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International Business: Competing in the Global Marketplace 11th Edition Test Bank

Get the most out of your study time with International Business: Competing in the Global Marketplace 11th Edition Test Bank, a guide designed to improve efficiency and exam readiness.

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    Chapter 01 Globalization True / False Questions 1. A company does not need a large size to facilitate, and benefit from, the globalization of markets. True False 2. Companies hope to lower their overall cost structure or improve the quality or functionality of their product offering through globalization of production. True False 3. The most global markets currently are markets for consumer products. True False 4. Outsourcing is a process that is limited to manufacturing enterprises. True False 5. The World Bank has focused on policing the world trading system and making sure nation - states adhere to the rules laid down in trade treaties. True False 6. The World Bank is known as the lender of the last resort. True False

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    7. One of the UN's central mandates is the promotion of higher standards of living, full employment, and conditions of economic and social progress and development. True False 8. The Uruguay Round, finalized in December 1993, reduced protection for patents, trademarks, and copyrights. True False 9. "Beggar thy neighbor" retaliatory trade policies involved countries progressively lowering trade barriers against each other, which contributed to the Great Depression of the 1930s. True False 10. Rivers Inc., a U.S. based sports apparel manufacturer, sets up a production unit in China to take advantage of the lower labor costs there. This is an example of foreign direct investment. True False 11. World Bank gives an aid of 100 million dollars to Kenya for creating rural health care facilities. This is an example of foreign direct investment. True False 12. The lowering of barriers to international trade enables firms to view the world, rather than a single country, as their market. True False 13. According to WTO data, the volume of world merchandise trade has grown faster than the world economy since 1950. True False

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    14. The cost of microprocessors continues to fall, while their power increases. This statement supports the predictions made by Moore's Law. True False 15. Non - U.S. firms increasingly began to invest across national borders because they wanted to disperse production activities to optimal locations and to build a direct presence in major foreign markets. True False 16. A current trend in international business is the decline of medium - sized and small multinationals, known as mini - multinationals. True False 17. The globalization of the world economy has resulted in a relative increase in the dominance of U.S. firms in the global marketplace. True False 18. Doing business in Russia involves risks because the country has shown signs of shifting back toward greater state involvement in economic activity and authoritarian government. True False 19. Globalization critics argue that the decline in unskilled wage rates is due to the migration of low - wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers. True False 20. Evidence suggests that technological change has had a bigger impact than globalization on the declining share of national income enjoyed by labor. True False

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    21. According to supporters of free trade, as countries get richer they commit greater violation of environmental and labor regulations. True False 22. According to critics of globalization, today's interdependent global economy limits a nation's national sovereignty. True False 23. Supporters of debt relief argue that new democratic governments in poor nations should not be forced to honor debts incurred by corrupt and dictatorial predecessors. True False 24. A firm does not have to become a multinational enterprise to engage in international business. True False 25. Managing an international business is much easier than managing a domestic business. True False Multiple Choice Questions 26. The shift toward a more integrated and interdependent world economy is referred to as _____. A. outsourcing B. international marketing C. privatization D. globalization

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    27. In 2008 and 2009, the _____ became the forum though which major nations attempted to launch a coordinated policy response to the global financial crisis, which started in America. A. GATT B. Group of Ten (G20) C. Group of Twenty (G20) D. World Trade Organization 28. The Uruguay Round provided: A. reduced protection for patents, trademarks, and copyrights. B. enhanced protection for patents, trademarks, and copyrights. C. increased trade barriers. D. reduced coverage of services and manufactured goods. 29. Since the collapse of communism at the end of the 1980s, the erstwhile communist nations have transformed their economies by globalizing their markets. This involves _____. A. regulating markets B. privatizing state - owned enterprises C. decreasing competition D. reducing foreign investment 30. Which of the following is a consequence of globalization? A. Decreasing interdependence between national economies B. Increasing outsourcing of services C. Differentiation of material culture D. Increase in barriers to cross - border trade

