Take Another Quiz

International Business Quizz

90 Questions
International Business Quizz

Questions and Answers
  • 1. 
    Globalization has __________ the opportunities for a firm to expand its revenues by selling around the world and __________ its costs by producing in nations where key inputs are cheap.
    • A. 

      Reduced, reduced

    • B. 

      Increased, increased

    • C. 

      Increased, reduced

    • D. 

      Reduced, increased

  • 2. 
    __________ refers to the shift toward a more integrated and interdependent world economy.
    • A. 

      Cross-border proliferation

    • B. 

      Globalization

    • C. 

      Worldwide consumerism

    • D. 

      Internationalization

  • 3. 
    The two main components of globalization are:
    • A. 

      The globalization of technology and the globalization of markets

    • B. 

      The globalization of finance and the globalization of accounting

    • C. 

      The globalization of advertising and the globalization of services

    • D. 

      The globalization of markets and the globalization of production

  • 4. 
    • A. 

      Globalization of production

    • B. 

      Globalization of services

    • C. 

      Globalization of accounting

    • D. 

      The globalization of markets refers to the merging of historically distinct and separate national markets into:

  • 5. 
    The globalization of markets refers to the merging of historically distinct and separate national markets into:
    • A. 

      Markets defined by a common language

    • B. 

      One huge global marketplace

    • C. 

      Markets defined by a common culture

    • D. 

      Several distinct regional markets

  • 6. 
    • A. 

      Have made it easier to sell internationally for manufacturing firms but harder to sell internationally for service firms

    • B. 

      Have made it harder to sell internationally

    • C. 

      Have had no meaningful impact on international trade

    • D. 

      Have made it easier to sell internationally

  • 7. 
    Which of the following markets has experienced the highest degree of globalization?
    • A. 

      Services

    • B. 

      Industrial goods and materials

    • C. 

      Consumer products

    • D. 

      Intellectual capital

  • 8. 
    The most global markets currently are not markets for __________, where national differences in tastes and preferences are still often important enough to act as a break on globalization, but markets for __________ that serve a universal need the world over.
    • A. 

      Services, consumer products

    • B. 

      Industrial goods and materials, intellectual capital

    • C. 

      Intellectual capital, services

    • D. 

      Consumer products, industrial goods and materials

  • 9. 
    The globalization of production refers to:
    • A. 

      The tendency among firms to recruit production workers from foreign countries

    • B. 

      The tendency among firms to move production facilities to foreign countries where wage rates are lower

    • C. 

      The tendency among firms to use similar production methods

    • D. 

      The tendency among firms to source goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production

  • 10. 
    In producing its latest mainframe computer, IBM purchased goods and services from different suppliers around the globe in an attempt to take advantage of national differences in the cost and quality of factors of production. This practice is made possible by the globalization of:
    • A. 

      Production

    • B. 

      Commerce

    • C. 

      Markets

    • D. 

      Finance

  • 11. 
    An international firm like 3M may design a product in one country, produce component parts for the product in another country, assemble the product in a third country, and export the product to several other countries. This scenario is made possible by:
    • A. 

      The globalization of management

    • B. 

      The globalization of marketing

    • C. 

      The globalization of production

    • D. 

      The globalization of technology

  • 12. 
    According to former Secretary of Labor Robert Reich, the propensity for firms to outsource many of their productive activities to different suppliers around the world has resulted in the creation of __________ products.
    • A. 

      International

    • B. 

      Cross-national

    • C. 

      Cross-cultural

    • D. 

      Global

  • 13. 
    Which of the following is not an impediment that makes it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe?
    • A. 

      Transportation costs

    • B. 

      A slowdown in the trend towards globalization worldwide

    • C. 

      Issues associated with economic and political risk

    • D. 

      Barriers to foreign direct investment

  • 14. 
    The two macro factors that seem to underlie the trend towards greater globalization are:
    • A. 

