International Business - 2006 SLC 1) Stockholders are usually the owners of a corporation.

A) True B) False 2) Culture is a constant and does not evolve over time. A) True B) False One form of trade barrier is import taxes. A) True B) False When a few small companies control an industry, an oligopoly exists. A) True B) False Within a host country, a multinational enterprise must operate outside the host countrys social and legal constraints. A) True B) False Culture is a complex whole that includes knowledge, beliefs, art, morals, laws, customs, and other capabilities acquired by people as members of a society. A) True B) False When a company does business in another country, it must only observe its own countrys laws. A) True B) False An advantage of a partnership is availability. A) True B) False An advantage of a sole proprietorship is the limited life of the business. A) True B) False Management contracting is one of the lowest risks for international business. A) True B) False Joint venture is a method of international business with the lowest risk. A) True B) False A symbol used to identify a companys product is a patent. A) True B) False A boycott is an example of a trade barrier. A) True B) False A common market does not eliminate all duties between member countries. A) True B) False In countries with more than one spoken language, we tend to find more than one culture. A) True B) False

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One disadvantage of a partnership is A) limited liability and disagreement among the owners B) none of the answers are correct C) limited liability. D) disagreement among the owners. Consideration refers to the following: A) an authors exclusive rights to publish a work. B) legally binding decision of an arbitrator. C) something of value that is received or promised in a contract. D) the protection of a product or process. Unlimited liability is defined as A) when each of the partners in a partnership independently make decisions that tend to affect the partnership. B) when all stockholders who own 100 shares of a corporation vote on who will manage the corporation. C) when all stockholders who own shares of a corporation vote on who will manage the corporation. D) none of the answers are correct Four components that are required in order for a contract to be valid and enforceable are A) consideration, mutual capacity, mediation, and capacity. B) legal agreement, arbitration, mediation, and capacity. C) consideration, arbitration, mediation, and capacity. D) consideration, legal purpose, mutual agreement, and capacity. When there is arbitration between parties, what must occur? A) Arbitrator may be an officer in a chamber of commerce or trade association for third country B) Host country seeks the arbitrator C) Host country establishes procedures for arbitration D) All answers are correct The name of the economy in which the individual may own and run private businesses in order to make profit, with little governmental involvement with business, is A) market economy. B) standard economy. C) command economy. D) mixed economy. One purpose of a credit union is to A) provide funds for international business activities. B) serve the financial needs of the unions members. C) provide life insurance for international business activities. D) provide loans for international business activities. Which of the following promises to pay a set amount by a certain date? A) Credit letter B) Account receivable C) Both a Credit letter and a Promissory note D) Promissory note One source of debt capital is A) buy and sell of stock. B) investments. C) the sale of stock and bonds. D) sale of bonds. An example of a political risk is A) currency exchange. B) family relationships. C) political instability. D) investments by owners. A function of the Overseas Protection Investment Corporation is to cover financial losses that result from

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A) goods damaged by fire. B) the seizure of assets by a host government. C) goods that are lost or damaged during shipment on inland waterways. D) losses due to payment of delivered goods. 27) The fact that a large percentage of new businesses fail within a year refers to A) liability of newness. B) liability of global culture. C) liability of owners. D) liability of size. A small business global culture exists when A) none of the answers are correct B) decision makers view the competition as more domestic than global. C) small businesses are facing global competition. D) managers give priority to the relevance of national boundaries. The World Trade Organization A) is a consulting group for companies who want to engage in international trade. B) succeeded the GATT agreements. C) collects duties for member organizations. D) is a major trading company. Cultures that tend to have high power distance values usually have A) large wave differences between the management and the workers. B) active leadership. C) centralized decision making. D) large wave differences between only management. Which of the following countries has high-text communication? A) Australia B) China C) United States D) Japan In which countries would business subcultures be similar? A) Argentina, Chile, and Venezuela B) Japan, China, and France C) Argentina, Poland, and Japan D) Argentina, Chile, and Poland Which term describes when a separate foreign company is owned by a parent company? A) Joint venture B) Wholly owned subsidiary C) Partnership D) Cooperative Copyright is defined as A) protection of an original work by an author, artist, or composer. B) protection of a symbol used by a business. C) protection of product or process. D) none of the answers are correct An example of a trade barrier is A) tariffs. B) boycotts. C) quotas. D) all answers are correct One factor that is used to describe the demographics of a nation is A) social values. B) religious beliefs.

