Global Business Environment
Exam Solutions
Course Introduction
The Global Business Environment course examines the dynamic and interconnected nature of international markets, focusing on economic, political, legal, technological, and sociocultural factors that influence global business operations. Students will explore how multinational enterprises navigate diverse regulatory regimes, manage cross-border risks, and harness global opportunities amid ever-changing trends. The course provides frameworks for understanding globalization, international trade, investment flows, and cultural differences, equipping students with analytical tools to assess strategies for entering and thriving in global markets.
Recommended Textbook
International Marketing 17th Edition by Philip Cateora
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1940 Verified Questions
1940 Flashcards
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Page 2
Chapter 1: The Scope and Challenge of International Marketing
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Sample Questions
Q1) Sam just ate cookies and, therefore, feels justified in refusing food offered by his Middle Eastern host. In this instance, Sam's self-reference criterion has just saved him from making a cultural blunder.
A)True
B)False
Answer: False
Q2) _____ impedes the ability of a person to assess a foreign market in its true light.
A) Polycentrism
B) Pluralism
C) Xenocentrism
D) Ethnocentrism
E) Relativism
Answer: D
Q3) The process of evaluating the uncontrollable elements in an international marketing program involves substantial doses of cultural, political, and economic shock.
A)True
B)False
Answer: True
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Chapter 2: The Dynamic Environment of International Trade
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Sample Questions
Q1) To overcome the problems of inadequate monetary reserves and unstable currencies that plagued international trading before World War II, the _____ was formed.
A) European Union
B) World Trade Organization
C) Federation of International Trade Associations
D) International Monetary Fund
E) United Nations Development Program
Answer: D
Q2) Describe voluntary export restraints.
Answer: The voluntary export restraint (VER) is an agreement between the importing country and the exporting country for a restriction on the volume of exports. They are similar to quotas and also referred to as orderly market agreements (OMAs). A VER is called voluntary because the exporting country sets the limits; however, it is generally imposed under the threat of stiffer quotas and tariffs being set by the importing country if a VER is not established.
Q3) Quotas are more flexible than import licenses.
A)True
B)False
Answer: False
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Chapter 3: History and Geography: The Foundations of Culture
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Sample Questions
Q1) In the context of U.S. foreign policies, the Monroe Doctrine, in its broadest interpretation, meant that Americans were a chosen people ordained by God to create a model society.
A)True
B)False
Answer: False
Q2) Which of the following statements is true about the consumption of petroleum products by the United States?
A) America is the largest producer of petroleum products.
B) America is likely to stay self-sufficient for the next several decades.
C) America is the third largest consumer of petroleum products.
D) America has become a major importer of petroleum products.
E) Petroleum products are no longer the largest source of energy for the U.S.
Answer: D
Q3) China has emerged as the most efficient user of energy worldwide.
A)True
B)False
Answer: False
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Chapter 4: Cultural Dynamics in Assessing Global Markets
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Sample Questions
Q1) In the context of the elements of culture, briefly discuss the concept of linguistic distance.
Q2) Which of the following is a way individuals learn culture from social institutions?
A) Anarchy
B) Socialization
C) Cultural apathy
D) Etiquette awareness
E) Social rebellion
Q3) Much of American trade policy has depended on the happenstance of cotton being the original source of the Virginia colony's economic survival in the 1600s.
A)True
B)False
Q4) In the context of planned and unplanned cultural change, discuss the methods used by marketers to overcome resistance to change in an international marketing scenario.
Q5) In the context of the elements of culture, illustrate the differences in "Asian and Western" thought as discussed by Richard Nisbett.
Q6) List the four dimensions of cultural values as given by Hofstede.
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Page 6
Chapter 5: Culture, Management Style, and Business Systems
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Sample Questions
Q1) A characteristic of committee decision making is that:
A) it is only found in small businesses.
B) the committees always operate on a decentralized basis.
C) it is based on rank and hierarchy.
D) it is rarely employed in Asian countries.
E) it is by group or consensus.
Q2) We are less likely to evaluate a person's behavior in terms of what is familiar to us because we use our self-reference criterion (SRC).
A)True
B)False
Q3) The majority of business customs fit into the cultural elective category. A)True
B)False
Q4) Discuss the American manager's attitude toward objectivity in decision making.
Q5) Briefly describe the different types of business customs.
Q6) The treatment local women receive in their own cultures is a clear indicator of how a foreign businesswoman will be treated.
A)True
B)False
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Chapter 6: The Political Environment: a Critical Concern
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Sample Questions
Q1) Which of the following strategies is most effective in minimizing political risks for a multinational corporation in situations in which the technology is unique and the risk is high?
A) Trade embargo
B) Licensing
C) Expanding the investment base
D) Planned confiscation
E) Expropriation
Q2) In the context of international law, a _____ state is independent and free from all external control.
A) bounded
B) sovereign
C) legal
D) liberal
E) neutral
Q3) Economically prosperous countries do not display strong nationalistic feelings.
A)True
B)False
Q4) Discuss the threats posed by cyberterrorism or cyberattacks with an example.
Q5) Discuss the terms confiscation, expropriation, and domestication.
