Globalization and Business Page 1 of 8

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Assessment

Name: ___________________________________________
Class Schedule: ___________________________________

Multiple Choice

Directions: Read and analyze each item. Encircle the letter of the correct answer. You
may also view this exam on google class. Submit your work in the pigeon boxes which
are provided in your department/college, or to google class on or before the date as
reflected in your study schedule.

1. International business is defined as the performance of ______ activities by firms

across national borders
a. Marketing and fiduciary b. Trade and Investment
c. Finance and operational d. Manufacturing and sales

2. International business is also known as which of the following?

a. Born global business b. Laissez-faire business
c. Cross-border business d. Multi-hub business

3. Which of the following best characterizes the development of international business?

a. It has existed in some form for centuries
b. It first started in Europe
c. It developed after the year 200
d. Its development has slowed in recent year.

4. Globalization has helped increase all of the following except

a. The variety of capital flows across national borders
b. The economic isolation of developing countries
c. The rate at which products are diffused worldwide
d. The volume of cross-border transactions

5. Which of the following is another term for importing?

a. Capital investment b. Supply side development
c. Global sourcing d. Unilateral procurement

6. Which of the following is subject to importing and exporting?

a. Both finished products and intermediate goods
b. Finished products but not intermediate goods
c. Intermediate goods but not raw materials
d. Raw materials and components, but not finished products

7. Refers to the transfer of assets to another country or the acquisition of assets in that
country

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a. International investment b. International trade

c. Importing d. Exporting

8. Each of the following represents a factor of production except

a. Manufacturing infrastructure b. Technology
c. Government regulations d. Managerial talent

9. Which of the following would not be considered an example of foreign direct

investment?
a. Cross-border purchase of a textile plant
b. Cross-border purchase of stocks
c. Purchase of capital assets of a foreign country
d. Purchase of foreign land for business operation

10. Each of the following has contributed to the rapid integration of world economies
except
a. The growth of emerging countries
b. The increase in trade barriers
c. Advances in information technology
d. The liberalization of markets

11. Which of the following types of risk is also known as political risk?
a. Currency risk b. Cross-cultural risk
c. Commercial risk d. Country risk

12. Which of the following is not an example of cross-cultural risk factor?

a. Negotiation patterns b. Decision-making style
c. Costs of production d. Ethical practices

13. Fluctuating exchange rates are example of which of the following?

a. Country risk b. Political risk
c. Currency risk d. Cross-cultural risk

14. Businesses that directly initiate and implement international business activity are
known as
a. Focal firms b. Fiscal enterprise
c. Fiduciary trust d. Business affiliates

15. Each of the following types of organizations is active in international business except
a. MNE b. SME c. RND d. NGO

16. Which of the following is an example of a new global challenger?

a. A firm from Russia that is rapidly growing in the communications industry
b. A U.S. non-profit that focuses on fundraising for children’s health care
c. An MNE from France with large-scale operations across the globe
d. An SME from Canada that began international operations early in its
development.

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17. The process of targeting and serving markets outside the home country is known as

a. Market diversification b. Competition intensity

c. Reactive internationalization d. Trade protectionism

18. Increases in international trade and investment are accompanied by increase in all of
the following except
a. Literacy rates b. Individual affluence
c. Cross-border conflict d. National prosperity

19. Which of the following is characteristics of globalization of market?

a. Lacked of skilled labor
b. Conservatism
c. Declining trade barriers
d. Diminishing gap between the rich and the poor

20. The first phase of globalization was characterized by the

a. Rise of steel production b. Rise of SME
c. Dominance of MNEs in the agricultural industry d. Growth of railroads.

21. The _____ phase of globalization began around 1900 and was associated with the
rise of electricity and steel production
a. First b. Second c. Third d. Fourth

22. The third phase of globalization was triggered by

a. The end of the World War II b. The invention of electricity
c. The end of World War I d. The Great Depression

23. Which of the following reflects the major contribution of GATT to globalization?
a. It instituted strict controls o international currencies.
b. It simplified patent and copyright laws.
c. It reduced barriers to international trade and investment
d. It eliminated the divide between the rich and the poor.

24. The fourth phase of globalization is characterized by:

a. The rise of railroads and ocean transport
b. The reduction of barriers to trade by Western industrialized countries.
c. The initiation of the Marshall Plan to reconstruct Europe
d. The enormous growth of cross border trade and investments.

25. Overtime, the GATT evolved into the

a. World Bank b. International Monetary Fund
c. World Trade Organization d. World Intellectual Property Organization

26. As market globalization intensifies

a. The gap between the rich and the poor shrinks rapidly.

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b. The distance between consumers worldwide expands.

c. Individual firms respond to the challenges and new advantages that it brings
d. Firms internationalize solely as a reaction to it.

27. Which of the following is a driver of globalization?

a. Greater emphasis on proactive internationalization.
b. Internationalization of firm’s value chain
c. Integration of world financial markets
d. Globalization of services.

28. Which of the following is a societal consequences of market globalization?

a. Greater emphasis on proactive internationalization
b. Internationalization of firm’s value chain
c. New risks and instant rivalry from foreign competitors
d. Offshoring and the flight of jobs.

