International Business Test Preparation
Course Introduction
International Business explores the theories, practices, and challenges involved in conducting commerce across national borders. This course examines the global business environment, including cultural, economic, political, and legal differences impacting international operations. Students learn about international trade theories, entry strategies, global marketing, international financial management, and the role of multinational corporations. Emphasis is placed on understanding how companies adapt strategies for international markets, navigate cross-cultural communication, manage global supply chains, and address ethical and sustainability issues in a rapidly changing world economy.
Recommended Textbook
International Business Competing in the Global Marketplace 12th Edition by Charles W. L. Hill
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20 Chapters
2122 Verified Questions
2122 Flashcards
Source URL: https://quizplus.com/study-set/231
Page 2
Chapter 1: Globalization
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105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/3547
Sample Questions
Q1) ABC Global has decided to invest resources in business activities outside its home country. This is called
A) foreign direct investment (FDI).
B) direct international investment (DII).
C) international trade (IT).
D) foreign direct production (FDP).
Answer: A
Q2) What is true about the International Monetary Fund?
A) It is primarily responsible for policing the world trading system.
B) It is seen as the lender of last resort to nation-states whose economies are in turmoil.
C) It is responsible for establishing multinational treaties to govern the global business system.
D) It was established to formulate a coordinated policy response to financial crises in developing nations.
Answer: B
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Chapter 2: National Differences in Political, Economic, and Legal Systems
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107 Verified Questions
107 Flashcards
Source URL: https://quizplus.com/quiz/3548
Sample Questions
Q1) An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a
A) planned economy.
B) command economy.
C) closed economy.
D) market economy.
Answer: D
Q2) A ________ grants the inventor of a new product or process exclusive rights for a defined period of time to the manufacture, use, or sale of that invention.
A) copyright
B) trademark
C) contract
D) patent
Answer: D
Q3) To facilitate international business, property rights are defined in a consistent way across countries.
A)True
B)False
Answer: False
Page 4
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Chapter 3: National Differences in Economic Development
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103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/3549
Sample Questions
Q1) In some countries, the official GNI per capita measured at PPP data does not reflect the actual total annual income because
A) it doesn't consider differences in the cost of living.
B) it gives a static picture of development.
C) it fails to include income earned from other countries in the form of dividends.
D) large amounts of economic activity may be in the form of barter agreements.
Answer: D
Q2) Studies of privatization in central Europe have shown that the process often fails to deliver predicted benefits if the newly privatized firms
A) stop receiving subsidies from the government.
B) are completely owned by private individuals.
C) are sheltered from foreign competition.
D) are allowed to restructure their operations.
Answer: C
Q3) Economic risks are independent of political risk.
A)True
B)False
Answer: False
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Chapter 4: Differences in Culture
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) For international businesses, the connection between culture and competitive advantage is important because
A) a weak connection is likely to encourage isolationism.
B) a weak connection is likely to encourage competition.
C) a strong connection is likely to produce the most viable competitors.
D) a strong connection is likely to hamper innovation.
Q2) Hofstede's concept of power distance focused on the extent to which different cultures socialized their members into tolerating uncertainty.
A)True
B)False
Q3) Discuss why the stratification of a society is important to business.
Q4) Max Weber believed that Protestantism encouraged capitalism's development by emphasizing the importance of wealth creation and frugality.
A)True
B)False
Q5) Explain how the Koran views business.
Q6) Explain the concept of social stratification.
Q7) Why is the role of education in a culture important to international companies?
Q8) What are the determinants of culture?
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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108 Verified Questions
108 Flashcards
Source URL: https://quizplus.com/quiz/3551
Sample Questions
Q1) The United Nations Universal Declaration of Human Rights, related to employment, upholds which of the following?
A) the requirement for the formation of trade unions
B) a sliding pay scale based upon need
C) prohibition of trade unions
D) protection against unemployment
Q2) Business ethics that either deny the value of business ethics or apply the concept in a very unsatisfactory way are termed
A) straw man.
B) the Sullivan principles.
C) just distribution.
D) rights theories.