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Chapter 7: The International Legal Environment: Playing by the Rules
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Sample Questions
Q1) The Islamic law prohibits the payment of _____.
A) taxes
B) profits
C) interest
D) equity
E) accounting fees
Q2) Which of the following indicates the exportability status of an item based on the ECCN?
A) Commerce Control List
B) Entity List
C) Common List
D) Priority Export List
E) International Trade List
Q3) Arbitration clauses require agreement wherein the concerned parties agree:
A) on who is right and who is wrong.
B) on the validity of the litigation issues.
C) to abide by the awards resulting from the arbitration.
D) to not hire a legal counsel to represent them.
E) to not name the arbitrators.
Q4) Compare conciliation with arbitration.
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Chapter 8: Developing a Global Vision Through Marketing Research
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Sample Questions
Q1) Marketers use three different techniques to ferret out translation errors in marketing research questionnaires ahead of time. Which of the following is one of those techniques?
A) Simultaneous translation
B) Serial translation
C) Back translation
D) Linear translation
E) Recentering
Q2) In Italy and many Latin countries, family generally means only the parents and children.
A)True
B)False
Q3) Write a short note highlighting the key features of quantitative research.
Q4) Which of the following is the last step of the market research process?
A) Defining the research problem and establish research objectives
B) Effectively communicating the results to decision makers
C) Analyzing, interpreting, and summarizing the results
D) Considering the costs and benefits of the research effort
E) Gathering the relevant data from secondary or primary sources, or both
Q5) Write a short note on the analogy method of demand forecasting.
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Chapter 9: Economic Development and the Americas
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Sample Questions
Q1) Which of the following accounts for the lion's share of Mercosur exports to Europe?
A) Clothing and apparel
B) Telecommunication equipment
C) Consumer durables
D) Petroleum and minerals
E) Agricultural and agro-industrial products
Q2) What is happening in BEMs today is analogous to what happened in:
A) Saudi Arabia in the 1800s.
B) India during the rule of the British Empire.
C) Russia after the fall of the Czar.
D) Europe after World War II.
E) Iraq between 1890 and 1990.
Q3) When the marketing process in a country is in the commercial-transition substage, the only marketing function performed is physical distribution.
A)True
B)False
Q4) What is economic development?
Q5) Why was Caribbean Community and Common Market (CARICOM) created? What are its goals?
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Chapter 10: Europe, Africa, and the Middle East
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Sample Questions
Q1) The European Union is most accurately described as a free trade area.
A)True
B)False
Q2) Most eastern European countries are privatizing state-owned enterprises, establishing free market pricing systems, and:
A) introducing autarchic trade policies.
B) increasing trade barriers.
C) wrestling with inflation.
D) making import controls stringent.
E) switching to a socialistic economy.
Q3) Which of the following statements is true of the European Court of Justice?
A) It initiates policy and supervises its observance by member states.
B) Its decisions require approval by the top three nations of the European Union.
C) Its decisions are final and cannot be appealed in national courts.
D) It primarily has a consultative role in interpreting the nuances of the EU law.
E) It can amend and adopt Union legislation.
Q4) Briefly explain the concept of a multinational market region.
Q5) Write a short note on the Commonwealth of Independent States.
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Chapter 11: The Asia Pacific Region
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Sample Questions
Q1) Which of the following is at present the center of trade links with north China and the Asian republics of the former Soviet Union?
A) Japan
B) South Korea
C) Malaysia
D) Singapore
E) India
Q2) Which of the following is a cultural hurdle in the path of China becoming a vast market in the long run?
A) Caste system
B) Xenophobia
C) Excessive focus on human rights
D) Excessive bureaucracy
E) Excessive spending
Q3) Tianjin is China's largest industrial city.
A)True
B)False
Q4) Elaborate on the two major events of 2000 that had a major impact on China's economy.
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Chapter 12: Global Marketing Management: Planning and Organization
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Sample Questions
Q1) The first step in the international planning process is to adapt the marketing mix to target markets.
A)True
B)False
Q2) Phase 3 of the international planning process involves developing a marketing plan and deciding budgets and profit expectations.
A)True
B)False
Q3) In the context of foreign market entry strategies, the advantages of _____ are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse.
A) consortia
B) exporting arrangements
C) strategic alliances
D) licensing
E) joint ventures
Q4) Explain the difference between joint ventures and consortia.
Page 14
Q5) List the four phases of the international planning process.
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Chapter 13: Products and Services for Consumers
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Sample Questions
Q1) A company focusing its efforts on making its new innovation more user-friendly than before is working on the _____ of the product.
A) docibility
B) partibility
C) complexity
D) discordancy
E) observability
Q2) The decision to standardize or adapt a product is crucial in delivering quality.
A)True
B)False
Q3) List out the five characteristics of an innovation that assist in determining the rate of acceptance or resistance of the market to a product.
Q4) Effective advertising and proper positioning of products can help brands to ameliorate a less-than-positive country stereotype.
A)True
B)False
Q5) In the context of products and services for consumers, what is the importance of quality while marketing products?
