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ADMS 3960 (12)
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Department
Administrative Studies
Course
ADMS 3960
Professor
Brian Zeiler- Kligman
Semester
Fall

Description
International Business: Environments and Operations, 14e (Daniels et al.) Chapter 1 Globalization and International Business 1) The broadening set of interdependent relationships among people from different parts of the world is known as ________. A) globalization B) offshoring C) franchising D) outsourcing Answer: A Diff: 1 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 1 AACSB: Dynamics of the global economy 2) Which of the following best defines international business? A) It includes all public economic flows between two or more countries. B) It includes all private economic flows between two or more countries. C) It includes all business transactions involving two or more countries. D) It includes all business transactions in countries other than your home country. Answer: C Diff: 2 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 1 3) Which of the following is NOT a likely reason to study international business? A) Global events affect almost all companies. B) Physical, social, and competitive conditions differ from country to country. C) Business conducted outside the confines of any one country is inexplicably on the decline. D) Firms are better able to obtain needed resources by approaching operating strategies from an international standpoint. Answer: C Diff: 3 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 1 1 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4) In terms of international business, it is most accurate to say that ________. A) there is a universal "best way" to conduct business B) global competition affects large companies but not small ones C) most firms depend either on foreign markets and supplies or compete against companies that do D) government regulation of international business has little effect on a company's profits Answer: C Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 1 AACSB: Dynamics of the global economy 5) Devon, an accounts manager at a large electronics firm, does not have any direct international responsibilities. However, Devon would most likely benefit from studying international business issues so that he can ________. A) conduct better job interviews B) make more informed operational decisions C) supervise and evaluate subordinates who have global assignments D) understand the legalities of importing and exporting products overseas Answer: B Diff: 2 Skill: Application Objective: 1 6) The shifting of national borders has most likely created which of the following situations for international business? A) It has left rural residents more reliant on costly technology. B) It has complicated the understanding of behavioral factors affecting business. C) It has made comparisons of historical data on international transactions problematic. D) It has slowed communications between a company's headquarters and foreign operations. Answer: C Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 2 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 7) Which of the following is an indication of the increased globalization of business since the end of World War II? A) Foreign ownership of U.S. assets has leveled off. B) World trade has grown more rapidly than world production. C) Most countries now depend on foreign output for more than half their consumption. D) Countries have increased their import restrictions to counter the rising tide of imports. Answer: B Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 1 AACSB: Dynamics of the global economy 8) Most of the world's goods and services are sold ________. A) in international markets B) in the countries where they are produced C) through exports to small countries D) through exports to large countries Answer: B Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 1 AACSB: Dynamics of the global economy 9) According to the A.T. Kearny/Foreign Policy Globalization Index, countries ________. A) tend to be ranked similarly on all four dimensions B) are more globalized on the political dimension than on personal contact C) that are large in land mass and population are less globalized than small countries D) sometimes rank high on one dimension and low on another Answer: D Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 1 AACSB: Dynamics of the global economy 3 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 10) Which of the following has NOT been a major force increasing globalization in recent decades? A) liberalization of cross-border trade B) increase in and expansion of technology C) growing pressure from consumers D) decreasing global competition Answer: D Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 11) Institutional development of services by business and government has aided the expansion of international business by ________. A) providing a universally agreed upon language for conducting international transactions B) removing immigration restrictions so that global firms can move personnel easily C) developing means to ease the flow of goods among countries D) spurring competition among domestic producers Answer: C Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 12) Which of the following has caused consumers to demand access to foreign-made products? A) Declining global affluence has caused consumers to seek out lower-priced products from abroad. B) Consumers have become more efficient in using media and technologies to compare prices worldwide. C) Fearing that their governments will enact restrictive policies on imports, consumers are stocking up on foreign products before restrictions are put in place. D) Expectations of rising prices of foreign products have caused consumers to seek