Test 1

Question 1

As a result of globalization, we have been moving toward a world in which national
economies are relatively self-contained entities.

Answer 1

false

Question 2

2) As a result of globalization, companies rarely need to customize marketing strategies,
product features, and operating practices in different countries.

Answer 2

false

Question 3

3) The World Trade Organization, the International Monetary Fund and its sister
institution the World Bank, and the United Nations were all created by voluntary
agreement between individual nation-states.

Answer 3

True

Question 4

4) After World War II, the advanced industrial nations of the West committed themselves
to increasing barriers to the free flow of goods, services, and capital between nations.

Answer 4

false

Question 5

5) The lowering of trade and investment barriers allows firms to base production at the
optimal location for that activity.

Answer 5

true

Question 6

6) In recent years, the economies of the world’s nation-states have become less intertwined
as a result of international trade

Answer 6

False

Question 7

7) The globalization of markets and production and the resulting growth of world trade,
foreign direct investment, and imports all imply that firms are finding it easier to protect
themselves from attack by foreign competitors.

Answer 7

False

Question 8

8) A multinational enterprise (MNE) is any business that exports goods or services to
consumers in another country.

Answer 8

false

Question 9

9) Containerization has revolutionized the transportation business, significantly lowering
the costs of shipping goods over long distances

Answer 9

True

Question 10

10) Despite all the talk about the emerging global village, differences between countries,
such as differences in cultures and political systems, can be very profound and
enduring

Answer 10

True

Question 11

11) What is the shift toward a more integrated and interdependent world economy called? A) foreign direct investment
B) international trade
C) containerization
D) Moore’s Law
E) globalization

Answer 11

Globalization

Question 12

12) Which of the following refers to the sourcing of goods and services from locations
around the globe to take advantage of national differences in the cost and quality of
factors such as labor, energy, land, and capital?
A) globalization of markets
B) industrialization of markets
C) globalization of production
D) dispersal of production
E) containerization of production

Answer 12

Globalization of production

Question 13

13) Why was the World Bank set up?
A) to promote economic development
B) to preserve peace through international cooperation
C) to formulate a coordinated policy response to financial crises
D) to police the world trading system
E) to maintain order in the international monetary system

Answer 13

to promote economic development

Question 14

14) Which of the following is a macro factor underlying the trend toward greater
globalization?
A) dramatic developments in information processing and other technologies
B) rise of communism across the globe
C) increase in trade regulations across the globe
D) increase in diversity in consumer tastes and preferences
E) increase in nationalization of private organizations

Answer 14

dramatic developments in information processing and other technologies

Question 15

15) For foreign direct investment (FDI) to occur, a firm should primarily
A) conduct cross-border bartering with neighboring countries.
B) invest resources in business activities outside its home country.
C) erect formidable barriers to international trade.
D) export goods or services to consumers in another country.
E) import goods or services from producers in another country.

Answer 15

invest resources in business activities outside its home country

Question 16

16) Due to the changing economic geography, many of tomorrow’s economic opportunities
are most likely to be found in the
A) centrally planned economies of the communist world.
B) developing nations of the world such as China, India, and Brazil.
C) rich industrialized nations of the world like Great Britain and Germany.
D) United States.
E) countries that are currently not members of the World Trade Organization.

Answer 16

developing nations of the world such as China, India, and Brazil.

Question 17

17) In the past two decades, the majority of Latin American countries have
A) restricted investment by foreign firms.
B) been characterized by low growth, high debt, and hyperinflation.
C) discouraged both democracy and free market reforms.
D) experienced a decline in the health of their economies.
E) sold state-owned enterprises to private investors.

Answer 17

sold state-owned enterprises to private investors.

Question 18

18) An argument in support of the falling barriers to international trade and investment is
that the falling barriers
A) reduce the need to export jobs overseas.
B) drive the global economy toward greater prosperity.
C) reduce attacks from foreign competitors.
D) prohibit countries from specializing in the production of goods and services.
E) increase the bargaining power of business firms by decreasing the incomes of
consumers

Answer 18

drive the global economy toward greater prosperity.