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Chapter 14: Products and Services for Businesses
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Sample Questions
Q1) Buyers in country X prefer to use the older, cheaper version of Firm A's product although it is bulkier and less user-friendly. Buyers in country Y, however, prefer to use the newer, lightweight version for its new user interface. Which of the following statements is the most accurate conclusion from the given information?
A) Firm A needs to revamp its after-sales services.
B) The sales of industrial goods are higher in country X than in country Y.
C) The perception of quality can differ across countries.
D) Country X is a highly industrialized nation.
E) Country Y has a lower average income level compared to country X.
Q2) The industrialized economies in the _____ stage of Rostow's five-stage model of economic development focus more on low-cost manufacturing of a variety of consumer and some industrial goods. They buy from all categories of industrial products and services.
A) traditional society
B) drive to maturity
C) preconditions to takeoff
D) age of mass consumption
E) takeoff
Q3) Explain the concept of derived demand. Provide an illustration.
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Page 16
Chapter 15: International Marketing Channels
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Sample Questions
Q1) A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that covers only one or two markets.
A) manufacturer's retail store
B) export management company
C) Webb-Pomerene export association
D) global retailer
E) manufacturer's export agent
Q2) _____ is a subject area that should be on the checklist of criteria for evaluating middlemen servicing a market.
A) Flexibility
B) Hypersensitivity
C) Cultural empathy
D) Productivity
E) Breadth of knowledge
Q3) What is complementary marketing?
Q4) The distribution channel process includes all activities, beginning with the manufacturer and ending with the retailer.
A)True
B)False
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Chapter 16: Integrated Marketing Communications and International Advertising
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Sample Questions
Q1) For most companies, trade shows and direct selling are the major components in the marketing communications mix.
A)True
B)False
Q2) What are sales promotions?
Q3) Which of the following statements about advertising laws around the world is correct?
A) Advertising of pharmaceuticals is unrestricted in most countries.
B) Toy, tobacco, and liquor advertising is restricted in numerous countries.
C) Advertising on television is unregulated in most countries.
D) The Internet is the only medium where no restrictions exist in any country.
E) Television ads are exempted from tax in all countries.
Q4) One of the drawbacks of satellites, which is also their strength, is:
A) the cost of creating a high quality ad for satellite television.
B) the limited market penetration of satellite television.
C) the number of intermediaries required for satellite service transmission.
D) the government regulations placed on satellite advertising.
E) their ability to span a wide geographical region.
Q5) Describe the role of public relations (PR).
Q6) Explain the significance of radio and television in international advertising. Page 18
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Page 19
Chapter 17: Personal Selling and Sales Management
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Sample Questions
Q1) Overseas premiums that are paid to the family of expatriates during short-term assignments if they do not relocate to the foreign country are called:
A) fringe benefits.
B) pension plans.
C) displacement reserves.
D) special assessments.
E) separation allowances.
Q2) Which of the following is true of an expatriate sales force?
A) In relationship-based cultures, an expatriate sales force proves to be most efficient.
B) An expatriate sales force is unsuitable when a company wants to sell high-technology products.
C) An expatriate sales force is found to be lacking in knowledge regarding the product line of the company.
D) Information-oriented cultures do not respond favorably to an expatriate sales force.
E) When selling requires an extensive background of information, an expatriate sales force is the best choice.
Q3) What are the advantages and disadvantages of using an expatriate sales force?
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Chapter 18: Pricing for International Markets
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Sample Questions
Q1) Dumping in the world markets is most likely to increase when:
A) domestic production capacity is low.
B) demand in the home country is low.
C) demand in the foreign country is low.
D) foreign production capacity is high.
E) cost of production is low.
Q2) Which of the following is true of price quotations for international sale?
A) Price quotations can be made only if it is shown that prices are lower in the importing country than in the exporting country.
B) Price quotations must specify the currency to be used and the credit terms of the transaction.
C) The price quotation and contract should define only the quantity of goods and not necessarily the quality.
D) Price quotations must be quoted only in terms of electronic trade dollars.
E) Price quotations need to specify the transportation charges but need not necessarily state what type of documentation needs to be used.
Q3) Explain the concept of administered pricing.
Q4) What is a countertrade? What are the problems of countertrading?
Q5) What is the difference between variable-cost pricing and full-cost pricing?
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Chapter 19: Inventive Negotiations With International
Customers, Partners, and Regulators
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Sample Questions
Q1) The behavior of the businesspeople in Taiwan is quite different from that in China and Japan but similar to that in Korea.
A)True
B)False
Q2) In the context of international business negotiations, labeling Americans as "cowboys" and associating the Japanese with the image of a samurai warrior are examples of:
A) national icons.
B) linguistic identifiers.
C) social hierarchy.
D) class distinction.
E) cultural stereotypes.
Q3) Which of the following approaches is adopted by Westerners when faced with a complex negotiation task?
A) Dividing the large task into a series of smaller tasks
B) Analyzing the task in a holistic manner with foreign and domestic experts
C) Discussing all issues at once, in no apparent order
D) Making larger than normal concessions in a bid to push the deal through
E) Buying time by tackling peripheral issues first, and then tackling the main task
Page 22
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