foreign products before their prices become prohibitive. Answer: B Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Use of information technology 4 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13) Which of the following best explains why international business has grown rapidly in the past few decades? A) the end of the political schism between the Communist and non-Communist blocs B) stricter government policies on cross-border movements C) decreasing global competition and market share D) increased concerns about terrorism Answer: A Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 14) Advanced communication systems have contributed to growth in international business by ________. A) enabling better oversight of global operations B) reducing the effects of global competition C) altering the political environment D) reducing export regulations Answer: A Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Use of information technology 15) Aussie Flowers, a mid-size Australian flower company, is a strong competitor against U.S. firms in the American flower and bouquet market. Which of the following most likely allows Aussie Flowers to be a significant competitor in the U.S.? A) more effective domestic production techniques B) advances in communication systems C) advances in transportation D) cross-national cooperation Answer: C Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Application Objective: 2 AACSB: Dynamics of the global economy 5 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 16) Because consumers want a greater variety of goods and services at lower prices, many governments have ________. A) reduced their restrictions on the international movement of goods and services B) acted to reduce the pressures created by global competition C) sought to eliminate reciprocal advantages negotiated through international organizations and treaties D) increased their participation in multinational problem-solving efforts Answer: A Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 17) Which of the following best explains recent governmental relaxation of restrictions on cross- border trade or resource movements? A) Most countries face shortages of workers, so they seek foreign workers who can help them produce more. B) Governments believe that this will decrease the need to make their own companies more innovative. C) Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary. D) Governments believe that domestic producers will become more efficient as a result of foreign competition. Answer: D Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 18) A company starting out with a global focus, usually because of the international experience of its founders, is called a ________. A) multinational enterprise B) transnational company C) strategically allied company D) born-global company Answer: D Diff: 1 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 2 6 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 19) In a strategy known as ________, many new companies locate themselves near competitors and suppliers. A) offshoring B) franchising C) clustering D) exporting Answer: C Diff: 1 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 2 20) Braxton Enterprises is considering expanding its operations overseas. Which of the following best supports this decision? A) Braxton's foreign competitors have raised their prices. B) Braxton's main competitor recently opened a foreign plant. C) Most of Braxton's suppliers follow an agglomeration strategy. D) All of Braxton's competitors are operating in domestic facilities. Answer: B Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Critical Thinking Objective: 2 AACSB: Reflective thinking skills 21) When a company successfully responds to foreign production and market opportunities, ________. A) other companies will likely emulate its successful practices B) it likely has a long-term advantage over competitors C) it typically downsizes its domestic operations D) its home government likely raises taxes on the company Answer: A Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 7 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 22) According to your text, which of the following is NOT one of the three main reasons governments cooperate with each other? A) to attack problems jointly that one country acting alone cannot solve B) to deal with issues that lie outside the territory of any nation C) to gain reciprocal advantages D) to establish bribery laws Answer: D Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 23) Governments have signed treaties to protect foreign-owned property rights, such as investments and patents. A primary reason for doing so is to ________. A) gain reciprocal advantages B) reduce the domestic effects of other countries' economic policies C) deal with areas of concern outside the territory of any one country D) reduce national conflicts leading to violent political demonstrations Answer: A Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 24) All of the following are global areas that belong to no single country EXCEPT ________. A) noncoastal areas of the oceans B) inland waterways C) outer space D) Antarctica Answer: B Diff: 2 Skill: Concept Objective: 2 25) What is the most likely reason that governments cooperate with each other through treaties, agreements, and consultations? A) to gain an advantageous division of labor B) to be in compliance with United Nations' requirements C) to attack problems jointly that one country acting alone cannot solve D) to assure that all countries get an equitable share of taxes from multinational enterprises Answer: C Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 2 8 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 26) Which of the following is the LEAST likely reason that small countries worry about overdependence caused