INTB 265 INTB265 EXAM 1 REVIEW ANSWERS - BALL STATE UNIVERSITY
INTB 265 EXAM 1 Answers (Ball State University)
Ch. 1
1. Which country has seen their share of world output increase the most from 1960 to today?
• Japan
• United States
• China
• Germany
• The United Kingdom
2. California-based Urban Health Source has invested resources in business activities in Italy. What type of business activity does this represent?
• Globalization of markets
• International trade
• Foreign direct investment
• Multinational exchange
• exporting
3. Economist Robert Reich advocates that the outsourcing of productive activities to different suppliers results in the creation of
• A global legal system
• A single currency
• Unlimited costs
• National tensions
• Global products
4. What organization is often seen as the lender of last resort to nation-states whose economies are in turmoil and currencies are losing value against those of other nations?
• United National Development Fund
• Group of Twenty (G20)
• International Monetary Fund (IMF)
• World Trade Organization (WTO)
• United Nations (UN)
5. Gigantic Games., a U.S.-based company that specializes in strategy-based board games, has production facilities in Poland and Spain. Based on this information, Gigantic Games can be classified as what type of enterprise?
• Multinational
• Semipublic
• Public
• Private
• Local
6. What was the motivation for non-U.S. firms to begin investing across national borders in the 1970s?
• Shift toward a more integrated and interdependent global economy
• Host of investment opportunities in foreign nations
• Rise in barriers to trade and foreign direct investments
• Desire to disperse production activities to optimal locations
• Limits imposed by government intervention in international trade
7. One cost-cutting measure used by Garr Tool Corp is sourcing the parts it uses from companies in Germany, Ireland, and Canada that are more economical than home-country sources. The choice to use these sources in an example of
• Globalization of markets
• Regulation of environment
• Globalization of production
• Company’s social responsibility
• Emergence of global institutions
8. Why was the World Trade Organization established?
• To preserve peace through international cooperation
• To police the international trading system
• To maintain order in the international monetary system
• To promote economic development
• To formulate a coordinated policy response to financial crises
9. Canadian company Yummy Snacks exports a number of products to consumers in Peru, Chile, and Argentina. According to this information, Yummy Snacks is most likely involved in
• Foreign direct investment
• globalization of production
• Outsourcing
• Trade protectionism
• International trade
10. The merging of national markets that have historically been distinct and separate is the process of
• Industrialization
• Globalization
• Foreign direct investment
• Containerization
• International business
Ch. 2
1. The United Nations Convention on Contracts for the International Sale of Goods (CISG) was introduced to
• make it illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority.
• set up a legal mechanism that will help protect a firm when its product causes injury, death, or damage.
• resolve disputes that arise in international trade regarding which country’s laws to apply.
• specify the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.
• allow establishing ownership over intellectual property such as a computer software or a new drug.
2. James is the warehouse supply manager for a major tool corporation. It is his job to take inventory of the tools the company has available and send orders to make more tools when supplies run low. This supply and demand form of production is an example of a ________ economy.
• Public
• Command
• Private
• Socialist
• Market
3. When Aristotle said that private property is more highly productive than communal property, he was advocating for
• Collectivism
• Totalitarianism
• Anarchism
• Individualism
• Monarchism
4. A ________ economy follows the principles of collectivism as resources are allocated based on “the common good.”
• Supply
• Private
• Mixed
• Market
• command
5. An individual’s right to do something may be restricted on the grounds that it runs counter to “the good of society” when the political system emphasizes
• Individualism
• Collectivism
• Privatization
• Capitalism
• Democracy
6. In a pure command economy, the prices at which goods and services are sold are planned by the
• World trade organization
• Government
• Producers
• Private monopolists
• Consumers
7. What political system has a government that is by the people, exercised either directly or through elected representatives?
• Socialism
• Tribal totalitarianism
• Communism
• Democracy
• Right-wing totalitarianism
8. HealthWise Corporation has developed a new diet supplement to assist with weight loss. Which type of legal protection grants HealthWise Corporation exclusive rights for a defined period to the manufacture, use, or sale of this new diet supplement?
