Advanced International Business Exam
Questions
Course Introduction
Advanced International Business delves into the complex and dynamic challenges faced by firms operating in a global environment. The course covers strategic decision-making, cross-cultural management, international trade theories, global market entry strategies, and the impact of economic, legal, and political factors on global business operations. Emphasizing both theory and practical application, students will analyze case studies, explore the internationalization process, evaluate emerging market opportunities, and examine the ethical considerations inherent in the international business landscape. The course is designed to equip students with the advanced analytical tools and intercultural competencies necessary for successful leadership and management in a highly interconnected global economy.
Recommended Textbook
International Business The New Realities 4th Edition by S. Tamer Cavusgil
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Page 2
Chapter 1: Introduction: What Is International Business
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Sample Questions
Q1) One of the attendees represents a leading nation in the international services trade. This attendee is most likely from which of the following countries?
A)Brazil
B)Greece
C)Singapore
D)South Africa
Answer: C
Q2) International business is performed not just by individual firms, but also governments and international agencies.
A)True
B)False
Answer: True
Q3) A country's economic assets are also known as factors of production.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Globalization of Markets and the
Internationalization of the Firm
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Q1) Discuss the effect of globalization on national culture.
Answer: Globalization exerts strong pressures on national culture. Market liberalization exposes local consumers to global brands, unfamiliar products, and different values. People worldwide are exposed to movies, television, the Internet, and other information sources that promote lifestyles of people in the United States and other advanced economies. Appetites grow for Western products and services, which are seen to signal higher living standards. For example, despite low per-capita income, many Chinese buy consumer electronics such as cell phones and TV sets. Advertising disseminates societal values modeled on Western countries. Hollywood dominates the global entertainment industry. Cultural imperialism is offset by the countertrend of local nationalism. Although many products and services have become largely universal, people's behaviors and attitudes remain relatively stable over time. Religious differences are as strong as ever. Language differences are steadfast across national borders. As globalization standardizes superficial aspects of life across national cultures, people resist these forces by insisting on their national identity and taking steps to protect it. For example, laws exist to protect national language and culture in Belgium, Canada, and France.
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Page 4
Chapter 3: The Cultural Environment of International Business
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Sample Questions
Q1) Which of the following best supports the selection of Sato over Aoki?
A)Sato is familiar with both Tag-Mart operations as well as the local customs in Japan.
B)Sato is no more skilled in employee training techniques than Aoki.
C)Sato is clearly more relationship-oriented than Aoki.
D)Sato is likely to discourage homogenization of cultures.
Answer: A
Q2) Ethnocentric assumptions lead to poor business strategies in both planning and execution.
A)True
B)False
Answer: True
Q3) In collectivist societies, competition for resources is the norm, and those who compete best are rewarded financially.
A)True
B)False
Answer: False
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Chapter 4: Ethics, Corporate Social Responsibility,
Sustainability and Corporate Governance
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Sample Questions
Q1) An international human rights organization recommends that its member countries review their human rights policies on a periodic basis to ensure that their governments are upholding ethical standards for the treatment of prisoners. Which of the following represents the most effective reasoning in support of the organization's recommendation?
A)Ethical policies and practices tend to remain consistent within the same country over time.
B)Nations should emphasize more on rehabilitation than retribution in their treatment of prisoners.
C)Nations should enforce only those ethical standards that have been adopted by other nations.
D)Ethical standards change over time, so national policies should be updated as necessary.
Q2) ________ are moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong.
A)Attitudes
B)Ethics
C)Laws
D)Biases
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Chapter 5: Theories of International Trade and Investment
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Q1) Which of the following, if true, weakens Daniel's proposition?
A)Mercantilism helps curb inflation.
B)Running a trade surplus is beneficial for nations.
C)Restricting imports reduces the choice of products consumers can buy.
D)Mercantilism tends to benefit firms that import.
Q2) Entrepreneurial orientation and availability of venture capital are examples of country-specific advantages .
A)True
B)False
Q3) ________ refers to the superior features of a country that provide unique benefits in global competition, typically derived from either natural endowments or deliberate national policies.
A)Comparative advantage
B)Competitive advantage
C)Absolute advantage
D)Industrial cluster
Q4) Distinguish between comparative and competitive advantages. Provide examples.
Q5) In a short essay, explain the absolute advantage principle. Provide an example of the principle at work.
