CHAPTER 1Globalization and International BusinessMultiple Choice Questions STUDY QUESTION 1: What are international business and globalization?

What is therelationship between them? 1. Which of the following best defines international business c. It includes all business transactions involving two or more countries, whether thetransactions are conducted by private or governmental organizations. (definition,page 7) 2. The deepening relationship and broadening interdependence among people from differentparts of the world is known as _____. a. globalization (definition, page 6) b. off-shoringc. economic geographyd. outsourcing3. In the comparison of private and governmental conduct of international business, one can saythat _____.a. the objectives are the same b. the private objective is profit; whereas, governments may or may not have profit asthe objective (interpretation, page 7) c. governments operate strictly for nonprofit motives, but private organizations seek profits d. governments undertake international business for more long-term objectives than privatecompanies4. All commercial transactions between two or more countries are known as _____.a. foreign tradeb. the balance of paymentsc. globalization d. international business (definition, page 7) 21

Chapter 1Globalization and International Business STUDY QUESTION 2: Why should you study international business? 5. Which of the following is not a reason to study international business? a.

All business except that outside the territory of any nation is international.(interpretation, page 7) b. International business comprises a large and growing portion of the world's totalbusiness.c. The conditions within foreign countries affect the best way to conduct business there.d. A company operating internationally may engage in modes of business that differ fromthose it is accustomed to domestically.6. Even if you never have direct international responsibilities, understanding some of thecomplexities of international business may be useful to you because _____.a. an understanding is essential for most managerial job interviews b. it may help you make more informed decisions in support of government policy(interpretation, pages 78) c. you will need to supervise and evaluate subordinates who have internationalresponsibilitiesd. it teaches you how to evade taxes in your country7. Today, we can say that because global events and competition affect almost all companies,you need to _____.a. pressure your government to become more independent of other countriesb. take a job with a company headquartered in another countryc. find employment with a company that does not compete against international companies d. gain some understanding of international business

(interpretation, page 7) 8. In terms of international business, we can say that _____.a. the best way to conduct business is the same from one country to another b. global competition affects large companies but not small ones c. most companies, regardless of industry, depend either on foreign markets andsupplies or compete against companies that do (interpretation, page 7) d. government regulation of international business has little effect on companies' profits STUDY QUESTION 3: Explain how globalization has changed over time and differs bothamong countries and within countries. 9. Most of the world's goods and services are sold _____.a. in international markets b. in the countries where they are produced (interpretation, page 8) c. through exports of goods and servicesd. through production abroad by foreign investors 10.

According to the A.T. Kearny/Foreign Policy Globalization Index, which ranked countries ontheir extent of globalization across four dimensions (economic, technological, personalcontact, and political), countries _____. 22

Chapter 1Globalization and International Business a. tend to be ranked similarly on all four dimensionsb. are similarly globalizedc. that are large in land mass and population are more globalized than small countries d. sometimes rank high on one dimension and low on another (interpretation, page 9) 11. A difficulty in comparing the amount of business globalization over time is that _____.a. countries differ in their extent of globalizationb. companies adopt different operating forms c. shifting borders obsolesce figures on what is international (interpretation, page 8) d. many private companies were once government owned12. An indication of the increased globalization of business since the end of World War II is that_____. a. world trade has grown more rapidly than world production in almost every year(interpretation, page 8) b. most countries now depend on foreign output for more than half their consumption c. most countries now depend on foreign markets for more than half their salesd. countries have had to increase their import restrictions to counter the rising tide of imports STUDY QUESTION 4: Identify and explain the seven forces that have been causing thegrowth in globalization. 13. Which of the following has been a major force behind recent globalization?a. lower tax ratesb. the slower rise of prices in general than prices of transportation and communicationsc. greater prohibitions on the placement of capital in countries with secretive bank-holdinglaws d. cumulative institutional developments that aid foreign trade and investment(interpretation, page 11) 14. Cumulative institutional developments by business and government have aided the expansionof international business by _____.a. providing a universally agreed upon language for conducting international transactionsb. removing immigration restrictions so that international firms can move personnelwherever they are most needed

c. developing means to ease the flow of goods among countries (interpretation, page11) d. assisting in the development of MNEs from low-income countries15. International business has recently grown at such a rapid pace because of _____. a. development of institutions to support and facilitate trade (interpretation, page 11) b. stricter government policies on cross-border movementsc. decreasing global competitiond. increased concerns about terrorism 23