INTERNATIONAL BUSINESS
OPPORTUNITIES AND CHALLENGES IN
A FLATTENING WORLD (V9.0) -
COMPREHENSIVE ASSESSMENT
QUESTIONS AND ANSWERS. VERIFIED
2026/2027
1. According to Thomas Friedman, which ‘flattener’ was primarily responsible for creating a
global platform for multiple forms of collaboration by allowing applications to connect to
other applications?
A. Work-flow software
B. Netscape going public
C. The fall of the Berlin Wall
D. Open-sourcing
Answer: A
Conceptual Explanation: Work-flow software enabled the seamless connection of
different applications, allowing people to collaborate on content regardless of their
location.
,2. How does ‘Globalization 3.0’ differ from ‘Globalization 2.0’ in Thomas Friedman’s
framework?
A. It is driven by countries expanding their reach through imperialism.
B. It is driven by companies searching for markets and labor.
C. It is driven by individuals and small groups collaborating globally.
D. It is driven by the flattening of the world through logistics and transportation.
Answer: C
Conceptual Explanation: Globalization 3.0 is characterized by individuals having the
power to compete and collaborate globally, whereas 2.0 was dominated by multinational
corporations.
3. Under the CAGE framework, which of the following is an example of ‘Administrative
Distance’?
A. Differences in consumer incomes and purchasing power.
B. Physical remoteness and lack of a common border.
C. The absence of a shared colonial history or common currency.
D. Differences in religious beliefs and social norms.
Answer: C
, Conceptual Explanation: Administrative distance refers to differences in political
systems, colonial ties, and institutional frameworks, including trade agreements and
currencies.
4. Which trade theory suggests that a country should specialize in producing goods that use
its most abundant and cheap factors of production?
A. Heckscher-Ohlin Theory
B. Absolute Advantage
C. Mercantilism
D. New Trade Theory
Answer: A
Conceptual Explanation: The Heckscher-Ohlin theory (Factor Proportions Theory)
focuses on the relationship between the relative abundance of production factors (like
land, labor, and capital) and comparative advantage.
5. What is the primary focus of the ‘Internalization Theory’ in the context of Foreign Direct
Investment (FDI)?
A. Determining the exchange rate stability of the host country.
B. Calculating the total factor productivity of a domestic firm.
C. Analyzing the trade balance between two neighboring nations.
D. Explaining why firms prefer FDI over licensing to protect proprietary knowledge.
OPPORTUNITIES AND CHALLENGES IN
A FLATTENING WORLD (V9.0) -
COMPREHENSIVE ASSESSMENT
QUESTIONS AND ANSWERS. VERIFIED
2026/2027
1. According to Thomas Friedman, which ‘flattener’ was primarily responsible for creating a
global platform for multiple forms of collaboration by allowing applications to connect to
other applications?
A. Work-flow software
B. Netscape going public
C. The fall of the Berlin Wall
D. Open-sourcing
Answer: A
Conceptual Explanation: Work-flow software enabled the seamless connection of
different applications, allowing people to collaborate on content regardless of their
location.
,2. How does ‘Globalization 3.0’ differ from ‘Globalization 2.0’ in Thomas Friedman’s
framework?
A. It is driven by countries expanding their reach through imperialism.
B. It is driven by companies searching for markets and labor.
C. It is driven by individuals and small groups collaborating globally.
D. It is driven by the flattening of the world through logistics and transportation.
Answer: C
Conceptual Explanation: Globalization 3.0 is characterized by individuals having the
power to compete and collaborate globally, whereas 2.0 was dominated by multinational
corporations.
3. Under the CAGE framework, which of the following is an example of ‘Administrative
Distance’?
A. Differences in consumer incomes and purchasing power.
B. Physical remoteness and lack of a common border.
C. The absence of a shared colonial history or common currency.
D. Differences in religious beliefs and social norms.
Answer: C
, Conceptual Explanation: Administrative distance refers to differences in political
systems, colonial ties, and institutional frameworks, including trade agreements and
currencies.
4. Which trade theory suggests that a country should specialize in producing goods that use
its most abundant and cheap factors of production?
A. Heckscher-Ohlin Theory
B. Absolute Advantage
C. Mercantilism
D. New Trade Theory
Answer: A
Conceptual Explanation: The Heckscher-Ohlin theory (Factor Proportions Theory)
focuses on the relationship between the relative abundance of production factors (like
land, labor, and capital) and comparative advantage.
5. What is the primary focus of the ‘Internalization Theory’ in the context of Foreign Direct
Investment (FDI)?
A. Determining the exchange rate stability of the host country.
B. Calculating the total factor productivity of a domestic firm.
C. Analyzing the trade balance between two neighboring nations.
D. Explaining why firms prefer FDI over licensing to protect proprietary knowledge.
