International Business
Chapter Exam Questions
Course Introduction
International Business explores the dynamics of conducting business across national borders, focusing on the complexities of operating in global markets. The course covers key topics such as international trade theories, cross-cultural management, global marketing strategies, international finance, and the impact of political, economic, and legal environments on business operations. Students will gain insights into how multinational corporations navigate cultural differences, adapt to various regulatory landscapes, and manage global supply chains, preparing them to effectively address the challenges and opportunities of the contemporary international business environment.
Recommended Textbook
International Business The Challenges of Globalization 9th Edition by John J. Wild
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Page 2
Chapter 1: Globalization
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Sample Questions
Q1) Each ________ is composed of unique cultural,political,legal,and economic characteristics that define business activity within that nation's borders.
A) capital market
B) national business environment
C) international bond market
D) operational center
Answer: B
Q2) The KOF Index measures the ________.
A) distribution of the global workforce
B) extent of globalization
C) gross regional product of an area
D) extent of technological innovation in a nation
Answer: B
Q3) International business includes all commercial transactions between two or more countries.
A)True
B)False
Answer: True
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Chapter 2: Cross-Cultural Business
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Sample Questions
Q1) Folk customs that spread by cultural diffusion to other regions develop into popular customs.
A)True
B)False
Answer: True
Q2) A folk custom can be defined as ________.
A) behavior shared by a heterogeneous group or by several groups of people
B) behavior, often dating back several generations, that is practiced by a homogeneous group of people
C) positive or negative evaluations, feelings, and tendencies that individuals harbor toward objects or concepts
D) positive or negative evaluations, feelings, and tendencies that individuals harbor toward themselves
Answer: B
Q3) The cultural component that deals with elements of imagery and symbolism is known as material culture.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Political Economy and Ethics
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Sample Questions
Q1) In a market economy,the patterns of resource allocation are most directly influenced by ________.
A) government administrators who monitor the equilibrium of supply and demand
B) industry coalitions that strive to improve the efficiency of production and service
C) consumer group alliances that negotiate with firms to improve product quality
D) consumers who "vote" by their personal decision to buy or not buy products
Answer: D
Q2) The cultural relativist view says that a company's sole responsibility is to maximize profits for its owners while operating within the law.
A)True
B)False
Answer: False
Q3) Which of the following statements about representative democracies is true?
A) All citizens participate freely and actively in political processes.
B) Leaders of representative democracies can stay in power indefinitely.
C) Citizens elect individuals from political groups to act on their behalf.
D) Representative democracies across the world share identical features.
Answer: C
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5
Chapter 4: Economic Development of Nations
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Sample Questions
Q1) Does greater economic freedom guarantee a higher standard of living? Provide examples of two specific countries to support your answer.
Q2) A government can limit the economic activities of a foreign firm that resists its effort to introduce home-country nationals into the company.
A)True
B)False
Q3) A company is conducting a research on new markets by comparing countries in terms of their human development index (HDI)scores.The company wishes to expand into a market where individuals experience a very high level of total well-being.Which of the following countries would the company most likely choose?
A) Russia
B) Mexico
C) China
D) Japan
Q4) Explain the three types of property seizure.Why might property seizure be a risk for a business operating in a totalitarian nation?
Q5) How does economic development in countries affect international business?
Q6) Compare and contrast the business environments in China and Russia.
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Chapter 5: International Trade Theory
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Sample Questions
Q1) Discuss the limitations of the international product life cycle theory.How well does the theory explain current trade patterns?
Q2) Which of the following statements is incorrect with regard to the importance of colonies for mercantilist nations?
A) They served as sources of inexpensive raw materials.
B) They served as markets for higher-priced finished goods.
C) They served as a source of military protection.
D) They served as a source of profits for mercantilist powers.
Q3) Which of the following is true about the theory of absolute advantage?
A) The theory accepts the mercantilist idea that international trade is a zero-sum game.
B) The theory approves the objective of national governments to acquire wealth through restrictive trade policies.
