Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
Test Bank
Chapter 4: Country Selection and Entry Strategies
1. An economy in which most economic decisions are made in the marketplace is known as a
______.
a. market economy
b. planned economy
c. command economy
d. mixed economy
e. stabilized economy
2. A central authority makes all key economic decisions in a ______.
a. market economy
b. planned economy
c. command economy
d. mixed economy
e. stabilized economy
3. An example of a country with a strong command economy is ______.
a. United States
b. England
c. Canada
d. Germany
e. Cuba
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
4. An extreme form of socialism is ______.
a. capitalism
b. command socialism
c. market behaviorism
d. communism
e. isolationism
5. When the marketplace guides part of an economic system and the government runs the other
part, this is called a ______.
a. moderate economy
b. mixed economy
c. planned economy
d. fixed economy
e. stabilized economy
6. In a mixed economy, the government usually does not oversee ______.
a. defense
b. education
c. road building and repair
d. fire protection
e. cultural customs
7. The amount of goods and services that producers will provide at various prices is ______.
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
a. supply
b. demand
c. price
d. quantity
e. quality
8. Which of the following is a stage in Rostow’s stages of development?
a. traditional
b. newly formed
c. regional power
d. economic leader
e. postmodern
9. Which of the following is a BRIC country?
a. Chile
b. China
c. Chad
d. Colombia
e. Cambodia
10. An underdeveloped country may also be referred to as ______.
a. traditional
b. industrialized
c. newly industrialized
d. sustenance
e. nationalized
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
11. In which stage of Rostow’s model do manufacturing industries grow rapidly, and airports,
roads and railways are built?
a. traditional
b. preconditions for take-off
c. take-off
d. the drive to maturity
e. mass consumption
12. South Korea, Taiwan, Hong Kong, and Singapore are referred to as ______.
a. Four Giants
b. Four Lions
c. Four Leaders
d. Four Tigers
e. Four Bears
13. Older consumers who remain resistant to foreign goods after a conversion from communism
suffer from what is known as ______.
a. ethnocentric fatigue
b. transition fatigue
c. socialist fatigue
d. regiocentric fatigue
e. economic fatigue
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
14. In which stage of Rostow’s model does rapid expansion of tertiary, third-wave support
industries occur alongside a decline in manufacturing?
a. traditional
b. preconditions for take-off
c. take-off
d. drive to maturity
e. mass consumption
15. Which feature of transition economies is described by prices being set by supply and demand
and removal of trade barriers?
a. privatization
b. liberalization
c. budget reform
d. maturation
e. stabilization
16. Which of the following factors generate national competitive advantage according to Michael
Porter’s theory?
a. firm strategy, structure, and rivalry
b. climate conditions
c. international economics
d. firm age
e. firm size
17. The theory of national competitive advantage was introduced by ______.
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
a. Michael Porter
b. Michael Foster
c. Jonathan Dunning
d. Theodore Levitt
e. Sidney Arenas
18. A strong scientific community represents which of the following factors in the theory of
national competitive advantage?
a. demand conditions
b. related and supporting industries
c. factor conditions
d. government
e. supply conditions
19. Which has occurred in what were formerly communist countries as they moved to free
markets?
a. industrialization
b. commercialization
c. transition economy
d. fragmented economy
e. moderation in economic growth
20. Which of the following is NOT one of Porter’s Five Competitive Forces?
a. threat of new entrants
b. threat of substitute products
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
c. bargaining power of suppliers
d. rivalry among competitors
e. threat of governmental actions
21. If a technology can be easily copied without violating any laws, which exists?
a. threat of new entrants
b. threat of substitute products
c. bargaining power of suppliers
d. rivalry among competitors
e. bargaining power of consumers
22. When Korean Airlines focused on differentiating through the speed and convenience of its
service, it was responding to which competitive force?
