure.
D. transaction exposure. C
79. A(n) involves attempting to collect foreign currency receivables early when a foreign currency is expected to depreciate
and paying foreign currency payables before they are due when a currency is expected to appreciate.
A. follower strategy
B. interim strategy
C. lead strategy
D. lag strategy C
80. A(n) involves delaying collection of foreign currency receivables if that currency is expected to appreciate and delaying
payables if the currency is expected to depreciate.
A. follower strategy
B. interim strategy
C. lead strategy
D. lag strategy D
41. _____ can be defined as the rate of return that the firm makes on its invested capital, which is calculated by dividing the
net profits of the firm by total invested capital.
A. Profitability
B. Performance
C. Cash flow
D. Efficiency A
42. The percentage increase in net profits over time measures:

A. capital return.
B. profitability.
C. net profits.
D. profit growth D
43. Which of the following statements is not true?

A. The way to increase the profitability of a firm is to create more value.
B . The amount of value a firm creates is measured by the difference between its costs of production and the value that
consumers perceive in its products.
C. The more value customers place on a firm's products, the higher the price the firm is able to charge for those products.
D. The price a firm charges for a good or service is typically more than the value the customer places on that good or service
D
44. The price a firm charges for a good or service is typically less than the value placed on that good or service by the
customer. This is because:
A. the customer's disposable income is significantly higher than what the market demands.
B. the customer captures some of that value in the form of a consumer surplus.
C. regulatory mechanisms ensure that the customer is not overcharged for products/services.
D. marketers implement psychological pricing tactics to ensure that customers perceive the prices to be low. B
45. The value of a product to an average consumer is V; and the average price that the firm can charge a consumer for that
product is P. Here, V - P can be termed as:
A. consumer surplus per unit.
B. producer surplus per unit.
C. profit growth.
D. profit per unit sold. A
46. A consumer surplus can be best described as:

A. what the consumer has "left-over" after a purchase.
B. how much extra a consumer has to pay for a product.
C. value for the money.
D. the premium charged for a quality product. C
47. Michael Porter has argued that _____ and _____ are two basic strategies for creating value and attaining a competitive
advantage in an industry.
A. differentiation; price competition
B. economies of scale; diversification.
C. low cost; differentiation
D. efficiency; promotion C
48. A strategy that focuses on increasing the attractiveness of a product is referred to as a(n):
A. differentiation strategy.
B. low cost strategy.
C. effectiveness strategy.
D. efficiency strategy A
49. The _____ shows all of the different positions a firm can adopt with regard to adding value to the product and low cost
assuming the firm's internal operations are configured efficiently to support a particular position.
A. strategic choice curve
B. strategy convex
C. efficiency frontier
D. experience curve C
50. _____ imply that when a firm already has significant value built into its product offering, increasing value by a relatively
small amount requires significant additional costs. A. Efficiency matrixes
B. Diminishing returns
C. Cost plus curves
D. Strategy convex curves B
51. The basic strategy paradigm suggests that to maximize its profitability, a firm should do all of the following, except: A.
choose, according to strategy, any position on the efficiency frontier as all positions are viable.
B. pick a position on the efficiency frontier that is viable in the sense that there is enough demand to support that choice.
C. configure its internal operations so that they support the position on the efficiency frontier.
D. make sure that the right organization structure is in place to execute the strategy. A
52. _____ activities are basically concerned with creating the product, marketing and delivering the product to buyers, and
providing support and after-sales service.
A. Support
B. Subordinate
C. Ancillary
D. Primary D
53. Which of the following is an example of a primary activity in a firm's value chain?
A. Information systems
B. Research and development
C. Logistics
D. Human relations B
54. The marketing and sales functions of a firm can help to create value through all of the following ways, except:
A. creating goods and services.
B. brand positioning.
C. advertising.
D. communicating consumer needs to R&D. A
55. Which of the following is an example of a support activity in a firm's value chain?
A. R&D
B. Customer service
C. Human resources
D. Marketing and sales C
56. _____ activities of the value chain provide inputs that allow the primary activities to occur.
A. Complementary
B. Basic
C. Support
D. Core C
57. The _____ function creates value by ensuring the company has the right mix of people to perform activities effectively.
A. information systems
B. company infrastructure
C. human resources
D. logistics C
58. Global expansion allows firms to achieve all of the following, except:
A. standardize their product offering, marketing strategy, and business strategy for all national conditions.
B. realize location economies by dispersing value creation activities to the optimal location.
C. realize cost economies from experience effects generated by serving a larger market from a central location.
D. expand the market for their domestic product offerings by selling those products in international markets. A
59. A firm focusing on _____ will benefit by basing each value creation activity it performs at that location where economic,
political, and cultural conditions, including relative factor costs, are most conducive to the performance of that activity.
A. organizational advantage
B. core competency
C. competitive gains
D. technical skill sets B
60. Economies that arise from performing a value creation activity in the optimal place for that activity are referred to as:
A. factor economies.
B. production economies.
C. location economies.
D. value creation economies. C
61. When companies disperse different stages of the value chain to those locations around the world where perceived value is
maximized or where the costs of value creation are minimized, companies create:
A. a differentiated organization.
B. a location economy curve.
C. economies of scale.
D. a global web of value creation activities. D
62. It has been observed that a product's production costs decline by some quantity about each time, cumulative output:
A. increases by twenty five percent.
B. quadruples.
C. doubles.
D. triples C
63. _____ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product. A.
Experience curve
B. Economies of scale
C. Location economies
D. Production possibility A
64. When individuals gain knowledge of the most efficient ways to perform particular tasks, they are saving costs through:
A. location economies.
B. value creation effects.
C. experience curve effects.
D. learning effects. D
6 5. Learning effects:
A. tend to be less significant when a technologically complex task is repeated.
B. will be less significant in an assembly process involving 1,000 complex steps than in one of only 100 simple steps.
C. typically disappear after a while, in spite of the complexity of the task.
D. are more significant after two or three years of the introduction of a new process. C
66. Economies of scale arise from all of the following sources, except:
A. increasing fixed costs by limiting them to small volumes.
B. serving domestic and international markets from the same production facilities
C. serving global markets.
D. bargaining with suppliers to bring down the cost of key inputs. A
67. Moving down the experience curve:

A. increases the cost of a firm's raw material.
B. allows a firm to reduce its cost of creating value.
C. decreases a firm's profitability.
D. increases the R&D expenditure of a firm. B
68. Firms usually respond to pressures for cost reduction by trying to:
A. lower the costs of value creation.
B. be locally responsive.
C. undertaking product differentiation.
D. diversifying product lines. A
69. Responding to pressure for _____ requires that a firm differentiate its product offering and marketing strategy from
country to country.
A. cost reductions
B. experience effects
C. lowering the costs of value creation
D. being locally responsive D
70. _____ exist when the tastes and preferences of consumers in different nations are similar if not identical.
A. Universal needs
B. Homogenous needs
C. Basic needs
D. Bundled needs A
71. Which of the following is less likely to add to the pressure for a firm to be locally responsive?
A. National differences in consumer tastes and preferences B. Differences in infrastructure and traditional practices
C. Switching costs for consumers
D. Host-government demands C
72. A firm will face intense pressure for cost:

A. when competitors are based in low-cost locations.
B. where there is persistent excess capacity.
C. where industries produce commodity-type products.
D. where consumers have low switching costs. C
73. When a firm has a strategic goal of pursuing a low cost strategy on a worldwide scale, the firm should follow a(n) _____
strategy.
A. global standardization
B. localization
C. international
D. customizationA
74. Which of the following is not associated with firms following the global standardization strategy?
A. Low pressures for local responsiveness
B. Use cost advantage to support aggressive pricing in world markets
C. High pressures for cost reductions
D. Customize product offering and marketing strategy to local conditions D
75. Which strategy makes most sense when there are strong pressures for cost reductions and minimal demands for local
responsiveness?
A. Global standardization strategy
B. Transnational strategy
C. Localization strategy
D. International strategy A
76. _____ strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes
and preferences.
A. Localization
B. Transnational
C. Global standardization
D. International A
77. Which strategy focuses on increasing profitability by customizing the firm's goods or services so they provide a good match
to tastes and preferences in different national markets?
A. Global standardization strategy
B. Transnational strategy
C. Localization strategy
D. International strategy C
78. Which of the following is a disadvantage of the localization strategy?