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C) culture. D) educational level. 37) One way to increase the value of a countrys currency is by A) lowering inflation. B) raising the interest rates. C) raising inflation. D) lowering the interest rates. Which party or parties can appear before the International Court of Justice? A) Only individuals B) Only countries C) Countries and individuals D) Countries and companies An example of a cultural factor that would affect international business is A) stability of the government. B) stability of the money supply. C) stability of the country. D) the relationships of the family. Currency future is defined as A) a contract. B) the exchange present. C) the exchange rate. D) the exchange future. Which of the following is a form of nonverbal communication? A) Speaking to a friend B) Laughing out loud C) Yelling at the top of your lungs D) Waving to a teacher What is one advantage of a corporation? A) Ease of creation B) Limited liability of owners C) Unlimited liability of owners D) All answers are correct If a person rents a movie and then makes duplicate copies of this movie and proceeds to sell it, what would he be violating? A) Trademark B) Patent C) Infringement D) Copyright Which of the following is not a criterion for packing goods for international shipments? A) Minimizing theft B) No answers are correct C) Making sure the company makes a good impression to its customers D) Minimizing shipping costs Where is the widest range of financial services usually offered? A) A commercial bank B) An investment company C) A Federal Credit Union D) An insurance company Who provides the most exporting assistance? A) The export management company B) The customs broker and freight forwarder C) All answers are correct D) An export trading company (ETC)

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Which type of human resources approach uses natives in the host country to manage operations within their country, and parent-country natives to manage at headquarters? A) Both a Polycentric approach and a Regiocentric approach B) Geocentric approach C) Polycentric approach D) Regiocentric approach An advantage of staffing policy is A) it is a tool for developing corporate culture. B) all answers are correct C) it is a tool for promoting corporate culture. D) it selects employees who have the right skills. Which of the following is a drawback of the ethnocentric approach? A) No drawbacks exist. B) It results in cultural myopia. C) It limits a firms ability to pursue immigration policies. D) It creates a gap between home and host country operations. Values and norms of a culture are influenced by A) all answers are correct B) social structure. C) religion, language, andeducation. D) political and economic philosophy To develop cross-cultural literacy, international businesses need to A) none of the answers are correct B) guard against the dangers of ethnocentric behavior. C) both guard against the dangers of ethnocentric behavior and employ host country nationals. D) employ host country nationals. One disadvantage to exporting is A) employee attitudes. B) ignorance of foreign market. C) company image. D) ignorance of domestic market. One purpose of the bill of lading is it A) all of the answers are correct B) servies as a document of title. C) serves as a contract. D) servies as a receipt. The choice of optimal manufacturing location must consider country factors, technological factors, and product factors. What would be a country factor? A) Fixed costs of setting up manufacturing facilities B) Whether the product serves as a universal need C) Value to weight ratio of the product D) Influence of factor costs What would be a technological factor? A) Political economy B) Minimum efficient scale of operation C) National culture on manufacturing costs D) Value to weight ratio of product Country differences in consumer tastes and preferences are due to A) similarities in product and technical standards B) differences in culture and economic development. C) both the changing economy and similarities in product and technical standards D) the changing economy

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Whether a push strategy or pull strategy is effective depends on A) the type of consumer. B) politics. C) the type of product. D) the money supply of the country. What can price discrimination do to a firm? A) Help a firm minimize its profits B) Help a firm maximize its profits C) Nothing D) Cause bankruptcy The principal objectives of global money management are to A) minimize the firms global tax assets. B) utilize the firms cash resources in an inefficient manner. C) maximize firms global tax liabilities. D) minimize firms global tax liabilities. A type of exposure to foreign exchange risk is A) risk exposure. B) political exposure. C) cultural exposure. D) translation exposure. A fundamental dilemma faced by all multinationals is A) none of the answers are correct B) how to fight their rivals. C) how much should they emphasize or not emphasize responding to differences in all the markets they operate. D) which form of competitive strategy they should use. Selling global products and using similar marketing techniques worldwide is an example of a(n) A) international strategy. B) transnational strategy. C) multinational strategy. D) regional strategy. Small businesses differ from large businesses when going international primarily in A) the available transnational strategies. B) their founder or entrepreneur influence. C) the available multinational strategies. D) the available participation strategies. Which of the following participation strategies do small A) Exporting B) Licensing C) Importing D) Foreign direct investment Which of the following does an economy of scale refer to? A) Gains from the spreading of investment across more units of production B) Efficiencies that are common in low-tech operations C) Efficiencies that are not common in low tech operations D) Losses from the spreading of investment across more units of production All of the following is true of culture except that it is A) directly observable. B) passed from generation to generation through norms, beliefs, and values. C) the shared belief, norms, and values that guide groups. D) very pervasive in societies.

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The term used to describe when people believe that norms, values, and beliefs of their own culture represent only correct ways of dealing with the world is called A) polycentrism. B) regiocentrism. C) stereotyping. D) ethnocentrism. Which of the following is not a stage of culture shock? A) Depression B) Total rejection of the new culture after a lengthy stay there C) Anger D) Frustration When cartoon characters are used on clothing items with permission of the movie company, it's an example of A) direct exporting. B) direct importing. C) contract by management. D) licensing. When business organizations are formed to provide services without regard to making a profit, they are called A) none of the above B) municipal corporations and nonprofit corporations. C) sole proprietorships. D) nonprofit organizations. The International Court of Justices legal principles are based on A) principles of law from Western Countries. B) principles of law from Eastern Countries. C) principles of law from all countries. D) principles of law from Northern Countries. Which of the following is a benefit of international business? A) All answers are correct B) Expanded business opportunities C) Increased sources of raw materials D) Improved political relationships Why are protectionism policies such as tariffs and quotas used? A) Government wants to make it harder for the companies in other countries to compete with the local companies. B) Countries need additional revenue and expenses. C) Consumers need additional revenue. D) None of the answers are correct An example of a political influence of a marketing environment would be a nations A) school systems. B) economy C) type of government. D) distribution of the population When goods are exported to other companies, A) the most expensive method of shipment should be used. B) the most inexpensive method of shipment should be used. C) the quickest method should be used. D) the method will vary. The exchange rates for stable countries A) change on a day to day basis. B) always stay the same. C) are always based on the U.S. dollar. D) all answers are correct When noise exists in the communication process, this is called

