International Business The New Realities, 5th edition
BY Tamer Cavusgil
Email: richard@qwconsultancy.com
International Business: The New Realities, 5e (Cavusgil) Chapter 1 Introduction: What Is International Business? 1) International business is defined as the performance of ________ activities by firms across national borders. A) marketing and fiduciary B) trade and investment C) finance and operational D) accounting and auditing Answer: B Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 2) International business is also known as which of the following? A) born global business B) laissez-faire business C) cross-border business D) multi-hub business Answer: C Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 3) Which of the following best characterizes the development of international business? A) It has existed in some form for centuries. B) It first started in Europe. C) It developed after the year 2000. D) Its development has slowed in recent years. Answer: A Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 4) A few decades ago, international business was largely the domain of ________. A) service firms B) multinational firms C) smaller firms D) all of the these Answer: B Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 1 .
5) Which of the following is another term for importing? A) capital investment B) supply side development C) global sourcing D) unilateral procurement Answer: C Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 6) Which of the following is subject to importing and exporting? A) both finished products and intermediate goods B) finished products but not intermediate goods C) intermediate goods but not raw materials D) raw materials and components, but not finished products Answer: A Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 7) ________ refers to the transfer of assets to another country or the acquisition of assets in that country. A) International investment B) International trade C) Importing D) Exporting Answer: A Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 8) Each of the following represents a factor of production EXCEPT ________. A) manufacturing infrastructure B) technology C) government regulations D) managerial talent Answer: C Diff: 2: Moderate Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge
2 .
9) Which of the following would NOT be considered an example of foreign direct investment (FDI)? A) cross-border purchase of a textile plant B) cross-border purchase of stocks C) purchase of capital assets of a foreign company D) purchase of foreign land for business operations Answer: B Diff: 2: Moderate Skill: Application Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 10) ________ is the total value of products and services produced in a country over the course of a year. A) GDP B) CAD C) FDI D) PPP Answer: A Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 11) Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades? A) Both world exports and domestic production have grown significantly over the past 30 years. B) The cost to import products is generally higher than the cost to produce domestic products. C) Growth in gross domestic product in most countries has steadily increased since 1970. D) Advanced economies now source many of their consumable products from low-cost manufacturing nations. Answer: D Diff: 3: Hard Skill: Critical Thinking Objective: 1-1: Describe the key concepts in international business AACSB: Analytical Thinking
3 .
12) Each of the following has contributed to the rapid growth of trade among nations EXCEPT ________. A) the growth of emerging market countries B) the increase in trade barriers C) advances in information technology D) the liberalization of markets Answer: B Diff: 2: Moderate Skill: Application Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge Freehold Investment Corp. (Scenario) Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures. 13) At the meeting, Dan explains to the attendees that Freehold direct investment projects differ from international trade in that ________. A) the firm itself is crossing international borders to purchase foreign assets B) the firm is restricting its investments to stocks and does not purchase mutual funds C) the firm has chosen to focus strictly on the technology sector D) the firm is engaging in the transfer of products across national borders Answer: A Diff: 1: Easy Skill: Concept Objective: 1-1: Describe the key concepts in international business AACSB: Application of Knowledge 14) Dan discusses an investment opportunity that involves the purchase of selected securities from the Chinese stock market. This opportunity represents which type of international investment? A) indirect production B) international portfolio C) foreign direct D) domestic securities Answer: B Diff: 2: Moderate Skill: Application Objective: 1-1: Describe the key concepts in international business AACSB: Analytical Thinking
4 .