Introduction to Global Business
Final Test Solutions
Course Introduction
Introduction to Global Business provides students with a foundational understanding of how organizations operate in the interconnected global marketplace. The course explores key concepts such as international trade, the global economic environment, cross-cultural communication, and strategies for entering international markets. Students learn about the influence of cultural, legal, political, and economic factors on global business decisions and examine the role of multinational corporations, international finance, and global supply chains. Through case studies and real-world examples, students gain insights into the challenges and opportunities faced by businesses operating across borders.
Recommended Textbook
Introduction to Global Business 1st Edition by Julian Gaspar
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Page 2
Chapter 1: The Rise of Globalization
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Sample Questions
Q1) In India, several politicians are working very hard toward a system of full disclosure and openness that aims to avoid any semblance of corruption and cronyism. These efforts can be described as creating a system focused on _____.
A) politics
B) integrity
C) accountability
D) transparency
E) democracy
Answer: D
Q2) Even though business is global, the credit crisis of 2008, started by an American investment bank, was limited to the American economy with fortunately no impact on the global economy.
A)True
B)False
Answer: False
Q3) The rules, enforcement mechanisms, and organizations that support market transactions are called ______.
Answer: institutions
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Chapter 2: The Evolution of International Business
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Q1) Porter stresses the importance of domestic demand for goods and services when determining a nation's competitive advantage. When domestic demand remains high, the number of suppliers will also be high.
A)True
B)False
Answer: True
Q2) Emerging countries like Brazil, Russia, India, and China (BRIC)that have large populations, an expanding middle class, and a combination of relatively low wage-rates and rapidly growing economies tend to attract sizable less amounts of foreign investment.
A)True
B)False
Answer: False
Q3) Trade sanctions which are imposed upon a nation to restrict trade with that country refers to _______.
Answer: embargoes
Q4) A tax on imports levied as a constant percentage of the monetary value of one unit of the imported good refers to ______.
Answer: ad valorem tariff
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Chapter 3: Regional Economic Integration
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Sample Questions
Q1) Of the following, which is NOT true about the future of ASEAN?
A) ASEAN's Vision 2020 calls for aggressive outward-looking economic policies.
B) Several bilateral Free Trade Agreements are currently being implemented.
C) A growing ASEAN concern is the economic ascendancy of North Korea.
D) The ASEAN-Japan Comprehension Economic Partnership agreement covers trade in goods, services, and investment and economic cooperation.
E) The ASEAN Australian-New Zealand FTA was signed in February 2009.
Answer: C
Q2) The World Bank's (2009)World Development Report does which of the following?
A) Forecasts the economic surplus of countries based on topography
B) Analyzes trade and regional economic integration through the lens of economic geography
C) Forecasts the economic deficit of countries through population lens
D) Analyzes economies of scale through production cycles
E) Analyzes regional integration blocs
Answer: B
Q3) Geographically, only about 25 percent of Turkey's land mass is in Europe.
A)True
B)False
Answer: False
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Chapter 4: The International Flow of Funds and Exchange
Rates
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Sample Questions
Q1) Of the following, which is NOT listed in the text as a reason why currency values can change?
A) Different price levels in different countries for the same goods and services
B) Price imbalances due to mispricing
C) Varying interest rates across countries
D) Price imbalances due to differential inflation
E) WTO mandates
Q2) ____ is a monetary system with minimal government intervention; largely market determined.
Q3) Of the following, which is NOT true about the Bretton Woods System?
A) It was established in 1965.
B) It established a global currency system based on a gold standard with the U.S. dollar pegged at a fixed rate of exchange to gold in an effort to control inflation.
C) The IMF was established under the Bretton Woods Agreement.
D) Eventually, major nations met to consider abandoning the Bretton Woods Agreement.
E) Under the Smithsonian Agreement, the U.S. devalued the dollar against other countries' currencies.
Q4) Explain how exchange rates can be forecasted using different methodologies.
Page 6
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Chapter 5: The Cultural Environment
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Q1) Mexican business executives who buy business-to-business products from U.S. suppliers indicate that "knowledge of the mexican culture" and "enthusiasm" were the most important cutural variables determining from which supplier they purchased. this example of which of the four charecteristics of culture which is important for global companies to recognize?