Question 19

19) The North American Free Trade Agreement (NAFTA) was formed in 1994 among
A) Canada, Argentina, and Mexico.
B) Uruguay, Colombia, and Costa Rica.
C) the United States, Brazil, and Argentina.
D) Canada, Mexico, and the United States.
E) Colombia, Venezuela, and Brazil.

Answer 19

Canada, Mexico, and the United States.

Question 20

20) A concern voiced by critics of globalization is that today’s increasingly interdependent
global economy shifts economic power toward
A) nations that have authoritarian forms of government.
B) supranational organizations such as the World Trade Organization.
C) the communist states of eastern Europe and central Asia.
D) the medium-size and small U.S. multinationals.
E) the national governments of the countries participating in globalization.

Answer 20

supranational organizations such as the World Trade Organization.

Question 21

21) The term political economy is used to stress the fact that the political, economic, and
legal systems of a country are independent of each other.

Answer 21

False

Question 22

22) Political systems that emphasize collectivism tend to be democratic, while political
systems that place a high value on individualism tend to be totalitarian.

Answer 22

False

Question 23

23) By the mid-1990s, communism was rising worldwide.

Answer 23

False

Question 24

24) The Cold War was in many respects a war between collectivism, championed by the
former Soviet Union, and individualism, championed by the United States.

Answer 24

True

Question 25

25) In a totalitarian country, all the constitutional guarantees on which representative democracies are built—an individual's right to freedom of expression and organization, a free media, and regular elections—are denied to the citizens.

Answer 25

True

Question 26

26) The governments of China, Vietnam, and Laos are communist in name only because those nations have adopted wide-ranging, market-based economic reforms.

Answer 26

True

Question 27

27) Judges under a civil law system have less flexibility than those under a common law system.

Answer 27

True

Question 28

28) Compared to a common law system, it is more expensive to draw up contracts in a civil law jurisdiction

Answer 28

False

Question 29

29) The term patent refers to the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit.

Answer 29

False

Question 30

30) By adopting the Contracts for the International Sale of Goods (CIGS), a nation signals to other adopters that it will treat the convention's rules as part of its law.

Answer 30

True

Question 31

31) Which of the following systems is a part of the political economy? A) legal system B) technological system C) religious system D) demographic system E) value system

Answer 31

legal system

Question 32

32) Which of the following was advocated by Karl Marx? A) socialism B) individualism C) selling state-owned enterprises to private investors D) capitalist society E) private profit over public good

Answer 32

socialism

Question 33

33) In the early twentieth century, the socialist ideology split into two broad camps and the people who believed that socialism could be achieved only through violent revolution and totalitarian dictatorship were referred to as A) anarchists. B) communists. C) capitalists. D) individualists. E) democrats.

Answer 33

communists

Question 34

34) Those who attempt to achieve the same ideologies as that of the communists without violent revolution and totalitarian dictatorship are called A) individualists. B) pure capitalists. C) anarchists. D) aristocrats. E) social democrats

Answer 34

social democrats

Question 35

35) The sale of state-owned enterprises to independent, nonpublic investors is referred to as A) privatization. B) nationalization. C) communalism. D) public action. E) collectivism.

Answer 35

privatization

Question 36

36) Democracy, in its purest form, is based on the belief that A) citizens should be directly involved in decision making. B) political freedom of the citizens should be limited. C) individual freedom in the economic sphere should be restricted. D) one person should have an absolute control over all the citizens of a nation. E) citizens are responsible for their own economic health and thus need no government.

Answer 36

citizens should be directly involved in decision making.

Question 37

37) States that limit the freedom of religious expression with laws based on religious principles most likely follow the political system of A) right-wing totalitarianism. B) representative democracy. C) communist totalitarianism. D) pure democracy. E) theocratic totalitarianism.

Answer 37

theocratic totalitarianism.