• Trademark
• Copyright
• Patent
• Warranty
• Treaty
9. In the United States, citizens have the right to elect officials who make decisions on behalf of the public. This practice is the reason the United States is a
• Representative democracy
• Socialist state
• Theocratic state
• Tribal totalitarian regime
• Pseudo-democracy
10. Communists believed that socialism could only be achieved through
• Democratic principles
• The free flow of goods
• Violent revolution
• The feudal system
• State-owned enterprises
11. The practices of bribery
• Is a normal part of business in some countries
• Is always illegal and unethical regardless of the situation
• Is only associated with corrupt government officials in developing countries
• Can usually be avoided by bigger companies
• Can result in negative economic growth
12. According to the _________, it is illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority.
• European Union
• UN Convention on trade
• World Trade Organization
• General Agreement on Tariffs and Trade
• Foreign Corrupt Practices Act
Ch. 3
1. A country that has ________ is an unattractive choice for international business.
• A large market size in terms of population
• The presence of business contract law
• A closed totalitarian dictatorship
• Market-based economic policies
• Strong protection of property rights
2. ABC Company is hesitant about entering Ukraine, because the country has been experiencing social unrest in recent years. Based on this information, what type of risk is ABC Company trying to avoid?
• Political
• Economic
• Ethical
• Technological
• Legal
3. People in the West tend to associate a representative democracy with
• A theocratic regime
• A market economic system
• Low level of life expectancy at birth
• A command economic system
• Weak property rights protection
4. In 2017, the Brazilian government transferred the state ownership of the electric company, the airports, highways, and ports to private investors to stimulate the economy. This is an example of
• Communism
• Privatization
• Socialism
• Protectionism
• Nationalization
5. Julie asked her assistant to determine the gross national income of three different countries by evaluating the GNI against the cost of living in the United States. What measure is Julie asking her assistant to use?
• Cash reserve ratio
• Return on investment
• Factor endowments
• Gross domestic product
• Purchasing power parity
6. U.S.-based Centra Corporation is hesitant about entering into a licensing agreement with Fission, Inc., a company from another nation, due to the likelihood that Fission will break a contract or expropriate property rights. What specific type of risk is Centra Corporation trying to avoid?
• Legal
• Economic
• Technological
• Political
• Ethical
7. Economist Hernando de Soto believes that the benefits of capitalism will not be achieved until
• There is a shift from individualism to collectivism
• Property rights are better protected
• A theocratic law system is in place
• Totalitarian governments are more widespread
• More nations adopt planned economies
8. The spread of democracy among countries is most likely to lead to
• A decline in privatization
• The promotion of greater competition
• The widespread use of centrally planned command economies
• A decrease in innovation and entrepreneurship
• A strong shift toward a mixed economy
9. What is an accurate description of how the political economy of many of the world’s nation-states has changed radically since the late 1980s?
• New communication technologies have increased countries' ability to control access to uncensored information.
• There has been a move away from centrally planned and mixed economies and toward a more free market economic model.
• Market-based economic systems have been replaced by command economies.
• There has been a significant reduction of the middle class
• Democratic governments have been replaced by totalitarian governments.
10. The main reason that gross national income figures can be misleading is because they
• are determined by individual governments instead of a national institution.
• measure the total dollar amount of imports coming into a nation.
• don’t consider differences in the cost of living.
• are an adjustment of the purchasing power parity (PPP).
• allow for a direct comparison of living standards in different countries.
11. GNI figures are helpful in understanding an economy because they
• Allow us to predict income growth in a nation
• Allow us to predict economic growth rates
• Help us understand whether a country is closing the gap in economic growth
• Give a dynamic picture of development
• Tell us how poor a country is relative to another
Ch. 4
1. Which of the following BEST increases a country’s competitive advantage and its attractiveness as a location for international business?
• Presence of class or caste differences
• Presence of more than one language or culture
• Education system that is well developed
• Belief in monotheism
• Prevalence of communist ideals
2. The social strata evident in a society is primarily derived from
• Evidence of competition
• Socioeconomic characteristics
• Individual characteristics such as physical appearance
• The collectivistic nature of the group
• Government policy
3. Intelligent Tool Corp. is planning to set up a production plant abroad. It has selected five potential countries based on their population size, stage of economic development, labor costs, and access to world markets. Considering the connection between culture and competitive advantage, which of the following countries would be the best investment site for Intelligent Tool Corp.?
• Country B, where education is well-developed and social stratification is lacking.
• Country C, where education is well-developed and the society is characterized by a marked stratification between the upper and lower classes.
• Country D, where education is undeveloped and there are two prevalent religions.
• Country A, where there is one prevalent religion and the society is characterized by a marked stratification between the upper and lower classes.
• Country E, where education is undeveloped and there are seven major linguistic groups
4. According to Geert Hofstede, what dimension captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors?
• Power distance
• Long-term versus short-term orientation
• Class consciousness
• Uncertainty avoidance
• Social mobility
5. American company Software Unlimited is planning to expand its operations to the Bangor Republic where the group is the primary unit of social organization. According to this information, what is a likely outcome for Software Unlimited from operating in the Bangor Republic?