Q3) What is the term for a company's formal statement of the ethical priorities it expects all of its employees to follow?
A) code of ethics
B) stakeholders pledge
C) moral courage
D) difference principle
Q4) In your opinion, are bribes ever acceptable? Why or why not?
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Chapter 6: International Trade Theory
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) Ricardo's theory makes fewer simplifying assumptions compared to Heckscher-Ohlin theory.
A)True
B)False
Q2) New trade theorists stress the role of luck in giving a firm first-mover advantages.
A)True
B)False
Q3) The simple comparative advantage model assumed that trade
A) changes efficiency with which a country utilizes resources.
B) changes a country's stock of resources.
C) allows for dynamic changes in the marketplace.
D) does not change a country's stock of resources.
Q4) ________ are unit cost reductions associated with a large scale of output.
A) Current account deficits
B) Economies of scale
C) Current account surpluses
D) Factor endowments
Q5) Identify a major disadvantage of the product life-cycle theory.
Q6) What are the four attributes that are discussed in Porter's diamond?
Page 8
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Chapter 7: Government Policy and International Trade
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/3553
Sample Questions
Q1) To conform to local content regulations, a firm may have to locate more production activities in a given market than it would otherwise.
A)True
B)False
Q2) Export tariffs are far less common than import tariffs.
A)True
B)False
Q3) The Netherlands exports tulip bulbs to almost every country in the world except Japan. This was because in Japan, customs inspectors insisted on checking every tulip bulb by cutting it vertically down the middle. This is an example of which of the following trade barriers?
A) export restraint
B) administrative trade policies
C) local content requirement
D) ad valorem
Q4) The infant industry argument is the latest argument for government intervention in trade.
A)True
B)False
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Chapter 8: Foreign Direct Investment
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) A country rejects FDI proposals in certain industries. It does so because the tangible advantages of such investments are lesser than potential costs like loss of employment and reduction of overall well-being. However, it aggressively pursues inviting foreign investments in sectors like infrastructure, education, and health care because of the benefits that accrue with them. Which political view of FDI is discussed in this example?
A) the pure market view
B) the free market view
C) the radical view
D) the pragmatic nationalist view
Q2) Recent years have seen a ________ in the number of countries that adhere to a radical ideology regarding FDI.
A) marked decline
B) slight decline
C) marked increase
D) slight increase
Q3) Discuss the reasons for the growth in FDI over the past 30 years.
Q4) Only a few countries have adopted the free market view in its pure form.
A)True
B)False
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Chapter 9: Regional Economic Integration
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98 Verified Questions
98 Flashcards
Source URL: https://quizplus.com/quiz/3555
Sample Questions
Q1) Which feature of a customs union differentiates it from a free trade area?
A) harmonization of members' tax rates
B) a common currency
C) a common external trade policy toward nonmembers
D) ability of factors of production to move freely between members
Q2) In theory, WTO rules should ensure that a free trade agreement
A) does not result in trade creation.
B) does not result in trade diversion.
C) results in trade creation.
D) results in trade diversion.
Q3) How does the NAFTA seem to increase the international competitiveness of U.S. and Canadian firms?
A) It gives them access to scarce natural resources hitherto unavailable.
B) It increases tariff barriers making the North American market less attractive to Asian companies.
C) It allows them to take advantage of lower labor costs in Mexico.
D) It gives them production bases in South American markets such as Brazil and Argentina.
Q4) Discuss the trend toward increased regional economic integration.
Q5) What prompted the formation of the European Union?
Page 11
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Chapter 10: The Foreign Exchange Market
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105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/3556
Sample Questions
Q1) If the spot exchange rate is £1 = $1.50 when the market opens, and £1 = $1.48 at the end of the day, the pound has appreciated, and the dollar has depreciated.
A)True
B)False
Q2) The foreign exchange market converts the currency of one country into that of another country.
A)True
B)False
Q3) Which of the following is the most important foreign exchange trading center?
A) London
B) New York
C) Tokyo
D) Singapore
Q4) Explain the notion of economic exposure. How can economic exposure be minimized?
