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

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Chapter 01GlobalizationTrue / False Questions1.A company does not need a large size to facilitate, and benefit from, the globalization ofmarkets.TrueFalse2.Companies hope to lower their overall cost structure or improve thequality or functionality oftheir product offering through globalization of production.TrueFalse3.The most global markets currently are markets for consumer products.TrueFalse4.Outsourcing is a process that is limited tomanufacturing enterprises.TrueFalse5.The World Bank has focused on policing the world trading system and making sure nation-statesadhere to the rules laid down in trade treaties.TrueFalse6.The World Bank is known as thelender of the last resort.TrueFalse

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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.TrueFalse8.The Uruguay Round, finalized in December 1993, reduced protection for patents, trademarks, andcopyrights.TrueFalse9."Beggar thy neighbor" retaliatory trade policies involved countries progressively lowering tradebarriers against each other, which contributed to the Great Depression of the 1930s.TrueFalse10.Rivers Inc., a U.S. based sports apparel manufacturer, sets up a production unit in China to takeadvantage of the lower labor costs there. This is an example of foreign directinvestment.TrueFalse11.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.TrueFalse12.The lowering of barriers tointernational trade enables firms to view the world, rather than asingle country, as their market.TrueFalse13.According to WTO data, the volume of world merchandise trade has grown faster than the worldeconomy since 1950.TrueFalse

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14.The cost of microprocessors continues to fall, while their power increases. This statementsupports the predictions made by Moore's Law.TrueFalse15.Non-U.S. firms increasingly began to invest across national borders because they wanted todisperse production activities to optimal locations and to build a direct presence in major foreignmarkets.TrueFalse16.A current trend in international business is the decline of medium-sized and small multinationals,known asmini-multinationals.TrueFalse17.The globalization of the world economy has resulted in a relative increase in the dominance ofU.S. firms in the global marketplace.TrueFalse18.Doing business in Russia involves risks because thecountry has shown signs of shifting backtoward greater state involvement in economic activity and authoritarian government.TrueFalse19.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 unskilledworkers.TrueFalse20.Evidence suggests that technological change has had a bigger impact than globalization on thedeclining share of national income enjoyed by labor.TrueFalse

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21.According to supporters of free trade, as countries get richer they commit greater violation ofenvironmental and labor regulations.TrueFalse22.According to critics of globalization, today'sinterdependent global economy limits a nation'snational sovereignty.TrueFalse23.Supporters of debt relief argue that new democratic governments in poor nations should not beforced to honor debts incurred by corrupt and dictatorialpredecessors.TrueFalse24.A firm does not have to become a multinational enterprise to engage in international business.TrueFalse25.Managing an international business is much easier than managing a domestic business.TrueFalseMultiple Choice Questions26.The shift toward a more integrated and interdependent world economy is referred to as _____.A.outsourcingB.international marketingC.privatizationD.globalization

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27.In 2008 and 2009,the _____ became the forum though which major nations attempted to launcha coordinated policy response to the global financial crisis, which started in America.A.GATTB.Group of Ten (G20)C.Group of Twenty (G20)D.World TradeOrganization28.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 ofservices and manufactured goods.29.Since the collapse of communism at the end of the 1980s, the erstwhile communist nations havetransformed their economies by globalizing their markets. This involves _____.A.regulating marketsB.privatizing state-owned enterprisesC.decreasing competitionD.reducing foreign investment30.Which of the following is a consequence of globalization?A.Decreasing interdependence between national economiesB.Increasingoutsourcing of servicesC.Differentiation of material cultureD.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 marketsB.Falling barriers to cross border tradeC.Reduced homogeneity of material culture across the worldD.Increased government ownership of factors of production32.Which of the following factors hinders globalization of consumer goodsmarket?A.National differences in tastes and preferencesB.Higher production costs in developed nationsC.Homogenization of material cultureD.Increased outsourcing of goods and services33.Globalization of markets results inmarkets becoming _____.A.more interdependentB.less diverseC.more protectedD.less competitive34.A U.S. investment firm, Fin-Smart, set up a customer service call center in India to takeadvantage of the lower labor costs.This is called ____.A.homogenizing marketsB.vertical integrationC.international outsourcingD.horizontal integration

