Question

1 out of 1 points 1 out of 1 points 1 out of 1 points 1 out of 1 points

1
Which of the following is not characteristic of globalization?

Selected perceived distance is increasing between nations is increasing due to

Answer: advances in transportation and telecommunications

perceived distance is increasing

between nations is increasing due to
advances in transportation and
telecommunications
Correct Answer:

Questio
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n2
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.

Selected Answer: increased, reduced

increased, reduced
Correct Answer:

Questio
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n3
Falling barriers to cross-border trade:

Selected Answer: have made it easier to sell internationally

have made it easier to sell

internationally
Correct Answer:

Questio
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n4
The trend toward a more integrated global economic system that has been in place
for many years is commonly referred to as:

Selected Answer: globalization

globalization
Correct Answer:

Questio
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n5
The merging of historically distinct and separate national markets into one huge
global marketplace is referred to as the __________.
 Selected Answer: globalization of markets

globalization of markets
Correct Answer:

Questio
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n6
In the U.S., ________ percent of firms that export are small companies employing
fewer than 100 people.

Selected Answer: 90

90
Correct
Answer:

Questio
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n7
The most global of markets are not markets for __________, where national
differences in tastes and preferences are still often important enough to act as a
brake on globalization.

Selected Answer: consumer goods

consumer goods
Correct Answer:

Questio
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n8
As a result of __________, a company such as IBM can build the case, keyboard and
hard drive for its product in one country, build the wireless card in a second country,
the microprocessor in a third country, and assemble it in still another country.

Selected Answer: the globalization of production

the globalization of
production
Correct Answer:

Questio
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n9
Globalization results in a greater degree of __________ across markets than would
be present otherwise.

Selected Answer: homogeneity

homogeneity
Correct Answer:

Questio
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n 10
The globalization of __________ refers to the sourcing of goods and services from
locations around the globe to take advantage of national differences in the cost and
 quality of factors of production (such as labor, energy, land, and capital).

Selected Answer: production

production
Correct Answer:

TWO

Question
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1
The two major activities of exporting to and production in overseas markets are(is)

Selected Answer: related to international trade and foreign direct investment.

related to international trade and

foreign direct investment.
Correct Answer:

Questio
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n2
Which of the following is not true of the proportion of world merchandise exports
between 1980 and 2004?

Selected The proportion of exports coming from the regions of Latin America,
Answer: Africa, and the Middle East increased.

The proportion of exports coming from

the regions of Latin America, Africa, and
the Middle East increased.
Correct Answer:

Questio
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n3
The share of manufacturing value-added for developing regions, between 1980-2001,
shows all of the following trends, except

Selected Africa and Latin America have added appreciably to their proportion
Answer: of worldwide manufacturing value added.

Africa and Latin America have added

appreciably to their proportion of
worldwide manufacturing value added.
Correct Answer:

Questio
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n4
A notable difference between trade in services and trade in merchandise, in terms of
the countries represented among the leaders, is that the only emerging economies
ranking among the leaders for both exports and imports of services are
 Selected Answer: China and India.

China and India.

Correct Answer:

Questio
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n5
One reason why the United States exports more to developing nations than most
developed nations do is that

Selected American firms have significantly more subsidiaries in

Answer: developing nations.

American firms have significantly more

subsidiaries in developing nations.
Correct Answer:

Questio
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n6
Most of Canada's exports going to the United States, after 1989, as a result of the
U.S.-Canada Free Trade Agreement and the subsequent North American Free Trade
Agreement, is an example of

Selected Answer: the increased regionalization of trade.

the increased regionalization of

trade.
Correct Answer:

Questio
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n7
All of the following are some of the reasons for focusing attention on a nation that is
already a trading partner, except

Selected Answer: The marketing strategies are already in place for these
nations.
The marketing strategies are already in
place for these nations.
Correct Answer:

Questio
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n8
Which of the following is not a reason why many of the Asian countries, which are
trading partners of the United States, also appear as importers of American goods?

Selected The growing focus of the United States on these nations has led to
Answer: their having better trade agreements.

The growing focus of the United States

on these nations has led to their having
better trade agreements.
Correct Answer:
 Questio
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n9
_____ is the purchase of stocks and bonds solely for the purpose of obtaining a
return on the funds invested.

