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International Business: The Challenges of Globalization, 9e (Wild)
Chapter 1 Globalization
1) Which of the following best defines international business?
A) It includes all economic flows between two or more countries.
B) It includes all private economic flows between two or more countries.
C) It includes all business transactions involving two or more countries.
D) It includes all business transactions in countries other than your home country.
2) Goods and services purchased abroad and brought into a country are called ________.
A) gross domestic products
B) exports
C) gross national products
D) imports
3) ________ are all goods and services sold abroad and sent out of a country.
A) Net national products
B) Exports
C) Gross domestic products
D) Imports
4) Olive oil prepared in a small Italian oil press factory and sold by large supermarkets in the
United States is an example of a ________.
A) net national product
B) U.S. export
C) U.S. import
D) gross domestic product
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5) Christopher, an accounts manager at a mid-sized health care firm, does not have any direct
international responsibilities; however, Christopher would most likely benefit from studying
international business issues so that he can ________.
A) conduct better job interviews
B) better understand how foreign operations affect the company's competitive position
C) supervise and evaluate subordinates who have global assignments
D) understand the legalities of importing and exporting products overseas
6) A business that has direct investments (in the form of marketing or manufacturing
subsidiaries) abroad in several countries is called a ________.
A) dummy corporation
B) shell corporation
C) multinational corporation
D) domestic corporation
7) The rise of a new international entity called the ________ suggests that any company,
A) transnational corporation
B) multinational corporation
C) born global firm
D) global firm
Answer: C
AACSB: Application of knowledge
Skill: Concept
Difficulty: Easy
LO: 1.1: Identify the types of companies active in international business.
8) Which of the following is NOT a likely reason to study international business?
A) Global events affect almost all companies.
B) Differences among countries in physical, social, and competitive conditions may cause
companies to alter their operating methods from country to country.
C) Business conducted outside the limits of any one country is inexplicably on the decline.
D) Firms may be better able to obtain better or less expensive resources by operating
internationally.
9) ________ is an effective alternative to traditional distribution channels for firms that sell
digitized products.
A) Dual licensing
B) Electronic distribution
C) Visual merchandising
D) Digital switchover
10) The widening set of interdependent relationships among people from different parts of the
world is known as ________.
A) globalization
B) offshoring
C) franchising
D) outsourcing
11) Globalization is characterized by ________.
A) the demise of democracy within a nation
B) national boundaries becoming less relevant
C) the fortification of trade barriers
D) rigid foreign relations policies
12) As a result of globalization, Argonia finds that its national borders are becoming less
relevant. This indicates that Argonia is undergoing ________.
A) denationalization
B) standardization
C) reorganization
D) internationalization
13) The term ________ refers to entities cooperating across national boundaries.
A) internationalization
B) supranationalism
C) denationalization
D) multiculturalism
14) Most companies today operate in an environment of increased transparency and scrutiny
regarding their business activities. This is due to ________.
A) the rise of the social media
B) the prosperity of developing nations
C) the heterogeneity in markets
D) labor market flexibility in developing nations
15) The value of all goods and services produced by a country's domestic and international
activities over a one-year period is the country's ________.
A) gross domestic product (GDP)
B) gross world product (GWP)
C) gross national product (GNP)
D) gross state product (GSP)
16) Topsy Turvey Toys buying its merchandise from Ureshi Toys is an example of ________.
A) importing
B) exporting
C) outsourcing
D) insourcing
17) Ureshi Toys selling its products to Topsy Turvey Toys is an example of ________.
A) outsourcing
B) insourcing
C) exporting
D) importing
18) The products that Ureshi Toys manufactures are examples of ________.
A) global products
B) niche products
C) intangible products
D) customized products
19) Ureshi Toys is an example of a(n) ________.
A) domestic company
B) multinational company
C) direct importer
D) shell corporation
20) Upon what assumption does Donna's conclusion rest? Donne assumes that ________.
A) there are no factors other than globalization which influence the economic conditions of a
country
B) the welfare of individuals matters less than the economic prosperity of a nation
C) globalization does not affect the employment rate of developed and developing countries
D) the wages paid to all individuals within developed countries are equal
21) International business includes all commercial transactions between two or more countries.