Q5) Parla liked to gamble, so she sometimes moved her funds from dollars to euros in the hope that she would make money based on the exchange rates. This demonstrates a carry trade.
A)True
B)False
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Chapter 11: The International Monetary System
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101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/3557
Sample Questions
Q1) The gold standard called for fixed exchange rates against the U.S. dollar.
A)True
B)False
Q2) Under a currency board system
A) inflation rates are maintained at a high level.
B) countries issue domestic notes at will.
C) interest rates remain constant.
D) the government lacks the ability to set interest rates.
Q3) Adopting a pegged exchange rate regime increases the inflationary pressures in a country.
A)True
B)False
Q4) The World Bank was established at the at Bretton Woods conference to A) establish an international monetary system.
B) promote general economic development.
C) establish the gold standard across the world.
D) fund the initiatives of the United Nations.
Q5) Identify the multinational institutions that were established at the Bretton Woods agreement. What were their roles in the international monetary system?
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Chapter 12: The Global Capital Market
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104 Verified Questions
104 Flashcards
Source URL: https://quizplus.com/quiz/3558
Sample Questions
Q1) Eurobonds are usually offered to residents of the country in whose currency they are denominated.
A)True
B)False
Q2) Explain Eurobonds with an example.
Q3) If the international capital market continues to grow, financial intermediaries likely will provide less quality information about foreign investment opportunities.
A)True
B)False
Q4) Investors who purchase a fixed-rate bond receive
A) incremental payouts until the bonded money runs out.
B) cash payoffs only at maturity.
C) a full cash payoff on demand.
D) a fixed set of cash payoffs.
Q5) Which of the following statements is true of Eurocurrency?
A) The Eurocurrency market is a relatively high-cost source of funds.
B) It is produced and banked within European countries.
C) Eurocurrency can be created anywhere in the world.
D) It is used only for internal transactions within European Union.
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Chapter 13: The Strategy of International Business
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102 Verified Questions
102 Flashcards
Source URL: https://quizplus.com/quiz/3559
Sample Questions
Q1) Discuss the creation of a global web of value creation activities.
Q2) A firm facing low pressures for cost reductions and low pressures for local responsiveness is most likely to follow ________ strategy.
A) a global standardization
B) a localization
C) an international
D) a transnational
Q3) What are learning effects? When are learning effects most significant?
Q4) Economies that arise from performing a value creation activity in the optimal place for that activity are referred to as
A) factor economies.
B) production economies.
C) location economies.
D) value creation economies.
Q5) Systematic increases in sales that have been observed to occur over the life of the product are referred to as the experience curve.
A)True
B)False
Q6) How can a firm increase its profitability?
Page 15
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Chapter 14: The Organization of International Business
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106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/3560
Sample Questions
Q1) Because of inertia forces, ________ is often no change.
A) big bang change
B) cultural change
C) shock therapy change
D) incremental change
Q2) In the classic global matrix structure, horizontal differentiation proceeds along two dimensions. These dimensions are
A) hierarchy and overall strategy.
B) target returns and sales potential.
C) marketing strategy and sales potential.
D) product division and geographic area.
Q3) What is a knowledge network? What is the advantage of such a system?
Q4) Which control system is most widely used by small firms?
A) personal
B) output
C) bureaucratic
D) cultural
Q5) Why should a firm centralize its decision making?
Q6) Discuss the issues involved in unfreezing an organization.
Q7) Discuss the issues involved in refreezing an organization.
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Chapter 15: Entry Strategy and Strategic Alliances
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111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/3561
Sample Questions
Q1) To increase the potential for a successful acquisition, a firm should
A) always bid low to allow for partial failure.
B) try to acquire a firm with a very different corporate culture so there is no forced overlap.
C) rush to beat out other competitors.
D) screen the foreign enterprise to be acquired.
Q2) ________ can be used to formalize arrangements to swap skills and technology in a strategic alliance.
A) Modularization
B) Cross-licensing agreements
C) Structured transfer agreements
D) Contractual safeguards
Q3) ________ is advantageous because it avoids the cost of establishing manufacturing operations in the host country and it may help a firm achieve experience curve and location economies.
