Global Business
Exam Materials
Course Introduction
Global Business explores the dynamic environment of international commerce, equipping students with an understanding of how organizations operate across borders. The course examines global economic trends, trade theories, foreign market entry strategies, cultural differences, and the impact of political and regulatory frameworks on multinational enterprises. Through real-world case studies and applied analysis, students learn to identify opportunities and challenges in the global marketplace, develop cross-cultural management skills, and formulate strategic approaches for success in diverse international business contexts.
Recommended Textbook
Global Business Today 9Th Edition by Charles W. L. Hill
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17 Chapters
2039 Verified Questions
2039 Flashcards
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Page 2
Chapter 1: Globalization
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105 Flashcards
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Sample Questions
Q1) Which of the following is the most appropriate solution to the problem of rising carbon dioxide emissions in developed economies?
A)Roll back the trade liberalization efforts that have fostered economic growth and globalization.
B)Tie free trade agreements to the implementation of fewer environmental and labor laws in less developed countries.
C)Get the nations of the world to agree to policies designed to limit pollutant emissions.
D)Increase the export of low-wage manufacturing jobs to developing nations.
E)Restrict international trade and investment only to services.
Answer: C
Q2) Despite all the talk about the emerging global village, differences between countries such as cultures and political systems are very profound and enduring.
A)True
B)False
Answer: True
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Chapter 2: National Differences in Political, Economic, and Legal Systems
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Q1) Which of the following is true about communism?
A)Communism propagates the idea of "private profit rather than public good."
B)By the mid-1990s communism started rising worldwide.
C)China has moved sharply away from strict adherence to communist ideology in the economic sphere.
D)Communists committed themselves to achieving socialism by turning their backs on violent revolution and dictatorship.
E)Communism stresses that the interests of the individual should take precedence over the interests of the state.
Answer: C
Q2) In what type of economy are certain sectors of the economy left to private ownership and free market mechanisms, while in other sectors there is significant state ownership and government planning?
A)Command
B)Pure market
C)Mixed
D)Centrally planned
E)Laissez-faire
Answer: C
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Chapter 3: National Differences in Economic Development
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Q1) How have new information and communication technologies, including the Internet, affected the political economy in general?
A)They have led to the spread of communism.
B)They have reduced a state's ability to control access to uncensored information.
C)They have led to the collapse of democracy.
D)They have created new conduits for the spread of closed societies.
E)They have led to increased suppression of political and economic freedoms.
Answer: B
Q2) During the late 1980s and early 1990s, totalitarian governments collapsed and were replaced by democratically elected governments.
A)True
B)False
Answer: True
Q3) According to Freedom House, all democracies are free countries in terms of political and civil liberties.
A)True
B)False
Answer: False
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Chapter 4: Differences in Culture
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Sample Questions
Q1) According to Hofstede, in societies where which of the following was emphasized, ties between individuals were tight.
A)individualism
B)collectivism
C)femininity
D)low uncertainty avoidance
E)low power distance
Q2) Ms. X is a follower of a religion that emphasizes that individuals should be judged solely by their spiritual achievements. The caste she belongs to is of the highest order in her religion, and hence is highly respected. She also firmly believes that she was born into the high caste as a result of her spiritual development in her previous life. Ms. X follows:
A)Hinduism.
B)Buddhism.
C)Confucianism.
D)Islam.
E)Christianity.
Q3) Elaborate on the caste system supported by Hinduism.
Q4) Briefly describe the five cultural dimensions in Hofstede's model.
Q5) What are the three values that are central to the Confucian system of ethics?
Page 6
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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Q1) Which of the following approaches to ethics holds that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences?
A)Ethnocentric
B)Utilitarian
C)Cultural relativist
D)Naive immoralist
E)Righteous moralist
Q2) What are the seven things that an international business and its managers can do to make sure ethical issues are considered in business decisions?
Q3) Kantian ethics asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.
A)True
B)False
Q4) Discuss the environmental issues related to businesses operating in developing nations.
Q5) What kind of an organization culture should a business develop in order to foster ethical behavior?
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Chapter 6: International Trade Theory
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Q1) The new trade theory suggests that a country may predominate in the export of a good simply because it was lucky enough to have one or more pioneering firms to produce that good.
A)True
B)False
Q2) The new trade theory diverts from its advocacy of free trade by suggesting that:
A)the price of a new product increases along with the increase in the popularity of the product.
B)nations benefit from trade even in the absence of resource endowments and technology.
C)there is an economic rationale for a proactive trade policy.
D)the role of luck, entrepreneurship, and innovation is important in giving a firm first-mover advantages.
