Worksheets321 V1
Total questions: 73
Worksheet time: 37mins
______ can be defined as the rate of return that the firm makes on its invested capital, which is calculated by dividing the net profits of the firm by total invested capital.
Profitability
Performance
Cash flow
Efficiency
A strategy that focuses on increasing the attractiveness of a product is referred to as a(n):
Differentiation strategy
Low cost strategy
Effectiveness strategy
Efficiency strategy
______ activities of the value chain provide inputs that allow the primary activities to occur.
Complementary
Basic
Core
Support
A firm benefits by basing each value creation activity it performs at that location where economic, political, and cultural conditions, including relative factor costs, are most conducive to the performance of that activity. Firms that pursue such a strategy can realize:
Differentiation
Location economies
Vertical integration
Horizontal integration
Moving down the experience curve:
Increases the cost of a firm’s raw material
Allows a firm to reduce its cost of creating value
Decreases a firm’s profitability
Increases the R&D expenditure of a firm
When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow a(n) _____ strategy.
Global standardization
Localization
International
Customization
This long-term downward trend in production costs reflects the:
Innovation cycle
Experience curve
Market life cycle
Outsourcing advantage
Which institution primarily provides low-interest loans to governments in poor nations to support infrastructure and economic development?
World Bank
International Monetary Fund (IMF)
World Trade Organization (WTO)
United Nations (UN)
Which organization promotes peace through international cooperation, collective security, and respect for human rights?
United Nations (UN)
World Bank
World Trade Organization (WTO)
International Monetary Fund (IMF)
Which of the following was established to maintain order in the international monetary system and help stabilize national economies?
World Bank
International Monetary Fund (IMF)
World Trade Organization (WTO)
United Nations (UN)
A U.S. investment firm, Fin-Smart, set up a customer service call center in India to take advantage of the lower labor costs. This is called:
Homogenizing markets
Vertical integration
Outsourcing
Horizontal integration
A multinational enterprise (MNE) is a firm that:
Exports its products to multiple countries
Has production units in more than two countries
Does most of its business on the Internet
Lists its securities on a public exchange
The rapid advances in microprocessor technology have been central to globalization, especially in communication. Which of the following best describes the prediction that computing power doubles while costs are halved about every 18 months?
Moore's Law
Gordon's Law
Shannon's Theorem
Nyquist Theorem
A company in Germany designs a product, manufactures its components in China, assembles them in Mexico, and sells to consumers worldwide. Which factor made this global production strategy more feasible?
The Bretton Woods system
Advances in transportation technology
Increased tariff barriers
Declining communication networks
Which of the following is a consequence of globalization?
Decreasing interdependence between national economies
Increasing outsourcing of services
Differentiation of material culture
Declining global trade
The General Agreement on Tariffs and Trade (GATT) was responsible for:
Protecting government-owned enterprises
Reducing the global marketplace
Increasing trade barriers
Supporting trade monopolies
The World Trade Organization promotes ______
Lowering of barriers to cross-border trade and investment
Infrastructural development in poor nations through low-interest loans
State ownership of major enterprises
Regulation of national economies
Containerization allows:
Reduction of the time needed to get from one location to another
Simplification of transshipment from one mode of transport to another
Buyers and sellers to find each other easily
Enterprises to coordinate and control a globally dispersed production system
Globalization is criticized because it increases the power of:
Governments to own enterprises
Unskilled labor to form labor unions
Supranational organizations over nation-states
Nation-states to regulate markets and reduce competition
Supporters of globalization argue that the best way to improve conditions in poor nations is to:
Impose trade barriers to protect local industries
Reduce international investment flows
Lower barriers to trade and promote free market policies
Encourage isolationist economic policies
A developing country is struggling with corruption, weak property rights, and rapid population growth. Critics of globalization would most likely argue that:
These factors explain why globalization has failed to reduce poverty in the country
Globalization should be expanded further to solve these problems
The only solution is withdrawal from the global economy
Debt forgiveness is unnecessary in this context
Supporters of globalization argue that the best way to help poor nations is to:
Increase debt relief programs
Promote state-owned enterprises
Lower trade barriers and encourage free market policies
Restrict foreign investment to protect sovereignty
Supporters of globalization believe that lowering trade barriers and promoting free markets in developing nations will primarily lead to:
Widening inequality between nations
Increased foreign investment and economic growth
More corruption and lack of property rights
Declining global trade flows
Managing an international business differs from managing a domestic one because:
International businesses face a narrower range of problems
International managers work with identical policies in all countries
International businesses must deal with multiple currencies and varying government regulations
Domestic businesses face more complex political environments
A manager at a multinational firm must adjust business strategies because of differences in tax laws, consumer behavior, and currency fluctuations in various countries. This situation highlights which key characteristic of international business?
The global convergence of consumer preferences
The complexity of managing across borders
The absence of government intervention in trade
The simplicity of global financial transactions
______ is a regional trade agreement that allows free movement of goods, services, capital, and labor among member countries, and requires cooperation on economic policies.
Free Trade Area
Common Market
Customs Union
Economic Union
One major benefit of adopting the Euro is ______, which allows producers to look for ways to reduce production costs and makes it easier to compare prices across Europe.