A. Decrease in the value of the product in the local market B. Duplication of functions
C. Inability to accommodate varying tastes and preferences in different markets
D. Reduced customization B
79. A firm that is facing both strong cost pressures and strong pressures for local responsiveness should follow a _____
strategy.
A. localization
B. global standardization
C. international
D. transnational D
80. A(n) _____ strategy makes most sense when demands for local responsiveness are high, but cost pressures are moderate
or low.
B. international
C. localization
D. transnational C
81. A firm that is pursuing a(n) _____ strategy is simultaneously trying to achieve low costs through location economies,
economies of scale, and learning effects, and trying to differentiate its product offering across geographic markets.
A. global customization
B. international
C. localization
D. transnational D
82. Firms that pursue a transnational strategy are trying to simultaneously do all of the following except:
A. achieve low costs through location economies.
B. standardize their product offering for the global market. C. foster a multidirectional flow of skills between different
subsidiaries.
D. achieve low costs through economies of scale and learning effects. B
83. A firm facing low pressures for cost reductions and low pressures for local responsiveness, is most likely to follow a(n)
_____ strategy.
B. localization
C. international
D. transnational C
84. For firms that are selling a product that serves universal needs, and that do not face significant competition, a(n) _____
strategy makes sense.
A. localization
B. transnational
C. international
D. global standardization C
85. Which of the following is true of the international strategy?

A. Product development tends to be highly decentralized. B. Manufacturing and marketing are typically located in the
headquarters location.
C. Extensive production customization is common.
D. The strategy is not viable in the long-run. D
78. Which of the following is a disadvantage of the localization strategy?

A. Decrease in the value of the product in the local market B. Duplication of functions
C. Inability to accommodate varying tastes and preferences in different markets
D. Reduced customization
Which of these terms means the totality of a firm's organization, including formal organization structure, control systems and
incentives, processes, organizational culture, and people?
A. Organizational ethics
B. Organizational architecture
C. Organizational norms
D. Organizational hierarchy B
According to the text, superior enterprise profitability requires all of the following conditions to be fulfilled except:
A. the different elements of a firm's organizational architecture must be internally consistent.
B. the organizational architecture must match the strategy of the firm.
C. The strategy and architecture of the firm must not only be consistent with each other, but also consistent with the
competitive environment of the firm.
D. The firm's formal organizational structure must revolve around the indigenous population in each subunit. D
Organizational structure means all of the following, except:

A. the establishment of integrating mechanisms to coordinate the activities of subunits.
B. the location of decision-making responsibilities with a structure.
C. the manner in which decisions are made and work is performed by individuals.
D. the formal division of the organization into subunits such as product divisions and functions. C
Which term refers to the metrics used to measure the performance of subunits and make judgments about how well
managers are running those subunits?
A. Key processes
B. Control systems
C. Knowledge networks
D. Job assignments B
When a company measures the performance of its national operating subsidiaries according to profitability, the company is
using:
A. control systems.
B. lean processes.
C. incentives.
D. organizational culture.A
The manner in which decisions are made and work is performed within the organization is known as the firm's:
A. organizational culture.
B. incentives.
C. control systems.
D. processes. D
Incentives are:
A. The metrics used to measure the performance of subunits and make judgments about how well managers are running
those subunits.
B. the devices used to reward appropriate managerial behavior.
C. the manner in which decisions are made and work is performed within the organization.
D. the norms and value systems that are shared among the employees of an organization. B
The norms and values systems that are shared among the employees of a company are referred to as:
A. processes.
B. control systems.
C. incentives.
D. organizational culture.D
A firm's determines where in its hierarchy the decision-making power is concentrated.
A. integrating mechanism
B. vertical differentiation
C. knowledge network
D. horizontal differentiation B
What is horizontal differentiation?

A. The mechanisms that enable each subunit to operate independently
B. The formal division of the organization into subunits
C. The location of decision-making responsibilities within a structure
D. The mechanisms for coordinating subunits B
Integration mechanisms are:

A. the formal division of the organization into subunits.
B. the mechanisms that enable each subunit to operate independently.
C. the mechanisms for coordinating subunits.
D. the location of decision making responsibilities within a structure. C
Which of the following is an argument favoring centralization?

A. It permits greater flexibility.
B. Motivational research favors it.
C. It can avoid the duplication of activities.
D. It gives top management time to focus on critical issues by delegating routine issues to lower-level managers. C
Which of the following is an argument favoring decentralization?

A. It can facilitate coordination.
B. It can help ensure that decisions are consistent with organizational objectives.
C. It can give top-level managers the means to bring about needed major organizational changes.
D. It permits greater flexibility. D
Centralization:
A. gives top management time to focus on critical issues by delegating more routine issues to lower-level managers.
B. can give top-level managers the means to bring about needed major organizational changes by concentrating power and
authority in one individual or a management team.
C. permits greater flexibility because decisions do not have to be "referred up the hierarchy"
D. unless they are exceptional in nature.
E. can be used to establish relatively autonomous, self-contained subunits within an organization. B
A firm that needs greater flexibility should choose for its decision-making.
A. vertical differentiation
B. centralization
C. horizontal differentiation
D. decentralization D
Behavioral scientists have long argued that people are willing to give more to their jobs when they have a greater degree of
individual freedom and control over their work. This suggests that:
A. motivational research favors decentralization.
B. centralization can facilitate coordination.
C. centralization can ensure that decisions are consistent with organizational objectives.
D. decentralization permits total flexibility with no control. A
Which of the following decisions is typically centralized at a firm's headquarters?

A. Production decisions
B. Human resource management
C. Marketing decisions
D. Overall firm strategy D
The emphasis on local responsiveness in firms pursuing a local responsiveness strategy creates strong pressures for:
A. decentralizing all decisions to foreign subsidiaries.
B. decentralizing operating decisions to foreign subsidiaries.
C. centralizing all operating decisions.
D. centralizing all decisions. B
Global learning based on the multidirectional transfer of skills between subsidiaries and the corporate center is a central
feature of a firm pursuing a(n) strategy.
A. localization
B. global standardization
C. transnational
D. international C
Which of the following would be a typical responsibility of a product division in a product divisional structure?
A. Operating decisions
B. Overall strategic development of the firm
C. Financial control of the various divisions
D. None. All decisions are typically centralized. A
Regardless of a firm's domestic structure, its international division tends to be organized on:
A. product.
B. geography.
C. people.
D. economy. B
In a domestic firm with a product divisional structure, each division is responsible for a distinct:
A. product line.
B. individual product.
C. product assortment.
D. product design. A
Which of the following is a problem that arises due to an international division structure?
A. The need to get an area and a product division to reach a decision can slow decision making and
. produce an inflexible organization unable to respond quickly to innovate.
B. It gives limited voice to area or country managers, since it makes them subservient to product division managers.
C. The heads of foreign subsidiaries are not given as much voice in the organization as the heads of domestic functions or
divisions.
D. The dual-hierarchy structure can lead to conflict and perpetual power struggles between the areas and the product
divisions, catching many managers in the middle. C
The implied lack of coordination between domestic operations and foreign operations, which are isolated from each other in
separate parts of the structural hierarchy, is a problem encountered with a(n):
A. global matrix structure.
B. international division structure.
C. worldwide product division structure.
D. worldwide area structure. B
Which of the following is not true regarding a worldwide area structure?

A. It tends to be favored by firms with a low degree of diversification.
B. It facilitates local responsiveness.
C. It tends to be favored by firms with a domestic structure based on function.
D. Decision-making responsibilities are centralized. D
This structure encourages fragmentation of the organization into highly autonomous entities.
A. Worldwide area structure
B. Global matrix structure
C. Worldwide product structure
D. Global network structure A
Which of the following is a potential drawback of the worldwide area structure?

