International Business Quiz

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International Business Quiz - Quiz

Do you want to study international business, globalization, and more? Then we have brought this international business quiz for you here. The quiz tests your knowledge about international business and global markets. So, there are a lot of questions on the quiz, and we hope you answer most of these questions correctly and score well here. Let's go for this quiz now, and also wish you the best of luck!


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

    Correct Answer
    C. Increased, reduced
    Explanation
    Globalization has increased the opportunities for a firm to expand its revenues by selling around the world. This is because globalization allows companies to reach a larger customer base and tap into new markets. On the other hand, globalization has also reduced the costs for firms by producing in nations where key inputs are cheap. This is because globalization enables companies to take advantage of lower labor and production costs in certain countries, leading to cost savings.

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  • 2. 

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

    • A.

      Cross-border proliferation

    • B.

      Globalization

    • C.

      Worldwide consumerism

    • D.

      Internationalization

    Correct Answer
    B. Globalization
    Explanation
    Globalization refers to the shift toward a more integrated and interdependent world economy. It is the process of increasing interconnectedness and interdependence among countries through the exchange of goods, services, information, and ideas. This includes the flow of capital, technology, and people across national borders, leading to the integration of economies and societies on a global scale. Globalization has been facilitated by advancements in technology, transportation, and communication, allowing for increased trade, investment, and cultural exchange between nations.

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  • 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

    Correct Answer
    D. The globalization of markets and the globalization of production
    Explanation
    The correct answer is the globalization of markets and the globalization of production. This is because globalization of markets refers to the integration and interdependence of countries' economies through the exchange of goods and services. Globalization of production, on the other hand, refers to the sourcing of inputs, production, and distribution of goods and services across different countries. Both components are essential in the process of globalization as they promote economic integration and the expansion of international trade.

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  • 4. 

    The two main components of globalization are the globalization of markets and the:

    • 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:

    Correct Answer
    A. Globalization of production
    Explanation
    The globalization of markets refers to the merging of historically distinct and separate national markets into a single global marketplace. This means that companies are now able to sell their products and services worldwide, reaching a larger customer base. However, the globalization of production is the correct answer because it refers to the sourcing of goods and services from different countries to take advantage of lower costs and specialized expertise. This allows companies to produce their products in different parts of the world and distribute them globally.

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  • 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

    Correct Answer
    B. One huge global marketplace
    Explanation
    The correct answer is "one huge global marketplace." The globalization of markets refers to the process of integrating separate national markets into a single global market. This means that companies can now sell their products and services to customers all over the world, and consumers have access to a wider range of goods and services from different countries. The concept of a "one huge global marketplace" captures the idea that national borders are becoming less relevant in terms of trade and commerce.

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  • 6. 

    Failing barriers to cross-border trade:

    • 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

    Correct Answer
    D. Have made it easier to sell internationally
    Explanation
    The correct answer is "have made it easier to sell internationally." This is because the statement implies that failing barriers to cross-border trade have had a positive impact on international trade for manufacturing firms, making it easier for them to sell their products internationally. On the other hand, it suggests that service firms have faced more difficulties in selling internationally due to these failing barriers.

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  • 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

    Correct Answer
    B. Industrial goods and materials
    Explanation
    Industrial goods and materials have experienced the highest degree of globalization because they are essential for manufacturing and production processes across various industries. These goods and materials are often traded globally, leading to increased international trade and integration of markets. Additionally, advancements in transportation and communication technologies have facilitated the global movement of industrial goods and materials, further contributing to their high degree of globalization.

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  • 8. 

    Most global markets currently are not markets for __________, where national differences in tastes and preferences are still often important enough to act as a brake 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

    Correct Answer
    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

    Correct Answer
    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
    Explanation
    The correct answer is 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. This refers to the practice of companies seeking out the most cost-effective and efficient locations for production, taking into account factors such as labor costs, raw material availability, and expertise in certain industries. By sourcing globally, firms can benefit from lower costs and higher quality inputs, ultimately increasing their competitiveness in the global market.

