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 Page Ref: 49
2) 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 Page Ref: 57
3) Some observers feel that international institutions and the people working in them cannot
adequately handle the complexities of an interconnected world. Based on this, these
observers believe that ________.
A) international business will grow primarily on a regional basis
B) globalization is nevertheless inevitable
C) globalization will slow in the future
D) private companies will replace international organizations in running the world's economy
Answer: C Page Ref: 68
4) Which of the following is a common shortcoming of studies examining culture in different
countries and regions?
A) Cultures are static, tending not to evolve much over periods of time. This tempts researchers to
draw conclusions from old data.
B) It is impossible to compare countries because of differences in the form of data collected.
C) People are almost always reluctant to complain about their own cultures, so they present only
positive opinions to researchers.
D) Responses are reported in averages, which can lead to a belief in unrealistic stereotypes.
Answer: D Page Ref: 95
5) The nation offers a workable reference for studying cultural differences because
________.
A) a nation contains only one distinct culture
B) similarity among people is both a cause and effect of national boundaries
C) the commonality of language within a nation eases the process of conducting surveys
D) different groups within the same country always have more in common with each other than
with groups in other countries
Answer: B Page Ref: 95
6) A problem of using the nation as a reference point for culture is that ________.
A) nations fail to mediate the different interests within their boundaries
B) self-stereotypes tend to fall along national lines
C) such an approach tends to be polycentric
D) variations tend to be great within a country
Answer: D Page Ref: 96
7) ________ consists of specific learned norms based on attitudes, values, and beliefs of a
group of people.
A) Ethnology
B) Civilization
C) Culture
D) Doctrine
Answer: C Page Ref: 93
8) Companies may be able to better motivate workers through delayed compensation, such
as retirement programs, in a society characterized by ________.
A) low uncertainty avoidance
B) high trust
C) high future orientation
D) high masculinity
Answer: C Page Ref: 108
9) The fact that Spanish words and phrases such as macho and enchilada have come into
American English illustrates that ________.
A) cultural diffusion is a two-way process
B) most cultural diffusion moves from developed countries to developing countries
C) existing national borders are shifting
D) material cultures are becoming more universal
Answer: A Page Ref: 119
10) Why should managers in international business understand international trade theories?
A) Countries' trade policies, based on trade theories, influence which products companies might
export to given countries.
B) The understanding helps managers decide whether their companies should follow laissez-faire
management practices.
C) The theories help managers decide whether to locate production in large versus small countries.
D) The comprehension is useful when deciding whether to transfer managers abroad to manage
foreign operations.
Answer: A Page Ref: 262
11) According to the PLC theory, companies produce products where labor rates are high
during the introductory stage of the products' cycles. Which of the following is NOT a
reason for this practice?
A) These workers are efficient in non-standardized production.
B) Producers can pass on higher costs to consumers who are unwilling to await possible price
reductions.
C) The practice reduces transportation costs because early consumers are near the highly paid
workers.
D) Import restrictions prevent production in countries other than the ones making product
innovations. Answer: D Page Ref: 277
12) All the following are reasons for the lower international mobility of people than capital
EXCEPT which one?
A) The differences in economic return between countries are lower for people than for capital.
B) It is more expensive to move people than capital.
C) People may have to learn another language and adapt to a different culture.
D) International capital transfers have less cumbersome legal restrictions than international
movements of people.
Answer: A Page Ref: 283
13) Trade protectionism may affect companies' operations in all of the following ways
EXCEPT which one?
A) Foreign supplies may be more difficult to obtain.
B) Certain products may be sold more easily abroad.
C) The transfer of personnel internationally may be more difficult.
D) Certain products may be more difficult to sell abroad.
Answer: C Page Ref: 300
14) Countries sometimes fear that foreign producers are pricing their exports artificially low.
This fear would most likely be based on the assumption that ________.
A) foreign companies will earn inadequately to repay their foreign debt
B) there will be insufficient earnings to improve product technology
C) foreign producers will charge exorbitant prices after putting competition out of business
D) they will be unable to maintain industries needed in times of war
Answer: C Page Ref: 307
15) Which of the following hypothetical examples would be a restriction on the import of
services?