C) The theory emphasizes that nations should open their doors to trade so that people can obtain more goods at cheaper rates.
D) The theory measures a nation's wealth by how much gold and silver it has on reserve.
Q4) Discuss the three essential pillars of the theory of mercantilism.
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Page 7
Chapter 6: Political Economy of Trade
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Sample Questions
Q1) Explain how tariffs protect domestic producers,and describe how a foreign trade zone might offset the effects of tariffs.
Q2) Consumers are benefitted when a government imposes import quotas on products.
A)True
B)False
Q3) According to the ________ argument,as an industry grows and matures,it gains the knowledge it needs to become more innovative,efficient,and competitive.
A) maturing industry
B) infant industry
C) standardized product
D) developing economy
Q4) Which of the following motives illustrates Freeland's efforts to protect local jobs?
A) political motive
B) economic motive
C) cultural motive
D) social motive
Q5) Describe the different types of tariffs and provide an example of each.
Q6) Describe each instrument that governments use to promote trade.
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Chapter 7: Foreign Direct Investment
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Q1) The ________ theory states that when an aspect of the market makes a transaction less efficient than it could be,a company will undertake foreign direct investment to internalize the transaction and thereby remove the efficiency-reducing aspect.
A) market power
B) eclectic
C) international product life cycle
D) market imperfections
Q2) Foreign direct investment is acquisition of foreign assets for the purpose of controlling them.
A)True
B)False
Q3) In the maturing product stage of the international product life cycle theory,increased competition creates pressures to reduce production costs.
A)True
B)False
Q4) What two factors propel growth in foreign direct investment?
Q5) Explain the theory of market imperfections and describe the two major market imperfections.
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Chapter 8: Regional Economic Integration
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Q1) For countries to become members of the European Union,they have to meet certain demands laid down by the EU referred to as the ________.
A) Copenhagen Criteria
B) Closer Economic Relations Agreement
C) Andean Community
D) Euro-Plus Pact
Q2) The European Union plan that established its own central bank and currency in January 1999 is known as the ________.
A) Single European Act
B) European Monetary Union
C) Copenhagen Criteria
D) Southern Common Market
Q3) A(n)________ requires member nations to harmonize their tax,monetary,and fiscal policies and create a common currency.
A) customs union
B) economic union
C) free trade area
D) common market
Q4) Differentiate among the five levels of economic and political integration.
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Chapter 9: International Financial Markets
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Sample Questions
Q1) The forces of supply and demand play no role in determining rates of exchange and currency prices.
A)True
B)False
Q2) If ABC Software simultaneously purchases and sells foreign exchange for two different dates,the company is said to be involved in ________.
A) increasing its foreign exchange rate risk
B) conducting a currency swap
C) entering an arbitrage situation
D) buying and selling at the spot rate
Q3) The rate at which one currency is expressed in relation to the currency of another country is called the ________.
A) exchange rate
B) interbank interest rate
C) official cash rate
D) prime rate
Q4) A Eurocurrency refers to a currency on deposit outside its country of issue.
A)True
B)False
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Chapter 10: International Monetary System
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Sample Questions
Q1) Inflation is a result of the supply and demand for a currency.
A)True
B)False
Q2) It the actual euro/dollar exchange rate on currency markets is 1.2/$,and a kilogram of wheat still costs $1 in the U.S.and 1.5 in France,Sam also knows that the price of a kilogram of wheat in France is ________.
A) $1.25
B) $.80
C) .80
D) 1.2
Q3) The efficient market view holds that ________.
A) companies can search for new pieces of information to improve forecasting
B) forward exchange rates provide the least accurate forecasts of future exchange rates
C) companies must spend time and money collecting and examining information believed to affect future exchange rates
D) prices of financial instruments reflect all publicly available information at any given time
Q4) Compare and contrast the two main techniques for forecasting exchange rates.
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Chapter 11: International Strategy and Organization
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Sample Questions
Q1) ________ is the process of dividing a company's activities into primary and support activities and identifying those that create value for customers.
