Business in Emerging Markets
Test Preparation
Course Introduction
This course explores the unique challenges and opportunities of conducting business in emerging markets, focusing on the economic, cultural, political, and legal environments that shape these regions. Students will examine strategies for market entry, growth, and risk management, and analyze the impact of globalization and technology on business operations. Through case studies and real-world examples, the course emphasizes the importance of adaptability, innovation, and ethical considerations when navigating rapidly changing markets in countries undergoing significant development and transformation.
Recommended Textbook
International Business 7th Edition by Ricky W. Griffin
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19 Chapters
2470 Verified Questions
2470 Flashcards
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Chapter 1: An Overview of International Business
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) International nonprofit organizations are called ________.
A) multinational corporations
B) multinational organizations
C) multinational enterprises
D) multinational nonprofits
Answer: B
Q2) Attacking and counterattacking rivals in every region of the world is common in the earthmoving equipment industry.
A)True
B)False
Answer: True
Q3) The British term for the trading of tangible goods is ________.
A) visible trade
B) invisible trade
C) merchandising
D) service franchising
Answer: A
Q4) Into what two categories can international investments be divided?
Answer: International investments can be divided into portfolio investments and foreign direct investments.
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Chapter 2: Global Marketplaces and Business Centers
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Sample Questions
Q1) Parker Manufacturing is considering relocating its headquarters from its current location in Vancouver, British Columbia. Executives at Parker want the firm to be located with the majority of other MNCs in the world. Which location would be most appropriate?
A) Zurich
B) Boston
C) Tokyo
D) London
Answer: B
Q2) All of the countries that were aligned with the former Soviet Union are classified as lower-income countries.
A)True
B)False
Answer: False
Q3) China possesses the world's largest economy.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Legal, Technological, Accounting, and Political Environments
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130 Flashcards
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Sample Questions
Q1) Dawson Enterprises, a U.S. firm, conducts business in Saudi Arabia. The MNE recently experienced a business dispute with a local firm and was forced to meet the demands of the local firm without going through due process. Dawson's experience most likely occurred because Saudi Arabia relies on ________.
A) civil law
B) common law
C) religious law
D) bureaucratic law
Answer: C
Q2) How do accounting systems evolve in common law countries?
Answer: In common law countries like the United Kingdom and the United States, accounting procedures evolve via the decisions of independent standards-setting boards like the Financial Accounting Standards Board in the United States. Each board works together with professional accounting groups.
Q3) The United States has enforced an embargo against Cuba since the early 1960s.
A)True
B)False
Answer: True
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Chapter 4: The Role of Culture
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Sample Questions
Q1) Movies that are successful in the United States and the United Kingdom are generally successful in other developed markets such as Japan and India.
A)True
B)False
Q2) Which form of family is most emphasized in the United States?
A) nuclear
B) extended
C) blended
D) ancestral
Q3) In a high-context culture, the presence of a lawyer during business dealing would be considered a sign of ________.
A) wisdom
B) trust
C) distrust
D) pragmatism
E) commitment
Q4) Germany is a low-context culture.
A)True
B)False
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Chapter 5: Ethics and Social Responsibility in International Business
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Sample Questions
Q1) R.J. Reynolds' decision to follow laws regarding the marketing of its products in the United States but market its tobacco aggressively in countries without such regulations is an example of which approach to social responsibility?
A) the obstructionist stance
B) the defensive stance
C) the accommodative stance
D) the proactive stance
Q2) What are ethics? How does culture affect ethics for global organizations?
Q3) A company taking a proactive approach to social responsibility will most likely
A) exhibit sincere and significant efforts to contribute to society
B) require employees to participate in local charities
C) conform to regional customs and laws
D) provide online ethics training
Q4) To date, the ILO has focused most of its efforts on improving labor conditions in China.
A)True
B)False
Q5) What is the mission of the International Labor Organization?
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Chapter 6: International Trade and Investment
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130 Flashcards
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Sample Questions
Q1) Which trade theory is best at explaining trade in differentiated goods?
Q2) Which of the following is a condition of Dunning's eclectic theory?
A) The firm must own a competitive advantage that overcomes competing against foreign firms in their markets.
B) Research and development costs must outweigh expenses related to foreign direct investment.
C) The firm must benefit more from outsourcing a service than controlling a foreign business.
D) Business activity must be more profitable in a domestic location than in a foreign location.
Q3) Which theory listed below is also called the Heckscher-Ohlin theory?
A) relative advantage
B) comparative advantage
C) relative factor endowments
D) specialization of countries
Q4) What are the primary forms of international business?
Q5) Adam Smith developed the theory of comparative advantage.
A)True
B)False
Q6) Explain the three stages in the international product life cycle theory.
Page 8
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Chapter 7: The International Monetary System and the Balance of Payments
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Sample Questions
Q1) The ________ refers to an international monetary system in which countries agreed to buy or sell their paper currencies in exchange for gold on the request of any individual or firm and to allow the free export of gold.