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  • 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

    Correct Answer
    A. Production
    Explanation
    The correct answer is production. The passage mentions that IBM purchased goods and services from different suppliers around the globe to take advantage of national differences in the cost and quality of factors of production. This indicates that IBM is engaging in global production by sourcing inputs from different countries to maximize efficiency and cost-effectiveness.

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  • 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

    Correct Answer
    C. The globalization of production
    Explanation
    The correct answer is the globalization of production. This is because the scenario described in the question involves designing a product in one country, producing component parts in another country, assembling the product in a third country, and exporting it to several other countries. This demonstrates the global nature of the production process, where different stages of production are carried out in different countries to take advantage of various factors such as cost, expertise, and resources.

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  • 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

    Correct Answer
    D. Global
    Explanation
    The correct answer is "global" because outsourcing has led to the creation of products that are sourced from different suppliers around the world, resulting in a global supply chain and global products.

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  • 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

    Correct Answer
    B. A slowdown in the trend towards globalization worldwide
    Explanation
    The given answer, "a slowdown in the trend towards globalization worldwide," is not an impediment that makes it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe. This answer suggests that if there is a slowdown in the trend towards globalization, it would actually make it easier for firms to achieve the optimal dispersion of their activities, as there would be fewer barriers and obstacles to overcome.

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  • 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

    Correct Answer
    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
    Explanation
    The correct answer is 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. This is because globalization refers to the increasing interconnectedness and integration of economies and societies worldwide. The decline in barriers to trade and investment, such as tariffs and quotas, has facilitated the free flow of goods, services, and capital across borders. Additionally, technological advancements, such as the internet and telecommunications, have greatly enhanced communication and transportation, making it easier for businesses to operate globally.

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  • 15. 

    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

    Correct Answer
    A. International trade
    Explanation
    The practice of car manufacturers like General Motors, Ford, and Honda exporting goods and services to consumers in other countries is referred to as international trade. This term encompasses the exchange of goods and services between different countries, allowing companies to reach a global market and consumers to access products from around the world.

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  • 16. 

    __________ 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

    Correct Answer
    B. Foreign direct investment
    Explanation
    Foreign direct investment occurs when a firm invests resources in business activities outside its home country. This involves the establishment of operations or the acquisition of assets in a foreign country, with the intention of gaining ownership or control over the foreign business. Foreign direct investment allows firms to expand their operations and tap into new markets, taking advantage of opportunities for growth and diversification. It often involves long-term commitments and can have significant impacts on both the investing firm and the host country's economy.

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  • 17. 

    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

    Correct Answer
    C. General Agreement on Tariffs and Trade
    Explanation
    The General Agreement on Tariffs and Trade is a treaty designed to remove barriers to the free flow of goods, services, and capital between nations.

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  • 18. 

    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

    Correct Answer
    D. Uruguay Round
    Explanation
    The correct answer is Uruguay Round. The question asks for the most recent round of negotiations under GATT, and the Uruguay Round fits this criteria. The Paris Round, Pacific-Rim Round, and Central Asian Round are not mentioned in the context and there is no information to suggest that they were the most recent rounds of negotiations.

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  • 19. 

    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

    Correct Answer
    C. Established a common currency for international trade
    Explanation
    The 1993 Uruguay Round achieved several accomplishments, including further reducing trade barriers, providing enhanced protection for patents, trademarks, and copyrights, and establishing the World Trade Organization. However, it did not establish a common currency for international trade.

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  • 20. 

    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

    Correct Answer
    A. General Agreement on Tariffs and Trade
    Explanation
    The correct answer is "General Agreement on Tariffs and Trade". GATT is an international treaty that was created in 1947 to promote international trade by reducing trade barriers such as tariffs and quotas. It aimed to establish rules and principles for trade among its member countries and encourage the liberalization of trade. GATT was replaced by the World Trade Organization (WTO) in 1995, but its principles and agreements continue to influence international trade negotiations.

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  • 21. 

    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

    Correct Answer
    B. The volume of world trade has grown at the same rate as world output since 1950
    Explanation
    The statement that is incorrect in regard to trends in international trade is that the volume of world trade has grown at the same rate as world output since 1950. This is not true because the volume of world trade has grown at a faster rate than world output since 1950. This can be attributed to the lowering of barriers to international trade, which has allowed firms to view the world as their market and has facilitated the globalization of production. Additionally, foreign direct investment has played an increasing role in the global economy.