A) Fundamental analysis
B) Technical analysis
C) Structural analysis
D) Value-chain analysis
Q2) A multinational strategy should allow a company to charge higher prices and/or gain market share.
A)True
B)False
Q3) In an International Area Structure,a general manager is assigned to each country or region,and each geographic division operates as a self-contained unit,with decision making the responsibility of the country or regional managers.
A)True
B)False
Q4) Briefly describe the three generic business-level strategies,providing an example of each.
Q5) Explain how a global strategy complements a corporate growth strategy.
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Page 13
Chapter 12: Analyzing International Opportunities
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Sample Questions
Q1) Describe any five variables commonly included in creating a market-potential analysis for an emerging market.
Q2) Focus group interviews tend to work best when moderators are natives of the countries where the interviews are held.
A)True
B)False
Q3) The single greatest disadvantage of survey research is that it provides access to only a small amount of data in a single sweep.
A)True
B)False
Q4) When developing a market-potential indicator for an emerging market,the size of the market is typically estimated from the nation's ________.
A) income elasticity
B) GDP
C) total population
D) GDP at purchasing power parity
Q5) Define secondary market research and briefly discuss any three secondary data sources.
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Chapter 13: Selecting and Managing Entry Modes
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Sample Questions
Q1) What is the first step in selecting a foreign market?
A) identification of potential market
B) monitoring major markets
C) evaluating host country's trade policies
D) assessing general legal and political environments
Q2) Herb has been exploring another type of entry mode that requires ongoing assistance on the part of one firm,often in the form of start-up capital,management training,or location advice.Herb is most likely considering ________.
A) a strategic alliance
B) franchising
C) licensing
D) a joint venture
Q3) Which of the following refers to the exchange of goods or services directly for other goods or services without the use of money?
A) offset
B) barter
C) counterpurchase
D) switch trading
Q4) What are the differences between a turnkey project and a strategic alliance?
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Chapter 14: Developing and Marketing Products
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Sample Questions
Q1) Which of the following circumstances would best require a pull strategy to be implemented for product promotion?
A) channel members wield relatively lesser power compared to that of producers
B) buyers display a great deal of brand loyalty to a particular product
C) distribution channels are short
D) buyers need to be informed about the features of a product before purchase
Q2) Which of the following is a promotional strategy designed to pressure channel members to carry a product and promote it to final users?
A) differentiation strategy
B) retrenchment strategy
C) push strategy
D) pull strategy
Q3) Which promotional strategy would be most appropriate for Silk Industries consumer product line?
A) horizontal integration
B) vertical integration
C) push strategy
D) pull strategy
Q4) How does the dual extension method work as a promotional strategy?
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Chapter 15: Managing International Operations
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Sample Questions
Q1) Which of the following factors has the least effect on facilities layout planning?
A) supply of land in a nation
B) cost of land in a nation
C) a firm's production process
D) age of the company
Q2) ________ appeals to companies because it lowers the amount of taxes the companies must pay.
A) Debt
B) Equity
C) Stock value
D) Enterprise value
Q3) Just-in-time manufacturing drastically increases the costs associated with large inventories in the production process.
A)True
B)False
Q4) Explain the concept of capital structure as it applies to a company with international operations.
Q5) Why might companies decide to reinvest,scale back,or divest local operations?
Q6) What are the options available to companies seeking financial resources?
Page 17
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Chapter 16: Hiring and Managing Employees
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Sample Questions
Q1) CADE International,a MNC,typically fills high-level foreign positions with host country nationals.Which staffing model is most likely used by CADE International?
A) ethnocentric staffing model
B) polycentric staffing model
C) geocentric staffing model
D) monocentric staffing model
Q2) The psychological process of readapting to one's home culture after working in a host-country culture is called ________.
A) social loafing
B) assimilation effect
C) reverse culture shock
D) expatriate failure
Q3) The process of screening and hiring the best-qualified applicants with the greatest performance potential is called ________.
A) performance appraisal
B) orientation
C) recruitment
D) selection
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