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A) anything that can interfere with communication process. B) communication from audience back to source. C) none of the answers are correct D) intended receiver of message. 78) Problems arising from lack of trust between exporters and importers can by solved A) using a third party such as a reputable bank. B) Nothing can be done. C) cutting off all business ties. D) none of the answers are correct Barriers to international communication include A) only cultural differences. B) noise levels, cultural differences, and source effects. C) only noise levels. D) noise levels, trust, and cultural similarities. One technique that firms use to transfer funds across borders is A) transfer prices. B) royalty payments and fees. C) all answers are correct D) fronting loans. Strategic alliance can refer to which of the following activities? A) Design contracts B) Purchasing agreements C) Joint product development D) All answers are correct One characteristic of a strategic alliance is A) Usually a nonequity, tightly structured relationship. B) Each partner retains its business independence. C) None of the answers are correct. D) The relative size of the partners is a significant factor. Which of the following does a joint venture involve? A) a low level of commitment, funds, and time. B) a management voice for both parties. C) no degree of risk. D) no equity participation by each partner. One disadvantage of a joint venture is A) potentially low capital cost plus ongoing financial support are required. B) cultural differences and communication difficulties. C) low level of commitment of staff and management. D) not time consuming especially when a new venture is involved. The liability for unpaid wages that are due to an employee for the work he/she performed is called A) employee liability. B) organizational liability. C) liability for debt, loss and injury. D) product liability. Which of the following 4 Ps of marketing is responsible for communicating and selling to potential customers? A) Price B) Product C) Promotion D) Place Equity capital consists of funds provided by A) employees. B) management.

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C) savings bonds. D) a companys owners. 88) Money that is given as foreign aid to another country A) decreases the balance of payments of the country making the payment. B) has a negative effect on trade deficit. C) increases the balance of payments of the country making the payment. D) has a positive effect on trade deficit. When you put a message in a form that the audience will understand, it is called A) decoding. B) encoding. C) nonverbal. D) noise. Which of the following would not be a reason to use mediation or arbitration instead of court action to settle a dispute? A) To avoid wasting time B) To follow the legal procedures C) To stay away from any bad publicity D) To avoid discrimination in a foreign court Which of the following would be a reason for a company to go global? A) Foreign attacks on domestic markets B) Foreign markets with higher profit opportunities C) Reduce dependency on single market D) All answers are correct Which of the following is an example of a trade barrier? A) Implementing a sales tax on products that are made and sold within a country B) A limit on the number of foreign automobiles a country allows to be imported C) Efforts by a government to encourage exporting and importing among businesses in other countries D) Consumers who would prefer to get their products domestically rather than from foreign companies Which of the following language-related statements is true? A) Besides your native language, you need to learn 3 other languages to be successful in international business. B) International business people will often prefer to conduct business transactions in their native languages, even if they speak English very well. C) The only language that you will ever need is English. D) The language of Japanese is used by one unimportant trading company. When using the term consideration in regards to a contract, what does this generally mean? A) One party agrees to be considerate of each others needs. B) One of the party offers valid terms, and the other party accepts them. C) Something of value must be given by only one party. D) Something of value must be given by both parties. Which of the following does not explain why globalization is pushing the organizations to become more similar? A) Growing levels of economic development B) Growing levels of competition C) Growing convergence in national cultures and social institutions D) Growing levels of products and consumers When looking at a global information system, the roles of managers should be A) to understand that a global information system evolves over time and requires a one-time maintenance and refinement. B) to complete a system that meets all information needs when the system is launched. C) to stress to the MIS department the urgency in completing the global information system. D) to understand that a global information system evolves over time and requires continual maintenance and refinement. Human resource management differs in the global and domestic environments because A) no obstacles exist to worker mobility. B) companies must cope with differences in global and national orientations. C) both companies must cope with differences in global and national orientations and no obstacles exist to worker mobility.

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D) all labor markets are the same in the world. 98) Where does seniority tend to dominate evaluation and promotion? A) Cultures high on uncertainty avoidance and low on individualism B) Ethnocentric culture C) Cultures low on uncertainty avoidance and high on individualism D) Polycentric culture The national context of a society is made up of A) business cultures of that society. B) national and business cultures of that society. C) national cultures and social institutions of that society. D) national cultures of that society.

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