A. It encourages fragmentation of the organization into highly autonomous entities.
B. It is inconsistent with a localization strategy.
C. It discourages local responsiveness.
D. It is not suitable for firms with a low degree of diversification and a domestic structure based on functions. A
Firms structured on this basis may encounter significant problems if local responsiveness is less critical than reducing costs or
transferring core competencies for establishing a competitive advantage.
A. International division structure
B. Worldwide area structure
C. Global matrix structure
D. Worldwide product division structure B
A(n) tends to be adopted by firms that are reasonably diversified and, accordingly, originally had domestic structures based on
product divisions.
A. worldwide area structure
B. international division structure
C. worldwide product division structure
D. global matrix structure C
The main problem with this structure is the limited voice it gives to area or country managers, since it makes them subservient
to product division managers.
A. Worldwide product divisional structure
B. Worldwide area structure
C. International structure
D. Global matrix structure A
The worldwide product division structure:

A. is weak in local responsiveness.
B. inhibits the realization of location economies.
C. inhibits the realization of experience curve economies.
D. limits the transfer of core competencies between areas. A
In the classic global matrix structure, horizontal differentiation proceeds along two dimensions. These dimensions are:
A. hierarchy and overall strategy.
B. target returns and sales potential.
C. marketing strategy and sales potential.
D. product division and geographic area. D
In practice, the global matrix structure:

A. works as well as the theory predicts.
B. is often clumsy and bureaucratic.
C. makes it easy to ascertain accountability.
D. results in quick decision making. B
In practice, the dual-hierarchy structure:

A. lessens all forms of conflict.
B. makes it easy to ascertain accountability.
C. results in extremely quick decision making.
D. can lead to perpetual power struggles. D
The need for coordination between subunits is lowest in firms pursuing a(n):
A. localization strategy.
B. international strategy.
C. global strategy.
D. transnational strategy. A
The need for coordination between subunits is highest in firms pursuing a(n)
C. global strategy.
D. transnational strategy. D
The simplest integrating mechanism in an MNE is:

A. direct contact between managers.
B. the use of teams.
C. the introduction of liaisons.
D. the establishment of the matrix structure. A
A(n) is valuable because it can be used as a nonbureaucratic conduit for information flows within a multinational enterprise.
A. liaison network
B. matrix structure
C. organizational structure
D. knowledge network D
Firms traditionally have tried to achieve coordination by adopting:

A. informal integrating mechanisms.
B. formal integrating mechanisms.
C. vertical differentiation.
D. horizontal differentiation. B
The main types of control systems used in MNEs include all of the following, except:
A. personal controls.
B. bureaucratic controls.
C. input controls.
D. cultural controls. C
Which control system is most widely used by small firms?

A. Personal
B. Output
C. Bureaucratic
D. Cultural A
Control through a system of rules and procedures that directs the actions of subunits is:
A. personal control.
B. bureaucratic control.
C. output control.
D. cultural control. B
Budgets and capital spending are the most important in subunits within multinational firms.
A. cultural controls
B. output controls
C. personal controls
D. bureaucratic controls D
A company using achieves control by comparing actual performance against targets and intervening selectively to take
corrective action.
A. personal control
B. output control
C. bureaucratic control
D. cultural control B
There is low interdependence, performance ambiguity, and costs of control in firms pursuing a(n):
C. transnational strategy.
D. global strategy. A
Due to the high level of interdependence, the costs of controlling firms are higher than the costs of controlling firms that
pursue other strategies.
A. localized
B. transnational
C. international
D. global B
In firms pursuing either global or transnational strategies, the usefulness of controls is limited by substantial performance
ambiguities.
A. bureaucratic
B. cultural
C. personal
D. output D
These refer to abstract ideas about what a group believes to be good, right, and desirable.
A. Values
B. Norms
C. Thoughts
D. Ideas A
Mechanisms to maintain culture include all of the following except:

A. the hiring and promotional practices of the organization.
B. reward strategies.
C. socialization processes.
D. ongoing cultural assessments. D
Which of the following is not true of a strong corporate culture?

A. Almost all managers share a relatively consistent set of values and norms that have a clear impact on the way work is
performed.
B. A strong culture leads to a high performance.
C. Outsiders see firms with a strong culture as having a certain way of doing things.
D. A strong culture can be a bad culture. B
Sources of organizational inertia include all of the following, except:

A. the existing distribution of power within the organization.
B. environmental influences.
C. the existing culture.
D. senior managers' preconceptions about the appropriate business model. B
38. Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in:
A. politically unstable developing nations that operate with a mixed or command economy.
B. nations where there is a dramatic upsurge in either inflation rates or private-sector debt.
C. politically stable developed and developing nations that have free market systems.
D. developing nations where speculative financial bubbles have led to excess borrowing. C
39. Which of the following is not an advantage associated with entering a foreign market before other international
businesses?
A. Ability to preempt rivals and capture demand by establishing a strong brand name.
B. Ability to ride down the experience curve ahead of rivals.
C. Ability to create switching costs.
D. Ability to avoid pioneering costs. D
40. Switching costs:

A. drive early entrants out of the market.
B. make it easy for later entrants to win business.
C. make it difficult for later entrants to win business.
D. give later entrants a cost advantage over early entrants. C
41. Early entrants to a market that are able to create switching costs that tie the customer to the product are capitalizing on:
A. economies of scale.
B. pioneering costs.
C. first-mover advantages.
D. late-mover advantages. C
42. All of the following are examples of pioneering costs except the costs of:
A. business failure.
B. educating consumers.
C. promoting and establishing a product offering.
D. learning from the mistakes of early entrants. D
43. The costs of promoting and establishing a product offering when a firm enters a foreign market prior to its rivals are
known as:
A. switching costs.
B. market development costs.
C. pioneering costs.
D. promotional development costs. C
44. A large-scale entrant is more likely than a small-scale entrant to be able to capture first-mover advantages associated with:
A. demand preemption.
B. diseconomies of scale.
C. pioneering costs.
D. diseconomies of scope. A
45. Which of the following statements about small-scale entry is true?

A. The commitment associated with a small-scale entry makes it possible for the small-scale entrant to capture first-mover
advantages.
B. Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant
scale.
C. By giving a firm time to collect information, small-scale entry increases the risks associated with a subsequent large-scale
entry.
D. Small-scale entry limits a firms ability to learn about a foreign market thereby also limiting the firm's exposure to that
market. B
46. Which of the following is not an advantage of a small-scale entry?
A. A small-scale entrant is more likely to be able to capture first-mover advantages associated with demand preemption, scale
economies, and switching costs.
B. Small-scale entry is a way to gather information about a foreign market before deciding how best to enter.
C. By giving the firm time to collect information, small-scale entry reduces the risks associated with a subsequent large-scale
entry.
D. Small-scale entry allows a firm to learn about a foreign market while limiting the firm's exposure to that market. A
47. If a firm can realize location economies by moving production elsewhere, it should avoid:
A. exporting.
B. turnkey contracts.
C. licensing.
D. wholly owned subsidiaries. A
48. Which of the following is a distinct advantage of exporting?

A. It avoids the often substantial costs of establishing manufacturing operations in the host country.
B. Benefits from a local partner's knowledge of the host country's competitive conditions.
C. Avoids the threat of tariff barriers by the host-country government.
D. Appropriate if lower cost locations for manufacturing the product can be found abroad. A
49. When a firm faces significant transportation costs, _____ can be uneconomical.
A. joint ventures
B. greenfield investments
C. licensing agreements
D. exporting D
50. When an exporting firm finds that its local agent is also carrying competitors' products, the firm may switch to a _____ to
handle local marketing, sales, and service.
A. wholly owned subsidiary
B. franchising arrangement
C. turnkey operation
D. licensing agreement A
51. When local agents carry the products of competing firms and have divided loyalties, _____ is not appropriate.
A. franchising
B. licensing
C. exporting
D. greenfield investment C
52. The threat of tariff barriers by the host government can make _____ very risky.
A. greenfield investment
B. franchising
C. licensing
D. exporting D
53. Identify the incorrect statement about turnkey projects.