Selected Answer: Portfolio investment

Portfolio investment
Correct Answer:

Questio
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n 10
The continued economic development of developing nations is reflected in the fact
that from1985 to 2004 their FDI proportion has more than

Selected Answer: doubled.

doubled.
Correct Answer:

THREE

Question
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1
The content of the Chicago Boys' program, a new program designed by Chilean
economists appointed by the post-Allende government, was largely based on the
theory of

Selected Answer: comparative advantage.

comparative advantage.
Correct Answer:

Questio
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n2
Which of the following is not an argument propounded by Adam Smith against
Mercantilism in his theory of absolute advantage?

Selected To increase wealth, government policies should promote exports

Answer: and discourage imports.

To increase wealth, government

policies should promote exports and
discourage imports.
Correct Answer:

Questio
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n3
David Ricardo's theory of comparative advantage states that
 Selected when a nation can produce a larger amount of a good or service for the
Answer: same amount of inputs as can another country or when it can produce the
same amount of a good or service using fewer inputs than could another
country, it would gain from the trade.
even though one nation holds an
absolute advantage over another in the
production of each of two different goods,
international trade could still create benefit
for each country.
Correct Answer:

Questio
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n4
India due its abundance of labor concentrates on producing labor-intensive goods
and Germany, with relatively more capital than labor, specializes in capital-intensive
products. They then trade, and each obtains at a lower price those goods that require
large amounts of the production factor that is relatively scarce in their own country,
and both benefit from the transaction. This example reflects which of the following
theories?
Selected Answer: Heckscher-Ohlin's factor endowment theory

Heckscher-Ohlin's factor
endowment theory
Correct Answer:

Questio
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n5
Hewlett-Packard provides its American consumers with higher quality and lower
priced products because it spreads its very high fixed costs over sales within foreign
as well as home markets. Hewlett-Packard in this example is making use of

Selected Answer: economies of scale in international trade.

economies of scale in
international trade.
Correct Answer:

Questio
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n6
Michael Porter in his Diamond Model of national advantage has cited variables that
have an impact on the ability of the local firms in a country to utilize the country's
resources, to gain a competitive advantage. Which of the following is not an example
of the variables?
Selected The government of Argentina deciding to set a fixed exchange rate of
Answer: 1 peso to 1 U.S. dollar to fight rampant inflation.

The government of Argentina deciding

to set a fixed exchange rate of 1 peso to 1
U.S. dollar to fight rampant inflation.
Correct Answer:

Questio
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n7
Identify the statement that is incorrect in relation to the United States policy of
imposing sanctions to punish offending nations.
 Selected Limitations on exporting Iraqi oil resulted in substantial economic gains
Answer: by Libya and Iran, nations whose behavior had subjected them to U.S.
trade sanctions.
During the time that the United States
was imposing sanctions on Iraq that
prohibited American firms from doing
business, companies from France, Russia,
and other nations were also repudiating
their business contracts there.
Correct Answer:

Questio
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n8
An argument made by protectionists justifies protection from cheap imports by
claiming that other countries, with lower hourly labor rates than those in their nation,
can flood their nation with low-priced goods and take away domestic jobs. This is
usually based on relative hourly wages and is misleading because
Selected the labor cost component of the goods being produced in developed
Answer: countries is higher because the wages there are higher.

where wage rates are low, the capital

costs are usually low too, and thus
production costs are low.
Correct Answer:

Questio
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n9
The European Union closed its markets to hormone-treated beef from the United
States in1988. American beef producers complained that no scientific evidence
supported the claim, and the United States promptly imposed import duties on about
$100 million worth of EU products. This example is an instance of
Selected Answer: retaliation.

retaliation.
Correct Answer:

Questio
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n 10
The relocation, by an American multinational company, of a manufacturing plant in
France to a developing country following negotiations that lead employees in the
developing country to accept inferior terms and conditions of employment would be
an example of
Selected Answer: cultural dumping.

social dumping.
Correct Answer:

FOUR

Question
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1
Which of the following is not a member of the United Nations, although it may
maintain missions or offices at UN headquarters and participate in some UN
 activities?

Selected Answer: Taiwan

Taiwan
Correct Answer:

Questio
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n2
Identify the statement which is not true of the UN General Assembly.

Selected Its decisions have a legally binding force for governments and citizens
Answer: in the member-nations, and they carry the heavy weight of world opinion.

Its decisions have a legally binding

force for governments and citizens in the
member-nations, and they carry the heavy
weight of world opinion.
Correct Answer:

Questio
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n3
Which of the following examples essentially reflects the task of The United Nations
Security Council?

