International Business Environment
Final Exam
Course Introduction
International Business Environment explores the dynamic and complex factors affecting businesses operating across national boundaries. This course examines the influence of economic, political, legal, and cultural environments on international business decisions, strategies, and operations. Students will analyze key global trends, such as globalization, regional integration, and emerging markets, while considering the impacts of international trade policies, exchange rates, and regulatory frameworks. Through case studies and real-world examples, the course provides insights into how organizations adapt and compete effectively in the global marketplace.
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 Verified Questions
105 Flashcards
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Sample Questions
Q1) Who, along with representatives from the European Union and the European Central Bank, represent the 19 largest economies in the world on the G20?
A)Finance ministers and central bank governors
B)Presidents and defense ministers
C)Prime ministers and army chiefs
D)International trade ministers
E)Ministers of foreign affairs
Answer: A
Q2) The World Trade Organization, the International Monetary Fund and its sister institution the World Bank, and the United Nations were all created by voluntary agreement between individual nation-states.
A)True
B)False
Answer: True
Q3) Throughout the 1990s, the amount of investment directed at both developed and developing nations increased dramatically.
A)True
B)False
Answer: True
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Page 3
Chapter 2: National Differences in Political, Economic, and Legal Systems
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Which of the following protects the Nike "Swoosh" logo from being used by any other shoe manufacturer?
A)Trademark
B)Affidavit
C)Patent
D)Warrant
E)Writ
Answer: A
Q2) In the context of individualism, which of the following is inconsistent with the works of the ancient Greek philosopher Aristotle?
A)Guaranteeing individual freedom
B)Government dictating what is in the best interest of society
C)Guaranteeing self-expression
D)Committing to private ownership
E)Treating individual diversity as desirable
Answer: B
Q3) Intellectual property laws stimulate innovation and creative work.
A)True
B)False
Answer: True
Page 4
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Chapter 3: National Differences in Economic Development
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Sample Questions
Q1) What are the various reasons that account for the spread of democracy?
Answer: Three main reasons account for the spread of democracy. First, many totalitarian regimes failed to deliver economic progress to the vast bulk of their populations. Second, new information and communication technologies, including satellite television, fax machines, desktop publishing, and, most important, the Internet, have reduced a state's ability to control access to uncensored information. These technologies have created new conduits for the spread of democratic ideals and information from free societies. Third, in many countries economic advances have led to the emergence of increasingly prosperous middle and working classes that have pushed for democratic reforms.
Q2) Strong legal protection of property rights is a requirement for a business environment to be conducive to innovation, entrepreneurial activity, and hence economic growth.
A)True
B)False Answer: True
Q3) Economic freedom does not necessarily equate with political freedom.
A)True
B)False Answer: True
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Chapter 4: Differences in Culture
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Sample Questions
Q1) Under the Islamic banking method of mudarabah, when an Islamic bank lends money to a business, rather than charging that business interest on the loan, it takes a share in the profits that are derived from the investment.
A)True
B)False
Q2) Janet believes that the cultural group she belongs to is superior and is hence highly intolerant toward employees from the cultures of other countries. This behavior of Janet is known as:
A)cultural convergence.
B)Confucian dynamism.
C)ethnocentrism.
D)ethnic gloss.
E)class consciousness.
Q3) Although upward social mobility was possible in Britain, it could not normally be achieved in one generation.
A)True
B)False
Q4) What are norms? Briefly describe the two categories of norms.
Q5) Briefly describe the five cultural dimensions in Hofstede's model.
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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125 Verified Questions
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Sample Questions
Q1) Which of the following concepts was developed by John Rawls and posited that everyone is imagined to be oblivious to all of his or her particular characteristics, such as, race, sex, intelligence, nationality, family background, and special talents?
A)Tragedy of the commons
B)Naive immoralism
C)The Universal Declaration of Human Rights
D)Veil of ignorance
E)Difference principle
Q2) Article 23 of the Universal Declaration of Human Rights implies that it is unethical to employ child labor in sweatshop settings and pay less than subsistence wages, even if that happens to be common practice in some countries. This is in contrast to:
A)Kantian ethics.
B)cultural relativism.
C)rights theories.
D)Marxism.
E)justice theories.