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    31. Which of the following has enabled globalization of markets? A. Marginal differentiation among national markets B. Falling barriers to cross border trade C. Reduced homogeneity of material culture across the world D. Increased government ownership of factors of production 32. Which of the following factors hinders globalization of consumer goods market? A. National differences in tastes and preferences B. Higher production costs in developed nations C. Homogenization of material culture D. Increased outsourcing of goods and services 33. Globalization of markets results in markets becoming _____. A. more interdependent B. less diverse C. more protected D. less competitive 34. A U.S. investment firm, Fin - Smart, set up a customer service call center in India to take advantage of the lower labor costs. This is called ____. A. homogenizing markets B. vertical integration C. international outsourcing D. horizontal integration

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    35. Early outsourcing efforts were primarily confined to _____. A. health care B. service activities C. technological research D. manufacturing activities 36. Which of the following is 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. Government deregulations C. Reduction of barriers to trade between countries D. Reduction of barriers to foreign direct investment 37. The General Agreement on Tariffs and Trade (GATT) was responsible for ____. A. protecting government owned enterprises B. policing the global marketplace C. limiting nuclear testing D. promoting environment friendly technology 38. The ______ is primarily responsible for policing the world trading system and making sure nation - states adhere to the rules laid down in trade treaties signed by member states. A. International Development Association B. World Bank C. International Court of justice D. World Trade Organization

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    39. The World Trade Organization promotes the: A. lowering of barriers to cross - border trade and investment. B. development of poor nations through low - interest loans. C. state ownership of major enterprises. D. regulation of national economies. 40. Which of the following is true about the International Monetary Fund? A. It is primarily responsible for policing the world trading system. B. It is seen as the lender of last resort to nation - states whose economies are in turmoil. C. It is responsible for establishing multinational treaties to govern the global business system. D. It was established to formulate a coordinated policy response to financial crises in developing nations. 41. The _____ was established on October 24, 1945, by 51 countries committed to preserving peace through international cooperation and collective security. A. World Trade Organization B. United Nations C. G20 D. World Bank 42. The G20 was originally established to: A. preserve peace through international cooperation and collective security. B. maintain order in the international monetary system. C. formulate a coordinated policy response to financial crises in developing nations. D. manage, regulate, and police the global marketplace.

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    43. _____ occurs when a firm exports goods or services to consumers in another country. A. International trade B. Foreign direct investment C. Inward investment D. Outsourcing 44. Which of the following is a factor of production? A. tariffs B. transportation costs C. capital D. government 45. Which of the following is true regarding the WTO? A. WTO stands for World Transition Organization. B. The WTO was succeeded by GATT. C. As of 2015, the WTO has 160 members. D. The WTO is policed by the United Nations. 46. Which of the following is focused on making low - interest loans to cash - strapped governments in poor nations that wish to undertake significant infrastructure investments? A. The WTO B. The GATT C. The World Bank D. The IMF

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    47. Which of the following was established to maintain order in the international monetary system? A. The WTO B. The GATT C. The World Bank D. The IMF 48. Which of the following is true of the IMF? A. It is often seen as the lender of first choice to nation - states whose economies are in turmoil. B. Its loans come with no strings attached. C. It is the less controversial of the two sister institutions, the IMF and the World Bank. D. It has emerged as a significant player in the global economy. 49. In late 2001, the WTO launched a new round of talks in Doha aimed at: A. helping member states to cope with financial crisis. B. liberalizing of the global trade and investment framework. C. protecting national economies from global competition. D. promoting higher standards of living in all member states. 50. Which of the following is included in world merchandise trade? A. Service industry B. Agricultural labor C. Foreign services D. Mining products