a. threat of new entrants
b. threat of substitute products
c. bargaining power of suppliers
d. rivalry among competitors
e. threat of governmental actions
23. Consumer price sensitivity leads to increased ______.
a. threat of new entrants
b. threat of substitute products
c. bargaining power of suppliers
d. rivalry among competitors
e. threat of governmental actions
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
24. When a banking organization sees the potential to become nationalized, it experiences
______.
a. threat of new entrants
b. threat of substitute products
c. bargaining power of suppliers
d. rivalry among competitors
e. threat of governmental action
25. Which of the following cultural factors emphasizes purchasing new and better goods and
services?
a. patriotism
b. nationalism
c. discrimination
d. materialism
e. frugality
26. Sustainability challenges are highlighted in the trade of virtual ______.
a. plants
b. web space
c. water
d. oxygen
e. ingredients
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
27. With regard to sustainability, one of the biggest challenges facing international marketers as
more countries develop economically is ______.
a. how to get products into consumers’ hands
b. how to set price levels in the face of economic uncertainty
c. how to advertise products internationally with a consistent message
d. how to balance economic growth with environmental protection
e. how to enter free trade areas
28. Which of the following entry modes has the lowest risk but offers the lowest level of control
for the international marketer?
a. exporting
b. licensing
c. wholly owned subsidiaries
d. joint ventures
e. strategic alliances
29. Which of the following entry modes can be accomplished through direct sales and use of an
intermediary?
a. exporting
b. licensing
c. wholly owned subsidiaries
d. joint ventures
e. strategic alliances
30. Which type of reseller buys and resells products?
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
a. merchant
b. exchange
c. company wholesale
d. joint enterprise
e. none of the above
31. McDonald’s and KFC are well known for which type of activity worldwide?
a. joint venture
b. strategic alliance
c. licensing
d. franchise
e. distribution
32. A legal partnership that involves investment, a division of ownership, and the creation of a
new legal entity is a ______.
a. strategic partnership
b. joint venture
c. joint enterprise
d. cooperative alliance
e. cooperative venture
33. The Quantas American Express Classic Card is an example of a ______.
a. strategic partnership
b. joint venture
c. joint enterprise
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
d. cooperative alliance
e. cooperative venture
34. A greenfield investment is a type of ______.
a. strategic partnership
b. joint venture
c. joint enterprise
d. wholly owned subsidiary
e. cooperative venture
35. Which grants the exporting company the greatest degree of control?
a. strategic partnership
b. cooperative venture
c. joint enterprise
d. wholly owned subsidiary
e. joint venture
36. What is the primary advantage of a wholly owned subsidiary?
a. shared risk
b. shared investment
c. control
d. diversification
e. acquisition equity
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
37. What is a fundamental difference between a strategic alliance and a joint venture?
a. Ideas are not shared in a strategic alliance.
b. A separate legal entity is not created in a joint venture.
c. A separate legal entity is not created in a strategic alliance.
d. Resource sharing does not take place in a strategic alliance.
e. Joint ventures are not allowed in several European countries while strategic alliances are.
38. Which is a formal agreement between two companies to work together toward a common
goal?
a. joint alliance
b. strategic alliance
c. joint venture
d. strategic venture
e. none of the above
39. Which of the following is NOT a category of joint ventures?
a. majority owned
b. minority owned
c. subsidiary owned
d. equal split of ownership
e. divided ownership
40. When textbook publishers grant rights to companies to reprint books and sell them in foreign
countries, it is ______.
a. franchising
Instructor Resource
Baack et al., International Marketing, 2e
SAGE Publishing, 2019
b. cooperative contracts
c. licensing
d. wholly owned subsidiaries
e. none of the above
41. Internationalization Theory is closely related to which school?
a. Oxford
b. Blanley
c. Windem
d. Hardman
e. Uppsala
42. According to Internationalization Theory, companies go through each of the following stages
when becoming global EXCEPT ______.
a. no regular export activities
b. export via independent representatives
c. establishment of an overseas sales subsidiary
d. establishment of merchant exchange agreements
e. foreign production
43. Which plays a primary role in country selection under Internationalization Theory?
a. governmental contacts
b. psychic distance
c. trade restrictions
d. global relations