10/28/21, 8:52 AM Bus 2aN - T2 - Quiz 1

Bus 2aN - T2 - Quiz 1

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An international management contract is a contractual arrangement in which a

firm in one country licenses the use of its intellectual property to a firm in a
second country in return for a royalty payment. *

True

False

Operating risk is when the property of a firm is threatened through confiscation

or expropriation.

True

False

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10/28/21, 8:52 AM Bus 2aN - T2 - Quiz 1

Improvements in technology made international business more feasible and

profitable. *

True

False

International business has grown dramatically in recent years because of

strategic imperatives and environmental changes. *

True

False

Flight capital is an investment made for the purpose of actively controlling

property, assets, or companies located in host countries. *

True

False

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10/28/21, 8:52 AM Bus 2aN - T2 - Quiz 1

Firms are able to increase their revenues and profits by using their core
competency in new markets. *

True

False

A key indicator of a country’s desirability to international businesses is its per

capita income, which provides information about its consumers and its value as a
production site. *

True

False

Privatization stems from political ideology and economic pressures among

countries. *

True

False

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10/28/21, 8:52 AM Bus 2aN - T2 - Quiz 1

Administrative distance is the physical, communications, and transportation links

between countries and how the connection of countries affects their integration
as a world marketplace. *

True

False

Any firm contemplating entering a new market should acquire basic knowledge
of that country, learning its political and economic structures to control the firm’s
political risks. *

True

False

National differences in accounting practice can distort the measured

performance of firms incorporated in different countries. *

True

False

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10/28/21, 8:52 AM Bus 2aN - T2 - Quiz 1

To reduce the risk of foreign operations, most developed countries have created
government-owned or sponsored organizations to ensure firms against political
risks. *

True

False

If there’s no independent judiciary in the country to protect the foreigner’s rights,

the foreigner is in a weak bargaining position. *

True

False

South Korea, Taiwan, Singapore, and Thailand are known as the “Four Tigers” in
Pacific Asia. *

True

False

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Australia is the prime market for lower-income countries trying to raise their
standards of living through export-oriented economic development strategies. *

True

False

Devalued capital is money sent out of a politically or economically unstable

country to one perceived as a safe haven. *

True

False

Configuration is when suppliers are expected to deliver necessary inputs just as

they are needed. *

True

False

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Confiscation is when the host government offers no compensation for the

transfer. *

True

False

Sanction is when countries attempt to regulate business activities that are

conducted outside their borders. *

True

False

The growth of e-commerce has also opened up new opportunities for small
businesses. *

True

False

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