• Employees will strive to achieve a personal brand
• Employees will constantly innovate with their creative ideas for products
• Employees will achieve close cooperation with others
• Employees will lack company loyalty
• Employees will fail to obtain company-specific experience and knowledge
6. Connor was born into a poor family, but he worked hard during high school and went on to receive his master’s degree in business. Today, he is considered “upper middle class” and enjoys a comfortable lifestyle. Connor’s journey is an example of
• Class consciousness
• A rigid class system
• Social mobility
• A caste system
• Reciprocal beliefs
7. Within the context of the individual as the basic unit of a social organization, what is an implication of the emphasis on individualism in many Western societies?
• Low degree of entrepreneurial activity
• High degree of social stratification
• High degree of managerial mobility between companies
• Low degree of competition between individuals
• High degree of cooperation between individuals
8. Which of these is not used to determine culture?
• Economic philosophy
• Geography
• Religion
• Language
• Social structure
9. Shayla is from South Africa and believes that the customs and beliefs of her culture are superior to those she has encountered during her trip to America. Shayla’s attitude is an example of
• Confucian dynamism
• Ethnocentrism
• Class consciousness
• Collectivism
• Cultural convergence
10. What is one criticism regarding Geert Hofstede’s research on cultural dimensions?
• It did not assume a one-to-one correspondence between culture and nation-state
• It did not assess cultures affecting the workplace
• The research team consisted of only Europeans and Americans
• It did not consider physical capabilities
• It was too all-encompassing and did not allow for differences
Ch.5
1. A ________ is an individual or group that has an interest or claim in what a company does and how well it performs.
• Supplier
• Competitor
• Trustee
• Drawee
• stakeholder
2. One root cause of unethical behavior in business is
• A strong sense of personal ethics
• Pressure to meet unrealistic performance goals
• A societal culture with low power distance
• Management’s ability to see beyond economic benefits
• Organization culture that emphasizes business ethics
3. Strategies that not only help the multinational firm make good profits, but that do so without harming the environment while simultaneously ensuring that the corporation acts in a socially responsible manner with regard to its stakeholders are called
• Kantian strategies
• Sustainable strategies
• Utilitarian strategies
• Moral strategies
• Righteous strategies
4. If Kendra was working in the home office in Ohio she never would have agreed to pay the government official to speed up the delivery of the cargo; but since she is working in the company’s foreign office, she agrees to the practice since it is considered normal in this country. Which philosophical approach to ethics is Kendra using to make her decision?
• Kantian approach
• Cultural relativism
• Naïve immoralism
• Righteous moralism
• Friedman doctrine
5. John, an American executive, learns that a foreign subsidiary hired a 12-year-old orphan girl to work on the factory floor. He knows that using child labor is in direct violation of the company's own ethical code. At the same time, he does not think that denying the child her only source of income is right. John is facing
• The stakeholder doctrine
• The tragedy of the commons
• Positivity effect
• An ethical dilemma
• The sustainability effect
6. During the second stage of the ethical decision-making process, managers must determine whether a proposed decision would violate
• Home country values
• Utilitarian beliefs
• The global commons
• The fundamental rights of any stakeholders
• A righteous distribution
7. A number of employees at Sports Plus Inc., which is headquartered in a country where masculinity and power distance are high, do not behave in an ethical manner. In this context, the roots of unethical behavior can be traced to
• The organizational culture
• Unrealistic performance goals
• The legal environment
• The company’s leadership
• The societal culture
8. ________ gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company.
• Moral courage
• Cultural relativism
• Righteous moralism
• Moral imagination
• Naïve immoralism
9. Daria owns 100 shares of stock in Dow Corning. She would be considered a(n)
• Internal stakeholder
• Mini-multinational
• External stakeholder
• Customer
• Supplier
10. Saturn Systems Inc., which is headquartered in the United States, has its production plant located in a less-developed country where working conditions are poor. For example, employees work 15-hour shifts, are exposed to toxic chemicals, and are forced to work overtime. What type of behavior is Saturn Systems Inc. exhibiting?
• Unethical
• Just
• Uneconomical
• Fair
• Courageous
Ch. 6
1. According to Porter, which factor endowment would be classified as an advanced factor?
• Location
• Natural resources
• Climate
• Demographics
• Communication infrastructure
2. Karvel lives in northern California where there is sufficient land and labor to successfully grow grapes for wine. Heckscher-Ohlin would consider the land and labor to be
• Location economics
• Resource allocations
• Factor endowments
• Innovative technologies
• Economies of scale
3. Raymond Vernon noticed that in the 1960s, the wealth and size of the U.S. market was a natural incentive to develop new consumer products. What theory did he propose based on this fact?
• New trade
• Absolute advantage
• Mercantilism
• Product life-cycle
• Comparative advantage
• etc.
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