Question 38

38) Which of the following refers to an economic system in which the interaction of supply and demand determines the quantity in which goods and services are produced? A) regulated B) centrally planned C) command D) market E) barter

Answer 38

market

Question 39

39) In what type of economy are certain sectors of the economy left to private ownership and free market mechanisms, while in other sectors there is significant state ownership and government planning? A) laissez-faire B) mixed C) command D) centrally planned E) pure market

Answer 39

mixed

Question 40

40) Which of the following legal systems is most likely to be based on tradition, precedent, 40) and custom? A) universal law B) autocracy law C) monarchy law D) common law E) civil law

Answer 40

common law

Question 41

41) The purchasing power parity for different countries is adjusted (up or down) depending upon whether a country's cost of living is lower or higher than the cost of living in the United States.

Answer 41

True

Question 42

42) Although countries such as China and India are currently relatively poor, their economies are already large in absolute terms and growing more rapidly than those of many advanced nations.

Answer 42

True

Question 43

43) Entrepreneurial individuals have fewer economic incentives to develop valuable new innovations in market economies than in planned economies.

Answer 43

False

Question 44

44) Five of the fastest growing economies of the past 30 years—China, South Korea, Taiwan, Singapore, and Hong Kong—had one thing in common at the start of their economic growth: democratic governments.

Answer 44

False

Question 45

45) During the late 1980s and early 1990s, totalitarian governments collapsed and were replaced by democratically elected governments.

Answer 45

True

Question 46

46) In Amartya Sen's view, development is solely an economic process, and not a political process.

Answer 46

False

Question 47

47) In Samuel Huntington's thesis, global terrorism is a product of the tension between civilizations and the clash of value systems and ideology.

Answer 47

True

Question 48

48) In general, command and mixed economies failed to deliver the kind of sustained economic performance that was achieved by countries adopting market-based systems.

Answer 48

True

Question 49

49) Economic freedom does not necessarily equate with political freedom.

Answer 49

True

Question 50

50) Social unrest and disorder are less likely to be found in countries that contain more than one ethnic nationality.

Answer 50

False

Question 51

51) In the context of political economy, the past three decades have seen a general move toward A) command-based economic reforms. B) autocratic forms of government. C) military parties monopolizing political power worldwide. D) adoption of legal systems that better enforce property rights. E) an environment which is unfavorable for international business.

Answer 51

adoption of legal systems that better enforce property rights.

Question 52

52) One common measure of economic development is a country's A) gross national income. B) gender ratio. C) infant mortality rate. D) population density. E) total geographical area.

Answer 52

gross national income

Question 53

You can adjust GNI per capita by purchasing power to account for differences in the A) cost of living. B) factor endowments. C) geographical area. D) population density. E) labor productivity.

Answer 53

cost of living

Question 54

54) Which of the following is based on three measures: life expectancy at birth, educational attainment, and average incomes based on PPP estimates? A) Cost of Living Index B) Gross National Income C) Gross Domestic Product D) Human Development Index E) Cash Reserve Ratio

Answer 54

Human Development Index

Question 55

55) Which of the following is broadly defined as the development of new products, processes, organizations, management practices, and strategies? A) privatization B) economic deregulation C) innovation D) boundary spanning E) benchmarking

Answer 55

innovation

Question 56

56) People in the West tend to associate which of the following with a free market system, strong property rights protection, and economic progress? A) representative democracy B) command economy C) anarchist state D) planned economy E) communist state

Answer 56

representative democracy

Question 57

57) During the late 1980s and early 1990s, many of the world's nation-states moved away from A) individualism. B) totalitarian governments. C) democratically elected governments. D) free market capitalism. E) political and civil freedoms.

Answer 57

totalitarian governments

Question 58

58) Economic advances in many countries have led to the A) emergence of increasingly prosperous middle and working classes. B) decline of middle and working classes. C) emergence of closed and self-contained societies. D) rise of totalitarian reforms. E) decline of property rights.

Answer 58

emergence of increasingly prosperous middle and working classes

Question 59

59) The collapse of communism will result in the new world order that will be dominated by a universal civilization characterized by democratic regimes and free market capitalism, according to A) Samuel Huntington. B) Francis Fukuyama. C) Adam Smith. D) Jeffrey Sachs. E) Amartya Sen.

Answer 59

Francis Fukuyama

Question 60

60) In the context of global economy, which of the following has been widely accepted since the late 1980s? A) centrally planned command economy B) deregulation of economies C) mixed economy D) authoritarian regime E) nationalization of private property

Answer 60

deregulation of economies

Question 61

61) Values provide the context within which a society's norms are established and justified.