E)market expansion leads to better realization of economies of scale.
Q3) Briefly explain how demand conditions shape the environment in which local firms compete.
Q4) Describe the shortcomings of the product life-cycle theory.
Q5) Briefly describe the new trade theory.
Q6) Discuss Paul Samuelson's critique of free trade.
Q7) Discuss Adam Smith's concept of absolute advantage.
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Chapter 7: Government Policy and International Trade
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Q1) Paul Krugman argues that although strategic trade policy looks unappealing in theory, in practice it is most likely to be workable.
A)True
B)False
Q2) Which of the following is a major reason why many economists remain critical of the infant industry argument?
A)It makes the domestic industry inefficient.
B)It does not provide guaranteed employment for the citizens.
C)It affects the standards of living and per capita income of the people.
D)It promotes foreign direct investment.
E)It leads to reduced prices in domestic markets.
Q3) Which of the following is NOT a constraint on a firm's ability to disperse its productive activities to foreign countries?
A)Tariff barriers raising the costs of exporting products to a country
B)Quotas restricting the quantity of a good that can be imported into a country
C)Local content requirements demanding a specific fraction of domestic production
D)The increasing integration of the world economy
E)Antidumping policies limiting the ability of a firm to use aggressive pricing
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Chapter 8: Foreign Direct Investment
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Sample Questions
Q1) The difference between Internalization theory and imitative theory is that:
A)internalization theory does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license.
B)imitative theory addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad.
C)most economists favor imitative theory as an explanation for FDI.
D)no important aspect of FDI is explained by imitative theory.
E)internalization theory addresses the issue of efficiency of FDI over exporting or licensing.
Q2) The attractiveness of exporting increases in comparison to FDI or licensing when products have a low value-to-weight ratio.
A)True
B)False
Q3) Which of the following products has a low value-to-weight ratio?
A)Electronic components
B)Personal computers
C)Medical equipment
D)Computer software
E)Cement
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Chapter 9: Regional Economic Integration
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Q1) A common market has no barriers to trade among member countries, includes a common external trade policy, and allows factors of production to move freely among members.
A)True
B)False
Q2) Which of the following is true of Alexander Yeats's criticism of the Andean Pact?
A)He pointed out that the slowest growing items in intra-Mercosur trade were cars, buses, agricultural equipment, and other capital-intensive goods.
B)He believed that the trade creation effects of Mercosur outweighed its trade diversion effects.
C)He felt that Mercosur countries were prepared to compete globally once the group's external trade barriers came down.
D)He pointed out that Mercosur countries were insulated from outside competition by tariffs that run as high as 70 percent of value.
E)He felt that capital was being drawn toward more efficient enterprises.
Q3) Describe the Central American Common Market and the Central America Free Trade Agreement.
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Chapter 10: The Foreign Exchange Market
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Sample Questions
Q1) If a basket of goods costs $100 in the United States and 120 in Europe, what would the purchasing power parity theory's prediction of the dollar/euro exchange rate be?
A)$1 = 1.20
B)$1 = 1
C)$1 = 0.80
D)$1 = 0.90
E)$1 = 1.10
Q2) Which of the following is true of the differences in relative demand and supply of currencies?
A)They cannot be used to explain the determination of exchange rates.
B)While they provide an understanding of the major factors underlying exchange rates, they exclude minor factors.
C)They provide a high-level understanding of exchange rates.
D)While they provide an accurate explanation for appreciation of currencies, they fail to explain depreciation.
E)They cannot explain or predict when the demand of a particular currency would exceed its supply and vice versa.
Q3) What is meant by a currency swap?
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Chapter 11: The International Monetary System
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Sample Questions
Q1) Since March 1973, currency exchange rates have become less volatile and more predictable than they were between 1945 and 1973.
A)True
B)False
Q2) Which of the following observations about the International Development Association (IDA) scheme of the World Bank is true?
A)Money is raised through bond sales in the international capital market.
B)Borrowers have up to 50 years to repay at an interest rate of less than 1 percent a year.
C)IDA loans go only to European countries.
D)Grants and interest-free loans are denied to governments of underdeveloped nations.
E)The bank offers loans only to customers with a satisfactory credit rating.
Q3) What changes have occurred in the International Monetary Fund in recent years?
Q4) Describe the gold standard and a balance-of-trade equilibrium.
Q5) The International Monetary Fund can force countries to adopt the policies required to correct economic mismanagement.
A)True
B)False
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Page 13
Chapter 12: The Strategy of International Business
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Sample Questions
Q1) Successful global expansion requires the transfer of core competencies to foreign markets where indigenous competitors lack them.