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    51. _____ have/has the most to gain from reductions in agricultural tariffs and subsidies that are a part of the Doha agenda. A. The world's developed nations B. The world's poorer nations C. European nations D. The United States 52. The volume of world trade in merchandise growing faster than world GDP implies that: A. more firms are dispersing their production processes to global locations. B. the economies of the world's nation - states are becoming more independent from each other. C. the global economy is headed for a large downward correction. D. the world is becoming poorer. 53. In 2009, the financial crisis in the United States was triggered by: A. the global hike in the price of crude oil B. the slowdown in U.S. imports C. the problems in the U.S. subprime mortgage lending market D. the artificial fixing of currency rate by China 54. _____ predicts that the power of microprocessor technology doubles and its cost of production falls in half every 18 months. A. Keynes's Law B. Say's Law C. Moore's Law D. Sullivan Principles

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    55. Containerization allows: A. reduction of the time needed to get from one location to another. B. simplification of transshipment from one mode of transport to another. C. buyers and sellers to find each other easily in a global economy. D. enterprises to coordinate and control a globally dispersed production system. 56. The average tariff rates for manufactured goods have fallen significantly since 1950 and now stand at about _____. A. 18% B. 5.9% C. 4.8% D. 1.5% 57. The volume of world trade in merchandised goods has been: A. growing at the same rate as world GDP. B. growing faster than world GDP. C. growing slower than world GDP. D. declining faster than world GDP. 58. The growth of international trade in services has been driven by advances in: A. communications. B. transportation. C. agriculture. D. energy.

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    59. The value of international trade in services now accounts for about _____ of the value of all international trade. A. 15% B. 20% C. 30% D. 40% 60. _____ occurs when a firm invests resources in business activities outside its home country. A. Foreign direct investment (FDI) B. Direct international investment (DII) C. International trade (IT) D. Foreign direct production (FDP) 61. The relative decline of the United States in the share of world output and world exports reflects: A. an increase in the barriers to foreign trade in the United States. B. the deepening of the global financial crisis. C. the reduced industrialization in developing nations. D. the growth in the economic development of the world economy. 62. Why did many Japanese firms invest in North America and Europe in the 1970s? A. To avoid a highly competitive domestic market. B. To exploit high domestic tariff barriers. C. To create a hedge against unfavorable currency movements. D. To take advantage of low labor costs.

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    63. The total cumulative value of foreign investments is best referred to as: A. accumulation of foreign shares. B. portfolio investments. C. stock of foreign direct investments. D. stock market investments. 64. Throughout the 1990s, the amount of foreign direct investment directed at both developed and developing nations increased dramatically. This trend reflects: A. a slowdown in global economic activity. B. the increasing share of the United States in the total FDI stock. C. the decline in cross - border flows of foreign direct investment. D. the increasing internationalization of business corporations. 65. Which of the following countries has been the largest recipient of foreign direct investment and received about $60 billion to $100 billion a year in inflows in 2004 - 2012? A. Brazil B. Russia C. India D. China 66. A multinational enterprise (MNE) is a firm that: A. exports its products to multiple countries. B. has production units in more than two countries. C. does most of its business on the Internet. D. lists its securities on a public exchange.

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    67. Which of these statements pertaining to cross - border FDI flows is true? A. There was a growth of FDI between 2004 and 2007. B. A slump in FDI from 1998 to 2000 was followed by a surge from 2001 to 2003. C. Among developing nations, the largest recipient of FDI has been Russia. D. The dramatic increase in FDI reflects the decreasing internationalization of business corporations. 68. Since the 1960s, which of the following has been a notable trend in the demographics of the multinational enterprise? A. The decline of multinational companies in the manufacturing sector B. The growth of government - owned multinational enterprises C. The decline of non - U.S. multinationals D. The growth of mini - multinationals 69. In the last two decades, Latin American countries like Brazil, Mexico, and Chile have _____. A. embraced communist principles B. promoted government ownership of enterprises C. experienced increasing debt and inflation D. welcomed foreign investment 70. Which of the following is a risk associated with globalization? A. Restrictions on competition B. Global financial contagion C. Excessive market regulation D. Differentiation of markets

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