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Chapter 6: Political and Legal Systems in National Environments
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Q1) Which of the following terms refer to the application of home-country laws to persons or conduct outside national borders?
A)anti-boycott regulations
B)extraterritoriality
C)transparency
D)anti-dumping policies
Q2) A(n)________ is a type of trade penalty imposed on one or more countries by one or more other countries.
A)confiscation
B)expropriation
C)subsidy
D)sanction
Q3) An embargo is an official ban on exports to or imports from a particular country.
A)True
B)False
Q4) Market forces and free trade are encouraged in democracies.
A)True
B)False
Page 8
Q5) What is transparency? Explain how transparency varies around the world.
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Chapter 7: Government Intervention and Regional Economic Integration
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Q1) A formal arrangement between two or more countries to reduce or eliminate tariffs is known as a(n)________.
A)quota arrangement
B)free trade agreement
C)memorandum of association
D)memorandum of understanding
Q2) Explain how quotas work as an instrument of government intervention. What are voluntary export restraints? How can firms use foreign trade zones as a strategy to manage government intervention?
Q3) Export-led development refers to government policies that impose high tariffs and quotas on imports from the developed world.
A)True
B)False
Q4) Currency controls harm companies that export their products from the host country, but favor those that rely heavily on imported parts and components.
A)True
B)False
Q5) In a short essay, explain how the GATT changed international trade.
Page 9
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Chapter 8: Understanding Emerging Markets
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Sample Questions
Q1) MNEs must set high prices in emerging markets because emerging market consumers have high spending power.
A)True
B)False
Q2) For foreign firms wanting to do business in emerging markets, family conglomerates can make valuable venture partners.
A)True
B)False
Q3) Which of the following is typical of developing economies?
A)low levels of bureaucracy and red tape
B)low debt levels
C)lack of cultural history
D)poor education systems
Q4) Which of the following is an example of a developing economy?
A)Australia
B)Bangladesh
C)France
D)Brazil
Q5) Write a short essay on technology and emerging markets.
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Chapter 9: The International Monetary and Financial Environment
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Q1) Describe the two main types of foreign exchange management used today. Provide examples of nations which use each type of system. What are the benefits of each system?
Q2) Which of the following situations often results in a banking crisis?
A)when investors withdraw funds from financial institutions
B)when exchange rates fluctuate dramatically
C)when governments borrow excessively from banks
D)when a nation's currency rapidly depreciates
Q3) All else being equal, the greater the supply of a currency, the lower its price; the lower the supply of a currency, the higher its price.
A)True
B)False
Q4) The French franc is one of the European currencies which was taken out of circulation and replaced by the euro.
A)True
B)False
Q5) The International Monetary Fund is part of the global financial system.
A)True
B)False
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Chapter 10: Financial Management and Accounting in the Global Firm
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Sample Questions
Q1) Currency swap is an agreement to exchange one currency for another, according to a specified schedule.
A)True
B)False
Q2) In terms of financial management tasks that are key to MNE success, which of the following comes immediately after the task of raising funds for the firms?
A)assesses the financial attractiveness of major investment projects, such as foreign expansion
B)determines the ideal long-term mix of financing for the firm's international operations
C)learns to operate in a global environment with diverse accounting practices and international tax regimes
D)administer funds passing in and out of the firm's value-adding activities
Q3) With a futures contract, the purchaser agrees to buy or sell a currency ________.
A)within a certain amount of time, at the rate applicable on that day
B)when the exchange rate reaches a set amount
C)at any rate after a specified period of time has elapsed
D)at a pre-determined price on a specific date
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Page 12
Chapter 11: Strategy and Organization in the International Firm
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Q1) Which of the following is true about global teams?
A)It is a locally distributed group of employees charged with specific problem solving that affects company operations at the domestic scale.
B)To develop global strategies, the team should include culturally diverse managers whose business activities span the globe.
C)Strategic global teams focus on the efficient and effective operation of the business across the whole network.
D)Operational global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry.
Q2) Armaz Inc. , a manufacturing company, has its headquarters located in Texas, U.S. , and subsidiaries in India, China, and Vietnam. Which of the following decisions will be the most centralized?
A)decision about building factories in Cambodia
B)decision about hiring a marketing manager for its India operations
C)decision to open a retail store in Vietnam
D)decision about marketing newly developed products for the Chinese market
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Chapter 12: Global Market Opportunity Assessment
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Sample Questions
Q1) An arrangement in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or other forms of compensation is known as
A)franchising
B)licensing
C)outsourcing
D)offshoring
Q2) Explain the four factors contributing to product suitability for international markets, and describe how these factors can help an international firm with a gradual elimination screening methodology.