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  • 22. 

    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

    Correct Answer
    A. Nations are becoming increasingly self-sufficient for important goods and services
    Explanation
    The given answer suggests that nations are not becoming increasingly self-sufficient for important goods and services. This is contrary to the information provided by the World Trade Organization data, which states that the volume of world trade has grown faster than the volume of world output. This implies that nations are relying more on international trade for important goods and services, rather than becoming self-sufficient.

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  • 23. 

    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

    Correct Answer
    C. Development of optic fiber
    Explanation
    The development of optic fiber has had a significant impact on international trade. Optic fiber technology allows for faster and more reliable communication, which is essential for conducting business across borders. It enables the transmission of large amounts of data at high speeds, making it easier for companies to communicate, share information, and conduct transactions internationally. This advancement in communication technology has greatly facilitated global trade and has made it more efficient and accessible for businesses around the world.

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  • 24. 

    According to __________, the power of microprocessor technology doubles and the cost its production falls in half every 18 months.

    • A.

      Timmon's Principle

    • B.

      Jacob's Theorem

    • C.

      Moore's Law

    • D.

      Porter's Statute

    Correct Answer
    D. Porter's Statute
  • 25. 

    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

    Correct Answer
    B. The Internet and World Wide Web
    Explanation
    The correct answer is the Internet and World Wide Web because they have already become a crucial part of the global economy and are expected to continue growing in importance. They provide a platform for communication, information sharing, and e-commerce on a global scale, making them the backbone of the digital economy.

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  • 26. 

    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

    Correct Answer
    A. An equalizer
    Explanation
    The given correct answer, "an equalizer," suggests that the Web is leveling the playing field and providing equal opportunities for individuals and businesses globally. It implies that the internet is bridging the gap between different regions and demographics, allowing people from all walks of life to access information, resources, and opportunities that were previously limited to a privileged few. The Web is seen as a tool that empowers individuals and promotes equality by providing a platform for communication, collaboration, and innovation on a global scale.

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  • 27. 

    __________ 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

    Correct Answer
    B. Containerization
    Explanation
    Containerization has revolutionized the transportation business by significantly lowering the costs of shipping goods over long distances. This method involves the use of standardized containers that can be easily loaded onto ships, trucks, and trains, allowing for efficient and seamless transfer of goods between different modes of transportation. Containerization has eliminated the need for manual handling of cargo, reduced the risk of damage or loss, and increased the speed and reliability of shipments. This innovation has greatly contributed to the growth of international trade and globalization.

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  • 28. 

    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

    Correct Answer
    C. Small, U.S. entrepreneurial firms dominated the international business scene
    Explanation
    In the past, small, U.S. entrepreneurial firms did not dominate the international business scene.

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  • 29. 

    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

    Correct Answer
    D. Fallen sharply
    Explanation
    The correct answer is "fallen sharply". This means that the percentage of world output accounted for by the United States has decreased significantly since the early 1960s.

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  • 30. 

    Which of the following countries increased its share of world output from 1963 to 2000?

    • A.

      Canada

    • B.

      United States

    • C.

      Japan

    • D.

      Germany

    Correct Answer
    C. Japan
    Explanation
    Japan increased its share of world output from 1963 to 2000.

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  • 31. 

    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

    Correct Answer
    B. Rapid rise, rapid decline
    Explanation
    In the future, it is predicted that developing nations such as China, India, Indonesia, and Brazil will experience a rapid rise in their share of world output. This means that these countries will become more economically powerful and their contribution to the global economy will increase significantly. On the other hand, rich industrialized countries such as Great Britain, Germany, Japan, and the United States are expected to experience a rapid decline in their share of world output. This implies that these countries will lose some of their economic dominance and their contribution to the global economy will decrease.

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  • 32. 

    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

    Correct Answer
    C. Chinese
    Explanation
    The World Bank has estimated that if current trends continue, by 2020 the Chinese economy could be larger than that of the United States. This suggests that China's economic growth and development is outpacing that of the United States, potentially making it the largest economy in the world.

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  • 33. 

