Package Title: Chapter 17, Testbank
Course Title: Schermerhorn, Exploring 5e
Chapter Number: 17
Question type: Multiple Choice
1) ________ is the process of growing interdependence among elements of the global economy.
a) Nationalization
b) Industrialism
c) Globalization
d) Internationalism
2) The creation of domestic jobs by foreign employers is called ________.
a) insourcing
b) outsourcing
c) international operation
d) strategic alliance
3) A(n) ________ economy is one in which resources, markets, and competition are worldwide
in scope.
a) foreign
b) domestic
c) outsourced
d) global
4) A company that conducts business across national boundaries is called a(n) ________.
a) global industry
b) international business
c) trade association
d) conglomerate
5) ABC Manufacturers conducts commercial transactions across national boundaries. ABC
Manufacturers would be classified as a(n) ________.
a) large business
b) franchise
c) international business
d) foreign licensed company
6) The reasons why businesses go global include all of the following EXCEPT:
a) Expanding profit potential
b) Gaining access to more customers
c) Reducing access to capital
d) Lowering the cost of materials and supplies
7) ________ takes advantage of international wage gaps by contracting for low-cost goods and
services in foreign locations.
a) Insourcing
b) Exporting
c) Global sourcing
d) Reshoring
8) A ________ is a network of a firm’s outsourcing suppliers and contractors.
a) franchise
b) global supply chain
c) joint venture
d) partnership
9) ________ moves foreign production and jobs back to domestic locations.
a) Outsourcing
b) Insourcing
c) Reshoring
d) Offshoring
10) Which of the following terms is used to describe the selling of locally made products in
foreign markets?
a) Importing
b) Greenfield venturing
c) Outsourcing
d) Exporting
11) ABC Manufacturing, a company based in the United States, buys products from China and
sells them in U.S. markets. This practice refers to ________.
a) importing
b) insourcing
c) exporting
d) franchising
12) Businesses go global for all of the following reasons EXCEPT:
a) To minimize domestic customers
b) To increase profits through expanded operations
c) To increase access to low-cost, talented workers
d) To increase access to products, services, and materials
13) Which of the following is a direct investment strategy?
a) Global sourcing
b) Joint ventures
c) Exporting
d) Licensing
14) Anna has purchased the rights to make and sell another company’s products. Which of the
following market entry approaches to international business has Anna used?
a) Exporting
b) Importing
c) Franchising
d) Licensing
15) Global sourcing primarily involves ________.
a) exporting products for sale
b) purchasing materials, manufacturing, or services from around the world for local use
c) selling a foreign firm the right to make your products
d) building a plant to produce goods for sale in foreign countries
16) When a firm grants licenses internationally, it is giving foreign companies access to its
________.
a) technologies, patents, or trademarks
b) facility designs and equipment
c) product ingredients
d) management systems
17) One of the business risks of licensing is ________.
a) corruption
b) franchising
c) counterfeiting
d) terrorism
18) When a firm grants franchising rights to a foreign firm, it is giving the foreign firm access to
its ________.
a) unique manufacturing technology
b) special patent
c) trademark
d) management systems
19) The payment of a fee to use another firm’s name and operating methods is called ________.
a) licensing
b) franchising
c) importing
d) leasing
20) Which of the following operates through co-ownership with local partners?
a) Franchise
b) Wholly owned subsidiary
c) Joint venture
d) Licensed venture
21) ABC Co. wants to market their products in Brazil. Armed with the design and manufacturing
capability, ABC looks for a company with the distribution channels and knowledge of the
Brazilian culture necessary to market their products. After conducting research, ABC decides to
form a partnership with XYZ Inc. in Brazil. The company will be jointly owned and operated. In
this scenario, ABC Co. forms a(n) ________ with XYZ Inc.
a) franchise
b) joint venture
c) licensing agreement
d) operating subsidiary
22) A joint venture arrangement usually involves all of the following EXCEPT:
a) Pooling resources
b) Sharing risks
c) Jointly operating the venture
d) One firm buying out the other firm
23) A ________ establishes a foreign subsidiary by building an entirely new operation in a
foreign country.
a) joint venture
b) strategic alliance
c) greenfield venture
d) franchise
24) International joint ventures are types of ________ in which foreign and domestic partners
cooperate for mutual gains.
a) foreign subsidiaries
b) global strategic alliances
c) greenfield ventures
d) global sourcing
25) A ________ is a local operation completely owned by a foreign firm.
a) foreign partnership
b) franchise
c) foreign subsidiary
d) licensee
26) The ________ is a global institution established to promote free trade and open markets
around the world.
a) International Monetary Fund
b) World Bank
c) World Trade Organization
d) U.S. Chamber of Commerce
27) If Japan receives the most favorable treatment for imports and exports with other countries,
Japan will be said to have a(n) ________ status.
a) international
b) outsourced
c) greenfield venture
d) most favored nation
28) When an American business gets being mistreated in a foreign country, the U.S. government
can help by appealing to the ________.
a) European Union
b) World Trade Organization
c) World Bank
d) United Nations
29) If Brazil applies for tariffs and favorable treatment for protecting local firms from foreign
competition, it will be known as ________.
a) idealism
b) internationalism
c) globalism
d) protectionism
30) Which of the following is a nontariff barrier that discourages imports?
a) Taxes
b) Ad valorem duty
c) Quotas
d) Customs duty
31) The ________ creates a trade zone that frees the flows of goods and services, workers, and
investments among the United States, Canada, and Mexico.
a) Asia-Pacific Economic Cooperation
b) North American Free Trade Agreement
c) Central America Free Trade Agreement
d) Southern United States Trade Association
32) The ________ is both a regional economic and political alliance.
a) European Union
b) World Trade Organization
c) Asia-Pacific Economic Cooperation
d) Southern Africa Development Community
33) The European Union has ________ members.
a) 25
b) 28
c) 30
d) 35
34) The ________ links 14 southern African countries in trade and economic development
efforts to improve prosperity and living standards for their citizens.
a) African Union
b) Southern African Customs Union
c) Trade Union Council of South Africa
d) Southern Africa Development Community
35) A ________ has extensive international business dealings in many foreign countries.
a) conglomerate
b) wholly owned subsidiary
c) partnership
d) multinational corporation
36) When large global firms gain disproportionately from the global economy versus smaller
firms, it creates a ________.
a) most favored nations status
b) currency risk
c) nontariff barrier
d) globalization gap
37) All of the following are MNC complaints about host countries EXCEPT:
a) Profit transfer limitations
b) Overpriced local resources
c) Below–cost prices
d) Restrictive government rules