INTERNATIONAL BUSINESS:
OPPORTUNITIES AND CHALLENGES IN
A FLATTENING WORLD VERSION 6.0
QUESTIONS AND ANSWERS. VERIFIED
2026/2027
1. According to Thomas Friedman’s ‘The World Is Flat’ concept, which of the following
‘flatteners’ primarily enabled individuals to collaborate and compete globally?
A. The fall of the Berlin Wall
B. The rise of open-sourcing and workflow software
C. The implementation of the Gold Standard
D. The expansion of the Silk Road
Answer: B
Conceptual Explanation: Friedman argues that workflow software and open-sourcing
allowed for seamless collaboration across borders, making the world ‘flat’ by leveling the
playing field for international competition.
2. In the CAGE Distance Framework, which dimension refers to differences in religious beliefs,
social norms, and language?
A. Administrative Distance
,B. Geographic Distance
C. Cultural Distance
D. Economic Distance
Answer: C
Conceptual Explanation: Cultural distance encompasses the differences in social norms,
religious beliefs, and languages between countries that can impact business operations.
3. Which trade theory suggests that a country should export goods that use its relatively
abundant factors of production?
A. Mercantilism
B. Heckscher-Ohlin Theory
C. Comparative Advantage
D. Product Life Cycle Theory
Answer: B
Conceptual Explanation: The Heckscher-Ohlin theory focuses on factor endowments,
suggesting countries export goods that intensively use resources they have in abundance.
4. In Porter’s Diamond Model, ‘Related and Supporting Industries’ refers to:
A. The nature of home-market demand for the industry’s product
B. The conditions governing how companies are created and managed
, C. The presence of supplier industries that are internationally competitive
D. The status of the country’s infrastructure and human capital
Answer: C
Conceptual Explanation: Porter’s Diamond includes related and supporting industries as
a key determinant of national competitive advantage, emphasizing the ecosystem of
suppliers.
5. Which type of economic system is characterized by the government making all decisions
regarding the production and distribution of goods?
A. Command Economy
B. Mixed Economy
C. Market Economy
D. Laissez-faire Economy
Answer: A
Conceptual Explanation: In a command economy, the central government plans and
controls the production and pricing of goods and services.
6. According to Hofstede, a culture that emphasizes long-term results and persistence over
short-term gratification is high in:
A. Uncertainty Avoidance
B. Long-Term Orientation
OPPORTUNITIES AND CHALLENGES IN
A FLATTENING WORLD VERSION 6.0
QUESTIONS AND ANSWERS. VERIFIED
2026/2027
1. According to Thomas Friedman’s ‘The World Is Flat’ concept, which of the following
‘flatteners’ primarily enabled individuals to collaborate and compete globally?
A. The fall of the Berlin Wall
B. The rise of open-sourcing and workflow software
C. The implementation of the Gold Standard
D. The expansion of the Silk Road
Answer: B
Conceptual Explanation: Friedman argues that workflow software and open-sourcing
allowed for seamless collaboration across borders, making the world ‘flat’ by leveling the
playing field for international competition.
2. In the CAGE Distance Framework, which dimension refers to differences in religious beliefs,
social norms, and language?
A. Administrative Distance
,B. Geographic Distance
C. Cultural Distance
D. Economic Distance
Answer: C
Conceptual Explanation: Cultural distance encompasses the differences in social norms,
religious beliefs, and languages between countries that can impact business operations.
3. Which trade theory suggests that a country should export goods that use its relatively
abundant factors of production?
A. Mercantilism
B. Heckscher-Ohlin Theory
C. Comparative Advantage
D. Product Life Cycle Theory
Answer: B
Conceptual Explanation: The Heckscher-Ohlin theory focuses on factor endowments,
suggesting countries export goods that intensively use resources they have in abundance.
4. In Porter’s Diamond Model, ‘Related and Supporting Industries’ refers to:
A. The nature of home-market demand for the industry’s product
B. The conditions governing how companies are created and managed
, C. The presence of supplier industries that are internationally competitive
D. The status of the country’s infrastructure and human capital
Answer: C
Conceptual Explanation: Porter’s Diamond includes related and supporting industries as
a key determinant of national competitive advantage, emphasizing the ecosystem of
suppliers.
5. Which type of economic system is characterized by the government making all decisions
regarding the production and distribution of goods?
A. Command Economy
B. Mixed Economy
C. Market Economy
D. Laissez-faire Economy
Answer: A
Conceptual Explanation: In a command economy, the central government plans and
controls the production and pricing of goods and services.
6. According to Hofstede, a culture that emphasizes long-term results and persistence over
short-term gratification is high in:
A. Uncertainty Avoidance
B. Long-Term Orientation