by globalization? A) A large country on whom they depend may pressure them on political matters. B) A large international firm may dictate its terms of operations in a small country. C) A large company may exploit legal loopholes to avoid tax payments. D) A large country may interfere with cultural homogeneity efforts. Answer: D Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 3 AACSB: Dynamics of the global economy 27) Which of the following statements would most likely be made by a supporter of globalization? A) Globalization encourages the adoption of uniform and superior standards for combating environmental problems. B) Economic growth created by globalization is largely in services, which involves the use of few nonrenewable resources. C) Global competition discourages resource-saving technologies, which are costly. D) Air pollution and toxic runoff problems increase with global economic growth. Answer: A Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 3 28) Curtailment of logging in the Amazon region is generally viewed as environmentally beneficial for the planet as a whole. However, unemployed Brazilian workers have felt that job creation inside Brazil is more important than climate protection outside Brazil. This example best illustrates which of the following? A) why smaller countries are concerned that large international countries are powerful enough to dictate operating terms B) why globalization is needed to foster uniform standards for combating environmental problems C) how cultural homogeneity threatens the cultural foundation of smaller nations D) how global interests can conflict with a country's local interests Answer: D Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Application Objective: 3 AACSB: Reflective thinking skills 9 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 29) Although globalization may bring economic growth, critics nevertheless contend that ________. A) the growth is not fast enough B) the inequality of gains puts some people in a relatively worse economic situation C) this growth is mainly for the future, thus ignoring present economic growth needs D) the cultural foundations of sovereignty are supported by globalization Answer: B Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 3 30) The process of shifting production from a domestic to a foreign location is best known as ________. A) offshoring B) outsourcing C) licensing D) joint venturing Answer: A Diff: 1 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 4 31) Which of the following statements would most likely NOT be supported by an advocate of offshoring? A) Offshoring increases the number of high-value jobs in the home countries of offshoring companies. B) Offshoring is fundamentally better for workers than the introduction of labor-saving technologies. C) Aggregate employment figures show that workers displaced due to offshoring are able to find new jobs. D) There are upper limits to offshoring because of the lack of skilled workers willing to work permanently for low wages. Answer: B Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 3 10 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 32) A major criticism of offshoring is that it ________. A) increases production costs B) exchanges good jobs for bad jobs C) threatens the sovereignty of larger countries D) allows companies to avoid payment of any taxes Answer: B Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 3 33) Critics of offshoring claim all EXCEPT which of the following? A) Cost savings are seldom passed on to final consumers. B) Offshoring reduces the incomes of people in low-wage countries. C) Incomes of workers in offshoring countries have gone down as a percentage of national income. D) Workers who have been displaced by offshoring do not have the skills needed for higher- value jobs. Answer: B Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Concept Objective: 3 34) Wilson Electronics is a mid-sized firm based in Michigan. Executives at the firm would like to increase sales and are considering expanding into international markets to accomplish this goal. Which of the following factors, if true, best supports a decision to expand sales globally? A) Wilson can offshore most of its production. B) Wilson can obtain all of its resources for the same price overseas. C) Costs of making additional sales would not increase disproportionately. D) The foreign market can be reached through exporting rather than through FDI. Answer: C Diff: 3 Learning Outcome: Discuss trends in and the debate over globalization Skill: Critical Thinking Objective: 2 AACSB: Reflective thinking skills 11 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 35) Kevin, marketing manager of the North American Bowling League, has decided to televise major bowling competitions to viewers in multiple countries rather than only in Canada and the U.S. Which of the following goals would this most likely help Kevin accomplish? A) acquiring new resources B) minimizing corporate risks C) increasing sales and profits D) obtaining competitive advantages Answer: C Diff: 2 Learning Outcome: Discuss trends in and the debate over globalization Skill: Application Objective: 2 AACSB: Reflective thinking skills 36) Alfred Enterprises, an American firm, is currently seeking resources from foreign countries. Which of the following is the LEAST likely reason for the actions taken by Alfred? A) manufacturing products at a lower cost B) gaining knowledge about a specific market C) following a customer into the global market D) differentiating its products from the competition Answer: C Diff: 2 Learning Outcome: Define the fundamental concepts of international business Skill: Application Objective: 2 37) Which of the following best explains how a firm that operates internationally minimizes risk? A) taking advantage