A) foreign exchange system
B) free market system
C) gold standard
D) mercantilism
Q2) During the gold standard, the international monetary system was also called the dollar-based gold standard.
A)True
B)False
Q3) Dell Computers invests excess cash balances overnight in a London bank to earn a higher interest rate than it could earn in a New York bank. Dell is most likely making a(n)
A) international currency investment
B) short-term portfolio investment
C) long-term portfolio investment
D) foreign direct investment
Q4) Why do you think the gold standard and mercantilism are considered opposites?
Page 9
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Chapter 8: Foreign Exchange and International Financial Markets
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Sample Questions
Q1) What is the difference between a call option and a put option?
Q2) ________ suggests that arbitrage activities will continue until the price of the good is identical in both markets.
A) Purchasing power parity
B) The law of one price
C) Equilibrium pricing
D) Two-point arbitrage
Q3) Ross Manufacturing wants to sell foreign exchange on a spot basis and contracts with an international bank to handle the transaction. What is the most likely reason that Ross uses an international bank in this case?
A) The bank can customize the spot to meet Ross' needs.
B) Laws require that banks handle spot transactions.
C) The bank will not charge Ross a service fee.
D) Ross is a U.S. organization.
Q4) What is the international Fisher effect? Explain how it relates to the foreign-exchange market?
Q5) Explain the theory of purchasing power parity. How does it affect arbitrage?
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Q6) What is a correspondent relationship between banks? What services are performed by correspondent banks?
Chapter 9: Formulation of National Trade Policies
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Sample Questions
Q1) ________ encourages the growth of domestic manufacturing industries by erecting high barriers to imported goods.
A) Strategic trade theory
B) Export promotion strategy
C) Import substitution strategy
D) Import promotion strategy
Q2) Local purchase requirements, investment controls, and product and testing standards are all forms of ________.
A) numerical export controls
B) voluntary export restraints
C) nontariff barriers
D) embargoes
Q3) Brazil has accused the United States of significantly depressing world cotton prices through subsidies paid to U.S. farmers.
A)True
B)False
Q4) Why do governments impose tariffs?
Q5) What arguments are used to justify government intervention in foreign trade? What tools are used to restrict trade?
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Chapter 10: International Cooperation Among Nations
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Sample Questions
Q1) Country X has violated its WTO obligations. How would the WTO handle the problem?
Q2) What was the European Commission's White Paper?
Q3) Why do you think it takes years to transform an EU Commission proposal into an EU law and then implement that law into national legislation?
Q4) What is a free trade area? Provide an example of a free trade area.
Q5) In decisions made by the Council of the European Union, every country has an equal vote.
A)True
B)False
Q6) The U.S., a GATT member, lowers its tariffs to Country X, a developing country, but requires the normal tariff for all other countries. The U.S. is most likely using a ________. A) generalized system of preferences
B) normal trade relations system
C) staggered system of taxation
D) cumulative tariff system
Q7) What are the three pillars upon which the Maastricht Treaty rests?
Q8) What was the most important aspect of the Maastricht Treaty?
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Chapter 11: International Strategic Management
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130 Flashcards
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Sample Questions
Q1) Executives at Harper Industries are evaluating the firm's international strategy to determine if the current approach is effective. Harper has been using a multidomestic strategy for the last five years. Which of the following statements best supports Harper continuing to use the same strategy?
A) Few differences exist between national markets.
B) Central headquarters makes most decisions.
C) Economies of scale for production are low.
D) Products are marketed to global consumers.
Q2) Firms using a ________ conduct business the same way anywhere in the world.
A) home replication strategy
B) transnational strategy
C) global strategy
D) multidomestic strategy
Q3) Resource deployment answers the question: "How can different elements of our business benefit each other?"
A)True
B)False
Q4) What is the purpose of an environmental scan? Why is it important to perform an environmental scan when developing an international business strategy?
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Chapter 12: Strategies for Analyzing and Entering Foreign Markets
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Sample Questions
Q1) Executives at Smithson Soda, a U.S. firm, have decided to enter the Chinese market through a licensing agreement with a beverage manufacturer located in Shanghai. Which of the following statements, if true, best supports this decision?
A) Smithson Soda recently sold one of its manufacturing facilities.
B) Smithson Soda is unfamiliar with the needs of Chinese consumers.
C) Smithson Soda uses an EMC to ship its products to a Chinese distributor.
D) Smithson Soda belongs to a Webb-Pomerene association to gather market research.
Q2) What is indirect exporting?
Q3) Burger King has established a franchise agreement with an individual in Tokyo. Burger King will most likely provide the Japanese franchisee with all of the following EXCEPT ________.
A) intellectual property
B) operating systems
C) financial capital
D) training
Q4) Dunning's eclectic theory is useful in understanding which mode of entry to use.