    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

    Correct Answer
    A. The developing nations of the world
    Explanation
    The correct answer is "the developing nations of the world." According to the textbook, there is a dramatic shift happening in the economic geography of the world. This suggests that future economic opportunities are likely to be found in developing nations. Additionally, the most capable competitors in the future are also expected to emerge from these regions.

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  • 34. 

    The following is an example of a developing nation.

    • A.

      Germany

    • B.

      Japan

    • C.

      Britain

    • D.

      India

    Correct Answer
    D. India
    Explanation
    India is considered a developing nation due to its ongoing economic and social progress. Despite having a large and diverse economy, India still faces challenges such as poverty, inequality, and inadequate infrastructure. However, the country has made significant strides in recent years, with improvements in areas like education, healthcare, and technology. India's government has implemented various initiatives to promote economic growth and development, such as the "Make in India" campaign and the introduction of goods and services tax (GST). Overall, India's status as a developing nation reflects its ongoing efforts to improve the living standards and opportunities for its population.

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  • 35. 

    All of the following are examples of developing nations with the exception of:

    • A.

      Brazil

    • B.

      Thailand

    • C.

      Japan

    • D.

      China

    Correct Answer
    D. China
    Explanation
    China is not considered a developing nation because it has experienced significant economic growth and development over the past few decades. It is now one of the world's largest economies and has a high level of industrialization. In contrast, Brazil, Thailand, and Japan are still considered developing nations due to their lower levels of economic development and industrialization compared to China.

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  • 36. 

    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

    Correct Answer
    D. United States and Britain
    Explanation
    During the 1960s, the United States and Britain were the two most dominant countries in terms of foreign direct investment. This means that these two countries were the top destinations for companies looking to invest their capital in foreign markets. They had the highest levels of inflow of investment from multinational corporations, indicating their strong economies and business environments that attracted foreign investors.

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  • 37. 

    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

    Correct Answer
    A. The desire to disperse production activities to optimal locations; and the desire to build a direct presence in major foreign markets
    Explanation
    During the 1970s and 1980s, non-U.S. firms were primarily motivated to invest directly in foreign countries for two reasons. First, they wanted to disperse their production activities to optimal locations, which means they wanted to set up production facilities in countries where they could benefit from factors such as lower labor costs or access to raw materials. Second, they wanted to build a direct presence in major foreign markets, meaning they wanted to establish a physical presence in countries where they could sell their products directly to consumers.

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  • 38. 

    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

    Correct Answer
    A. The total cumulative value of foreign direct investments
    Explanation
    The "stock of foreign direct investment" refers to the total cumulative value of foreign direct investments made by nations in the world. This includes the total value of investments made by one country in another country over a period of time. It represents the amount of money and assets that have been invested in foreign countries by a particular nation.

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  • 39. 

    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

    Correct Answer
    B. Declined
    Explanation
    The correct answer is "declined". This means that from 1980 to 1999, the share of the total stock in foreign direct investment accounted for by the U.S. decreased. This suggests that during this time period, other countries may have been increasing their share of foreign direct investment, while the U.S. share decreased.

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  • 40. 

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

    • A.

      South Korea

    • B.

      Brazil

    • C.

      India

    • D.

      China

    Correct Answer
    D. China
    Explanation
    China has received the greatest volume of inward FDI in recent years among developing nations. This is due to several factors such as its large population, growing consumer market, and favorable investment climate. China has implemented various policies to attract foreign investment, including tax incentives, streamlined regulations, and infrastructure development. Additionally, China's strong manufacturing sector and access to global supply chains have made it an attractive destination for foreign investors looking to establish production facilities. Overall, China's economic growth and market potential have made it a top choice for foreign direct investment.

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  • 41. 

    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

    Correct Answer
    A. Multinational enterprise
    Explanation
    A multinational enterprise is the correct answer because it refers to a business that operates in multiple countries and engages in productive activities in each of them. This term encompasses companies that have subsidiaries, branches, or affiliates in different countries, and often involves activities such as production, marketing, and sales on a global scale. The term "international conglomerate" refers to a large corporation with diverse business interests across different industries, but it does not necessarily imply operations in multiple countries. "International consortium" refers to a group of companies or organizations working together on a specific project, while "global endeavor" is a more general term that can refer to any global business initiative.