Increased fiscal autonomy
A single currency
Restriction of capital flows
Loss of national monetary control
From least integrated to most integrated, the levels of economic integration are:
A common market, a free trade area, an economic union, a customs union, and a political union
A free trade area, a customs union, a common market, an economic union, and a political union
A customs union, a free trade area, a common market, a political union, and an economic union
A common market, an economic union, a customs union, a free trade area, and a political union
One major benefit of adopting the Euro is ______, which allows producers to look for ways to reduce production costs and makes it easier to compare prices across Europe.
A single currency
Restriction of capital flows
Which legal system is primarily based on religious teachings, with Islamic law being its most common example?
Theocratic law
Customary law
Common law
Civil law
A company planning to operate in a foreign country notices that legal decisions are heavily influenced by past court rulings and judicial precedent rather than strictly written codes. Which type of legal system is the country most likely using?
Common law
Theocratic law
Customary law
Civil law
In a(n) ______ economy, the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold.
Market
Command
Open economy
Laissez-faire
An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a ______.
Planned economy
Command economy
Closed economy
Market economy
A common law system is different from a civil law system because:
A common law system is based on religious teachings, while a civil law system is based on cultural traditions
A common law system is very rigid, while a civil law system tends to be more flexible
In a common law system a judge relies on legal codes to make rulings, while in a civil law system a judge relies on intuition
In a common law system a judge has the power to interpret the law
A political system that prioritizes the needs of the society over individual freedoms is called:
Totalitarianism
Collectivism
Capitalism
Egalitarianism
The tenet of ______ is that the welfare of society is best served by letting people pursue their own economic self-interest.
Socialism
Communism
Anarchism
Individualism
Which of the following is a feature of a democracy?
Exercise of absolute control by one person or political party
Governance by people or elected representatives
Prohibition of entry to opposing political parties
Complete restriction of individual political freedom
In a pure market economy:
All productive activities are owned by the state
Production is determined by the interaction of supply and demand
Collectivist goals are given priority over individual goals
Prices are determined by the government
A civil law system tends to be less adversarial than a common law system, since:
The judges’ decisions are based on detailed legal codes
Judges have the freedom to interpret laws based on the situation
Judges’ decisions are based on religious teachings
Judges are guided by interpretations made in prior legal cases
A multinational company is involved in a contract dispute. In Country X, the judge interprets past court rulings to decide the case. In Country Y, the judge strictly follows written legal codes without interpreting beyond them. Which statement BEST explains the difference in legal systems between Country X and Country Y?
Country X uses a legal system based on religious teachings, while Country Y uses one based on cultural traditions
Country X has a very rigid system, while Country Y’s system is more flexible
Country X’s judges rely mainly on intuition and moral reasoning, while Country Y’s judges rely on legal codes
Country X follows a common law system where judges interpret the law
41. The FCPA requires publicly traded companies to keep detailed records because:
To help companies justify any payment to foreign officials
To detect and prevent illegal bribery of foreign officials
To encourage paying small facilitation fees
To allow companies to evade local laws
Which is a main goal of anti-bribery laws like the FCPA and OECD Convention?
Reduce corruption and ensure fair competition in international business
Encourage companies to pay local officials
Limit U.S. companies from entering foreign markets
Make bookkeeping optional
Why must international companies pay careful attention to product safety standards abroad?
Only local laws matter; international standards are optional
Violating safety standards can lead to liability, legal penalties, and ethical issues
Product liability only applies if a product is intentionally harmful
Which of the following best explains why a country’s legal system matters for international businesses?
It sets the rules, enforces laws, and provides remedies, all of which are shaped by the country’s political system
It only regulates criminal behavior, not business practices
It guarantees that all business disputes are resolved quickly
It is mostly irrelevant if a company follows its home country’s laws
A country is ruled by a single party that controls all political activity, restricts free speech, and tightly monitors citizens’ behavior. Private businesses exist but operate under strict government oversight. Which type of political system does this scenario describe?
Democracy
Totalitarianism
Oligarchy
Monarchy
Which scenario best illustrates the two dimensions of social structure?
A society that values individual success but also has strong class divisions
A culture with advanced technology and strong democratic institutions
A nation where rural traditions dominate despite urban growth
A community that is both industrialized and religious
In sociology, what term describes the ability of individuals to move from one social stratum to another, which varies across societies and differs in caste and class systems?
Social inequality
Social mobility
Social stratification
Social cohesion
A multinational bank is considering expansion into a country where charging or receiving interest is prohibited, yet private property is protected and business activity is encouraged within a framework of social justice. Which religion’s principles are most directly influencing this business environment?
Hinduism
Buddhism
Islam
Christianity
Which of the following is NOT true regarding culture?
Culture is static
Culture varies across and within nations
Culture is a system of values and norms shared among a group of people
Culture involves the knowledge and beliefs of people
A _______ is a less rigid form of social stratification in which social mobility is possible.
