Global Business Exam Practice Tests
Course Introduction
Global Business examines the dynamics of operating in international markets, exploring how businesses interact with diverse legal, cultural, economic, and political environments. The course covers topics such as global trade theories, international finance, cross-cultural management, global supply chains, and the impact of globalization on strategy and operations. Students will analyze case studies of multinational corporations and develop an understanding of the strategies organizations use to compete and succeed in a rapidly changing global marketplace.
Recommended Textbook
Global Business Today 3rd Edition by Charles
W. L. Hill
Dr
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14 Chapters
699 Verified Questions
699 Flashcards
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Chapter 1: Globalisation
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Sample Questions
Q1) Globalisation results in a greater degree of ________ across markets and __________ in the world economy than would be present otherwise.
A)diversification;homogeneity
B)diversity;complexity
C)integration;interdependency
D)isolation;independence
Answer: C
Q2) Managing an international business is different from managing a purely domestic business for all of the following reasons,except:
A)countries are different.
B)international transactions involve converting money into different currencies.
C)the range of problems confronted by a manager in an international business is narrower than those confronted by a manager in a domestic business.
D)an international business must find ways to work within the limits imposed by government intervention in the international trade and investment system.
Answer: C
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3
Chapter 2: Theories of Trade: Investment and Internationalisation
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Sample Questions
Q1) In small national markets such as New Zealand,there may not be enough demand to enable producers to realise ____________ertain products.
A)profit margins
B)economies of scale
C)a sufficient quantity of buyers
D)efficient allocation
Answer: B
Q2) British economist John Dunning,who became known for developing the eclectic paradigm,suggested the following elements of advantage:
A)operations,localisation and internationalisation.
B)outsourcing,legal and institutional.
C)ownership,location and internalisation.
D)oligopolistic,language and intellectual.
Answer: C
Q3) The most contentious implication of new trade theory is that it generates an argument for government and strategic trade policy.
A)True
B)False
Answer: True
Page 4
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Chapter 3: The Political Economy of Trade and Investment
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Q1) The least integrated or shallowest form of economic integration to the most integrated or deepest form is known as:
A)a Free Trade AreA.
B)a Customs Union.
C)a Common Market.
D)an Economic Union.
Answer: A
Q2) The recent decision by the Federal government to assist financially with the Australian motor firm General Motors Holden is because of national sovereignty.
A)True
B)False
Answer: False
Q3) There are two possible adverse effects of FDI on a host country's balance of payments.These are:
A)effects on the competition and adverse effects on the balance of payments.
B)transfer pricing and loss of sovereignty and autonomy.
C)repatriation of profits and inputs from abroad.
D)global marketing networks and control of supply chain logistics.
Answer: C
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Page 5
Chapter 4: Foreign Exchange and the International Monetary System
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Q1) If the demand for dollars outstrips the supply of them,and if the supply of Japanese yen is greater than the demand for them,the dollar will:
A)appreciate against the yen.
B)depreciate against the yen.
C)not change.
D)not be reflected in currency changes.
Q2) The ______ states that a country's nominal interest rate is the sum of the required 'real' rate of interest and the expected rate of inflation over the period for which the funds are to be lent.
A)PPP theory
B)efficient market theory
C)Sora Effect
D)Fisher Effect
Q3) Fluctuating exchange rates expose an international business to three types of foreign exchange risk: transaction,translation and economic.
A)True
B)False
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Page 6
Chapter 5: Differences in Culture
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Q1) The Koran explicitly forbids interest to be paid to lenders.Consequently,Islamic banks make their money using two different methods.These are through the __________ methods.
A)Mudarabah and Murabaha
B)Sukuk and Wadiah
C)Musharakah and Hibah
D)Ijarah and Qardhul Hassan
Q2) In Islamic banking,all except one of the following are honoured principles:
A)the time value of money
B)Shari'a Law
C)no interest (Riba)on loans
D)a Mudaraba contract
Q3) Which of the following principles is NOT consistent with the teachings of the Koran?
A)The protection of the rights of private property.
B)Earning a legitimate profit through trade economics.
C)Free enterprise.
D)Earning profit through the exploitation of others.
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Chapter 6: Political and Legal Environments
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Q1) The parties to an agreement normally resort to _________ when one party feels the other has violated either the letter of the spirit of the agreement.
A)property law
B)arbitration
C)a third-party mediator
D)contract law
Q2) When public officials,such as politicians and government bureaucrats,extort income or resources from property holders,this can be described as:
A)patents.
B)public action.
C)warrants.
D)private action.
Q3) Pragmatic nationalism has been adopted from economic rationalism.
A)True
B)False
Q4) All democracies are the same.
A)True
B)False
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Chapter 7: Economic Environment
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Q1) Fiscal policy and monetary policy are the main instruments that national governments use to stabilise the economy.
