405 INTERNATIONAL BUSINESS MCQs (weeks 1-5)

1) The broadening set of interdependent relationships among international business?

people from different parts of the world is known as .
A) Globalization A) Global events affect almost all companies.
B) Offshoring B) Physical, social, and competitive conditions differ from country
C) Franchising to country.
D) Outsourcing C) Business conducted outside the confines of any one country is
inexplicably on the decline.
D) Firms are better able to obtain needed resources by approaching
2) The European Union is an example of integration. operating strategies from an international standpoint.
A) Regional
B) Relative 6) Why should managers have an understanding of trade
C) Global protectionism?
D) Bilateral A) Trade protectionism targets factor endowments, thus affecting
the best country to locate
3) Global integration occurs as countries from all over the world Production.
decide to cooperate through the . B) Trade protectionism affects a company's ability to sell abroad and
A) EU ability to compete at home.
B) NAFTA agreement C) Trade protectionism affects the number of people permitted to
C) WTO practice a specific profession.
D) CARICOM D) Trade protectionism prevents companies' enactment of merger
and acquisition agreements.
4) Which of the following best defines international business?
A) It includes all public economic flows between two or more 7) Why should managers in international business understand
countries. international trade theories?
B) It includes all private economic flows between two or more A) Countries' trade policies, based on trade theories, influence which
countries. products companies might export to given countries.
C) It includes all business transactions involving two or more B) The understanding helps managers decide whether their
countries. companies should follow laissez-faire management practices.
D) It includes all business transactions in countries other than your C) The theories help managers decide whether to use large-scale
home country. versus small-scale technologies for serving their export markets.
D) The comprehension is useful when deciding whether to transfer
5) Which of the following is NOT a likely reason to study managers abroad to manage foreign operations.

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8) Which of the following undesirable results will most likely
occur for a country running a favourable balance of trade?
A) Higher unemployment
B) Higher domestic interest rates
C) Fewer funds to invest abroad
D) Granting credit that may be risky
9) Most of the world's goods and services are sold .
A) In international markets
B) In the countries where they are produced
C) Through exports to small countries
D) Through exports to large countries
10) Successful trade retaliation is most likely achieved
A) On agricultural products
B) On manufactured products
C) By a large trading country
D) By a small trading country
11) As a leading exporter of luxury automobiles, Germany has
built a strong reputation in engineering. Germany's trade most
likely relies on a (n) . firms establish joint ventures.
A) Outward immigration restriction
B) Natural advantage
C) Acquired advantage
D) Neomercantilist policy
12) Which of the following has NOT been a major force increasing
globalization in recent decades?
A) Liberalization of cross-border trade
B) Increase in and expansion of technology
C) Growing pressure from consumers
D) Decreasing global competition
13) Nontradable goods are best defined as .
A) Products and services for which exporting costs are excessive
B) Factors of production that exceed safety regulations
C) Goods used for national defence
D) Products that comprise a portion of the inputs for finished
products
14) consists of specific learned norms based on attitudes,
values, and beliefs of a group of people.
A) Ethnology
. B) Civilization
C) Culture
D) Doctrine
15) Which of the following is NOT true about cultural diversity?
A) Companies may gain competitive advantages by bringing
together people of diverse backgrounds.
B) Cultural diversity is most successful when domestic and foreign
C) Cultural diversity may help a company gain deeper knowledge
about products and services.
D) The process of bringing people of different national cultures
together is often difficult.
16) Because people can be grouped in many ways, such as on the
basis of nationality, ethnicity, religion, profession, and income level, D) China lacks an educated pool of employees due to latent
. industrialization.
A) People live in a state of cultural collision
B) Cultural studies fail to understand behaviours
C) Identity crises make individual's lives chaotic 20) Which of the following problems in China is blamed for the
D) People have more than one cultural group membership annual loss of $250 billion by American MNEs?
A) Theft of intellectual property
B) Environmental hazards
17) When divergent cultures come in contact, occurs. C) Child labour violations
A) Power distance D) Embezzlement
B) Culture shock
C) Cultural collision
D) Group membership 21) Which of the following countries has an individualistic
orientation?
A) Venezuela
18) Which of the following best describes a condition under which B) Japan
cultural collision would most likely occur in international business? C) Egypt
A) A company implements practices that are less effective than D) Canada
intended.
B) Local employees are overlooked for promotions by home
country managers. 22) Which of the following asserts that a government should NOT
C) Expatriate managers rely too heavily on local employees interfere in business affairs?
for negotiating business deals. A) Collectivism
D) Foreign and domestic companies make adjustments for the local B) Laissez-faire
culture and legal environment. C) The rule of man
D) Pluralism
19) Which of the following is a true statement about China?
A) The Chinese government's shift from communism to capitalism 23) The principle that an individual has the freedom to pursue his or
has led to an increase in FDI. her interests is called .
B) China attracts FDI because the government has A) Socialism
eliminated elaborate bureaucracies. B) Totalitarianism
C) The Chinese government manipulates market activities for C) Individualism
political purposes. D) Collectivism
 .
A) Life expectancy
24) The recent global economic crisis has led to which of the
B) Literacy
following?
C) Environmental sustainability
A) Governments seeking to impose more constraints on capitalism
B) Governments seeking to eliminate constraints on capitalism D) Diversity
C) Governments seeking to increase the interdependence of
developing economies 28) History suggests that if the economic crisis worsens, we are
D) Governments seeking to eliminate the interdependence of likely to see more people question the .
developing economies A) Fall of communism
B) Legitimacy of capitalism
25) Which of the following is most likely a true statement about the C) Practicality of mixed market economies
global economy since the 1980s? D) Correlation between economic freedom and prosperity
A) Socialist governments are intervening more in global exchanges.
B) Wealthy countries are maintaining total control of expanding 29) Which of the following is NOT a key stakeholder group that a
markets. company must work to satisfy in order to survive in a global
C) Developing countries are losing their share of foreign-exchange environment?
reserves. A) Employees
D) Emerging economies are adopting the principles and practices of B) Competitors
free markets. C) Shareholders
D) Customers
26) Since the late 1980s, the growing emergence of freer markets
has been powered by the realization that . 30) Which stakeholder group primarily wants additional sales and
A) Economic growth is directly related to economic freedom increased productivity?
B) Economic growth has a limited effect on the standard of living A) Customers
C) Adoption of free market principles contributes to social injustices B) Shareholders
D) Centrally planned economies are best designed to deliver C) Society at large
progress D) Government