Q3) Discuss the environmental issues related to businesses operating in developing nations.
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Chapter 6: International Trade Theory
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Sample Questions
Q1) The major advantage of mercantilism was that it viewed trade as a zero-sum game.
A)True
B)False
Q2) David Ricardo's theory of comparative advantage was the first to explain why unrestricted free trade is beneficial to a country.
A)True
B)False
Q3) 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.
Q4) Briefly describe the new trade theory.
Q5) What is meant by the term free trade? Is free trade compatible with the concept of mercantilism?
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Chapter 7: Government Policy and International Trade
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100 Verified Questions
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Sample Questions
Q1) Which of the following is true regarding the difference between GATT and WTO?
A)The WTO was encouraged to extend its reach to encompass regulations governing foreign direct investment unlike GATT.
B)WTO operates on the basis of consensus unlike GATT.
C)GATT gives trading partners the right to compensation or, in the last resort, to impose (commensurate) trade sanctions unlike WTO.
D)GATT's verdict is binding unlike that of WTO's.
E)WTO allows member-countries to block adoption of arbitration reports unlike GATT.
Q2) Which of the following multilateral agreements was established under U.S. leadership in 1947, with the objective to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like?
A)General Agreement of Tariffs and Trade (GATT)
B)North American Free Trade Agreement (NAFTA)
C)Central American Free Trade Agreement (CAFTA)
D)Free Trade Areas of the Americas (FTAA)
E)North Atlantic Treaty Organization (NATO)
Q3) What are the issues that are at the forefront of the current agenda of the WTO?
Q4) Explain the organizational structure and the key functions of the WTO.
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Page 9
Chapter 8: Foreign Direct Investment
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Sample Questions
Q1) Many investor nations now have government-backed insurance programs to cover major types of foreign investment risk like the risks of expropriation (nationalization), war losses, and the inability to transfer profits back home.
A)True
B)False
Q2) Which of the following involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit sold?
A)Outsourcing
B)Exporting
C)Licensing
D)Diverging
E)Hedging
Q3) According to the pragmatic nationalist view, no country should ever permit foreign corporations to undertake FDI.
A)True
B)False
Q4) Describe the role of the WTO in the liberalization of FDI.
Q5) What are the benefits of FDI to the home (source) country?
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Chapter 9: Regional Economic Integration
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Sample Questions
Q1) The European Union is by far more significant than the European Free Trade Association (EFTA), in terms of membership as well as economic and political influence in the world economy.
A)True
B)False
Q2) Where has the movement toward regional economic integration been most successful?
A)Africa
B)South America
C)North America
D)Europe
E)Asia
Q3) An advantage of the emergence of single markets is that the lowering of barriers to trade and investment among countries has led to decreased price competition throughout the European Union.
A)True
B)False
Q4) The Andean Community now operates as a customs union.
A)True
B)False
Page 11
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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) What is meant by economic exposure?
A)The extent to which a firm's future international earning power is affected by changes in exchange rates
B)The impact of currency exchange rate changes on the reported financial statements of a company
C)The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values
D)The extent to which the quantity of money in circulation rises faster than the stock of goods and services
E)The extent of disparity in prices, when expressed in the same currency, of similar products in different countries
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12
Chapter 11: The International Monetary System
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123 Flashcards
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Sample Questions
Q1) Which of the following statements is true about the current monetary system?
A)Use of instruments such as the forward market and swaps has decreased since the breakdown of the Bretton Woods system.
B)The present monetary system lacks the volatile movements in exchange rates that existed in a fixed exchange rate system.
C)The current foreign exchange market works exactly as depicted in the purchasing power parity theory.
D)Instruments such as the forward market and swaps increase the foreign exchange risk a company faces.
E)A combination of government intervention and speculative activity drives the current foreign exchange market.
Q2) What changes have occurred in the International Monetary Fund in recent years?
Q3) In terms of speculation, describe the arguments for a fixed exchange rate system.
Q4) Differentiate between a floating exchange rate and a pegged exchange rate.
Q5) The rise in the value of the dollar between 1980 and 1985 occurred when the United States was running a large and growing trade deficit. Explain the factors that led to this rise.