A) Culture is larned, not inherited.
B) It is nearly impossible to change an entire county's culture.
C) It is the responsibility of the global firm to ascertain the level of importance of various aspects of culture in the foreign markets it serves.
D) Companies' operations, chiefly marketing and management, need to recognize and adjust to the cultural environment existing in the countries the global company serves.
E) Culture is inherited, not learned.
Q2) The ability of a firm to adjust to a culture different from it own is referred to as
Q3) ________is the cultural dimension that refers to egalitarianism (equality)versus authority.
Q4) Describe the cultural dimensions of doing business in Japan.
Q5) Briefly describe any four elements of culture. Provide an example of each.
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Chapter 6: The Legal and Political Environment of Global Business
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Q1) _______ is an economic ideology where by the government owns and controls all major factors of production, and is philosophically an economically classless society.
Q2) Describe the economic and political risks faced by companies doing business in global arena.
Q3) _____ risks are the risks that political forces or problems in a given country will have a meaningful negative impact upon the conduct of business in that country.
A) Political
B) Environmental
C) Individual
D) Economic
E) Financial
Q4) _______ risks are those that financial problems or mismanagement in a given country will have a meaningful negative impact upon the conduct of business in that country
Q5) _______ legal system is based on a comprehensive listing of legal rules in sets of written codes of law.
Q6) Business corruption involving other private businesses, individuals, or groups is called _____.
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Chapter 7: Corruption and Ethics in Global Business
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Q1) Corporate social responsibility refers only to the company's obligations to its stockholders and investors.
A)True
B)False
Q2) Of the following statements about Vivendi, which is NOT true?
A) It is a Swiss-based corporation.
B) Between October 2000 and April 2002, the company cooked its books to make its financial performance appear better than it was.
C) Vivendi agreed to pay a fine of $50 million.
D) Company CEO Jean Merrier was required to pay a fine of $1 million.
E) Company CEO Jean Merrier was required to forfeit his $25 million severance package.
Q3) Which of the following is not a fundamentals of ethics education suggested by AACSB?
A) Personal integrity
B) Emotional intelligence
C) Ethical leadership
D) Corporate governance
E) Responsibility of business in society
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9
Chapter 8: Entry Strategies in Global Business
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Sample Questions
Q1) When MNEs go abroad, they generally do so for two major reasons. There could be massive competition in the home market or firms may genuinely identify new business opportunities abroad based upon the company's competitive advantage in production, technology and management.
A)True
B)False
Q2) The ultimate objective of most joint ventures is _____.
A) acquiring other companies
B) making a brand name
C) developing sustainable environment
D) using joint production and sales distribution networks to increase revenue
E) helping others
Q3) ______ refers to the purchase of established firms abroad with the goal of utilizing the existing production, marketing, and distribution networks and of having instant access to foreign markets that fit the purchasing firm's global strategy.
Q4) Differentiate between strategic alliances and international joint ventures.
Q5) _______ explains what happens to a product's revenue and profits at different stages of its development before the product is discontinued.
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Chapter 9: Control of Global Business
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Sample Questions
Q1) A(n)_____ plan for Wal-Mart might be to build and open a textile manufacturing plant in China within the next two-and-one-half years.
A) reactionary
B) standing
C) strategic
D) tactical
E) operational
Q2) The stakeholder model of strategy formulation believes businesses exist to benefit not just their shareholders, but also all the various groups that have a meaningful stake in their operations. Such groups, for example, might include a company's employees, customers, and the community where it operates.
A)True
B)False
Q3) ___________ involves executives engaging in personal contact with subordinates as a way of managing an organization
Q4) ________ refers to the ability of organizations to recognize, assimilate and apply new knowledge.
Q5) Describe the importance of mission in an organization's strategy making process.
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Chapter 10: The Organization of Global Business
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Q1) A market structure is a particular kind of divisional structure that groups products into separate divisions according to the needs of different customers.
A)True
B)False
Q2) Of the following, which is NOT an advantage of the functional structure?
A) It promotes economies of scale.
B) It can help the organization to acquire the latest and most scale-intensive machinery.