27) The Economic Freedom Index indicates that economic freedom 31) Which stakeholder group is most interested in trustworthy
is positively correlated with all of the following EXCEPT behaviour by corporate executives and increased corporate taxes?
A) Shareholders D) A company's present production location will be competitive
B) Society
C) Employees
D) Customers 35) The trade theory that says a country should export more than it
imports is known as .
32) Which of the following statements is most likely true regarding A) Mercantilism
relationships between MNEs and stakeholders? B) Absolute advantage
A) An MNE typically serves all stakeholder groups equally at any C) Comparative advantage
given time. D) Import substitution
B) No individual stakeholder group is powerful enough to cause
the demise of an MNE. 36) Under mercantilism, governments sought to influence trade by
C) All stakeholders of an MNE have the same short-term and long- .
term goals and interests. A) Establishing bilateral trading agreements with other countries
D) The inability to adequately meet the long-term needs of all B) Limiting exports
stakeholders increases the probability of an MNE failing. C) Limiting imports and subsidizing exports
D) Encouraging the development of manufacturing in their colonies
33) Monique has recently been hired as an accounts supervisor at
Ballston Enterprises. She wants to understand Ballston's values and 37) Country X runs a favourable balance of trade. Which of the
its expectations for employee behaviour. Which of the following following undesirable results will most likely occur?
would most likely provide Monique with this information? A) Higher unemployment
A) Mission statement B) Higher domestic interest rates
B) Code of conduct C) Lower value of global investments
C) Vision statement D) Lower credit value for purchasing goods
D) Employee contract

38) Neomercantilism describes the approach of countries that try to

34) All countries face the questions of what, how much, and with run a favourable balance of trade to .
whom they should import and export. How they answer these A) Build up gold reserves
questions primarily affects whether . B) Achieve a political objective
A) Non-taxable goods become tradable C) Lower their rates of inflation
B) Products go through a lengthy life cycle D) Buy raw materials more cheaply
C) Companies adhere to laissez-faire export policies
39) Countries with varied climates and varied natural resources A) Employees
generally than countries with less varied climates and B) Competitors
natural resources. C) Shareholders
A) Have lower per capita incomes D) Customers
B) Depend less heavily on trade
C) Have more ethnic subgroups 44) The recent global economic crisis has led to which of
D) Have higher endowments of capital relative to labour the following?
A) Governments seeking to impose more constraints on capitalism
40) Eight of the top 10 exporting and importing countries are B) Governments seeking to eliminate constraints on capitalism
countries with . C) Governments seeking to increase the interdependence of
A) Cheap labour forces developing economies
B) Small landmasses D) Governments seeking to eliminate the interdependence of
C) Natural advantages developing economies
D) Developed economies
45) Which stakeholder group primarily wants additional sales
41) Most world trade takes place . and increased productivity?
A) Between developed countries and developing countries A) Customers
B) Among developed countries B) Shareholders
C) Among developing countries C) Society at large
D) Between raw material exporters and manufacturing exporters D) Government