A. The contractor agrees to handle every detail of the project for a foreign client.
B. They are most common in industries which use inexpensive production technologies.
C. This is a means of exporting process technology to other countries.
D. They create efficient global competitors in the process. B
54. In which of the following industries are turnkey projects the most common?
A. Fresh fruit, grain, and meat products.
B. Chemical, pharmaceutical, and metal refining.
C. Consumer durables, computer peripherals, and automotive parts.
D. Apparel, shoes, and leather products. B
55. A turnkey strategy:

A. is always riskier than conventional FDI.
B. is never used in a country with unstable political and economic environments.
C. is useful where FDI is limited by host-government regulations.
D. is a strong indicator of a firm's long-term interest in a foreign country. C
56. Many Western firms that sold oil-refining technology to firms in Gulf states now find themselves competing with these
firms in the world oil market. This is an example of:
A. the firm entering into a turnkey project with a foreign enterprise, inadvertently creating a competitor.
B. the firm entering into a turnkey deal having no long-term interest in the foreign country.
C. the country subsequently proving to be a major market for the output of the process that has been
exported.
D. selling the firm's process technology through a turnkey project which is also selling competitive advantage to potential
competitors A
57. Firms that lack the capital necessary to develop foreign operations may choose _____ as a means of expanding
internationally.
A. turnkey projects
B. licensing
C. greenfield investments
D. acquisitions B
58. An arrangement whereby a firm grants the right of intangible property to another entity for a specified time period in
exchange for royalties is a(n) _____ agreement.
B. turnkey
C. licensing
D. exporting C
59. Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of
A. licensing agreements.
B. franchising agreements.
C. intangible property.
D. tangible property. C
60. What is the primary advantage of licensing?

A. It helps a firm avoid the development costs associated with opening a foreign market.
B. It gives a firm the tight control over manufacturing, marketing, and strategy.
C. It helps a firm achieve experience curve and location economies.
D. It increases a firm's ability to utilize a coordinated strategy. A
61. Which of the following is a disadvantage of licensing?

A. It does not help firms that lack capital to develop operations overseas.
B. It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies.
C. It cannot be used when a firm possesses some intangible property that might have business applications.
D. The firm has to bear the development costs and risks associated with opening a foreign market. B
62. When a company has some intangible property that might have business applications, but the firm does not want to
develop those applications itself, _____ makes sense.
A. exporting
B. a turnkey project
C. licensing
D. a wholly owned subsidiary C
63. Cross-licensing agreements are increasingly common in the _____ industry.
A. transportation
B. high-technology
C. construction
D. consumer durables B
64. Which mode of entry is pursued primarily by manufacturing firms?

A. Franchising
B. Turnkey
C. Licensing
D. Strategic alliance C
65. This mode of entry is primarily used by service firms.

A. Franchising
B. Licensing
C. A strategic alliance
D. A turnkey project A
66. If a service firm wants to build a global presence quickly and at a relatively low cost and risk, _____
makes sense.
A. a wholly owned subsidiary
B. exporting
C. a turnkey project
D. franchising D
67. Which of the following statements about franchising is true?

A. It guarantees consistent product quality.
B. It tends to involve more short-term commitments than licensing.
C. It is a specialized form of licensing.
D. It is employed primarily by manufacturing firms. C
68. Which of the following is an advantage of franchising?

A. A firm takes profits out of one country to support competitive attacks in another.
B. A firm is relieved of many of the costs and risks of opening a foreign market on its own.
C. It guarantees consistent product quality.
D. It achieves experience curve and location economies. B
69. Firms engaging in _____ with a local company can benefit from a local partner's knowledge of the host country's
competitive conditions, culture, language, political systems, and business systems.
A. turnkey projects
B. joint ventures
D. licensing arrangements B
70. Identify the advantage of establishing wholly owned subsidiaries.

A. It is the least expensive method of serving a foreign market from a capital investment standpoint.
B. Political considerations make it the most feasible entry mode.
C. It may be required if a firm is trying to realize location and experience curve economies.
D. It is particularly useful where FDI is limited by host-government regulations. C
71. A wholly owned subsidiary is appropriate when:

A. the firm wants to share the cost and risk of developing a foreign market.
B. the firm wants 100 percent of the profits generated in a foreign market.
C. the firm wants a plant that is ready to operate.
D. the firm wants to test a market. B
72. A firm that establishes a _____ must bear the full costs and risks of entering a foreign market.
A. licensing agreement
B. wholly owned subsidiary
C. franchise
D. joint venture B
73. A _____ is the most costly method of serving a foreign market from a capital investment standpoint.
B. franchising agreement
C. turnkey project
D. joint venture A
74. "Protection of technology and The Ability to engage in global strategic coordination" are advantages of which of the
following?
A. Franchising
B. Turnkey contracts
C. Joint ventures
D. Wholly owned subsidiarie D
75. If a firm's core competency is based on control over proprietary technological know-how, it should avoid _____ and _____
arrangements if possible, to minimize the risk of losing control over that technology.
A. licensing, joint-venture
B. wholly owned subsidiary, exporting
C. turnkey contracts, exporting
D. exporting, joint-venture A
76. If a high-tech firm sets up operations in a foreign country to profit from a core competency in technological know-how,
which of the following entry strategy is best?
A. Joint ventures
B. Licensing
C. Wholly owned subsidiaries
D. Turnkey contacts C
77. Most service firms have found that _____ with local partners work best for controlling subsidiaries.
A. joint ventures
B. licensing agreements
D. turnkey project A
78. Firms may prefer acquisitions to greenfield investments for all of the following reasons except:
A. they allow companies to completely sidestep government regulations on investment.
B. they are quick to execute.
C. they enable the firm to preempt competitors.
D. managers believe acquisitions are less risky. A
79. According to the _____, top managers typically overestimate their ability to create value from an acquisition.
A. misvaluation theory
B. performance extrapolation hypothesis
C. market timing theory
D. hubris hypothesis D
80. To increase the potential for a successful acquisition, a firm should:

A. always bid low to allow for partial failure.
B. try to acquire a firm with a very different corporate culture so there is no forced "overlap".
C. seek companies only from similar national cultures.
D. screen the foreign enterprise to be acquired. D
81. Which of the following is not important in the acquisition process?

A. Firms should strive to limit unwanted management attrition after acquisition.
B. An integration plan should quickly be implemented.
C. Proper screening of the company to be acquired should take place.
D. The hubris hypothesis should be maintained. D
82. When a firm wants to enter a market where there are already well-established incumbent companies, and where global
competitors are also interested in establishing a presence, the firm should consider:
A. joint ventures.
B. turnkey projects.
C. acquisitions.
D. greenfield investments. C
83. Firms entering markets where there are no incumbent competitors to be acquired should choose:
A. greenfield investments.
B. joint ventures.
C. acquisitions.
D. takeovers. A
84. Which of the following is not an advantage of strategic alliances?

A. It allows firms to share the fixed costs of developing new products or processes.
B. It is a way to bring together complementary skills and assets that neither company could easily develop on its own.
C. It will help the firm establish technological standards for the industry that will benefit the firm.
D. It gives a firm tight control over operations in different countries. D
1. _____ is the activity that controls the transportation of physical materials through the value chain, from procurement
through production and into distribution.
A. Outsourcing
B. Production
C. Logistics
D. Distribution C
2. _____ is a management philosophy according to which mistakes, defects, and poor-quality materials are not acceptable and
should be eliminated.
A. Scientific management
B. Total quality management
C. ISO 9000
D. Lean manufacturing B
3. The Six Sigma methodology:

A. is a direct descendant of the total quality management philosophy.
B. is a direct descendant of benchmarking.
C. was adopted first by British companies and then Japanese companies during the 1980s.
D. was developed by Deming, Juran, and Feigenbaum. A
4. Saving time by not producing poor-quality products that cannot be sold, lowering rework costs, lowering scrap costs, and
lowering warranty costs are the intended results of:
A. total feature management.
B. reengineering.
C. logistics.
D. total quality management. D
5. Before a firm is allowed access to the European marketplace, the European Union requires that the quality of the firm's
manufacturing processes and products be certified under a quality standard known as:
A. total quality management.
B. reengineering.
C. quality management system.
D. ISO 9000. D
6. The modern successor to TQM is:

A. Corporate Quality Commitment.
B. ISO 9000.
C. Quality Process Realized.
D. Six Sigma. D
7. At six sigma, a production process would be 99.99966 percent accurate, creating just _____.
A. 3.4 defects per hundred thousand units
B. 3.4 defects per million units
C. 34 defects per million units
D. 6.8 defects per million units B
8. Which of the following statements about Six Sigma is true?

