IB Test

What is international business?

Any commercial transaction that crosses the borders of two or more countries-

Which of the following can best describe born global firms?

Companies that adopt a global perspective and engages in international business from the start

Multinational corporations are key players in the international business and can be described as companies that

have direct investments in the form of marketing or manufacturing subsidiaries abroad in multiple countries

Which of following options helps companies reduce costs when they sell consumer goods globally?

Standardizing certain marketing activities

________ is the name we give to the trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies

. Globalization

When IBM USA sources computer materials from different locations around the world to reduce the cost of production, this is called

globalization of production

What is the major flaw of the original GATT, which led to the creation of the WTO?

Lacked the power to enforce world trade rules

Which are the two main forces that underlie the globalization of markets and production?

Falling barriers to trade and investment and technological innovation

If we compare average incomes in high-income countries with average incomes in middle- and low-income nations, we find a ________ gap

widening-

. Some of the critics of globalization argue that the relentless pursuit of low-cost goods has led to ________.

sending manufacturing jobs abroad

Opponents of globalization argue that freer trade and companies' continuous tendency to reduce costs has led companies to move into lower wage cost locations. This has resulted in ________.

. an increase in the wage gap between white-collar and blue-collar occupations in rich nations

Globalization's detractors say that ________.

it homogenizes our world and destroys its rich diversity of cultures

The ________ states that prices of financial instruments reflect all publicly available information at any given time

efficient market view--

Which of the following statements about exchange rates is FALSE?

A country with a currency that is weak will see an increase in the price of its exports and a decrease in the price of its imports

Which of the following is the intentional lowering of the value of a currency by the nation's government?

Devaluation--

An exchange rate tells us

. how much of one currency we must pay to receive a certain amount of another--

The ________ stipulates that an identical product must have an identical price in all countries when the price is expressed in a common currency

. law of one price

In a ________, currencies float freely against one another without governments intervening in currency markets

free float system--

The present-day ________ is the collection of agreements and institutions that govern exchange rates.

international monetary system-

The ________ is an international monetary system in which nations linked the value of their paper currencies to specific values of gold.

gold standard

Which of the following best defines culture

The set of values, beliefs, and rules of society

Which of the following is the belief that one's own ethnic group or culture is superior to that of others

Ethnocentricity

____________ is a group of people who share a unique way of life within a larger, dominant culture

. Subculture

What are the ideas, beliefs, and customs to which people are emotionally attached?

Values

A westerner says, "I do not like the Japanese purifications ritual because it involves being naked in a communal bath." The westerner quoted here might value modesty and hold conservative beliefs regarding exposure of the body. The westerner in this case

attitudes

According to Hofstede, which of the following cultural dimensions conveys the degree to which a culture accepts social inequality among its people?

Power distance

According to the Hofstede framework, China's culture ranks high on_______________.

collectivism

Because China ranks high in the cultural dimension of power distance, ________.

there is much inequality between superiors and subordinates

When doing business in China, it is important to show all EXCEPT

cultural imperialism

Which of the following are features of totalitarianism

Lack of and/or denying citizens constitutional guarantees; restricts political representations

What are the benefits of doing business in a totalitarian nation

. International companies can be relatively less concerned with local political opposition to their activities

. In _________, the government makes nearly all economy-related decisionslong dash�including who produces what and what the prices of products, labor, and capital will be

. centrally planned economies

The ________ of a country refers to its set of rules and regulations, including the processes by which its laws are enforced and the ways in which its courts hold parties accountable for their actions.

legal system

Under ________, the justice system decides cases by interpreting the law on the basis of tradition, precedent, and usage

common law

. Which of the following describes intellectual property?

Property that results from people's intellectual talent and abilities

Regulation designed to prevent companies from fixing prices, sharing markets, and gaining unfair monopoly advantages are called ________.

Antitrust laws

Which of the following philosophies of business ethics and social responsibility support the view that a company should adopt local ethics wherever it operates because all belief systems are determined within a cultural context?

. Righteous moralist view

Although Ralph Lauren considers itself "an iconic American company," it produced the Olympic merchandise in a low-wage country that maximized profits but cost American jobs. What view is represented by this attitude?

Friedman view