Selected United Nations Mission in Liberia (UNMIL) helping the new

Answer: Government in establishing its authority throughout the country,
particularly in the diamond and timber-producing regions, and border
areas.
United Nations Mission in Liberia
(UNMIL) helping the new Government in
establishing its authority throughout the
country, particularly in the diamond and
timber-producing regions, and border
areas.
Correct Answer:

Questio
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n4
The North Atlantic Treaty Organization, governed by the North Atlantic Treaty of
1949, was formed

Selected Answer: as a security alliance of 26 North American and European

nations.
as a security alliance of 26 North
American and European nations.
Correct Answer:

Questio
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n5
Which of the following statements, regarding the General Agreement on Tariffs and
Trade, is incorrect?
 Selected The Annecy round broke new GATT ground by writing international
Answer: rules for trade in services and agriculture and for the protection of
intellectual properties.
The Annecy round broke new GATT
ground by writing international rules for
trade in services and agriculture and for
the protection of intellectual properties.
Correct Answer:

Questio
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n6
Japan may import a product from the United States. Once the product has entered
the market, the Japanese government, in spite of pressures from local lobbyists to
impose higher taxes on the imported product as compared to its local counterpart,
does not apply this. The WTO principle, of the trading system, that Japan is adhering
to is
Selected Answer: trade will be without discrimination

trade will be without

discrimination
Correct Answer:

Questio
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n7
A WTO member country agrees to open its markets for goods and services, and
promises ceilings on customs tariff rates. This example best reflects the WTO
principle of

Selected Answer: trade should be predictable.

trade should be
predictable.
Correct Answer:

Questio
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n8
Identify the incorrect statement on the Organization for Economic Cooperation and
Development.

Selected It developed from an earlier collaboration, the Business and

Answer: Industry Advisory Committee (BIAC).

It developed from an earlier

collaboration, the Business and Industry
Advisory Committee (BIAC).
Correct Answer:

Questio
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n9
OPEC's control of the market has been diluted
 Selected by the huge oil and gas projects being developed in Kazakhstan,
Answer: Azerbaijan, and Russia.

by the huge oil and gas projects being

developed in Kazakhstan, Azerbaijan, and
Russia.
Correct Answer:

Questio
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n 10
Oil prices in April 2006 hit $75.35. Contributing to these high prices were all of the
following reasons, except

Selected Answer: recession and unemployment in oil-importing countries.

recession and unemployment in oil-

importing countries.
Correct Answer:

FIVE

Question
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1
The automatic adjustment where money supply would rise or fall in direct relation to
the gold flows is known as the

Selected Answer: price-specie-flow mechanism.

price-specie-flow
mechanism.
Correct Answer:

Questio
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n2
Under the modern monetary arrangements

Selected Answer: no special role is assigned to gold.

no special role is assigned to

gold.
Correct Answer:

Questio
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n3
Which of the following was not a consensus among the Bretton Woods
representatives?

Selected Trade imbalances would be automatically corrected by the price-

Answer: specie-flow mechanism.
 Trade imbalances would be
automatically corrected by the price-
specie-flow mechanism.
Correct Answer:

Questio
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n4
Which of the following was not established in 1944, by representatives of the 44 allied
nations who met at the Mount Washington Hotel in Bretton Woods?

Selected Answer: Bank for International Settlements

Bank for International

Settlements
Correct Answer:

Questio
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n5
All of the following are some of the successes of the IMF, except

Selected it has developed policies and actions, the framework for trade, by
Answer: dealing directly with businesses and people worldwide.

it has developed policies and actions,

the framework for trade, by dealing directly
with businesses and people worldwide.
Correct Answer:

Questio
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n6
From 1958 through 1971, the United States ran up a cumulative deficit of $56 billion.
This deficit

Selected inspired a lack of confidence in the reserve currency and led to a

Answer: financial crisis.

inspired a lack of confidence in the

reserve currency and led to a financial
crisis.
Correct Answer:

Questio
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n7
A Canadian company that is a subcontractor to a U.S. company enters into a contract
with the Department of Transportation of Virginia for a highway project. The Canadian
company claims that the United States government is breaching certain funding
obligations. The World Bank group that the Canadian company is most likely to
approach for a solution is the
Selected Answer: ICSID.

ICSID.
Correct Answer:
 Questio
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n8
Identify the statement that is not true in relation to the World Bank.