A) Licensing
B) Exporting
C) Franchising
D) A turnkey contract
Q4) How can a firm increase the probability of selecting a good partner?
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Chapter 16: Exporting, Importing, and Countertrade
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106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/3562
Sample Questions
Q1) A ________ serves as a receipt, a contract, and a document of title.
A) letter of credit
B) bill of lading
C) draft
D) bill of exchange
Q2) Nearly every state in the United States maintains active trade commissions to promote exports.
A)True
B)False
Q3) Japan's ________ have offices all over the world, and they proactively, continuously seek export opportunities for their affiliated companies large and small.
A) sogo shosha
B) kaizen
C) MITI
D) Samurai
Q4) The Foreign Credit Insurance Association is part of the U.S Department of Commerce and guides the activities of the Export-Import Bank.
A)True
B)False
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Chapter 17: Global Production and Supply Chain Management
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105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/3563
Sample Questions
Q1) The term distribution center is rarely used today in a global context.
A)True
B)False
Q2) Discuss the strategic objectives of the production and logistics functions of an international firm.
Q3) ________ refers to shared decision-making opportunities and operational collaboration of key global supply chain activities.
A) Global supply chain coordination
B) Make-or-buy decision
C) Reverse logistics
D) Global sourcing
Q4) Global learning refers to the idea that valuable knowledge does not reside just in a firm's domestic operations.
A)True
B)False
Q5) Logistics includes the buying of raw materials and component parts.
A)True
B)False
Q6) Explain how the strategic role of foreign factories evolves over time.
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Chapter 18: Global Marketing and R&D
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121 Verified Questions
121 Flashcards
Source URL: https://quizplus.com/quiz/3564
Sample Questions
Q1) Channel ________ refers to the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international businesses.
A) exclusivity
B) knowledge
C) quality
D) skill
Q2) Which of the following statements about barriers to international communication is true?
A) Source effects occur when the receiver of the message evaluates the message on the basis of the location of the sender.
B) The best way for a firm to overcome cultural barriers is to use local input.
C) Source effects and country of origin effects are always negative.
D) Noise is extremely high in highly developed countries such as the United States.
Q3) A company that depends on mass media advertising to communicate its marketing message to potential consumers is using a push strategy.
A)True
B)False
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Chapter 19: Global Human Resource Management
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111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/3565
Sample Questions
Q1) Expatriate failure refers to
A) expatriates who follow host-country norms instead of their home-country norms.
B) the inability of expatriate managers to treat foreign nationals as if they were home-country nationals.
C) the premature return of an expatriate manager to his or her home country.
D) the ethical drawbacks of the ethnocentric staffing approach.
Q2) How can the polycentric approach to staffing result in the creation of a "federation" within the firm? Why is this a disadvantage for the firm?
Q3) Which of the following is a drawback of the polycentric approach to staffing?
A) Firms are likely to suffer from cultural myopia.
B) Host-country nationals are vulnerable to cultural misunderstandings.
C) This approach increases the cost of value creation.
D) Host-country nationals have limited opportunities for advancement beyond senior positions in their subsidiary.
Q4) An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries.
A)True
B)False
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Page 21
Chapter 20: Accounting and Finance in the International Business
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109 Verified Questions
109 Flashcards
Source URL: https://quizplus.com/quiz/3566
Sample Questions
Q1) Financial management in an international business includes three sets of related decisions. Which of these involves making decisions about how to manage the firm's financial resources most efficiently?
A) multilateral decisions
B) financing decisions
C) investment decisions
D) money management decisions
Q2) The age of a foreign subsidiary
A) has no influence on payment of dividends.
B) indicates the number of capital investment needs; older subsidiaries have higher needs.
C) influences dividend policy in that younger subsidiaries tend to remit a higher proportion of their earnings in dividends to the parent company.
D) influences dividend policy in that older subsidiaries tend to remit a higher proportion of their earnings in dividends to the parent company.
Q3) Most subsidiaries of an international business operate in uniform environments. A)True B)False
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