A) The United States restricts foreign companies from carrying cargo between two U.S. cities.
B) Japan restricts North Koreans from visiting Tokyo Disneyland.
C) China does not allow the importation of rice from Thailand.
D) Canada does not allow Air Canada to buy Brazilian aircraft, which it claims are subsidized.
Answer: A
Page Ref: 317
16) The European Union is an example of ________ integration.
A) regional
B) relative
C) global
D) bilateral
Answer: A Page Ref: 328
17) An advantage for foreign multinationals operating in the European Union is that
________.
A) there are no exchange rate risks
B) market size is larger because of the elimination of internal tariff barriers
C) they can use differential external tariff barriers to determine where to ship products
D) the EU uses English as its official language
Answer: B Page Ref: 340
18) The ________ is a preferential trade agreement that was organized in 1967 and comprises
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore,
Thailand, and Vietnam.
A) APEC
B) OAU
C) ASEAN
D) CAFTA
Answer: C Page Ref: 349
19) Which of the following is NOT among the five forces in the Five-Forces Model of Industry
Structure?
A) governments
B) buyers
C) potential new entrants
D) suppliers of raw materials
Answer: A Page Ref: 442
20) In the international environment, firms use an international strategy, a multidomestic
strategy, a global strategy, or a ________ strategy.
A) regional
B) standardization
C) transnational
D) locational
Answer: C
Page Ref: 466
21) A disadvantage of the ________ strategy is that firms that adopt this strategy tend to
decentralize too much autonomy to national subsidiaries.
A) multidomestic
B) continental
C) international
D) transnational
Answer: A
Page Ref: 469
22) When planning international geographic expansion, managers use scanning to ________.
A) reduce the number of options available to a manageable number for further detailed analysis
B) assure the compatibility between the mode of operation and the country for international
expansion
C) assure that all countries within a region have similar investment climates
D) decide whether to use a concentration or a diversification strategy
Answer: A Page Ref: 486
23) Grids are a useful method of comparing countries for international business expansion
because ________.
A) they generally show how countries will perform in the future
B) they show risk on one axis and opportunity on another
C) they can highlight unacceptable conditions and set minimum scores for proceeding further
D) they highlight the interrelationship of operations in different countries
Answer: C Page Ref: 501
24) A go-no-go decision means ________.
A) an individual project decision is based on whether the project meets threshold criteria
B) projects are ranked in comparison to each other, and projects are approved from the top of the
list down until available resources are exhausted
C) management reviews existing information and decides whether additional individualized
feasibility studies are warranted
D) projects are approved or disapproved based on the potential ease of divestment
Answer: A Page Ref: 507
25) A(n) ________ operates on a contractual basis and provides exclusive representation for
an exporter's goods and services in a foreign market.
A) export management company
B) import broker
C) invoice agent
D) horizontal financial trader
Answer: A Page Ref: 541
26) Companies are likely to export products abroad in all of the following situations EXCEPT
which one?
A) when their average cost per unit of home country production declines substantially by increasing
output
B) when they want to use the riskiest method to engage in international trade
C) when they aim to increase degree of market diversification
D) when they are new to international business
Answer: B Page Ref: 524-525
27) The probability of being an exporter ________.
A) decreases with firm size
B) is almost always related to firm size
C) is rarely related to firm size
D) increases with firm size
Answer: D Page Ref: 526
28) Products that have to be altered significantly for a country's market are more likely to be
________.
A) imported into that market
B) licensed to a foreign firm
C) produced within that country
D) test-marketed in the home country
Answer: C Page Ref: 565
29) What is an international joint venture?
A) an agreement between two or more companies to manage a foreign business for a fee
B) the ownership of a company by two or more companies, of which at least one is a foreign
company where the venture is located
C) an international agreement between two or more firms for the use of a trademark
D) an agreement between two or more organizations to share management expertise
Answer: B Page Ref: 578-579
30) When a large company and a small company enter a collaborative arrangement,
________.
A) the large company is expected to contribute more to the arrangement
B) the large company is likely to be more active in the venture
C) the small company is more likely to view the collaboration's expansion as competition to itself
D) the small company is likely to be disadvantaged if legal action is necessary to solve a dispute
Answer: D Page Ref: 581