22) Imports are goods and services purchased abroad and brought into a country.
23) Multinational corporations (MNCs) have direct investments abroad in multiple countries.
24) Gaining some understanding of international business is important for any business student
because global events and competition affect almost all companies.
25) Extranets give distributors and suppliers access to a company's database to place orders or
restock inventories electronically.
26) Summarize each benefit a company might obtain from the globalization of markets.
27) Describe key characteristics of a born global firm, and explain why a born global firm would
be attuned to international firm management.
28) The widening set of interdependent relationships among people from different parts of the
world is known as ________.
A) globalization
B) offshoring
C) franchising
D) outsourcing
29) Which of the following refers to the use of computer networks to purchase, sell, or exchange
products; service customers; and collaborate with partners?
A) e-commerce
B) telecommuting
C) data virtualization
D) virtual hosting
30) Gentian Violet is a dye manufacturing company that uses computer networks to sell its
products, service customers, and collaborate with partners. Which of the following technologies
is the company engaging in this scenario?
A) rapid prototyping
B) e-business
C) simulation
D) console automation
31) Development that meets the needs of the present without compromising the ability of future
generations to meet their own needs indicates ________.
A) egalitarianism
B) denationalization
C) generalizability
D) sustainability
32) An established consumer market that primarily comprises the middle class and possesses
efficient infrastructure is characteristic of ________ markets.
A) emerging
B) frontier
C) traditional
D) developed
33) ________ markets are characterized by the rural population migrating to cities for better pay
and thus, overloading cities' infrastructures.
A) Traditional
B) Emerging
C) Virtual
D) Developed
34) Konesia is a country in which rising incomes are increasing the global demand for basic
products and services. Which of the following is the type of market featured in this country?
A) traditional market
B) emerging market
C) feudal market
D) virtual market
35) The population of a(n) ________ market is mostly rural and is characterized by poor
infrastructure with little credit or collateral.
A) emerging
B) traditional
C) developed
D) virtual
36) Kireki is a small country with a corrupt government. Its population is rural for most part and
citizens have few or no legal rights. Which of the following is the type of market featured in
Kireki?
A) developed market
B) traditional market
C) emerging market
D) virtual market
37) ________ is defined as the dispersal of production activities to locations that help a company
achieve its cost-minimization or quality-maximization objectives for a good or service.
A) Global offering
B) Globalization of production
C) Global governance
D) Globalization of markets
38) Which of the following has NOT been a major force increasing globalization in recent
decades?
A) liberalization of cross-border trade
B) increase in and expansion of technology
C) growing pressure from consumers
D) decreasing prices of natural resources
39) Whereas relocating production to low-cost locales traditionally meant production of goods
almost exclusively, it increasingly applies to the production of ________.
A) domestic products
B) perishables
C) services
D) global brands
40) Crystal Inc. is a multifaceted company that deals with the mining, cutting, and selling of
diamonds. It gives distributors and suppliers access to its database to place orders or restock
inventories electronically and automatically. Which of the following is the network implemented
in the company?
A) intranet
B) chaosnet
C) extranet
D) ethernet
41) Jeans Unlimited manufactures its clothing at facilities located in two Southeast Asian
countries. The dispersal of manufacturing activities by the company indicates ________.
A) customization of products
B) niche marketing
C) globalization of markets
D) globalization of production
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42) Which of the following statements would most likely be made by a SUPPORTER of
globalization?
A) Globalization encourages the adoption of uniform and superior standards for combating
environmental problems.
B) Economic growth created by globalization is largely in services, which involves the use of
few nonrenewable resources.
C) Global competition discourages resource-saving technologies, which are costly.
D) Air pollution and toxic runoff problems increase with global economic growth.
43) The term "globalization of production" refers to convergence in buyer preferences in markets
around the world.
44) The recent expansion of technology has contributed to the growth in international business
by creating new products that are important in world trade.
45) How might a company benefit from the globalization of production?
46) Explain how technological innovation has benefited entrepreneurs.
47) Explain globalization of production and its benefits. Why should a company study
international firm management if its leadership commits to globalization of production?