A. It is a statistically based philosophy.
B. It is easily possible for a company to achieve Six Sigma perfection.
C. At six sigma, a production process will have 66 defects per million units.
D. At six sigma, a production process would be 100 percent accurate. A
9. Factors that help a firm decide where to locate its manufacturing facilities can be best grouped under three broad headings.
These are:
A. political factors, social factors, and legal factors.
B. country factors, technological factors, and product factors.
C. product factors, service factors, and labor factors.
D. language factors, cultural factors, and transportation factors. B
10. The creation of a global web of value creation activities is the result of:
A. location economies.
C. shortage of skilled labor.
D. informal trade barriers. A
11. Identify the incorrect statement pertaining to exchange rate movements.

A. Adverse changes in exchange rates can quickly alter a country's attractiveness as a manufacturing base.
B. Currency appreciation can transform a low-cost location into a high-cost location.
C. Currency appreciation can cause firms to move their manufacturing offshore to lower-cost locations.
D. A low-cost location can be transformed into a high-cost location because of currency depreciation. D
12. Being too dependent on one location is particularly risky because of:
A. floating exchange rates.
B. fixed exchange rates.
C. lack of movement in currencies.
D. static exchange rates. A
13. According to the concept of economies of scale:

A. as plant output reduces, unit costs decrease.
B. as plant output expands, unit costs increase.
C. as plant output reduces, unit costs remain static.
D. as plant output expands, unit costs decrease. D
14. Identify an advantage of a low minimum efficient scale.

A. Allows the firm to accommodate demands for local responsiveness
B. Discounts currency risk by manufacturing all products in one location
C. Helps keep overheads low at the expense of fixed costs
D. Helps a firm to standardize its products for all markets A
15. A company that wants to reduce set-up time for complex equipment, increase the utilization of individual machines
through better scheduling, and improve quality control at all stages of the manufacturing process should adopt:
A. standardization.
C. flexible machine technology.
D. minimum efficient scale. C
16. The term _____ has been coined to describe the ability of companies to use flexible manufacturing technology to reconcile
the goals of low cost and product customization.
A. assembly-line-like customization
B. economies of customization
C. mass customization
D. standardized customization C
17. Flexible manufacturing technology is also known as:

A. mass customization.
B. lean production.
C. flexible machine cells.
D. minimum efficient scale. B
18. According to the concept of economies of scale what is the best way to achieve high efficiency and low unit costs?
A. Customizing products for each individual market
B. Mass producing standardized outputs
C. Concentrating on production of small volumes of products
D. D. Increasing the product variety dramatically B
19. This allows the company to produce a wider variety of end products at a unit cost that at one time could be achieved only
through the mass production of a standardized output.
A. Kaizen
B. Six Sigma
C. Lean production
D. TQM C
20. _____ challenged the notion that the way to increase efficiency and drive down unit costs is to limit product variety and
produce a standardized product in large volumes.
A. Bartlett and Ghoshal's theory of a transnational company
B. Minimum efficient scale
C. Economies of scale
D. Flexible manufacturing technology D
21. A _____ is a grouping of various types of machinery, a common materials handler, and a centralized cell controller.
A. flexible machine cell
B. mass customization policy
C. lean production system
D. minimum efficient scale cluster A
22. All of the following are the major efficiency benefits of flexible manufacturing technologies except:
A. it enables companies to customize products to the demands of small consumer groups.
B .it helps a company achieve mass customization, which increases its customer responsiveness.
C. it requires firms to establish manufacturing facilities in each major market to provide products that . satisfy specific
consumer tastes and preferences.
D. it improves capacity utilization and reductions in work in progress and waste. C
23. When a company's product has a low value-to-weight ratio, the company should:
A. have a centralized manufacturing location.
B. produce the product in multiple locations close to major markets.
C. ignore transportation costs.
D. produce the product in one optimal location and serve the world from there. B
24. Which of the following statements about products with high value-to-weight ratios is true?
A. They are relatively inexpensive and weigh a lot.
B. They are expensive and do not weigh very much.
C. Transportation costs usually account for a large percentage of their total costs.
D. They must be produced in multiple locations close to major markets. C
25. Which of the following is a characteristic of manufacturing technology that should be considered by a firm contemplating
international production?
A. Trade barriers
B. Value-to-weight ratio
C. Level of fixed costs
D. Exchange rates C
26. A company might consider decentralizing when:

A. a product's value-to-weight ratio is high.
B. the product serves universal needs.
C. trade barriers are low.
D. volatility in important exchange rates is expected. D
27. The concentration of production makes most sense when:

A. volatility in important exchange rates is expected.
B. the product's value-to-weight ratio is high.
C. location externalities are not important.
D. trade barriers are high. B
28. The concentration of production is favored when all of the following factors are high except
A. fixed costs.
B. minimum efficient scale.
C. value-to-weight ratio.
D. trade barriers. D
29. Initially, many foreign factories are established where _____ are low.
A. trade barriers
B. inventory turnover
C. marketing costs
D. labor costs D
30. Decisions a firm must make about whether to perform a certain value creation activity themselves, or outsource it to
another entity are best known as:
A. outsource potential decisions.
B. in-house potential decisions.
C. make-or-buy decisions.
D. integration decisions. C
31. Which of the following is not an argument that supports making a product in-house?
A. Vertical integration may be associated with higher costs.
B. Vertical integration may protect proprietary product technology.
C. Vertical integration may facilitate investment in highly specialized assets.
D. Vertical integration may ease the scheduling of adjacent processes. A
32. A _____ is an asset whose value is contingent upon a particular relationship persisting.
A. specialized asset
B. common asset
C. complementary asset
D. supplementary asset A
33. A firm will prefer to make the component internally rather than contract it out to a supplier, because of all of the following
reasons except:
A. it needs to maintain control over its proprietary technology.
B. substantial investments in specialized assets are required to manufacture a component.
C. the firm completely trusts the independent supplier to play fair.
D. it runs the risk that suppliers will expropriate the technology for their own use. C
34. How can firms attain tight coordination between different stages in the production process?
A. By using information technology
B. By lowering the costs of value creation
C. By implementing ISO 9000
D. By minimum efficient scale of output A
35. Which of the following is not a reason to outsource production?

A. It can give the firm greater flexibility
B. It can make planning, coordination, and scheduling of adjacent processes easier
C. It can help drive down the firm's cost structure
D. It may help the firm capture orders from international customers B
36. An advantage of buying component parts, or even an entire product, from independent suppliers is that:
A. the firm can maintain its flexibility of switching orders between suppliers as circumstances dictate.
B. it can make planning, coordination, and scheduling of adjacent processes easier for the firm.
C. it reduces the risk for the firm that suppliers will expropriate the technology for their own use.
D. the firm is able to maintain firm control over its proprietary technology. A
37. Vertical integration may raise a firm's cost structure for all of the following reasons except:
A. the greater the number of subunits in an organization, the more problems coordinating and controlling those units.
B. the firm that vertically integrates into component part manufacturing may find that because its internal suppliers have an
active customer, they lack the motivation to be more efficient.
C. vertically integrated firms have to determine appropriate prices for goods transferred to subunits within the firm.
D. it makes planning, coordination, and scheduling of adjacent processes more difficult, as compared to buying from
independent suppliers, particularly with just-in-time inventory systems. D
38. The major costs saving associated with JIT comes from:
A. speeding up inventory turnover.
B. having materials arrive at a manufacturing plant before they are needed.
C. avoiding production slowdowns by ensuring inventory is stockpiled.
D. using warehouse space to maintain on-hand inventory. A
39. Just-in-time inventory systems:

A. can help firms improve product quality.
B. are fast becoming obsolete.
C. require that parts be warehoused.
D. give firms a buffer stock of inventory. A
40. Which of the following is a drawback associated with a JIT system?

A. There are high transportation costs involved
B. It leaves a firm without a buffer stock of inventory
C. It leaves a firm with scrap costs associated with defective products
D. It increases the warranty costs B
41. With _____, suppliers, shippers, and the purchasing firm can communicate with each other with no time delay.
A. a CAD system
B. a JIT system
C. a CAM system
D. an EDI systemD
1. Which of the following is not an element that constitutes a firm's marketing mix?
A. Product attributes
B. Communication strategy
C. Reverse engineering
D. Distribution strategy C
2. The set of choices the firm offers to its targeted market is known as the
A. marketing mix.
B. marketing concept.
C. marketing strategy.
D. market promotion. A
3. Research has long maintained that a major factor of success for new products is the closeness of the relationship between:
A. finance and marketing.
B. marketing and R&D.
C. finance and materials management.
D. finance and R&D. B
4. According to Levitt, which of the following statements is true?