A)True
B)False
Page 14
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Chapter 13: International Strategic Alliances
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Sample Questions
Q1) How does the Star Alliance primarily benefit customers?
A) coordinating service inquiries
B) supporting airport construction
C) facilitating airline transfers
D) easing government restrictions
Q2) Why was it important for General Mills and Nestle to form a comprehensive joint venture in Europe, rather than a marketing alliance?
Q3) An alliance in which two or more firms each manufacture products is an R&D alliance.
A)True
B)False
Q4) Sharing risk in a strategic alliance is most important for a firm that is entering a(n) ________ market.
A) competitive
B) established
C) high-tech
D) new
Q5) Why do governments engage in public-private ventures in the oil industry? How do such alliances benefit international businesses?
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Chapter 14: International Organization Design and Control
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Sample Questions
Q1) Which organization design is LEAST appropriate for firms with few products and relatively stable markets?
A) global area design
B) global functional design
C) global matrix design
D) global hybrid design
Q2) ________ is the process of monitoring ongoing performance and making necessary changes to keep the organization moving toward its performance goals.
A) Coordination
B) Control
C) Implementation
D) Execution
Q3) Which design assigns worldwide responsibility for specific products or product groups to separate operating divisions within a firm?
A) global area design
B) global functional design
C) global product design
D) global hybrid design
Q4) What is the focus of strategic control?
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Chapter 15: Leadership and Employee Behavior in International Business
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Sample Questions
Q1) Using examples, compare and contrast leadership and management.
Q2) Extroversion refers to ________.
A) the ability to get along with others
B) the drive to impose order and precision
C) one's comfort level with relationships
D) one's rigidity of beliefs and range of interests
Q3) Which models of motivation attempt to identify the specific need or set of needs that result in motivated behavior?
A) need-based models
B) process-based models
C) reinforcement models
D) perceptual models
Q4) Extroversion describes the level of order and precision a person imposes on activities.
A)True
B)False
Q5) Management relies on formal power and authority rather than on motivation.
A)True
B)False
Q6) What is the basic theory behind the reinforcement model? Page 17
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Page 18
Chapter 16: International Marketing
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130 Flashcards
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Sample Questions
Q1) Which approach to international marketing is the easiest for a firm to adopt?
A) ethnocentric approach
B) polycentric approach
C) geocentric approach
D) transnational approach
Q2) Firms that use two-tiered pricing are vulnerable to charges of dumping.
A)True
B)False
Q3) The ________ is the communication channel used by the advertiser to convey a message.
A) medium
B) message
C) copy
D) graphic
Q4) Which of the following is not one of the elements of the promotion mix?
A) advertising
B) e-commerce
C) sales promotion
D) public relations
Q5) What are public relations?
Page 19
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Chapter 17: International Operations Management
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Sample Questions
Q1) Nissan stores hundreds of cars that will be sold in the southern part of North America at the Port of Houston. How does Nissan most likely benefit from this arrangement?
A) lowering costs
B) improving reliability
C) minimizing advertising needs
D) improving supply chain flexibility
Q2) How important are services to the U.S. gross domestic product?
Q3) ________ refer(s) to the reputation a country has for products it produces.
A) Country brand image
B) National reputation
C) Country-of-origin effects
D) Ethnocentric effects
Q4) What is vertical integration?
Q5) ________ is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
A) Production
B) Quality
C) Benefit
D) Marketing
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Chapter 18: International Financial Management
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Sample Questions
Q1) International banks participate in the swap market by acting as brokers and monitoring the foreign-exchange markets.
A)True
B)False
Q2) What is a swap market? How can swap markets help international firms obtain low-cost sources of capital and manage foreign exchange risk?
Q3) ________ occurs when exchange rate movements that occur after the firm is legally obligated to complete the transaction can affect the financial benefits and costs of an international transaction.
A) Exchange rate risk
B) Transaction exposure
C) Translation exposure
D) Currency conversion risk
Q4) In a counterpurchase, one part of the transaction can proceed even if the second part of the transaction requires additional time.
A)True
B)False
Q5) Which type of country relies most on countertrade?
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Chapter 19: International Human Resource Management and Labor Relations
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Sample Questions
Q1) A tax equalization program is a means of ensuring the expatriate's after-tax income is similar to what it would be in the home country.
A)True
B)False
Q2) The primary advantage of using a host country national is that the manager already understands the local laws, culture, and economic conditions.
A)True
B)False
Q3) Which term refers to the process used to make agreements between management and labor unions?
A) labor management
B) collective bargaining
C) negotiations
D) labor allowances
Q4) What kinds of skills and abilities are necessary to work in a foreign location?
Q5) What are the advantages and disadvantages of using parent country nationals in international assignments?
Q6) How is a hardship premium used?
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Q7) What are the three groups from which international firms can hire?
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