INTERNATIONAL BUSINESS:
OPPORTUNITIES AND CHALLENGES IN
A FLATTENING WORLD QUESTIONS
AND ANSWERS. VERIFIED 2026/2027
1. According to Thomas Friedman, which of the following ‘flatteners’ was primarily
responsible for creating a global platform for multiple forms of collaboration?
A. The fall of the Berlin Wall
B. The rise of outsourcing
C. The introduction of workflow software
D. The development of supply chaining
Answer: C
Conceptual Explanation: Workflow software allowed applications to talk to other
applications, enabling people to collaborate globally regardless of distance.
2. Which trade theory suggests that a country should specialize in producing goods that use
its most abundant factors of production?
A. Comparative Advantage Theory
B. Absolute Advantage Theory
C. Heckscher-Ohlin Theory
,D. Product Life Cycle Theory
Answer: C
Conceptual Explanation: The Heckscher-Ohlin theory focuses on factor endowments like
land, labor, and capital as the basis for trade specialization.
3. In the context of the CAGE framework, which distance refers to the differences in
consumer incomes and the cost of labor?
A. Cultural Distance
B. Administrative Distance
C. Geographic Distance
D. Economic Distance
Answer: D
Conceptual Explanation: Economic distance considers factors such as wealth, income per
capita, and the cost of resources like labor and infrastructure.
4. Which of the following describes a ‘Brownfield investment’?
A. Building a new facility from the ground up in a foreign market
B. Exporting goods directly to a foreign distributor
C. Forming a joint venture with a local partner to share risks
D. Buying or leasing an existing facility to start operations quickly
, Answer: D
Conceptual Explanation: Brownfield investment involves the acquisition or lease of
existing production facilities, saving time compared to building new ones.
5. A society that values ‘High Power Distance’ is most likely characterized by:
A. Flat organizational structures and open communication
B. A strong emphasis on egalitarianism and shared decision-making
C. An acceptance of hierarchical order and unequal distribution of power
D. Low tolerance for ambiguity and strict rules
Answer: C
Conceptual Explanation: High power distance cultures accept that power is distributed
unequally and rely heavily on hierarchy and authority.
6. Under the ‘Mercantilism’ philosophy, what is the primary goal of a nation’s trade policy?
A. To encourage imports to increase consumer choice
B. To achieve a trade deficit to stimulate domestic consumption
C. To maintain a trade surplus by maximizing exports and minimizing imports
D. To eliminate all tariffs and promote free trade zones
Answer: C
OPPORTUNITIES AND CHALLENGES IN
A FLATTENING WORLD QUESTIONS
AND ANSWERS. VERIFIED 2026/2027
1. According to Thomas Friedman, which of the following ‘flatteners’ was primarily
responsible for creating a global platform for multiple forms of collaboration?
A. The fall of the Berlin Wall
B. The rise of outsourcing
C. The introduction of workflow software
D. The development of supply chaining
Answer: C
Conceptual Explanation: Workflow software allowed applications to talk to other
applications, enabling people to collaborate globally regardless of distance.
2. Which trade theory suggests that a country should specialize in producing goods that use
its most abundant factors of production?
A. Comparative Advantage Theory
B. Absolute Advantage Theory
C. Heckscher-Ohlin Theory
,D. Product Life Cycle Theory
Answer: C
Conceptual Explanation: The Heckscher-Ohlin theory focuses on factor endowments like
land, labor, and capital as the basis for trade specialization.
3. In the context of the CAGE framework, which distance refers to the differences in
consumer incomes and the cost of labor?
A. Cultural Distance
B. Administrative Distance
C. Geographic Distance
D. Economic Distance
Answer: D
Conceptual Explanation: Economic distance considers factors such as wealth, income per
capita, and the cost of resources like labor and infrastructure.
4. Which of the following describes a ‘Brownfield investment’?
A. Building a new facility from the ground up in a foreign market
B. Exporting goods directly to a foreign distributor
C. Forming a joint venture with a local partner to share risks
D. Buying or leasing an existing facility to start operations quickly
, Answer: D
Conceptual Explanation: Brownfield investment involves the acquisition or lease of
existing production facilities, saving time compared to building new ones.
5. A society that values ‘High Power Distance’ is most likely characterized by:
A. Flat organizational structures and open communication
B. A strong emphasis on egalitarianism and shared decision-making
C. An acceptance of hierarchical order and unequal distribution of power
D. Low tolerance for ambiguity and strict rules
Answer: C
Conceptual Explanation: High power distance cultures accept that power is distributed
unequally and rely heavily on hierarchy and authority.
6. Under the ‘Mercantilism’ philosophy, what is the primary goal of a nation’s trade policy?
A. To encourage imports to increase consumer choice
B. To achieve a trade deficit to stimulate domestic consumption
C. To maintain a trade surplus by maximizing exports and minimizing imports
D. To eliminate all tariffs and promote free trade zones
Answer: C