A. Technology drives the world toward a converging commonalty.
B. There are accustomed differences in national preferences.
C. The multinational corporation operates in a number of countries at low relative costs.
D. The global corporation operates with resolute consistency at high relative costs. A
5. The continuing persistence of _____ differences between nations acts as a major brake on any trend toward global
consumer tastes and preferences.
A. technological and industrial
B. institutional and political
C. cultural and economic
D. GNP level and growth rate C
6. The identification of distinct groups of consumers whose purchasing behavior differs from others in important ways is
known as:
A. market segmentation.
B. market penetration.
C. diversification strategy.
D. differentiation. A
7. If market segments transcend national borders:

A. the company should develop unique products for each national market.
B. the company can view the global market as a single entity and pursue a global strategy.
C. a localization strategy would be appropriate.
D. consumers will have differing purchasing behavior in different nations. B
8. The most important aspect of a country's cultural differences, particularly important in foodstuffs and beverages, is the
impact of:
A. values.
B. traditions.
C. norms.
D. attitudes. B
9. Consumers in highly developed countries value _____ as compared to their counterparts in less developed nations.
A. price
B. product reliability
C. product attributes
D. standardized products C
10. Which of the following statements is false?

A. Product reliability may be a more important attribute in most advanced countries.
B.Consumers in highly developed countries tend to build a lot of extra performance attributes into their products.
C.Consumers in the most developed countries are often not willing to sacrifice their preferred attributes for lower prices.
DConsumers in the most advanced countries often shun globally standardized products that have been . developed with the
lowest common denominator in mind. A
11. Contrary to Levitt's suggestions, consumers in the most developed countries are often:
A. willing to sacrifice their preferred attributes for lower prices.
B. not willing to pay more for products that have additional features customized to their tastes.
C. not willing to sacrifice their preferred attributes for lower prices.
D.willing to accept globally standardized products that have been developed with the lowest common denominator in mind.
C
12. The means a firm chooses for delivering the product to the consumer is its:
A. communication strategy.
B. segmentation strategy.
C. product attributes.
D. distribution strategy. D
13. The way a product is delivered is determined by:

A. a firm's entry strategy.
B. a firm's product positioning.
C. the target market.
D. market segmentation. A
14. In a concentrated retail system:

A. there are many retailers who have a major share of the market.
B. there are many retailers, no one of which has a major share of the market.
C. a few retailers supply a small segment of the market.
D. a few retailers supply most of the market. D
15. A country with high car ownership, a large number of households with refrigerators, and a large number of two income
families tend to have:
A. retail division.
B. retail dispersion.
C. retail concentration.
D. retail fragmentation. C
16. In a _____ retail system, a few retailers supply most of the market.
A. fragmented
B. dispersed
C. focused
D. concentrated D
17. A _____ retail system is one in which there are many retailers, no one of which has a major share of the market.
A. concentrated
B. consolidated
C. focused
D. fragmented D
18. Which of the following statements about retail systems is true?

A. One factor contributing to greater retail concentration is an increase in car ownership.
B. The number of households with refrigerators leads to lesser retail concentration in developed countries.
C. There is a tendency for greater retail concentration in many developing countries.
D. Retail systems are very fragmented in developed countries. A
19. In terms of retail concentration, developed countries tend to have a higher degree of concentration than developing
countries for all of the following reasons except:
A. number of households with refrigerators and freezers.
B. tradition of established local neighborhoods in which people walk to stores.
C. increase in car ownership.
D. number of two-income households that accompany development. B
20. Which of the following is not a key difference between distribution systems in different countries?
A. Channel speed
B. Channel length
C. Channel exclusivity
D. Channel quality A
21. Developed countries are more likely to have a:
A. concentrated retail system.
B. fragmented retail system.
C. crowded retail system.
D. dispersed retail system. A
22. The number of intermediaries between the manufacturer and the consumer is referred to as:
A. channel reach.
B. channel concentration.
C. channel exclusivity.
D. channel length. D
23. If a producer sells through an import agent, a wholesaler, and a retailer, then
A. a long channel exists.
B. the retail system must be concentrated.
C. the Internet probably plays a big role in the economy.
D. there is no channel. A
24. The most important determinant of channel length is the degree to which a retail system is:
A. concentrated.
B. fragmented.
C. decentralized.
D. globalized. B
25. Which of the following statements about fragmented retail systems is true?
A. Countries with fragmented retail systems tend to have short channels of distribution.
B.The more fragmented the retail system, the less expensive it is for a firm to make contact with each individual retailer.
C. Fragmented retail systems tend to promote the growth of wholesalers to serve retailers.
D. When the retail sector is very fragmented, it makes sense for the firm to deal directly with retailers. C
26. What kind of retail systems do rural India and China have?
A. Fragmented
B. Direct
C. Indirect
D. Concentrated A
27. By acquiring retailers in different countries, large global retailers such as Carrefour and Wal-Mart have increased:
A. retail concentration.
B. retail fragmentation.
C. retail dispersion.
D. retail crowding. A
28. With a concentrated retail sector:

A. a relatively large sales force is required.
B. the orders generated from each sales call can be large.
C. there are long channels of distribution.
D. it is expensive for the firm to make contact with each individual retailer. B
29. A(n) _____ distribution channel is one that is difficult for outsiders to access.
A. selective
B. intensive
C. exclusive
D. multichannel C
30. When a channel is exclusive:

A. it carries only high-end products.
B. it is controlled by market leaders or by firms who have a niche market.
C. it focuses only on elite customers.
D. it is often difficult for a new firm to get access to shelf space in supermarkets. D
31. The expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products
of international businesses is referred to as their:
A. channel exclusivity.
B. channel knowledge.
C. channel quality.
D. channel skill. C
32. Which of the following does not affect a firm's international communication?
A. Cultural barriers
B. Source effects
C. Channel exclusivity
D. Noise levels C
33. To overcome cultural barriers, companies should:

A. develop products specifically for each market.
B. focus on universal needs.
C. focus only on market segments that transcend national boundaries.
D. develop cross-cultural literacy. D
34. When the receiver of a message evaluates a message based on the status or image of the sender, _____ are said to have
occurred.
A. sender effects
B. noise effects
C. source effects
D. communication effects C
35. The extent to which the place of manufacturing influences product evaluations is known as:
A. source effects.
B. country of origin effects.
C. noise effects.
D. location effects. B
36. The probability of effective communications is reduced by:

A. noise effects.
B. location effects.
C. country of origin effects.
D. source effects. A
37. Which of the following statements about barrier to international communication is true?
A.Source effects occur when the receiver of the message evaluates the message on the basis of the location of the sender.
B. The best way for a firm to overcome cultural barriers is to use local input.
C. Source effects and country of origin effects are always negative.
D. Noise is extremely high in highly developed countries such as the United States. D
38. When a firm emphasizes personal selling rather than mass media advertising in the promotional mix, the firm is using a:
A. standardized strategy.
B. pull strategy.
C. push strategy.
D. localized strategy. C
39. Which of the following statements is true?

A. Firms in consumer goods industries that are trying to sell to a large segment of the market generally favor a push strategy.
B. Mass communication has cost advantages for firms in consumer goods industries that are trying to sell to a large segment
of the market.
C. Direct selling may be the only way to reach consumers in poor nations with low literacy levels.
D. Firms that sell industrial products or other complex products favor a pull strategy. B
40. A firm that depends more on mass media advertising to communicate the marketing message to potential consumers is
using a:
A. pull strategy.
B. push strategy.
C. standardized strategy.
D. localized strategy. A
41. Factors that determine the relative attractiveness of push and pull strategies include all of the following except:
A. product type relative to consumer sophistication.
B. channel length.
C. noise levels.
D. media availability. C
42. When firms in the consumer goods industry are trying to sell to a large segment of the market they favor a:
A. push strategy.
B. pull strategy.
C. standardized strategy.
D. localized strategy. B
43. A(n) _____ strategy is favored by firms that sell industrial products or other complex products.
A. localized
B. indirect
C. push
D. pull C
44. When distribution channels are short, firms should:

A. use a direct channel.
B. use a push strategy.
C. focus on consumer products or other standardized products.
D. focus on industrial products or other complex products. B
45. A push strategy is appropriate when:

A. there are many choices of electronic media.
B. the firm is selling consumer goods.
C. distribution channels are long.
D. the firm is selling complex new products. D
46. If a firm is facing long distribution channels, the firm should choose a _____ strategy.
A. competitive advertising
B. price discrimination
C. predatory pricing
D. pull D
47. If media availability is limited, a firm should:

A. use a push strategy.
B. use a pull strategy.
C. consider a longer channel.
D. consider a shorter channel. A
48. Which of the following is an argument that supports global advertising?