A)True
B)False
Q2) Typically, the price a firm charges for a good or service is:
A)less than the value placed on that good or service by the customer.
B)more than what customers assume it would be.
C)more than the market price for similar goods or services.
D)the same as the value placed on that good or service by the customer.
E)less than the lowest priced similar good or service in the market.
Q3) Which of the following is a part of the organization architecture that consists of the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits?
A)Reports
B)Controls
C)Rewards
D)Knowledge flows
E)Dominions
Q4) Describe the localization strategy.
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Chapter 13: Entering Foreign Markets
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Sample Questions
Q1) Which of the following describes a turnkey project?
A)Granting rights to intangible property to other firms
B)Establishing firms that are jointly owned by two or more otherwise independent firms
C)Exporting process technology to other countries
D)Setting up wholly owned subsidiaries in foreign nations
E)Selling products produced in one country to residents of other countries
Q2) Which types of firms do NOT risk the loss of management control? What entry modes should such firms employ? Give examples.
Q3) Which of the following is the most likely outcome of a foreign firm entering a developed nation on a small scale after other international businesses in the firm's industry?
A)Capturing first-mover advantages
B)Higher pioneering costs
C)Rapid increase in market share
D)Limited future growth potential
E)Increase in sales volume
Q4) What are some of the ways in which a firm can reduce the risk of losing its proprietary know-how to foreign companies through licensing agreements?
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Page 15
Chapter 14: Exporting, Importing, and Countertrade
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Q1) A bill of lading can function as collateral against which funds are advanced to the exporter by its local bank before final payment by the importer.
A)True
B)False
Q2) The list provided by the International Trade Administration to a potential exporter with the names and addresses of potential distributors in foreign markets, along with businesses they are in, is called the:
A)ELAN list.
B)"best prospects" list.
C)"comparison shopping service."
D)SCORE list.
E)export management list.
Q3) Countertrade's main attraction is that it can give a firm a way to finance an export deal when other means are not available.
A)True
B)False
Q4) Briefly describe the various financial devices that help exporters solve the problem of a lack of trust in international trade.
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Chapter 15: Global Production and Supply Chain Management
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Sample Questions
Q1) Geminia Systems, a manufacturer of car components, wants to set up a system that will help in sending invoices to its customers once orders for input supply are placed. Which of the following should the company use to perform this function?
A)Computer-aided design system
B)Lean production
C)Just-in-time inventory system
D)Electronic data interchange
E)Social networking
Q2) With flexible manufacturing technologies, a firm can manufacture products customized to various national markets at a single factory sited at the optimal location but will nevertheless incur a significant cost penalty.
A)True
B)False
Q3) Since refined sugar has a low value-to-weight ratio, even if it is shipped halfway around the world, the transportation costs would account for a very small percentage of total costs.
A)True
B)False
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Chapter 16: Global Marketing and Rd
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Sample Questions
Q1) Which of the following is true of price discrimination as a part of international pricing strategy?
A)The more competitors there are, the lesser consumers' bargaining power will be.
B)The more competitors there are, the less likely consumers will be to buy from the firm that charges the lowest price.
C)A firm may charge a higher price for its product in a country where competition is limited than in one where competition is intense.
D)Many competitors cause low elasticity of demand.
E)If a firm raises its prices above those of its competitors, consumers will refuse to switch to the competitors' products.
Q2) When the retail sector is very concentrated:
A)it is more expensive for a firm to make contact with each individual retailer.
B)it makes sense for a firm to deal directly with retailers, cutting out wholesalers.
C)a relatively large sales force is required to deal with the retail sector.
D)the channels of distribution tend to be long.
E)the growth of wholesalers is promoted.
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Chapter 17: Global Human Resource Management
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Sample Questions
Q1) Bringing managers together in one location for extended periods and rotating them through different jobs in several countries help a firm build an informal management network.
A)True
B)False
Q2) Which of the following is a disadvantage of an ethnocentric staffing policy?
A)It leads to resentment in the host country.
B)It isolates the headquarters from foreign subsidiaries.
C)It does not allow transfer of core competencies.
D)It leads to a dearth of qualified managers in the host nation.
E)It diversifies corporate culture.
Q3) According to Mendenhall and Oddou, which of the following is a dimension that predicts success and allows expatriates to adapt their interests in food, sport, and music?
A)Perceptual ability
B)Self-orientation
C)Others-orientation
D)Cultural toughness
E)Empathy
Q4) Describe any two components of a typical expatriate compensation package.
Page 19
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