Q3) Describe the four factors that contribute to the likelihood of success for a product or service in an international market.
Q4) Compare and contrast industry market potential and company sales potential. How is an estimate of industry market potential helpful to managers? What factors are necessary to determine industry market potential?
Q5) Exporting, FDI, and sourcing all have identical screening criteria.
A)True
B)False
Q6) Describe the purpose of CORE. How does it aid managers?
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Chapter 13: Exporting and Global Sourcing
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Sample Questions
Q1) Which of the following statements is true with regard to the R&D activities of a firm?
A)As a strategic asset, R&D activities are of moderate importance to the firm.
B)R&D activities are usually concentrated at home.
C)R&D activities have a low likelihood of being internalized.
D)R&D activities have a high likelihood of being outsourced.
Q2) A ________ is the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized.
A)demand chain
B)buying center
C)global supply chain
D)decision making unit
Q3) A global supply chain is the compilation of business activities intended to create, produce, advertise, deliver, and support a focal firm's product or service.
A)True
B)False
Q4) In a short essay, explain how global sourcing can affect home-country employees.
Q5) What is offshoring? Describe the types of industries that tend to offshore.
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Chapter 14: Foreign Direct Investment and Collaborative Ventures
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Sample Questions
Q1) A consortium is defined as ________.
A)the purchase of an existing company or facility
B)two partners forming a new legal entity
C)an equity venture to consolidate the value chain
D)multiple partners participating on a large-scale project
Q2) Many international firms are investing in local communities and establishing global standards of fair treatment for workers in an effort to be socially responsible.
A)True
B)False
Q3) A greenfield investment is a direct investment to purchase an existing company or facility.
A)True
B)False
Q4) A firm that owns the activities performed in a single stage of its value chain is demonstrating ________.
A)centralization
B)decentralization
C)horizontal integration
D)reverse integration
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Chapter 15: Licensing, Franchising, and Other Contractual Strategies
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Sample Questions
Q1) One of the disadvantages of licensing is that it requires the licensor to make a high capital investment in the foreign market.
A)True
B)False
Q2) Host-country governments often encourage franchising because most of the money generated by the franchise remains in the local economy.
A)True
B)False
Q3) The government of Azoo might select Contractor B in order to ________.
A)prevent the builder from operating in the country for even a short period of time
B)avoid rental fee, user fee, and tolls during the operational stage of the bridge and subway system
C)build the projects cost-effectively
D)increase the number of visitors to Azoo
Q4) Describe five advantages of licensing agreements from the perspective of the licensor.
Q5) Describe three challenges faced by professional service firms when they internationalize.
17
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Chapter 16: Marketing in the Global Firm
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Sample Questions
Q1) Rigid cost-plus pricing refers to setting prices to cover only the firm's variable costs, but not its fixed costs.
A)True
B)False
Q2) Perhaps the most important distinction between standardization and adaptation is that ________.
A)standardization helps the firm customize products according to customer preferences, while adaptation helps the firm save time
B)standardization helps the firm cut costs, while local adaptation helps the firm more precisely cater to local needs and requirements
C)standardization helps the firm cater to the needs of local customers, while adaptation helps the firm save costs through mass production
D)standardization helps the firm upgrade quality to suit the unique tastes of consumers, while adaptation emphasizes uniformity
Q3) Direct marketing entails selling directly to end users.
A)True B)False
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Chapter 17: Human Resource Management in the Global Firm
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Sample Questions
Q1) Which of the following best describes an expatriate?
A)an employee who is assigned to live and work in a foreign country for an extended period
B)an employee who returns to his home country after a foreign assignment
C)an employee hired on a temporary basis by an MNE
D)an employee who is a host-country national
Q2) Firms prefer HCNs when the host-country environment is complex and their specialized knowledge or local connections are required in the local marketplace.
A)True
B)False
Q3) ________ tends to worsen culture shock.
A)The ability to speak more than one language
B)Proximity to family
C)Inadequate cross-cultural skills
D)High adaptability
Q4) In expatriate compensation, tax equalization is a special consideration.
A)True
B)False
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Q5) Discuss the reasons why labor union membership has declined in recent years.