C) It promotes in-depth skill development of employees.
D) It ensures that organizations will engage in socially responsible efforts.
E) It encourages collaboration, efficiency, and quality within the function.
Q3) A _______ is a new phase in the evolution of the multinational corporation, where work is sourced wherever it is most efficient and the corporation transcends nationality altogether.
Q4) "For a global business, organizational structure is not important." Do you agree with this statement? Defend your position.
Q5) A ______ is a business subunit that consists of a collection of functions or departments that share responsibility for producing a particular product or service.
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Page 12
Chapter 11: Global Human Resource Management
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Sample Questions
Q1) Hofstede's dimension of masculinity vs. femininity refers to
A) the extent that people think of themselves as members of a group or collective, rather than discrete individuals.
B) the degree of equality of authority distribution in a given society and its workplaces, and employee expectations related to the same.
C) a culture's desire for predictability, or the lack of predictability in the workplace and elsewhere.
D) values such as competition, assertiveness, and achievement versus values like care for the weak and relationships.
E) the extent to which members of a given society value future planning as opposed to a more immediate short-term perspective.
Q2) Perhaps the most interesting labor relations system in the world exists in _____.
A) Canada
B) Great Britain
C) Germany
D) Australia
E) Mexico
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Chapter 12: Global Marketing
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Sample Questions
Q1) International shipments using different modes of transportation are called _____.
A) freight back-warders
B) freight forwarders
C) containerization
D) public channels
E) international transporters
Q2) Of the following, which is NOT an option for companies to consider when marketing their products overseas?
A) Selling the same domestic product overseas
B) Modifying products for different countries and regions
C) Developing new products for foreign markets
D) Aligning with international companies and selling their products
E) Incorporating all product differences into one design and developing a global product
Q3) Describe the advantages and disadvantages of different methods of promoting products in international markets.
Q4) A depiction of the sales and profits for a new product over its life time is called the ______.
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Chapter 13: Global Operations and Supply-Chain Management
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Q1) Collections of computer hardware and software arranged to transmit information from one place to another are known as _____.
A) telecommunication networks
B) global networks
C) enterprise networks
D) internetworking networks
E) multi-national networks
Q2) Determining which components and raw materials should be produced in-house and which components and raw materials should be acquired from suppliers is known as the _____ decision.
A) sale-or-keep
B) manufacture-or-sale
C) sink-or-swim
D) make-or-buy
E) build-or-break
Q3) __________ occurs when a firm buys components and raw materials globally.
Q4) __________ refers to a property of ERP systems to handle multiple currencies.
Q5) A company that only completes product design and outsources all other production process functions is called a __________.
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Chapter 14: Global Financial Management
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Sample Questions
Q1) Bank and government loans used by exporters to finance working capital refers to ______.
Q2) Payment protection to both exporters and importers, as the importer's bank writes a guarantee of payment refers to ______.
Q3) ______ is an organization that provides secure communications for contracts, invoices, and other trade documents that normally accompany cash payments.
Q4) ______ refers to an interest rate swap, often combined with a currency swap, if the interest being swapped is in different currencies.
Q5) The buying of a currency in a currency futures contract and profiting on an increase in the value of the currency over time is called taking a _______.
Q6) _____ is a measurement of the general market risk of a stock in the Capital Asset Pricing Model (CAPM).
Q7) The sum of the costs of equity and debt weighted by the amount of financing from these two capital sources is the ______.
Q8) ______ are bonds that are sold in any country outside the home country, but in the home country's currency.
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Chapter 15: Accounting and Taxation in Global Business
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Sample Questions
Q1) Normally a lower current ratio indicates a better financial position, for it implies that that a company has adequate liquidity to carry out business operations.
A)True
B)False
Q2) A rule of thumb for a "good" current ratio is that companies should have a current ratio between _____ and _____.
A) 1; 2
B) 1; 5
C) 5; 10
D) 50; 75
E) 75; 100
Q3) A(n)_____ answers the question: How much cash was taken in and paid out during the period?
A) income statement
B) balance sheet
C) statement of retained earnings
D) statement of cash flows
E) statement of net value
Q4) Describe the two parts of the accounting information system.
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