A.Standardized advertising lowers the costs of value creation by spreading the fixed costs of developing . the advertisements
over many countries.
B.Because of concerns about the scarcity of creative talent, some feel that smaller efforts will produce . better results than
one large effort to develop a campaign.
C .Even though there are cultural differences between nations, a single advertising theme that is effective . worldwide can be
easily developed.
D. Standardized advertising may be implemented even in the face of advertising regulations. A
49. When a company charges whatever the market will bear, the company is using:
A. strategic pricing.
B. price discrimination.
C. a push strategy.
D. a pull strategy. B
50. In order for price discrimination to be successful:

A. there must be a strong case for arbitrage.
B. markets must be kept separate.
C. demand must be very elastic.
D. a large change in demand must be triggered by a small change in price. B
51. If a _____ change in a price produces a _____ change in demand, then price is elastic. .
A. small, large
B. small, small
C. large, small
D. large, large A
52. A measure of the responsiveness of demand for a product to change in price is referred to as:
A. arbitrage demand.
B. predatory pricing.
C. price elasticity of demand.
D. experience curve pricing. C
53. _____ occurs when an individual or business capitalizes on a price differential for a firm's product between two countries
by buying the product in the country where the price is low and reselling it in the country where prices are higher.
A. Arbitrage
B. Strategic pricing
C. Price discrimination
D. Market pricing A
54. Which of the following statements about price discrimination is true?

A. It exists whenever consumers in a country are charged different prices for the same product.
B. It involves charging whatever the market will bear.
C. It is the use of price as a competitive weapon to drive weaker competitors out of a national market.
D. It makes economic sense to charge the same prices across countries. B
55. What is the most important factor in determining the elasticity of demand for a product in a given country?
A. Personal selling
B. Logistics
C. Operating revenue
D. Income level D
56. Which of the following statements is false?

A. The lesser the number of competitors, the higher the elasticity of demand.
B. When competitors are limited, consumers' bargaining power is weaker.
C. A firm may charge a higher price for its product in a country where competition is limited than in one where competition is
intense.
D. When there is high elasticity of demand and a firm raises its prices above those of its competitors, . consumers will switch
to the competitors' products. A
57. In a country where competition is limited,

A. prices will be low.
B. there will be low elasticity of demand.
C. prices will be high.
D. consumers' bargaining power rises. C
58. For to work, the firm must normally have a profitable position in another national market, which it can use to subsidize
aggressive pricing in the market it is trying to monopolize.
A. multipoint pricing
B. value-based pricing
C. experience curve pricing
D. predatory pricing C
59. This refers to impact a firm's pricing strategy in one market may have on its rivals' pricing strategy in another market.
A. Multipoint pricing
B. Experience curve pricing
C. Predatory pricing
D. Competitive pricing A
60. Tight cross-functional integration between R&D, production, and marketing can help a company to ensure that all of the
following take place except:
A. time to market is minimized.
B. development costs are kept in check.
C. new products are designed for ease of manufacture.
D. product development projects are driven by internal needs. D
37. _____ refers to the activities an organization carries out to utilize its human resources effectively.
A. Organizational behavior
B. Strategic management
C. Human resource management
D. Labor relations C
38. _____ is/are the linchpin of a firm's organization architecture.

A. People
B. Strategy
C. Business processes
D. Organizational structure A
39. Firms should build a strong corporate culture and an informal management network for transmitting information and
knowledge within the organization if they are pursuing a(n):
A. transnational strategy.
B. localization strategy.
C. global standardization strategy.
D. international strategy. A
40. Which of the following is mainly concerned with the selection of employees for particular jobs?
A. Retention policy
B. Staffing policy
C. Incentive policy
D. Appraisal policy B
41. Many Japanese firms prefer expatriate Japanese managers to head their foreign operations because these managers have
been socialized into the firm's culture while employed in Japan. This implies that:
A. the firm may believe that such managers cannot progress beyond senior positions in their parent company.
B. the firm may see an ethnocentric staffing policy as the best way to maintain a unified corporate culture.
C. the firm is trying to create value by transferring core competencies to a foreign operation.
D. the firm requires host-country nationals to be recruited to manage subsidiaries. B
42. A polycentric approach to staffing is one in which:

A. all key management positions are filled by parent company nationals.
B. host-country nationals are recruited to manage subsidiaries while parent-company nationals occupy key positions at
corporate headquarters.
C. the best people, regardless of nationality, are recruited to fill key positions throughout the organization.
D. parent-company nationals are recruited to manage subsidiaries while host-country nationals occupy key positions. B
43. Which of the following is a drawback of the polycentric approach to staffing?
A. Firms are likely to suffer from cultural myopia.
B. Host-country nationals are vulnerable to cultural misunderstandings.
C. This approach increases the cost of value creation.
D. Host-country nationals have limited opportunities for advancement beyond senior positions in their subsidiary. D
44. Cultural myopia refers to a firm's failure to:

A. adapt to certain ethnocentric cultures through the expatriate.
B. permanently implement parent-company culture in the host country.
C. understand host-country cultural differences that require different approaches to marketing and management.
D. identify countries which are much tougher postings than others because their cultures are more unfamiliar and
uncomfortable. C
45. If a company recruits host-country nationals to manage subsidiaries while parent-country nationals occupy key positions at
corporate headquarters, the firm is following a(n):
A. ethnocentric staffing policy.
B. regiocentric staffing policy.
C. polycentric staffing policy.
D. geocentric staffing policy. C
46. Food and detergents giant Unilever had foreign subsidiaries that had evolved into quasi-autonomous operations, each
with its own strong national identity. They objected strenuously to corporate headquarters' attempts to limit their autonomy.
Thus, Unilever found it very difficult to shift from a strategic posture that emphasized localization to a transnational posture
because of:
A. difficulty in achieving the coordination required to pursue experience curve and location economies.
B. the difficulty in achieving coordination required to transfer core competencies.
C. the federation that resulted from a polycentric approach.
D. expensive implementation and increased costs of value creation.C
47. What is the most important advantage of using a geocentric staffing policy?
A. It enables the firm to build a cadre of international executives who feel at home working in a number of cultures.
B. It may be less expensive to implement than other policies, reducing the costs of value creation.
C. The higher pay managers on an international fast track enjoy is a source of inspiration within a firm.
D. It involves no costs of training and relocation when transferring managers from country to country. A
48. Which of the following is a problem that limits a firm's ability to pursue a geocentric policy?
A. The lack of management transfers from home to host countries, and vice versa, can lead to a lack of integration between
corporate headquarters and foreign subsidiaries.
B. The higher pay managers on an international fast track enjoy may be a source of resentment within a firm.
C. The firm fails to understand host-country cultural differences that require different approaches to marketing and
management.
D. It limits advancement opportunities for host-country nationals. B
49. An ethnocentric approach to staffing is appropriate for firms that are pursuing a(n):
A. international strategy.
B. localization strategy.
C. global standardization strategy.
D. transnational strategy. A
50. What is the advantage of using an ethnocentric staffing approach?