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  • 42. 

    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

    Correct Answer
    A. Multinational
    Explanation
    The term "multinational" refers to companies that have operations in multiple countries. This includes companies like Honda, 3M, and Nestle, which have branches and subsidiaries in different parts of the world. These companies often engage in international trade and have a global presence, making them multinational enterprises.

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  • 43. 

    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

    Correct Answer
    D. The rise of non-U.S. multinationals and the growth of mini-multinationals
    Explanation
    The correct answer is the rise of non-U.S. multinationals and the growth of mini-multinationals. This is because the passage states that there have been two notable trends in the demographics of multinational enterprises since the 1960s. It mentions the rise of U.S. multinationals as one trend, but does not mention the decline of non-U.S. multinationals. Instead, it states that there has been a growth of mini-multinationals. Therefore, the correct answer is the rise of non-U.S. multinationals and the growth of mini-multinationals.

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  • 44. 

    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

    Correct Answer
    D. Small and medium-sized multinationals
    Explanation
    Mini-multinationals refer to small and medium-sized multinational firms. These companies have a presence in multiple countries and engage in international business activities, but they are smaller in scale compared to larger multinational corporations. The term "mini" implies that these firms are not as large or established as traditional multinationals. They may have a limited number of foreign operations or generate a smaller portion of their revenues from international investments. Overall, mini-multinationals are characterized by their smaller size and international presence.

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  • 45. 

    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

    Correct Answer
    A. Mini-multinationals
    Explanation
    The term "mini-multinationals" refers to small firms that generate significant revenues through exports to different foreign countries. These firms, like Lubricating Systems Inc., have a global presence and engage in international business activities similar to larger multinational corporations. The term "mini" is used to emphasize their smaller size compared to traditional multinational corporations. Therefore, Lubricating Systems Inc. and similar firms are referred to as mini-multinationals.

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  • 46. 

    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

    Correct Answer
    D. The risk of doing business in these countries is minimal
    Explanation
    The statement "the risk of doing business in these countries is minimal" is not accurate in regard to many of the former communist nations of Europe and Asia. While these countries may share a commitment to democratic politics and free market economies, and may offer enormous opportunities for international business, the economies of most of the former communist states are weak. This implies that there may be significant risks involved in doing business in these countries, such as unstable economic conditions, political uncertainties, and potential legal and regulatory challenges.

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  • 47. 

    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

    Correct Answer
    D. Falling barriers to international trade, investment
    Explanation
    Falling barriers to international trade and investment are believed to be the twin engines driving the global economy towards greater prosperity. When barriers to trade and investment are reduced, it allows for the free flow of goods, services, and capital across borders, leading to increased economic growth and development. This enables countries to specialize in what they do best, take advantage of comparative advantages, and benefit from economies of scale. It also promotes competition, innovation, and efficiency, ultimately leading to higher productivity and living standards.

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  • 48. 

    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

    Correct Answer
    D. Lower
    Explanation
    Increased international trade and cross-border investments lead to higher competition in the market, which in turn leads to lower prices for goods and services. This is because companies have to lower their prices in order to attract customers and remain competitive. Additionally, increased trade allows for economies of scale, which can further reduce costs and lead to lower prices.

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  • 49. 

    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

    Correct Answer
    B. Falling trade barriers allows firms to move their manufacturing activities offshore to countries where wage rates are much lower
    Explanation
    Globalization allows firms to move their manufacturing activities offshore to countries where wage rates are much lower. This is a frequently voiced concern because it leads to the destruction of manufacturing jobs in wealthy advanced economies like the U.S. The lower wage rates in developing countries make it more attractive for firms to relocate their manufacturing operations, resulting in job losses in advanced economies.

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  • 50. 

    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

    Correct Answer
    B. All countries
    Explanation
    Supporters of globalization argue that free trade benefits all countries that adhere to a free trade regime. This is because free trade allows countries to specialize in producing goods and services that they have a comparative advantage in, leading to increased efficiency and productivity. It promotes competition, innovation, and access to a wider range of goods and services for consumers. Additionally, free trade can lead to higher economic growth and job creation, benefiting all countries involved.

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