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35.Early outsourcing efforts were primarily confined to _____.A.health careB.serviceactivitiesC.technological researchD.manufacturing activities36.Which of the following is an impediment that makes it difficult for firms to achieve the optimaldispersion of their productive activities to locations around theglobe?A.Transportation costsB.Government deregulationsC.Reduction of barriers to trade between countriesD.Reduction of barriers to foreign direct investment37.The General Agreement on Tariffs and Trade (GATT) wasresponsible for ____.A.protecting government owned enterprisesB.policing the global marketplaceC.limiting nuclear testingD.promoting environment friendly technology38.The ______ is primarily responsible for policing theworld trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by member states.A.International Development AssociationB.World BankC.International Court of justiceD.World TradeOrganization

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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 tonation-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 developingnations.41.The _____ was established on October 24, 1945, by 51 countries committed to preserving peacethrough international cooperation and collective security.A.World Trade OrganizationB.United NationsC.G20D.World Bank42.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 indeveloping 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 tradeB.Foreign direct investmentC.InwardinvestmentD.Outsourcing44.Which of the following is a factor of production?A.tariffsB.transportation costsC.capitalD.government45.Which of the following is true regarding the WTO?A.WTO stands for WorldTransition 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-strappedgovernments inpoor nations that wish to undertake significant infrastructure investments?A.The WTOB.The GATTC.The World BankD.The IMF

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47.Which of the following was established to maintain order in the internationalmonetary system?A.The WTOB.The GATTC.The World BankD.The IMF48.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.Itsloans 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 oftalks 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 ofliving in all member states.50.Which of the following is included in world merchandise trade?A.Service industryB.Agricultural laborC.Foreign servicesD.Mining products

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51._____ have/has the most to gain fromreductions in agricultural tariffs and subsidies that are apart of the Doha agenda.A.The world's developed nationsB.The world's poorer nationsC.European nationsD.The United States52.The volume of world trade inmerchandise 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 globaleconomy 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 oilB.the slowdown in U.S. importsC.the problems in the U.S. subprime mortgage lending marketD.the artificial fixing of currency rate by China54._____ predicts that the power of microprocessor technology doubles and its cost of productionfalls in half every 18months.A.Keynes's LawB.Say's LawC.Moore's LawD.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 oftransport 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 fallensignificantly since 1950 and nowstand 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.Thevalue of international trade in services now accounts for about _____ of the value of allinternational trade.A.15%B.20%C.30%D.40%60._____ occurs when a firm invests resources in business activities outside its homecountry.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 worldexports 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 economicdevelopment 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 hedgeagainst 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 offoreign direct investments.D.stock market investments.64.Throughout the 1990s, the amount of foreign direct investment directed at both developed anddeveloping 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 thefollowing countries has been the largest recipient of foreign direct investment andreceived about $60 billion to $100 billion a year in inflows in 2004-2012?A.BrazilB.RussiaC.IndiaD.China66.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 thesestatements 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 largestrecipient of FDI has been Russia.D.The dramatic increase in FDI reflects the decreasing internationalization of businesscorporations.68.Since the 1960s, which of the following has been a notable trend in the demographics of themultinational enterprise?A.The decline of multinational companies in the manufacturing sectorB.The growth of government-owned multinational enterprisesC.The decline of non-U.S. multinationalsD.The growth of mini-multinationals69.In thelast two decades, Latin American countries like Brazil, Mexico, and Chile have _____.A.embraced communist principlesB.promoted government ownership of enterprisesC.experienced increasing debt and inflationD.welcomed foreigninvestment70.Which of the following is a risk associated with globalization?A.Restrictions on competitionB.Global financial contagionC.Excessive market regulationD.Differentiation of markets

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