29. Financial markets integration makes it easier for internationally active firms to
a. Nationalize manufacturing industries
b. Minimize offshoring
c. Increase tariffs on the importation of automobiles and industrial machinery
d. Engage in foreign currency transactions.

30. The globalization of finance

a. Enables companies to minimize offshoring
b. Contributes to firm’s abilities to develop and operate world-scale production
and marketing
c. Discourages innovation
d. Discourages free international exchange of goods and services.

31. Which of the following statements is true of technological advances?

a. It provides a means for globalization to happen
b. It discourages internationalization
c. It inhibits the growth of new products and services
d. It helps consolidate traditional values among customers worldwide.

32. Technological leapfrogging is defined as

a. Adopting new technology late in the hype cycle
b. Adopting new technology as soon as it is released
c. Bypassing certain stages of technology to come up with a radical innovation
when upgrading to new products
d. Boosting demand artificially by postponing the sale of new technology in the
market.

33. The science and process of creating and using information resources is known as
a. Information design b. Information technology
c. Psychographics d. Demographics

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34. Which of the following benefits of IT is specific to smaller firm?

a. It mitigates organizational anarchy
b. It creates competitive advantages by encouraging organizational learning
c. It aids in the consolidation of market monopolies
d. It allows firms to design and produce customized products they can target to
narrow, cross-national market niches.

35. Technological advances have contributed to manufacturing by

a. Promoting traditional lifestyles and values
b. Reducing cross-border flow of factors of production
c. Promoting nationalization
d. Reducing production cost

36. In terms of international business, market globalization can be viewed as a

a. Consequences of a strong emphasis on traditional values worldwide
b. Consequences of the loss of national sovereignty
c. Driver and consequences of firm-level internationalization
d. Prime cause of rising diseconomies of scale in emerging economies.

37. A value chain is

a. The sequence of administrative policies implemented to promote economic
integration by a government
b. The process of relocating manufacturing and production to valuable and cost-
effective locations abroad
c. The process of integrating national economies during a financial crisis.
d. The sequence of value-adding activities performed by a firm in the course of
developing, producing, marketing and servicing a product.

38. Regional economic integration blocs

a. Reduce trade and investment barriers
b. Reduce private instrument
c. Adopt hostile stance toward the private sector
d. Hinder the cross-border flow of factors of production

39. Which of the following example of a supranational institution?

a. The World Intellectual Property Organization
b. The UNICEF
c. The Red Cross
d. The World Trade Organization

40. Government have facilitated economic integration by

a. Increasing barriers to international trade and investments
b. Creating supranational institutional to further reduce trade barriers
c. Adopting different monetary and fiscal policies within the same regional
economic integration blocs
d. Standardizing consumer lifestyles and preferences

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41. The free movement of capital around the world is also known as
a. Bond-based debt financing b. Contagion
c. The globalization of capital d. Common market arrangement

42. Companies strive to drive down prices__________, among other strategies

a. By centralizing manufacturing and procurement to a single source
b. By standardizing what they sell
c. By thwarting the growth of supranational institution
d. By discouraging competition

43. Convergence of consumer preferences has led to an enhanced emphasis on

standardization which implies that________
a. The consistently rising prices of consumer goods have led to a demand
vacuum in the market
b. The distance between consumers worldwide has increased wit the advent of
technology
c. The raw materials parts and components sourced by professional buyers are
very similar in design and structure
d. The globalization of services has adversely affected the quality of service
worldwide

44. Reduction in trade barriers is associated with the emergence of

a. Fragmentary monetary and fiscal policies across the borders
b. Regional economic integration blocs
c. Widespread violation of intellectual property rights law
d. Violation of GATT provisions

45. The most direct implication of market globalization is on the firm’s

a. Value chain b. Founders
c. Internal stakeholders d. Top management

46. Which of the following statements is true about value chain and international
business?
a. Exporting firms perform most of the downstream value chain activities in the
home market.
b. Exporting firms perform most of the upstream value chain activities in the
home market.
c. Exporting firms perform most of the upstream value chain activities abroad.
d. Exporting firms perform most of the research and product development and
production.

47. In a typical value chain, the firm

a. Rarely conducts research and development
b. Performs most upstream value chain activities abroad, when exporting
c. Performs marketing activities such as pricing, promotion and selling
d. Performs most downstream activities in the home market, when exporting

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48. Which of the following statements is true about the firm-level consequences of
market globalization?
a. The globalization of markets has narrowed down new business opportunities
for internationalizing forms
b. Globalization drives firms to relocate key value-adding activities to the most
advantageous locations around the world
c. A firm’s value chain is not subject to internationalization
d. Through offshoring, a firm relocates a major value-chain activity by
establishing a factory or subsidiary in the home market.

49. Specialist firm that provides various logistics and marketing services for focal firms
as part of the international supply chain, both in the focal firm’s home country and
abroad
a. Distribution channel intermediary b. Trading company
c. Focal Firm d. Logistics

50. A firm that grants another the right to use an entire business system in exchange for
fees, royalties, or other forms of compensation
a. Focal Firm b. Facilitator c. Franchisor d. Licensor

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