      The increase in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and the decline in economic pressures around the world

    • B. 

      The decline in political tensions around the world, formal and informal barriers to trade between countries

    • C. 

      The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and technological change

    • D. 

      A convergence in consumer tastes around the world, an increase in political tensions around the world

  • 15. 
    __________ occurs when a firm exports goods or services to consumers in another country.
    • A. 

      International trade

    • B. 

      Countertrade

    • C. 

      Foreign direct investment

    • D. 

      Cross-boarder exchange

  • 16. 
    Car manufacturers like General Motors, Ford, and Honda export goods and services to consumers in other countries. This practice is referred to as:
    • A. 

      International trade

    • B. 

      Country-to-country exchange

    • C. 

      Global salesmanship

    • D. 

      Cross-national barter

  • 17. 
    __________ occurs when a firm invests resources in business activities outside its home country.
    • A. 

      International diversification

    • B. 

      Foreign direct investment

    • C. 

      Cross-national investment

    • D. 

      Transnational commerce

  • 18. 
    American firms like eBay, General Electric, and Microsoft have substantial business activities outside the United States. This practice is referred to as:
    • A. 

      Transnational diversification

    • B. 

      International investment expansion

    • C. 

      Cross-national commerce

    • D. 

      Foreign direct investment

  • 19. 
    The __________ is a treaty designed to remove barriers to the free flow of goods, services, and capital between nations.
    • A. 

      Tariff Buster Trade Agreement

    • B. 

      North Atlantic Agreement on Trade and International Business

    • C. 

      General Agreement on Tariffs and Trade

    • D. 

      United Nations Treaty on Trade

  • 20. 
    Under the umbrella of GATT, there have been eight rounds of negotiations among member states. The most recent round of negotiations was referred to as the:
    • A. 

      Paris Round

    • B. 

      Pacific-Rim Round

    • C. 

      Central Asian Round

    • D. 

      Uruguay Round

  • 21. 
    All of the following were accomplishments of the 1993 Uruguay Round, with the exception of:
    • A. 

      Further reduced trade barriers

    • B. 

      Provided enhanced protection for patents, trademarks, and copyrights

    • C. 

      Established a common currency for international trade

    • D. 

      Established the World Trade Organization

  • 22. 
    The acronym GATT stands for:
    • A. 

      General Agreement on Tariffs and Trade

    • B. 

      Global Agreement on Taxation and Tariffs

    • C. 

      Global Association for Technology and Trade

    • D. 

      Global Agreement on Taxation and Trademarks

  • 23. 
    Which of the following statements in incorrect in regard to trends in international trade?
    • A. 

      The lowering of barriers to international trade enables firms to view the world, rather than a single country, as their market

    • B. 

      The volume of world trade has grown at the same rate as world output since 1950

    • C. 

      The lowering of trade barriers has facilitated the globalization of production

    • D. 

      Foreign direct investment is playing an increasing role in the global economy

  • 24. 
    According to data from the World Trade Organization, the volume of world trade has grown faster than the volume of world output since the 1950s. This relationship suggests all of the following except:
    • A. 

      Nations are becoming increasingly self-sufficient for important goods and services

    • B. 

      More firms are dispersing different parts of their overall production process to different locations around the globe to increase quality

    • C. 

      The economies of the world's nation states are becoming more intertwined.

    • D. 

      FDI is playing an increasing role in the global economy

  • 25. 
    Foreign direct investment is:
    • A. 

      Playing an increasing role in the global economy

    • B. 

      Playing a decreasing role in the global economy

    • C. 

      Playing an increasing role in the global economy for service organizations but a decreasing role for manufacturing firms

    • D. 

      Playing an increasing role in Asia but a decreasing role in Europe and North America

  • 26. 
    According to our textbook, the single most important technological innovation that has impacted international trade has been the:
    • A. 

      Containerized shipping

    • B. 

      Telephone

    • C. 

      Development of optic fiber

    • D. 

      Microprocessor

  • 27. 
    • A. 

      Timmon's Principle

    • B. 

      Jacob's Theorem

    • C. 

      Moore's Law

    • D. 

      Porter's Statute

  • 28. 
    According to our textbook, __________ promise to develop into the information backbone of tomorrow's global economy.
    • A. 

      MSNBC and other cable television networks

    • B. 

      The Internet and World Wide Web

    • C. 

      Fiber optics telephone and teletype service

    • D. 

      Videoconferencing and fax technology

  • 29. 
    Viewed globally, the Web is emerging as:
    • A. 

      An equalizer

    • B. 

      Too expansive of a medium to be effective

    • C. 

      A disruptive influence on international trade

    • D. 

      A predominately Western phenomenon

  • 30. 
    __________ has (have) revolutionized the transportation business, significantly lowering the costs of shipping goods over long distances.
    • A. 

      Satellite communications

    • B. 

      Containerization

    • C. 

      Super tankers

    • D. 

      Computer operated barges

  • 31. 
    Although the characteristics of the global economy have changed dramatically over the past 30 years, as late as the 1960s all of the following demographic characteristics were true except:
    • A. 

      The U.S. dominated the world economy and the world trade picture

    • B. 

      Roughly half the world was governed by centrally planned economies of the Communist world, and was off-limits to Western international business

    • C. 

      Small, U.S. entrepreneurial firms dominated the international business scene

    • D. 

      The U.S. dominated the world foreign direct investment picture

  • 32. 
    The percentage of world output accounted for by the United States has __________ since the early 1960s.
    • A. 

      Increased sharply

    • B. 

      Increased slightly

    • C. 

      Fallen slightly

    • D. 

      Fallen sharply

  • 33. 
    Which of the following countries increased its share of world output from 1963 to 2000?
    • A. 

      Canada

    • B. 

      United States

    • C. 

      Japan

    • D. 

      Germany

  • 34. 
    If we look 20 years into the future, most forecasts now predict a __________ in the share of world output accounted for by developing nations such as China, India, Indonesia, and Brazil, and a __________ in the share enjoyed by rich industrialized countries such as Great Britain, Germany, Japan, and the United States.
    • A. 

      Rapid rise, slight decline

    • B. 

      Rapid rise, rapid decline

    • C. 

      Sharp rise, sharp decline

    • D. 

      Slight rise, slight decline

  • 35. 
    The World Bank has estimated that if current trends continue, by 2020 the __________ economy could be larger than that of the United States.
    • A. 

      Japanese

    • B. 

      Indonesian

    • C. 

      Chinese

    • D. 

      Germany

  • 36. 
    According to our textbook, the dramatic shift that is taking place in the economic geography of the world suggests that many of tomorrow's economic opportunities may be found in __________, and many of tomorrow's most capable competitors will probably also emerge from these regions.
    • A. 

      The developing nations of the world

    • B. 

      Eastern Europe and the republics of the former Soviet Union

    • C. 

      South America and Africa

    • D. 

      Western Europe, including Britain, France, Germany and Belgium

  • 37. 
    The following is an example of a developing nation.
    • A. 

      Germany

    • B. 

      Japan

    • C. 

      Britain

    • D. 

      India

  • 38. 
    All of the following are examples of developing nations with the exception of:
    • A. 

      Brazil

    • B. 

      Thailand

    • C. 

      Japan

    • D. 

      China

  • 39. 
    In the 1960s, the two most dominant countries in terms of foreign direct investment were:
    • A. 

      Japan and the United States

    • B. 

      Germany and India

    • C. 

      Japan and China

    • D. 

      United States and Britain

  • 40. 
    During the 1970s and 1980s, the foreign direct investment by non-U.S. firms was motivated primarily by the following two factors:
    • A. 

      The desire to disperse production activities to optimal locations; and the desire to build a direct presence in major foreign markets

    • B. 

      The desire to disperse production activities to optimal locations; and the desire to influence foreign exchange rates

    • C. 

      The desire to influence foreign exchange rates; and the desire to influence political developments in foreign countries

    • D. 

      The number of foreign direct investments exceeding $25,000

  • 41. 
    The "stock of foreign direct investment" refers to:
    • A. 

      The total cumulative value of foreign direct investments

    • B. 

      The nations in the world that have the potential to participate in foreign direct investment

    • C. 

      The nations in the world that participate in foreign direct investment

    • D. 

      The nations in the world that participate in foreign direct investment

  • 42. 
    From 1980 to 1999, the share of the total stock in foreign direct investment accounted for by the U.S.:
    • A. 

      Increased slightly

    • B. 

      Declined

    • C. 

      Remained stable

    • D. 

      Increased dramatically

  • 43. 
    Among developing nations, __________ has received the greatest volume of inward FDI in recent years.
    • A. 

      South Korea

    • B. 

      Brazil

    • C. 

      India

    • D. 

      China

  • 44. 
    A __________ is any business that has productive activities in two or more countries.
    • A. 

      Multinational enterprise

    • B. 

      International conglomerate

    • C. 

      International consortium

    • D. 

      Global endeavor

  • 45. 
    Companies such as Honda, 3M, and Nestle have operations in two or more countries. These types of firms are commonly referred to as __________ enterprises.
    • A. 

      Multinational

    • B. 

      Cross-boarder

    • C. 

      Worldwide

    • D. 

      Diverse-national

  • 46. 
    Since the 1960s, there have been two notable trends in the demographics of the multinational enterprise. These two trends have been:
    • A. 

      The rise of U.S. multinationals and the disappearance of mini-multinationals

    • B. 

      The decline of non-U.S. multinationals and the decline of mini-multinationals

    • C. 

      The rise of U.S. multinationals and the growth of mini-multinationals

    • D. 

      The rise of non-U.S. multinationals and the growth of mini-multinationals

  • 47. 
    Mini-multinationals are:
    • A. 

      Multinational firms that obtain less than 10 percent of their revenues from investments in foreign countries

    • B. 

      Multinational firms from relatively small countries

    • C. 

      Multinational firms that operate in three or less foreign countries

    • D. 

      Small and medium-sized multinationals

  • 48. 
    Lubricating Systems Inc. is a small firm that generates more than $2 million in annual revenues through exports to a number of different foreign countries. Lubricating Systems Inc. and similar firms are referred to as:
    • A. 

      Mini-multinationals

    • B. 

      Secondary-multinationals

    • C. 

      Emerging-multinationals

    • D. 

      Subordinate-multinationals

  • 49. 
    Which of the following statements is not accurate in regard to many of the former communist nations of Europe and Asia?
    • A. 

      Many of these countries seem to share a commitment to democratic politics and free market economies

    • B. 

      In these countries, the opportunities for international business may be enormous

    • C. 

      The economies of most of the former communist states are weak

    • D. 

      The risk of doing business in these countries is minimal

  • 50. 
    Which of the following statements is not true regarding the majority of Latin American countries?
    • A. 

      Governments are selling state-owned enterprises to private investors

    • B. 

      Neither democracy nor free market reforms have seemed to take hold

    • C. 

      Foreign investment is welcome

    • D. 

      Debt and inflation are down

  • 51. 
    Many influential economists, politicians, and business leaders argue that the twin engines that are driving the global economy toward greater prosperity are:
    • A. 

      Political reforms, information technology

    • B. 

      Investment, information technology

    • C. 

      Strong currencies worldwide, political reforms

    • D. 

      Falling barriers to international trade, investment

  • 52. 
    Economists argue that increased international trade and cross-boarder investments will result in __________ prices for goods and services.
    • A. 

      Stable

    • B. 

      Higher

    • C. 

      Unstable

    • D. 

      Lower

  • 53. 
    One frequently voiced concern about globalization is that it destroys manufacturing jobs in wealthy advanced economies such as the U.S. The basic thrust of the critics' argument is:
    • A. 

      The governments of developing countries will heavily subsidize their primary industries, making competing products produced in advanced economies less attractive

    • B. 

      Falling trade barriers allows firms to move their manufacturing activities offshore to countries where wage rates are much lower

    • C. 

      Globalization increases the pace of the shift from a world economy based on manufactured goods to a world economy based on services

    • D. 

      Developing nations will recruit employees from the more advanced economies, thereby depleting their labor pools

  • 54. 
    D.L. Bartlett and J.B. Steele have gained notoriety for the attacks on:
    • A. 

      Foreign direct investment

    • B. 

      Free trade

    • C. 

      The World Trade Organization

    • D. 

      The United Nations

  • 55. 
    In general, supporters of globalization argue that free trade benefits __________ that adhere to a free trade regime.
    • A. 

      All but the largest countries

    • B. 

      All countries

    • C. 

      All but the smallest countries

    • D. 

      All but the countries with the highest wage rates

  • 56. 
    Critics use the following argument to suggest that globalization is a contributing factor to an increase in pollution.
    • A. 

      Globalization results in an increase in the amount of activity that takes place in companies that do not have adequate pollution controls

    • B. 

      Globalization results in increased commerce between countries, which results in an increase in the amount of transportation activity (e.g., trains, barges, air cargo, trucks, and so on)

    • C. 

      Firms that operate in countries that have adequate pollution regulations have a tendency to move their manufacturing operations to countries that have less stringent or no pollution controls to avoid the cost of regulation

    • D. 

      Globalization results in increased production, which has the undesirable side-effects of increased pollution

  • 57. 
    Supporters of free trade argue that tougher environmental regulations and stricter labor standards __________ economic progress.
    • A. 

      Diminish

    • B. 

      Have no impact on

    • C. 

      Are incompatible with

    • D. 

      Go hand in hand with

  • 58. 
    What is the primary purpose of the World Trade Organization?
    • A. 

      Monitor the implementation of trade agreements such as NAFTA

    • B. 

      Arbitrate trade disputes

    • C. 

      Act as a "watchdog" for countries that lower their pollution standards in an effort to attract more foreign manufacturing activity

    • D. 

      Set tariffs for countries that signed the GATT agreements

  • 59. 
    The __________ was founded in 1994 to police the world trading system.
    • A. 

      United Nations Trade Administration

    • B. 

      Global Trade Monitoring Commission

    • C. 

      International Trade Enforcement Agency

    • D. 

      World Trade Organization

  • 60. 
    The __________ was founded in 1994 to police the world trading system.
    • A. 

      United Nations Trade Administration

    • B. 

      Global Trade Monitoring Commission

    • C. 

      International Trade Enforcement Agency

    • D. 

      World Trade Organization

  • 61. 
    The rate at which globalization is spreading around the world has increased in recent years.
    • A. 

      TRUE

    • B. 

      FALSE

  • 62. 
    The global economy is moving towards a world in which national economies are merging into an interdependent global economic system, commonly referred to as globalization.
    • A. 

      TRUE

    • B. 

      FALSE

  • 63. 
    Globalization has two main components: the globalization of markets and the globalization of production.
    • A. 

      TRUE

    • B. 

      FALSE

  • 64. 
    Because of the global presence of widely accepted products like Citicorp credit cards, Coca-Cola, and McDonalds, national markets are all but disappearing.
    • A. 

      TRUE

    • B. 

      FALSE

  • 65. 
    The most global markets are the markets for consumer products.
    • A. 

      TRUE

    • B. 

      FALSE

  • 66. 
    The most global markets are the markets for consumer products.
    • A. 

      TRUE

    • B. 

      FALSE

  • 67. 
    Although many companies have lowered their overall cost structure and have improved the quality of their products by dispersing their production activities to locations around the world, this activity is confined primarily to large firms.
    • A. 

      TRUE

    • B. 

      FALSE

  • 68. 
    As a result of the great promise of the globalization of production, very few impediments make it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the world.
    • A. 

      TRUE

    • B. 

      FALSE

  • 69. 
    Foreign direct investment occurs when a firm exports goods or services to consumers in another country.
    • A. 

      TRUE

    • B. 

      FALSE

  • 70. 
    International trade occurs when a firm invests resources in business activities outside its home country.
    • A. 

      TRUE

    • B. 

      FALSE

  • 71. 
    Early on, many of the barriers to international trade took the form of high tariffs on imports of manufactured goods.
    • A. 

      TRUE

    • B. 

      FALSE

  • 72. 
    The lowering of barriers to international trade enables firms to view the world, rather than a single country, as their market.
    • A. 

      TRUE

    • B. 

      FALSE

  • 73. 
    The lowering of trade barriers has impeded the globalization of production.
    • A. 

      TRUE

    • B. 

      FALSE

  • 74. 
    According to our textbook, the single most important innovation has been the development of the jet airplane.
    • A. 

      TRUE

    • B. 

      FALSE

  • 75. 
    The World Wide Web allows businesses, both large and small, to expand their global presence at a lower cost than ever before.
    • A. 

      TRUE

    • B. 

      FALSE

  • 76. 
    Containerization has revolutionized the transportation business, significantly lowering the costs of shipping goods over a long business.
    • A. 

      TRUE

    • B. 

      FALSE

  • 77. 
    If we look 20 years into the future, most forecasts now predict a rapid rise in the share of world output accounted for by developing nations such as China, India, and South Korea.
    • A. 

      TRUE

    • B. 

      FALSE

  • 78. 
    The World Bank has estimated that today's developing nationals may account for over 60 percent of world economy activity by 2020.
    • A. 

      TRUE

    • B. 

      FALSE

  • 79. 
    Germany is an example of a developing nation.
    • A. 

      TRUE

    • B. 

      FALSE

  • 80. 
    The United States in an example of a developed nation.
    • A. 

      TRUE

    • B. 

      FALSE

  • 81. 
    The stock of foreign direct investment refers to the total cumulative value of foreign investments.
    • A. 

      TRUE

    • B. 

      FALSE

  • 82. 
    A multinational enterprise is any business that has productive activities in three or more countries
    • A. 

      TRUE

    • B. 

      FALSE

  • 83. 
    According to United Nations data, the ranks of the world's largest multinationals are still dominated by firms from developed economies.
    • A. 

      TRUE

    • B. 

      FALSE

  • 84. 
    Medium-sized and small multinationals are referred to as mini-multinationals.
    • A. 

      TRUE

    • B. 

      FALSE

  • 85. 
    The last quarter century has seen little change in the global economy.
    • A. 

      TRUE

    • B. 

      FALSE

  • 86. 
    Increased international trade and cross-border investment will result in lower prices for goods and services.
    • A. 

      TRUE

    • B. 

      FALSE

  • 87. 
    D.L Bartlett and J.B. Steele have gained notoriety for their attacks on free trade.
    • A. 

      TRUE

    • B. 

      FALSE

  • 88. 
    One concern associated with globalization is that free trade may encourage firms from advanced nations to move manufacturing facilities offshore to less developed countries that lack adequate regulations to protect labor and the environment by abuse by the unscrupulous.
    • A. 

      TRUE

    • B. 

      FALSE

  • 89. 
    The Global Trade Federation was founded in 1994 to police the world trading system established by the General Agreement on Tariffs and Trade.
    • A. 

      TRUE

    • B. 

      FALSE

  • 90. 
    An international business is any firm that employs people from more than one country.
    • A. 

      TRUE

    • B. 

      FALSE