42) History suggests that if the economic crisis worsens, we are 46) Ethical dilemmas tend to be for MNE managers than
likely to see more people question the . for domestic managers.
A) Fall of communism A) More complicated
B) Legitimacy of capitalism B) Less controversial
C) Practicality of mixed market economies C) Easier to decide
D) Correlation between economic freedom and prosperity D) Less common

43) Which of the following is NOT a key stakeholder group that a 47) Which of the following problems in China is blamed for the
company must work to satisfy in order to survive in a global annual loss of $250 billion by American MNEs?
environment? A) Intellectual property violations
B) Environmental hazards
C) Child labour violations
D) Embezzlement
48) Since the late 1980s, the growing emergence of freer markets
has been powered by the realization that . D) Within a culture, everyone responds to particular cultural
A) Economic growth is directly related to economic freedom
B) Economic growth has a limited effect on the standard of living
C) Adoption of free market principles contributes to social injustices
D) Centrally planned economies are best designed to deliver
progress
49) Which of the following statements best describes a pluralistic
society?
A) Multiple segments of society adhere to the same political
philosophy.
B) Two dominant political parties rule local and
federal governments.
C) Different ideologies are held by different segments of society.
D) Various ethnic groups belong to the official political party.
50) Which of the following most likely complicates ethical
behaviour for firms that expand overseas?
A) Local laws and values
B) Expatriate management
C) Unstable financial settings
D) International codes of conduct
51) Which of the following is the most accurate statement about
culture?
A) Cultural variables can easily be isolated from other factors such
as economic and political conditions.
B) Although most cultural variables are universal, the forms these
variables take differ from culture to culture.
C) Most cultural variables are superficial and can easily be
influenced by environmental factors.
variables the same way.
52) Which stakeholder group is most interested in trustworthy
behaviour by corporate executives and increased corporate taxes?
A) Shareholders
B) Society
C) Employees
D) Customers
53) Which of the following is a primary business objective for
pursuing ethical behaviour?
A) Avoiding industrial sanctions
B) Developing competitive advantages
C) Developing creative advertisements
D) Discouraging false commitments to the firm
54) Businesspeople seeking to understand more about another
culture in order to successfully conduct business within that culture
would be best advised to do which of the following?
A) Observing the behaviour of people who have gained respect
within that cultural environment
B) Relying on stereotypes, which are based on averages, to gain an
understanding of the culture
C) Avoiding cultural research studies because they perpetuate
unjustified stereotypes and behaviours
D) Memorizing the cultural variations that are typically encountered
in a specific cultural environment
55) The distinguishing feature of political ideologies along the
political spectrum is , with some emphasizing its primacy
and others opposing it.
A) Capitalism
B) Socialism
C) Freedom
D) Liberalism
56) In terms of international business, it is most accurate to say that
. C) Globally, consumers now depend on foreign output for more than
A) There is a universal "best way" to conduct business
B) Global competition affects large companies but not small ones
C) Most firms depend either on foreign markets and supplies or
compete against companies that do
D) Government regulation of international business has little effect
on a company's profits
57) Which of the following statements most accurately describes the
relationship between trading groups and MNEs?
A) Trading groups have no influence on the size of the regional
market.
B) Regional trading groups can define the rules under which
companies must operate within that region.
C) Companies never need to change their organizational structure to
take advantage of regional trading groups.
D) Regional trading groups have no influence on an MNE's strategy
since they operate worldwide.
58) Assume a government places restrictions on a specific product
from a specific foreign country. What would be the government's
most likely concern about the foreign country's response?
A) The foreign producers raising the prices of their exports
B) The foreign country restricting its own imports
C) The foreign country restricting its exports in that industry
D) The foreign producers seeking other markets
59) Which of the following is an indication of the increased
globalization of business since the end of World War II?
A) Foreign trade has largely replaced foreign ownership as a means
of conducting international business.
B) World trade has grown more rapidly than world production.
half their consumption.
D) Countries have increased their import restrictions to counter the
rising tide of imports.
60) Global integration occurs as countries from all over the world
decide to cooperate through the .
A) EU
B) NAFTA agreement
C) WTO
D) CARICOM