Caste system
Normative system
Religious system
Class system
Cross-cultural literacy refers to:
An individual’s self-concept derived from perceived membership in a relevant social group
The phenomenon of merging and converging cultures
Abstract ideas about what a group believes to be good, right, and desirable
An understanding of how cultural differences can affect business
A group of people who share a common set of values and norms form a:
Culture
Society
Country
Caste
Which of the following is an example of a social stratification system in India?
Caste system
Class system
Social system
Cultural system
A Japanese subsidiary of a multinational emphasizes precise procedures, rules, and risk avoidance. Employees prefer clear instructions over ambiguity. Which cultural dimension is most relevant?
Uncertainty avoidance
Individualism
Long-term orientation
Indulgence
A U.S. company is expanding into a Latin American country where employees expect hierarchical decision-making and defer to senior managers. Which Hofstede dimension best explains this workplace behavior?
Individualism
Power distance
Uncertainty avoidance
The GLOBE study suggests that a leader’s effectiveness varies across countries primarily because:
All leaders are equally effective regardless of culture
Leadership effectiveness is shaped by local societal and organizational norms, values, and beliefs
Leaders in high-income countries are always more effective
Leadership depends only on individual personality traits
Which research initiative studies people’s values and norms, tracks how they change over time, and examines their impact on society and business across dimensions such as democracy, gender equality, religion, and globalization?
Hofstede’s Cultural Dimensions
Global Leadership and Organizational Behavior Effectiveness (GLOBE)
World Values Survey
International Monetary Fund Cultural Index
A Chinese employee feels uncomfortable during a video conference with U.S. colleagues because Americans maintain constant eye contact, which she perceives as aggressive. Which aspect of communication is at play?
Spoken language
Nonverbal communication
Time zones
Gender roles
Which statement best explains why spoken language is important
for international business?
It shapes how people perceive the world and reflects cultural differences, which can affect communication and business interactions
Only the most widely spoken language matters in global business
Countries with multiple languages usually have only one culture
Language has little impact on business as long as translation tools are used
Which religion is the most widely practiced worldwide?
Islam
Christianity
Hinduism
Buddhism
A multinational company plans to expand into Country X, which has several distinct cultural groups with different languages, traditions, and business practices. Some of these cultural groups also exist across the borders of neighboring countries. What does this scenario illustrate about the relationship between culture and nation-states?
Each nation-state has only one homogeneous culture
A nation-state can contain multiple cultures, and a single culture can span multiple nations
Culture and nation-states always align perfectly
Cultural differences within a country are insignificant for business
Given to the group rather than individuals. What cultural difference is illustrated here?
Western cultures emphasize the individual; non-Western cultures emphasize the group
Non-Western cultures emphasize the individual; Western cultures emphasize the group
Both cultures value individual achievement equally
Both cultures value group recognition equally
The ______ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation.
Friedman effect
Noblesse oblige
Inequality aversion
Tragedy of the commons
Facilitating payments are:
A direct violation of the Foreign Corrupt Practices Act
Permitted so long as they are designed only to gain exclusive preferential treatment
Used to secure contracts that would otherwise not be secured
Permitted under the amended Foreign Corrupt Practices Act
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 is known as:
Moral relativism
Noblesse oblige
Ethical dilemma
Social responsibility
According to ______, the social responsibility of business is to increase profits, so long as the company stays within the rules of law.
The naïve immoralist
The righteous moralist
Cultural relativism
The Friedman doctrine
According to the ______ approach, the best decisions are those that produce the greatest good for the greatest number of people.
Naïve immoralist
Friedman doctrine
Kantian ethics
Utilitarian
______ means standing in the shoes of a stakeholder and asking how
a proposed decision might impact that stakeholder.
Veil of ignorance
Difference principle
Moral imagination
Noblesse oblige
International businesses often face ethical dilemmas because what is considered acceptable in one country may be illegal or frowned upon in another. Which of the following scenarios best illustrates an ethical issue commonly faced by multinational corporations?
Choosing a logo color that appeals to local consumers
Paying workers below the local minimum wage to reduce costs
Launching a new advertising campaign during a national holiday
Deciding on office layout to maximize productivity
When a multinational corporation operates in a country with lower labor standards than its home nation, which approach is generally considered the most ethical?
Follow only the host nation’s laws, even if conditions are poor
Follow the home nation’s standards, regardless of local norms
Establish minimal acceptable standards that protect employees’ basic rights and dignity
Leave decisions entirely to local contractors without oversight
A multinational corporation discovers that one of its suppliers in another country uses child labor. Which of the following is the best ethical response?
Continue business because the supplier is legally allowed to use child labor
Terminate the relationship or require the supplier to meet international labor standards
Reduce orders to avoid drawing attention
Ignore it, as human rights standards vary by country
The Sullivan Principles, adopted by companies like General Motors in South Africa, encouraged firms to:
Support apartheid policies for business efficiency
Promote equal treatment of employees and oppose discriminatory practices
Follow all local laws without question
Avoid interaction with local communities
A multinational corporation is considering moving production to a country with lax environmental regulations to reduce costs. Which of the following is the most ethical approach?
Move production and follow only the host nation’s minimal regulations
Continue operations while implementing environmentally responsible practices that protect shared resources
Ignore environmental impact because it is legal in the host nation
Lobby the host government to further relax regulations