of business-cycle differences among countries B) buying competitive risk insurance unavailable domestically C) preventing competitors from operating in the countries it has entered D) operating in less competitive environments than those at home Answer: A Diff: 2 Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 12 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 38) An example of a U.S. merchandise import is an automobile made in ________ and sold ________. A) the United States by a Japanese company; in the United States B) the United States by a Japanese company; outside the United States C) Japan by a Japanese company; in the United States D) Japan by a U.S. company; outside the United States Answer: C Diff: 2 Learning Outcome: Summarize the main entry strategies and modes that businesses use to enter into foreign markets Skill: Application Objective: 4 AACSB: Reflective thinking skills 39) Visible exports and imports are ________. A) merchandise imports and exports B) the sum total of goods and services traded C) international transactions paid for in money rather than barter D) typically a country's least common international economic transactions Answer: A Diff: 1 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 4 40) An example of a Japanese service export is a visit by a ________. A) Japanese citizen to Disneyland in the United States B) Japanese citizen to the Japan Pavilion at Epcot Center in the United States C) U.S. citizen to the Japan Pavilion at Epcot Center in the United States D) U.S. citizen to Tokyo Disneyland in Japan Answer: D Diff: 2 Learning Outcome: Define the fundamental concepts of international business Skill: Application Objective: 4 41) Reebok pays a royalty to the German Soccer League to use the team's logo on t-shirts that it sells. Reebok and the German Soccer League most likely have a ________. A) turnkey operation contract B) licensing agreement C) portfolio investment D) joint venture Answer: B Diff: 2 Learning Outcome: Define the fundamental concepts of international business Skill: Application Objective: 4 13 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 42) A foreign direct investment occurs when ________. A) a company owns at least 25% of a foreign firm B) a company has a controlling interest in a foreign company C) foreign ownership is in private rather than government securities D) a foreign firm agrees to a licensing agreement with a large conglomerate Answer: B Diff: 2 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 4 43) Which term refers to two or more companies that share ownership of an FDI? A) turnkey operation B) transnational firm C) joint venture D) franchise Answer: C Diff: 1 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 4 44) A multinational enterprise (MNE) is best defined as a firm ________. A) that is a member of the Fortune 500 B) with foreign business partners C) involved in global franchising D) with foreign direct investments Answer: D Diff: 1 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 4 45) The term used by the United Nations as a synonym for multinational enterprise is ________. A) multinational corporation B) transnational company C) international firm D) born-global Answer: B Diff: 1 Learning Outcome: Define the fundamental concepts of international business Skill: Concept Objective: 4 14 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 46) Politics, law, culture, and economy are all examples of ________ factors that can affect the ways in which companies produce and sell their products in foreign markets. A) social B) physical C) competitive D) political Answer: A Diff: 1 Skill: Concept Objective: 5 47) Managers who are knowledgeable about ________ are better able to identify the location, quantity, quality, and availability of the world's natural resources. A) political factors B) geographic factors C) competitive factors D) cultural factors Answer: B Diff: 1 Skill: Concept Objective: 5 48) Although the U.S. film industry depends heavily on revenue in foreign countries, revenue from international markets is usually low for a sports-themed film. This is most likely due to ________ factors. A) political B) geographic C) behavioral D) legal Answer: C Diff: 2 Skill: Concept Objective: 5 49) In addition to understanding the laws affecting business in countries where their companies operate, it is most important for managers to understand the ________. A) methods for appointing local judges B) ethical rationale behind the laws C) history of the local legal system D) degree of law enforcement Answer: D Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 5 AACSB: Ethical understanding and reasoning abilities 15 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 50) Some key ________ factors in the external environment of an international business are product strategy and resource experience. A) geographic B) political C) competitive D) behavioral Answer: C Diff: 1 Skill: Concept Objective: 5 51) The same automobile company produces Fiats and Ferraris. The company builds an engine plant in China with low production costs for Fiats but not Ferraris. The probable reason is that ________. A) Fiat competes mainly on a focus strategy, whereas Ferrari competes mainly on a mass-market strategy B) Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy C) Ferrari faces global competitors in China, whereas Fiat competes in China mainly against Chinese competitors D) although Ferrari did not build an engine plant, it will use the same Fiat engines in its models Answer: B Diff: 3 Skill: Application Objective: 5 AACSB: Analytic Skills 52) Elway Enterprises, a computer firm based in the U.S., has facilities overseas. Elway's sales in the Asian market are quite high, and Elway executives want to expand sales into Europ
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