TEST BANK
INTERNATIONAL BUSINESS: THE NEW REALITIES
5TH EDITION
CHAPTER NO. 01: INTRODUCTION: WHAT IS INTERNATIONAL BUSINESS?
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) accounting and auditing
Answer: B
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
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
Answer: C
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
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 2000.
,D) Its development has slowed in recent years.
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
4) A few decades ago, international business was largely the domain of ________.
A) service firms
B) multinational firms
C) smaller firms
D) all of the these
Answer: B
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
5) Which of the following is another term for importing?
A) capital investment
B) supply side development
C) global sourcing
D) unilateral procurement
Answer: C
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
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
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
7) ________ refers to the transfer of assets to another country or the acquisition of assets in that
country.
A) International investment
B) International trade
C) Importing
D) Exporting
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
8) Each of the following represents a factor of production EXCEPT ________.
A) manufacturing infrastructure
B) technology
C) government regulations
D) managerial talent
Answer: C
Diff: 2: Moderate
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
9) Which of the following would NOT be considered an example of foreign direct investment
(FDI)?
A) cross-border purchase of a textile plant
, B) cross-border purchase of stocks
C) purchase of capital assets of a foreign company
D) purchase of foreign land for business operations
Answer: B
Diff: 2: Moderate
Skill: Application
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
10) ________ is the total value of products and services produced in a country over the course of
a year.
A) GDP
B) CAD
C) FDI
D) PPP
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
11) Which of the following best explains why export growth has outpaced the growth of
domestic production during the last few decades?
A) Both world exports and domestic production have grown significantly over the past 30 years.
B) The cost to import products is generally higher than the cost to produce domestic products.
C) Growth in gross domestic product in most countries has steadily increased since 1970.
D) Advanced economies now source many of their consumable products from low-cost
manufacturing nations.
Answer: D
Diff: 3: Hard
Skill: Critical Thinking
Objective: 1-1: Describe the key concepts in international business
AACSB: Analytical Thinking
INTERNATIONAL BUSINESS: THE NEW REALITIES
5TH EDITION
CHAPTER NO. 01: INTRODUCTION: WHAT IS INTERNATIONAL BUSINESS?
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) accounting and auditing
Answer: B
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
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
Answer: C
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
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 2000.
,D) Its development has slowed in recent years.
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
4) A few decades ago, international business was largely the domain of ________.
A) service firms
B) multinational firms
C) smaller firms
D) all of the these
Answer: B
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
5) Which of the following is another term for importing?
A) capital investment
B) supply side development
C) global sourcing
D) unilateral procurement
Answer: C
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
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
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
7) ________ refers to the transfer of assets to another country or the acquisition of assets in that
country.
A) International investment
B) International trade
C) Importing
D) Exporting
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
8) Each of the following represents a factor of production EXCEPT ________.
A) manufacturing infrastructure
B) technology
C) government regulations
D) managerial talent
Answer: C
Diff: 2: Moderate
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
9) Which of the following would NOT be considered an example of foreign direct investment
(FDI)?
A) cross-border purchase of a textile plant
, B) cross-border purchase of stocks
C) purchase of capital assets of a foreign company
D) purchase of foreign land for business operations
Answer: B
Diff: 2: Moderate
Skill: Application
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
10) ________ is the total value of products and services produced in a country over the course of
a year.
A) GDP
B) CAD
C) FDI
D) PPP
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Describe the key concepts in international business
AACSB: Application of Knowledge
11) Which of the following best explains why export growth has outpaced the growth of
domestic production during the last few decades?
A) Both world exports and domestic production have grown significantly over the past 30 years.
B) The cost to import products is generally higher than the cost to produce domestic products.
C) Growth in gross domestic product in most countries has steadily increased since 1970.
D) Advanced economies now source many of their consumable products from low-cost
manufacturing nations.
Answer: D
Diff: 3: Hard
Skill: Critical Thinking
Objective: 1-1: Describe the key concepts in international business
AACSB: Analytical Thinking