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Page 13
Chapter 12: The Strategy of International Business
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Sample Questions
Q1) How does possessing a core competence help a firm?
A)It helps a firm to create value in such a way that premium pricing is impossible.
B)It reduces a firm's dependence on its logistics function.
C)It enables a firm to reduce the costs of value creation.
D)It reduces the scope of transfer of skills to foreign markets.
E)It reduces the need to replicate a business model in a foreign market.
Q2) Xerox had a monopoly on photocopiers for several years as the technology underlying the photocopier was protected by strong patents. As it served a universal need, this favorable position led Xerox to pursue a(n):
A)global standardization strategy.
B)localization strategy.
C)international strategy.
D)transnational strategy.
E)nationalization strategy.
Q3) A global standardization strategy makes most sense when there are strong pressures for cost reductions and demands for local responsiveness are minimal.
A)True
B)False
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Chapter 13: Entering Foreign Markets
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Firms pursuing global standardization or transnational strategies tend to prefer setting up wholly owned marketing subsidiaries.
A)True
B)False
Q2) In exporting, problems with local marketing agents can be overcome by:
A)selling intangible property to a franchisee and insisting on rules to conduct the business.
B)changing agents frequently.
C)engaging in turnkey projects and exporting process technology to foreign firms.
D)entering into cross-licensing agreements with foreign firms.
E)setting up wholly owned subsidiaries in foreign nations to handle local marketing.
Q3) In terms of international business, briefly describe pioneering costs.
Q4) An international firm that enters into a turnkey deal has a long-term interest in the foreign country.
A)True
B)False
Q5) What is a wholly owned subsidiary? List its advantages.
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Page 15
Chapter 14: Exporting, Importing, and Countertrade
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Sample Questions
Q1) A type of countertrade where a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them is called:
A)barter.
B)switch trading.
C)offset.
D)buyback.
E)compensation.
Q2) 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
Q3) Which of the following organizations runs the Service Corps of Retired Executives (SCORE) program?
A)Foreign Credit Insurance Association
B)International Trade Administration
C)Small Business Administration
D)U.S. Department of Commerce
E)U.S. Commercial Service
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Page 16
Chapter 15: Global Production and Supply Chain Management
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) With the advent of flexible manufacturing technologies and mass customization, establishing manufacturing facilities in each major market in which the firm is active is becoming less attractive.
A)True
B)False
Q2) The production and supply chain management of an international firm are independent of each other.
A)True
B)False
Q3) The basic philosophy behind just-in-time (JIT) inventory systems is to:
A)economize on inventory holding costs.
B)reduce inventory turnover.
C)create a buffer stock of inventory.
D)reduce costs by reducing quality.
E)increase the total working capital requirement.
Q4) A wide product variety makes it easier for a firm to increase its production efficiency and thus reduce its unit costs.
A)True
B)False
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Chapter 16: Global Marketing and Rd
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124 Flashcards
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Sample Questions
Q1) Describe how economic development influences product attributes.
Q2) Predatory pricing and experience curve pricing do not violate antidumping regulations.
A)True
B)False
Q3) Which of the following is the most important determinant of channel length?
A)The degree to which the retail system is fragmented
B)The increase in car ownership and two-income households
C)The level of consolidation in the global retail industry
D)The amount of difference between product or technical standards
E)The level of economic development of a country
Q4) Which of the following refers to identifying distinct groups of consumers whose needs, wants, and purchasing behavior differ from others in important ways?
A)Market penetration
B)Market development
C)Market segmentation
D)Product development
E)Diversification
Q5) Describe how cultural differences affect product attributes.
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Chapter 17: Global Human Resource Management
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Sample Questions
Q1) Which of the following strategies is concerned with the selection of employees for particular jobs?
A)Compensation policy
B)Staffing policy
C)Performance appraisal policy
D)Training policy
E)Management development policy
Q2) Which of the following staffing policies is pursued by firms where the lack of managers' mobility among national operations implies that the pay for expatriates should be kept country-specific?
A)Regiocentric
B)Ethnocentric
C)Geocentric
D)Polycentric
E)International
Q3) The fact that many countries want foreign subsidiaries to employ their citizens limits a firm's ability to pursue a geocentric policy.
A)True
B)False
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Page 19