A)True
B)False
Q2) Of the four main obstacles to economic performance,the listing comprises all of the following principles except:
A)policy uncertainty.
B)macroeconomic instability.
C)tax rate.
D)consumer price index.
Q3) Monetary policy is a form of ___________ policy.
A)microeconomic
B)national or macroeconomic
C)international
D)national,state and local
Q4) All of the following are types of economic systems except:
A)market economy.
B)command economy.
C)mixed economy.
D)progressive economy.
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Chapter 8: Ethics and Corporate Responsibilty
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Sample Questions
Q1) Many international business ethical issues arise as primarily because of differences in culture.
A)True
B)False
Q2) In a now famous case of corporate fraud in the United States reported in The Australian Financial Review,17 December 2008,the case against financier Bernard Madoff was primarily about:
A)greed.
B)fear.
C)betrayal.
D)jealousy.
Q3) Which one of the statements below would be considered a reason why businesspeople may not realise they are behaving in an unethical manner?
A)They are too focused on the competition.
B)They delegate responsibility and authority too quickly.
C)They fail to rationalise if the business decision is ethical.
D)They have relaxed internal operating procedures.
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Page 10
Chapter 9: Country Market Analysis
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Q1) For Australian firms,the most comprehensive source of information about export opportunities is:
A)the Small Business Administration.
B)the Australian Trade Commission.
C)the Federal Trade Commission.
D)foreign embassies.
Q2) Often,Australian and New Zealand firms exploring foreign markets will choose initial targets based on:
A)products and services.
B)culture and language.
C)size and timing.
D)market research and analysis.
Q3) Common pitfalls of exporting include all of the following except:
A)poor understanding of competitive conditions.
B)problems securing financing.
C)poor market analysis.
D)intimidating the foreign customers.
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Chapter 10: The Strategy of International Business
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Q1) To maximise its long-run return on invested capital,a firm must establish economies of scale through high-end customisation.
A)True
B)False
Q2) There are two basic strategies for improving a firm's profitability: a differentiation strategy and a low-cost strategy.
A)True
B)False
Q3) Which strategy focuses on increasing profitability by customising the firm's goods or services so that they provide a good match to tastes and preferences in different national markets?
A)international
B)global standardisation
C)localisation
D)transnational
Q4) A firm's strategy can be defined as the actions that managers take to attain the goals of the firm.
A)True
B)False
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Chapter 11: Entering Foreign Markets
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Q1) One of the principal risks with joint venture agreements is:
A)that they bring together the complementary skills of alliances partners.
B)to give control of a firm's technology to its partner.
C)a firm can give away more than it receives.
D)that they allow firms to share fixed costs.
Q2) An arrangement whereby a firm grants the rights to intangible property to another entity for a specified time period in exchange for payment is an exporting agreement.
A)True
B)False
Q3) Firms that specialise in the design,construction and start-up of a project and then later hand over the ownership of plant when it is fully operational is called:
A)an alliance partnership.
B)a turnkey project.
C)a licence agreement.
D)a takeover.
Q4) Every export is an import in the recipient country.
A)True
B)False
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Chapter 12: International Marketing and RD
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Q1) Advertising may be defined as any:
A)paid forms of non-personal communication about a product,service or company.
B)communications about a product,service or company.
C)communication that moves a product from one level to another level of the distribution channel.
D)personal communication from a company representative to prospective buyers.
Q2) If a company wanted to reach a large consumer audience and create a symbolic image or appeal for a new brand,which promotional mix element would probably be used?
A)advertising
B)personal selling
C)sales promotion
D)public relations
Q3) Price is said to elastic when a small change in price produces a large change in demand.
A)True
B)False
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Chapter 13: International Production, Outsourcing and Logistics
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Q1) Two important objectives shared by both production and logistics are to simultaneously increase quality and increase revenues.
A)True
B)False
Q2) Incentive problems do not arise when the firm uses ______uppliers.
A)internal
B)independent
C)dependent
D)home-grown
Q3) One of the most difficult decisions international businesses face is (i)when to perform value creation activities themselves or (ii)outsource it to another entity.This is called:
A)make-or-break decisions.
B)convergent-or-divergent decisions.
C)make-or-buy decisions.
D)divest-or-expropriate decisions.
Q4) Logistics is the expanded terminology for distribution.
A)True
B)False
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Chapter 14: International Human Resources Management
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Q1) In regard to the types of allowances often included in an expatriate's compensation package,______allowance is paid when the expatriate is being sent to a difficult location.
A)an education
B)a housing
C)a hardship
D)a cost-of-living
Q2) _________ is concerned with the selection of employees for particular jobs.
A)Compensation policy
B)Staffing policy
C)Performance appraisal policy
D)Training policy
Q3) A geocentric staffing policy requires host-country nationals to be recruited to manage subsidiaries,while parent-company nationals occupy key positions at corporate headquarters.
A)True
B)False
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Page 16