Answer 61

True

Question 62

62) The emphasis on individualism results in a low degree of managerial mobility between companies.

Answer 62

false

Question 63

63) The least rigid system of social stratification is a caste system.

Answer 63

False

Question 64

64) Like Christianity and Judaism, Islam is a monotheistic religion.

Answer 64

True

Question 65

65) Under the Islamic banking method of mudarabah, when an Islamic bank lends money to a business, rather than charging that business interest on the loan, it takes a share in the profits that are derived from the investment.

Answer 65

True

Question 66

66) The concept of mobility between castes within an individual's lifetime makes no sense to traditional Hindus.

Answer 66

True

Question 67

67) Confucianism is not concerned with the supernatural and has little to say about the concept of a supreme being or an afterlife.

Answer 67

True

Question 68

68) According to Geert Hofstede, high power distance cultures were found in societies that tried to play down inequalities of power and wealth as much as possible.

Answer 68

False

Question 69

69) The emphasis on individualism may make it difficult to build teams within an organization to perform collective tasks.

Answer 69

True

Question 70

70) It is easier for companies based in countries with a high degree of class consciousness to establish a competitive advantage in the global economy.

Answer 70

False

Question 71

71) Which of the following means an understanding of how cultural differences across and within nations can affect the way business is practiced? A) gerrymandering B) cross-cultural literacy C) cultural lag D) first-mover advantage E) demographics

Answer 71

cross-cultural literacy

Question 72

72) In a social context, the term values is used to describe the A) social rules and guidelines about the appropriate behavior in public. B) abstract ideas about what a group believes to be good, right, and desirable. C) political ascendancy of a country. D) economic benefits that are inherent to a culture. E) collective wealth of the society.

Answer 72

abstract ideas about what a group believes to be good, right, and desirable

Question 73

3) In a society, actions of people directed toward one another are governed by a set of social rules called A) norms. B) scriptures. C) dialects. D) manifestoes. E) structures

Answer 73

norms

Question 74

74) Which of the following is a dimension of social structure that is considered particularly important when explaining differences between cultures? A) extent to which work is viewed as more important than family B) degree to which a society supports multiple subcultures C) dominant race and the gender in the society D) average income of the people who belong to a particular culture E) degree to which the society is stratified into classes or castes

Answer 74

degree to which the society is stratified into classes or castes

Question 75

75) Which of the following is an ethical system that has influenced behavior and shaped culture in parts of Asia and is not considered a religion? A) Christianity B) Hinduism C) Buddhism D) Islam E) Confucianism

Answer 75

Confucianism

Question 76

76) In 1904, who theorized that there was a relationship between Protestantism and the emergence of modern capitalism? A) Abraham Maslow B) Max Weber C) Karl Marx D) Adam Smith E) Alfred Schmidt

Answer 76

Max Weber

Question 77

77) Which of the following is a religion that prohibits the payment or receipt of interest, as it is considered to be usury? A) Christianity B) Buddhism C) Islam D) Hinduism E) Confucianism

Answer 77

Islam

Question 78

78) Which of the following is the most widely spoken language in the world, and is increasingly becoming the language of international business? A) French B) Spanish C) German D) Chinese E) English

Answer 78

English

Question 79

79) Which of the following is an aspect of nonverbal communication? A) personal space B) speech tone C) punctuation D) grammar E) voice modulation

Answer 79

Personal space

Question 80

80) Who initially isolated four dimensions—power distance, uncertainty avoidance, individualism versus collectivism, and masculinity versus femininity—that he claimed summarized different cultures? A) Max Weber B) Michael Porter C) Geert Hofstede D) Abraham Maslow E) B. F. Skinner

Answer 80

Geert Hofstede

Question 81

81) The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.

Answer 81

True

Question 82

82) Many of the ethical issues in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation.

Answer 82

True

Question 83

83) Leon Sullivan argued that it was ethically justified for Western businesses to operate in South Africa so long as the companies obeyed the apartheid laws.