A. Uses human resources efficiently
B. Alleviates cultural myopia
C. Inexpensive to implement
D. Helps transfer core competencies D
51. A citizen of France who moves to Germany to work at BMW is a(n):

A. host-country national.
B. local.
C. inpatriate.
D. acquired citizen. C
52. The premature return of an expatriate manager to his/her home country is known as:
A. repatriation.
B. expatriate failure.
C. inpatriate failure.
D. foreign manager failure. B
53. Mendenhall and Oddou's "others-orientation" dimension, in their study on what predicts success in foreign jobs postings,
refers to:
A. the expatriate's self-esteem, self-confidence, and mental well-being.
B. the expatriate's ability to interact effectively with host-country nationals.
C. the expatriate's ability to understand why people of other countries behave the way they do.
D. the relationship between the country of the assignment and how well an expatriate adjusts to a particular posting. B
54. Which dimension of Mendenhall and Oddou's study suggests that an expatriate with high self-esteem, self-confidence,
and mental well-being is likely to succeed in a foreign job posing?
A. Self-orientation
B. Others-orientation
C. Cultural toughness
D. Perceptual ability A
55. Expatriate managers who lack this dimension of predicting success in a foreign posting tend to treat foreign nationals as if
they were home-country nationals.
A. Others-orientation
B. Self-orientation
C. Perceptual ability
D. Cultural toughness C
56. Mendenhall and Oddou identified cultural toughness as one of the dimensions in their study on dimensions that predict
success in foreign jobs postings. This dimension refers to:
A. the expatriate's self-esteem, self-confidence, and mental well-being.
B. the expatriate's ability to interact effectively with host-country nationals.
C. the expatriate's ability to understand why people of other countries behave the way they do.
D. the relationship between the country of the assignment and how well an expatriate adjusts to a particular posting. D
57. According to some researchers, which of the following is a fundamental attribute of a global manager and is characterized
by cognitive complexity and a cosmopolitan outlook?
A. A global mind-set
B. Cultural toughness
C. High self-esteem
D. Perceptual ability A
58. Ping Yee is a manager at a multinational technology firm and is being sent to Japan to head the company's operations
there. As a part of training, a familiarization trip to Japan has been planned for her before her formal transfer. What type of
training is Ping Yee receiving?
A. Language training
B. Cultural training
C. Practical training
D. Transfer training B
59. Which of the following statements is true regarding practical training?

A. Practical training is provided to foster an appreciation for the host country's culture.
B. The local community is a significant source of support in helping an expatriate family adapt to a foreign culture.
C. Expatriates should delay the process of establishing a routine as it increases the likelihood of premature return on account
of monotony.
D. Where an expatriate community exists, firms often devote considerable effort to ensuring that the new expatriate family is
quickly integrated into that group. D
60. Which among the following is seen as the final link in an integrated, circular process that connects good selection and
cross-cultural training of expatriate managers with completion of their term abroad and reintegration into their national
organization?
A. Residency
B. Visitation
C. Repatriation
D. Homecoming C
61. Which of the following statements is true regarding management development?

A. Management development programs attempt to increase skill levels by focusing mainly on providing management
education.
B. Management development programs help build a unifying corporate culture by socializing new managers into the norms
and value systems of the firm.
C. Rotating managers through different jobs in several countries as a part of management development programs leads to
adaptation problems.
D. Management development programs can be used to foster esprit de corps but is rarely used for developing technical
competencies. B
62. _____ makes it difficult to evaluate the performance of expatriate managers objectively.
A. Feedback
B. Hard data
C. Knowledge
D. Bias D
63. When evaluating expatriates, home-country managers usually rely on:

A. the manager's ability to develop cross-cultural awareness.
B. hard data such as market share.
C. the ability of the expatriate to work with local managers.
D. their own international experience. B
64. Which among the following should be done in order to reduce bias in the performance appraisal process for expatriates?
A. More weight should be given to an off-site manager's appraisal than to an on-site manager's appraisal.
B. The on-site manager should be of a different nationality as the expatriate manager.
C. When the policy is for foreign on-site managers to write performance evaluations, home-office managers should be
consulted before an on-site manager completes a formal termination evaluation.
D. A former expatriates who served in the same location as a current expatriate should not be allowed to participate in the
appraisal. C
65. Which of the following is the most common approach to expatriate pay?
A. Balance sheet approach
B. Net-to-net approach
C. Host-country approach
D. Higher of host or home A
66. Which component of a typical expatriate compensation package compensates the expatriate for having to live in an
unfamiliar country isolated from family and friends, deal with a new culture and language, and adapt to new work habits and
practices?
A. Benefit
B. Cost-of-living allowance
C. Base salary
D. Foreign service premium D
67. Which among the following allowances is paid when the expatriate is sent to a location where basic amenities such as
health care, schools, and retail stores are grossly deficient by the standards of the expatriate's home country?
A. Housing
B. Hardship
C. Cost-of-living
D. Education B
68. Labor unions generally try to get better pay, greater job security, and better working conditions for their members through
_____ with management.
A. collective bargaining
B. arbitration
C. conciliation
D. expert determination A
69. Unions' bargaining power is derived largely from their:

A. ability to threaten to disrupt production.
B. ability to change the organizational culture.
C. willingness to adapt to new employment practices.
D. ability to show restraint in negotiations. A
70. Which among the following is a concern of organized labor regarding multinational firms?
A. A company can counter a union's bargaining power with the power to move production to another country.
B. An international business will keep low-skilled tasks in its home country and farm out only highly skilled tasks to foreign
plants.
C. An international business can attempt to export employment practices and contractual agreements to its home country.
D. A multinational company is more likely to receive government support in the case of hostile labor relations. A
71. What is the long-term goal of international trade secretariats (ITSs)?

A. To reduce the competition between national unions.
B. To be able to bargain transnationally with multinational firms.
C. To reduce the ideological gap between union leaders in different countries.
D. To get national and international bodies to regulate multinationals. B
72. International trade secretariats (ITSs) have not enjoyed much success for all of the following reasons except:
A. national unions compete with each other to attract investment from international businesses.
B. the structure and ideology of unions tend to vary significantly from country to country.
C. organized labor has had only limited success in its efforts to get national and international bodies to regulate multinationals.
D. the codes of conduct developed by International Labor Organization and the Organization for Economic Cooperation and
Development prevented the ITSs from exercising absolute power. D
73. What is the main difference in the way international businesses approach international labor relations?
A. The degree to which organized labor can limit the choices of an international business
B. The way work is organized within a plant
C. The degree to which labor relations activities are centralized or decentralized
D. The way staffing, management development, and compensation activities are organized C

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1. Which of the following is not characteristic of globalization?

A. National economies are turning into independent economic systems.

4. Identify the incorrect statement concerning globalization.

5. The most global markets currently are markets for:

A. International Development Association

48. At the Doha Round of the WTO in late 2001,

13. The growing integration of the world economy is:

17. Technological innovations have facilitated all of the following except:

18. According to World Bank numbers,

25.Which of the following observations concerning Latin American countries is true?

28.When a company "exports jobs" overseas, the company is:

32.Interdependent political, economic, and legal systems of a country make up its:

33.Identify the incorrect statement pertaining to a country's political economy.

36.Which of the following statements about socialism is false?

37.Individualism can best be described by which of the following statements?

38. Identify the incorrect statement regarding individualism.

Antitrust laws in most countires are designed to:

In a pure market economy:

In a pure command economy:

The common law system:

A theocratic law system is:

Identify the incorrect statement pertaining to intellectual property rights.

The TRIPS agreement was designed to:

Safety standards to which a product must adhere are set by:

The HDI is based on all of the following measures except:

Identify the incorrect statement pertaining to innovation and entrepreneurship.

Which of the following is not true regarding culture?

_____ are the routine conventions of everyday life.

The social organization of Western society tends to emphasize on:

Emphasis on individualism results in all of the following disadvantages except:

A central value of Japanese culture is the importance attached to:

In China, class divisions:

The emergence of class consciousness in Great Britain can be attributed to:

Ethical systems are:

Religion may be defined as:

Which of the following observations is correct?

According to Islam, those who hold property are regarded as:

According to Max Weber:

The individualism vs. collectivism dimension of Hofstede's study explored:

Hofstede's uncertainty avoidance dimension considered:

Hofstede's masculinity vs. femininity dimension examined:

Hofstede's dimension of Confucian dynamism:

The belief in the superiority of one's own culture is known as:

Identify the incorrect statement regarding ethical issues in international business.

Identify the incorrect statement about environmental regulations.

Facilitating payments are:

Ethical dilemmas exist because of all of the following reasons except:

According to the Friedman doctrine:

The righteous moralist suggests that:

According to the naive immoralist:

The utilitarian approach to business ethics suggests that:

The Kantian approach to ethics suggests that:

Identify the correct statement about the rights theories.

Justice theories of business ethics focus on:

Under the veil of ignorance, everyone is imagined to be ignorant of:

According to John Rawls:

42. Specific tariffs are:

43. Tariffs do not benefit: