IB Business And Management Business Organisation & Environment: 1.9
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- 1.The sales revenue of large multinational corporations often exceeds the GDP of many countries
- A.
True
- B.
False
- 2.Globalisation can be defined as an increase in international trade across the world
- A.
True
- B.
False
- 3.Multinational companies are public limited companies that operate overseas
- A.
True
- B.
False
- 4.Cultural exports have lead to increased globalisation
- A.
True
- B.
False
- 5.A regional trading bloc allows member countries from all over the world to unite to remove barriers to international trade
- A.
True
- B.
False
- 6.Trade liberalisation has been a key driver of globalisation
- A.
True
- B.
False
- 7.Quotas are a form of international protectionism
- A.
True
- B.
False
- 8.Multinationals can minimise their tax bills by operating in overseas countries
- A.
True
- B.
False
- 9.NAFTA is an example of a free trade area
- A.
True
- B.
False
- 10.NAFTA is an example of a common market
- A.
True
- B.
False
- 11.The euro-zone is an example of a free trade area
- A.
True
- B.
False
- 12.The euro-zone is an example of an economic and monetary union
- A.
True
- B.
False
- 13.Mercosur is an example of a common market
- A.
True
- B.
False
- 14.Mercosur is an example of a customs union
- A.
True
- B.
False
- 15.The EU is an example of a common market
- A.
True
- B.
False
- 16.The EU is an example of an economic and monetary union
- A.
True
- B.
False
- 17.A free trade area is when a group of countries have removed tariffs and quotas between themselves, while retaining the right to set tariffs/quotas towards non-members
- A.
True
- B.
False
- 18.A common market is when a group of countries have removed tariffs and quotas between themselves, while retaining the right to set tariffs/quotas towards non-members
- A.
True
- B.
False
- 19.A customs union has all the benefits of a free trade area AND countries adopt a common set of trade restrictions with non-members
- A.
True
- B.
False
- 20.A common market has all the benefits of a free trade area AND countries adopt a common set of trade restrictions with non-members
- A.
True
- B.
False
- 21.In a common market, members do away with duties and other trade barriers. They allow companies to invest freely in each member's country.
- A.
True
- B.
False
- 22.In a free trade area, members do away with duties and other trade barriers. They allow companies to invest freely in each member's country.
- A.
True
- B.
False
- 23.Economic and monetary unions are an attempt to create the economic conditions that exist in just one country for all members; e.g. a common currency, a single interest rate and agreement on fiscal policy.
- A.
True
- B.
False
- 24.Cutoms unions are an attempt to create the economic conditions that exist in just one country for all members; e.g. a common currency, a single interest rate and agreement on fiscal policy.
- A.
True
- B.
False
- 25.Firms that establish themselves overseas before any other competitor is able to do so are likely to enjoy the exclusive benefit of
- A.
Economies of scope
- B.
Economies of scale
- C.
First mover advantage
- D.
Brand loyalty
- 26.Members of a fre trade area agree to remove all the following except
- A.
Tariffs
- B.
Quotas
- C.
Taxes
- D.
Export restraints
- 27.Potential problems of overseas expansion do not include
- A.
Lack of local knowledge
- B.
Higher distribution costs
- C.
Language and cultural barriers
- D.
Lower tax liabilities
- 28.An advantage of not joining a trading bloc is the opportunity to
- A.
Exploit new market opportunities
- B.
Lower costs by operating in overseas markets
- C.
Enjoy economic independence
- D.
Spread risks
- 29.Which of the following is drawback to a multinational expanding overseas?
- A.
The spreading of risks by not relying on any one economy
- B.
Opportunities for economies of scale
- C.
Different business etiquette and customs
- D.
Wage rates in less developed countries
- 30.Which of the following reasons does not explain why multinationals are better than domestic rivals in the provision of goods and services?
- A.
Well-known brand names
- B.
Economies of scale in production, distribution and marketing
- C.
Better knowledge of local cultures
- D.
The economic power to influence or encourage national governments
- 31.Costs of globalisation to a business do not include
- A.
Increased rivalry in the market place
- B.
Larger budget devoted to research and development
- C.
Relocation costs
- D.
Increasing returns to scale
- 32.Which of the following is not a potential problem for Chinese firm Lau & Chen Manufacturers expanding to the USA?
- A.
Differences in culture and language
- B.
Administration procedures and costs
- C.
Lack of infrastructure networks
- D.
Potential conflict and restrictions
- 33.Globalisation presents many opportunities for businesses. Which one of the options below is the most likley exception to this rule?
- A.
Mergers, acquisitions and joint ventures
- B.
Economies of scale
- C.
Larger customer base
- D.
Language translation
- 34.A free trade ___________ requires state members to remove trade _________ with each other
- A.
Area, barriers
- B.
Agreement, barriers
- C.
Area, conflict
- D.
Agreement, conflict
- 35.Which of the following is a disadvantage of joining a regional trading bloc?
- A.
Removal of barriers to trade
- B.
Promotes international trade of goods and services
- C.
Trade diversion
- D.
Trade creation
- 36.Reasons for a business developing overseas include
- A.
Incurring more risks
- B.
Favourable trading conditions in the domestic economy
- C.
Cheaper access to factors of production
- D.
Relocation costs
- 37.Which of the following is not a drawback of joining a regional tradding bloc?
- A.
Unemployment could be created as domestic firms face increased competition
- B.
Trade diversion is created
- C.
Trade creation takes place
- D.
Policies taken by the RTB might not suit all member states
- 38.A valid argument for multinational firms to spend money on foreign direct investment is that
- A.
Businesses will make more money by operating overseas
- B.
It is a form of altruism
- C.
It can avoid trade restrictions
- D.
They benefit from economies of scope
- 39.All the statements below are valid arguments for limiting free international trade except
- A.
Opportunities for specialisation
- B.
The protection of infant industries from international rivals
- C.
Political and strategic reasons
- D.
Protect domestic employment
- 40.Which of the following is least likely to be a barrier to international trading?
- A.
International business etiquette
- B.
Political and economic conflict
- C.
Cultural differences
- D.
Communication across geographical locations
- 41.Memeber countries of a trade agreement that agree to establish a common external tariff to non-member states are collectively known as a
- A.
Customs union
- B.
Economic trading bloc
- C.
Partnership agreement
- D.
Free trade area
- 42.The concept of adjusting global marketing techniques to better suit the varying needs of overseas customers is known as
- A.
Direct marketing
- B.
Global localisation (glocalisation)
- C.
International marketing
- D.
Technology transfer
- 43.Barriers to globalisation in developing countries do not include
- A.
Infrastructure
- B.
Distribution networks
- C.
Legal restrictions
- D.
Large populations
- 44.Benefits of globalisation to a business include
- A.
Economies of scale
- B.
Rivalry
- C.
Price transparency
- D.
Increased market choice
- 45.___________ is the growing trend towards worldwide markets in products, capital and labour, unrestricted by barriers
- 46._______ international trade, is international trade that is allowed to take place without restrictions such as 'protectionist' tariffs and quotas
- 47._______: A tax imposed on an imported product
- 48._______: A physical limit placed on the imports of certain products
- 49.NAFTA is an example of a ______________
- 50.Mercosur (Argentina, Brazil, Paraguay, Uruguay and Venezuela) is an example of a _____________
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