Selected The Multilateral Investment Guarantee Agency, of the World Bank,

Answer: helps to resolve disputes between governments and foreign investors.

The Multilateral Investment Guarantee

Agency, of the World Bank, helps to
resolve disputes between governments
and foreign investors.
Correct Answer:

Questio
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n9
One of the main functions of the BIS today is to serve

Selected Answer: as a forum for international monetary cooperation.

as a forum for international monetary

cooperation.
Correct Answer:

Questio
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n 10
The _____ is an international organization of central banks that exists to "foster
cooperation among central banks and other agencies in pursuit of monetary and
financial stability."

Selected Answer: Bank for International Settlements

Bank for International

Settlements
Correct Answer:

SIX

Question
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1
Characterizing a group of people by individual worldviews, social rules, and
interpersonal dynamics is known as

Selected Answer: culture.

culture.
Correct Answer:

Questio
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n2
 Belief in the superiority of one's own ethnic group is better known as

Selected Answer: ethnocentricity.

ethnocentricity.
Correct Answer:

Questio
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n3
In Great Britain, an American general manager complained, people were promoted
because of the school they had attended and their family background but not for their
accomplishments. This is an example of

Selected Answer: national culture as a key determinant for the evaluation of

managers.
national culture as a key determinant
for the evaluation of managers.
Correct Answer:

Questio
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n4
The promise of overtime can fail to keep workers on the job. In fact, raising
employees' salaries can actually result in their working less. This effect is also know
as

Selected Answer: "backward-bending' labor supply curve.

"backward-bending' labor
supply curve.
Correct Answer:

Questio
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n5
In Asian countries where Confucianism is strong, there is a drive toward hard work
and thrift; similar to the Protestant work ethic. In the recent times, a growing feeling of
prosperity and a shift to a five-day workweek has resulted in all of the following except

Selected Answer: reliability and an increased motivation at work.

reliability and an increased

motivation at work.
Correct Answer:

Questio
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n6
Knowledge of the caste-system in India, and the feudal Tokugawa regime in Japan is
required for the manager because

Selected it contributes to a better understanding of why people's attitudes

Answer: vary so greatly from country to country.

it contributes to a better understanding

 of why people's attitudes vary so greatly
from country to country.
Correct Answer:

Questio
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n7
Animism is

Selected Answer: the belief that everything in nature has its own spirit or
divinity.
the belief that everything in nature has
its own spirit or divinity.
Correct Answer:

Questio
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n8
The concept of using external technology to complement, rather than substitute for
internal technology is known as

Selected Answer: strategic technology leveraging.

strategic technology
leveraging.
Correct Answer:

Questio
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n9
The Korean firm Samsung was once known for cheap and unappealing electronics.
But its skills in the design of sleek, attractive products have made it a leader in cell
phones, and it tops global markets for color televisions, flash memory, and LCD
panels. This an example of
Selected technology enabling a firm to be competitive or even attain
Answer: leadership in world markets.

technology enabling a firm to be

competitive or even attain leadership in
world markets.
Correct Answer:

Questio
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n 10
Identify the term used to denote the side-by-side presence of technologically
advanced and technologically primitive production systems.

Selected Answer: Technological dualism

Technological dualism
Correct Answer:

SEVEN
 Question
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1
According to the text, the principal reason that Japan's sales to ASEAN members are
much greater than U.S. sales to ASEAN is because:

Selected Answer: of Japan's geographic proximity to ASEAN members.

of Japan's geographic proximity to

ASEAN members.
Correct Answer:

Questio
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n2
If you place a population map over a topographic map of all except tropical areas, the
blank areas on the population map would generally coincide with

Selected Answer: the areas of higher elevation.

the areas of higher

elevation.
Correct Answer:

Questio
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n3
Bodies of water:

Selected Answer: attract settlers.

attract settlers.
Correct Answer:

Questio
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n4
The century-long struggle between Chile and Bolivia is:

Selected Answer: over Bolivia's desire for an outlet to the sea.

over Bolivia's desire for an outlet to

the sea.
Correct Answer:

Questio
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n5
Patagonia, Inc. is an example of sustainable business practice because:

Selected Answer: it manufactures outerwear and gear for hiking and climbing.
 it manufactures outerwear and gear for
hiking and climbing.
Correct Answer:

Questio
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n6
Factor conditions are a combination of natural resources that are uncontrollable and
resources a country can mold, such as educational level and infrastructure.