Answer 83

False

Question 84

84) The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member-states and other signatories to make the bribery of foreign public officials a criminal offense.

Answer 84

True

Question 85

85) According to Friedman's doctrine, the only social responsibility of business is to increase profits, so long as the company stays within the rules of law

Answer 85

True

Question 86

86) According to the utilitarian approach, the action that produces the greatest good for the greatest number of people can result in the unjustified treatment of a minority.

Answer 86

True

Question 87

87) According to the concept of cultural relativism, a firm, while operating in any host country, should adopt the ethics of the culture that is predominant in its home country.

Answer 87

false

Question 88

88) John Rawls's veil of ignorance is a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas.

Answer 88

True

Question 89

89) Business leaders should use every relevant opportunity to stress the importance of business ethics and make sure that key business decisions not only make good economic sense but also are ethical.

Answer 89

True

Question 90

90) Ethics officers act as an internal ombudsperson with responsibility for handling confidential inquiries from employees.

Answer 90

true

Question 91

91) Which of the following refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization? A) mission B) vision C) strategy D) ethics E) goodwill

Answer 91

Ethics

Question 92

92) Ten years after he proposed what came to be known as Sullivan's principles, Leon Sullivan concluded that following his principles A) would safeguard the citizens and businesses in South Africa from Western businesses. B) was not sufficient to ethically justify the existence of Western businesses in South Africa. C) was the most ethical way of doing business in South Africa. D) would be effective only when companies opposed democracy in South Africa. E) had led international companies to successfully combat the apartheid regime in South Africa

Answer 92

was not sufficient to ethically justify the existence of Western businesses in South

Question 93

93) The term global commons refers to A) a group of nations that share similar ideologies on globalization. B) social norms and values that are common across the globe. C) arrangements, like common currencies, between countries to simplify international trading. D) common laws to be obeyed by companies involved in international business. E) natural resources from which everyone benefits but for which no one is specifically responsible.

Answer 93

natural resources from which everyone benefits but for which no one is specifically responsible.

Question 94

94) Which of the following refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and social consequences? A) corporate dissonance B) corporate dynamism C) tragedy of the commons D) corporate social responsibility E) economies of scale

Answer 94

corporate social responsibility

Question 95

95) Which of the following is a straw man approach to business ethics? A) Kantian ethics B) Sullivan's principles C) Just distribution D) Friedman doctrine E) Utilitarian philosophy

Answer 95

Friedman doctrine

Question 96

A righteous moralist is most likely to claim that A) a firm should adopt the ethics of the culture in which it is operating. B) a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. C) people should be treated as ends and never purely as means to the ends of others. D) inequalities are justified if they benefit the position of the least-advantaged person. E) human beings have fundamental rights and privileges that transcend national boundaries and cultures.

Answer 96

a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

Question 97

97) The utilitarian philosophy for business ethics primarily focuses on A) adopting the ethics of the culture in which a business operates. B) maximizing business profits by increasing employee productivity. C) applying home-country standards of ethics in foreign countries. D) ensuring justified treatment of any minority. E) weighing the benefits, costs, and risks associated with a course of action.

Answer 97

weighing the benefits, costs, and risks associated with a course of action

Question 98

98) The best decisions, from a utilitarian perspective, are those that A) result in the justified treatment of a minority. B) produce the greatest good for the greatest number of people. C) maximize stockholders' wealth. D) maximize a firm's profit. E) have greater social costs than benefits.

Answer 98

produce the greatest good for the greatest number of people

Question 99

99) Which of the following philosophies of ethics holds that people should be treated as ends and never purely as means to the ends of others? A) cultural relativism B) Kantian ethics C) naive immoralism D) Friedman doctrine E) righteous moralism

Answer 99

Kantian ethics

Question 100

100) Justice theories primarily focus on A) the attainment of maximum business profits. B) minimizing the amount of political liberty permitted to each person. C) minimizing the amount of economic freedom permitted to each person. D) the attainment of fair and equitable distribution of economic goods and services. E) protecting multinationals in case they violate fundamental human rights.

Answer 100

the attainment of fair and equitable distribution of economic goods and services