Selected Answer: True

True
Correct
Answer:

Questio
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n7
All European nations, except Switzerland, which has an excellent rail system, use the
Rhine waterway to transport goods.

Selected Answer: False

False
Correct
Answer:

Questio
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n8
As techniques become available to control pests and parasites the tropics will have
advantages over temperate zones in agriculture.

Selected Answer: True

True
Correct
Answer:

Questio
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n9
The differences in climatic conditions among a firm's markets have limited impact on
its product mix.

Selected Answer: False

False
Correct
Answer:

Questio
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n 10
 Environmental sustainability is a political state in which the demands placed on the
environment can be met without reducing the environment's ability to provide for
future generations.

Selected Answer: True

True
Correct
Answer:

EIGHT

Question
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1
According to the book, economic analyses become more complex when a firm enters
overseas markets because

Selected management must operate in two new environments, foreign and

Answer: international.

management must operate in two new

environments, foreign and international.
Correct Answer:

Questio
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n2
From comparisons of income distribution studies over time, it appears that in early
stages of development:

Selected the middle quintile grows at the expense of the upper and lower
Answer: quintiles.

the middle quintile grows at the

expense of the upper and lower quintiles.
Correct Answer:

Questio
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n3
Because _____ consumer expenditures eliminate differences in relative prices,
marketers use these data to analyze the change in composition consumption with the
level of development.

Selected Answer: PPP-based

PPP-based
Correct Answer:

Questio
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n4
According to the text, population size
 Selected provides a basis for estimating the consumption of low-priced, mass-
Answer: consumption products, such as cigarettes and soap.

provides a basis for estimating the

consumption of low-priced, mass-
consumption products, such as cigarettes
and soap.
Correct Answer:

Questio
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n5
Generally, because of higher birth rates,

Selected developing nations have more youthful populations than

Answer: developed nations.

developing nations have more youthful

populations than developed nations.
Correct Answer:

NINE

Question
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1
When communists take over a previously noncommunist country:

Selected Answer: the government will take over private business.

the government will take over private

business.
Correct Answer:

Questio
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n2
Which among the following is not a characteristic of governments of developing
countries?

Selected Answer: They would ideally not seek capital investment.

They would ideally not seek capital

investment.
Correct Answer:

Questio
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n3
Privatization includes all of the following except:
 Selected Answer: government agencies completely funding private owned
companies.
government agencies completely
funding private owned companies.
Correct Answer:

Questio
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n4
Antiterrorist firms have been established to deal with terrorists who have kidnapped
business executives. They recommend that the:

Selected Answer: negotiating be left to them.

negotiating be left to
them.
Correct Answer:

Questio
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n5
Country risk assessment

Selected helps companies decide where to conduct business and for

Answer: which risks to insure.

helps companies decide where to

conduct business and for which risks to
insure.
Correct Answer:

a) In terms of political risk (for example, expropriation), which of the following businesses
would you consider the most and least vulnerable? Explain.
Political risk refers to the complications businesses and governments may face as a result of what
are commonly referred to as political decisions—or “any political change that alters the expected
outcome and value of a given economic action by changing the probability of achieving business
objectives.” Political risk faced by firms can be defined as “the risk of a strategic, financial, or
personnel loss for a firm because of such nonmarket factors as macroeconomic and social policies
(fiscal, monetary, trade, investment, industrial, income, labor, and developmental), or events related
to political instability (terrorism, riots, coups, civil war, and insurrection).”Portfolio investors may
face similar financial losses. Moreover, governments may face complications in their ability to
execute diplomatic, military or other initiatives as a result of political risk. [1]

Expropriation is one of the political risks involved with foreign direct investment (FDI). It is
characterized by confiscation of the foreign asset. The most vulnerable business would be banks,
mines, oil fields, and oil refineries. Most of these companies are high profile and are well
established. They help to control major assets in a country and a more susceptible to government
interference as well as terrorist threats and plots. The least vulnerable would be businesses are low
profile.
Changing a company’s profile in a foreign country can be difficult. The company should embrace
its location’s surrounding culture. Also, security measures need to be in place to deter or combat
any terroristic acts. A secure company is less vulnerable because it helps to filter out crime against
it. It is nearly unthinkable to rob a bank these because of complex security systems.
[1] http://en.wikipedia.org/wiki/Political_risk