IBA final exam questions with verified
answers graded A+ passed
Yamna, a recent business school graduate, loves adventure, so she is seeking a job in a foreign
country to expand her sense of the world of business. She is being recruited by a company that
has 50 employees and is looking to hire additional personnel to oversee the firm's exporting
branch in Vietnam. What type of international business is recruiting Yamna? - correct answer
✔✔Small enterprise
In international business, cross-cultural risk can come from differences in language and culture.
Which statement best explains why language is an important aspect of culture? - correct answer
✔✔Language facilitates communication and sheds light on people's value systems.
When companies systematically engage in increasing the international dimension of their
business activities it is known as ________ - correct answer ✔✔Internationalization
Why would firms internationalize to earn higher margins and profits? - correct answer
✔✔Market growth in mature countries is often flat, and foreign markets may be underserved.
Starbucks sells coffee from a nonprofit organization that promotes the interests of the coffee
growers. Why is this example important to you as a student of international business? - correct
answer ✔✔It demonstrates social responsibility and good environmental practices.
Which type of investment is the passive ownership of foreign securities for the purpose of
generating financial returns? - correct answer ✔✔International portfolio investment
When Nissan opened its first factory in the United Kingdom, many Japanese auto parts suppliers
followed, establishing their own operations there. This is an example of ________. - correct
answer ✔✔better serving clients that have moved into foreign markets
,Companies primarily internationalize for the purpose of ________. - correct answer ✔✔Gaining
a competitive advantage
What is the LEAST likely motive for international expansion? - correct answer ✔✔Learning
about a new culture
Which of the following would be a cross-cultural risk in internationalization? - correct answer
✔✔Different languages
A focal firm is a company that ________. - correct answer ✔✔initiates international business
transactions
Faced with declining sales in the U.S, what strategy has Harley Davidson adopted? - correct
answer ✔✔A focus on foreign markets
Education and healthcare are two examples of _________ in international business. - correct
answer ✔✔Nongovernmental organizations
A U.S. mining operation opens a mine in Canada. The owner knows that it is easier and less
expensive to acquire mining equipment in the Klondike, an area of Canada, than elsewhere. The
owner of the mine goes to the Klondike and meets locals who offer to partner with him. Why is
this miner seeking international business, and what type of risk is he taking? - correct answer
✔✔To gain access to less costly factors of production; commercial risk
A macro trend of intense economic interconnectedness among the nations of the world is called
________. - correct answer ✔✔Globalization
Custom Cars, a painting and auto modification company, has expanded operations into South
America. The first problem Custom Cars encountered was determining the applicable laws in
,the new country. Next, Custom Cars was informed by the local mayor that the firm will be shut
down if it does not prepay its taxes in cash. Which risk in international business is Custom Cars
encountering? - correct answer ✔✔Country risk
A business student in Texas is considering learning a foreign language. Why might she benefit
from studying a language such as Russian or Chinese? - correct answer ✔✔Both Russia and
China feature fast-growing economies.
India is entering the global age and has a growing middle class. An Indian car manufacturer
wants to offer a car for the average citizen of India, but does not have the technology available
to create an inexpensive car that meets the laws that the Indian government is considering
imposing. The company sets out to find a U.S. hybrid and electric car manufacturer that is
willing to work with them. Why would a U.S. firm most likely agree? - correct answer ✔✔To
develop a network of people and increase business in the future
Which of the following is NOT a reason to study international business? - correct answer
✔✔Global markets are decreasing
________refers to the performance of trade and investment activities by firms across national
borders. - correct answer ✔✔International business
________ include businesses, institutions, and governments. - correct answer
✔✔Organizational buyers
If a firm is operating in a foreign country, what type of risk does it face from the country's
political, legal, and economic environment? - correct answer ✔✔Country risk
Carol wants to expand her recycled toy business abroad because demand for recycled products
is much higher in Europe and Asia than in the United States. She locates three suppliers in
Europe and three in Asia, and creates one factory in Germany and one in Singapore. She seeks
ways to advance her machinery to meet the needs of her production as well as her eco-friendly
, business model. In what type of international business has Carol engaged? - correct answer
✔✔Foreign direct investment
Which of the following is a critical employability skill? - correct answer ✔✔Cultural awareness
Pioneer Systems is a young entrepreneurial company that has engaged in international business
from the day it opened its doors. Pioneer is categorized as a ________. - correct answer
✔✔born global firm
Which of the following is NOT an economic integration bloc? - correct answer ✔✔World Trade
Organization (WTO)
What is one reason companies use social media such as Snapchat and Twitter? - correct answer
✔✔To communicate with connected individuals in new markets
In South Carolina, Jackson Mills, a longstanding textile plant, shut down and thousands of
workers lost their jobs. Jackson Mills learned that it could source textiles of equal quality at a
lower price from suppliers in Asia. This is an example of ________. - correct answer
✔✔relocating value-adding activities to achieve cost advantages
In Africa, the majority of people live on less than $5 a day. According to the author of the text,
what is one of the most effective ways to reduce African poverty? - correct answer ✔✔Develop
more business-based models of development
Why can many global products and services be standardized? - correct answer ✔✔There is a
convergence of consumer lifestyles and preferences worldwide.
What is one of the most typical reason for locating value-chain activities abroad? - correct
answer ✔✔To reduce the costs of R&D and production
answers graded A+ passed
Yamna, a recent business school graduate, loves adventure, so she is seeking a job in a foreign
country to expand her sense of the world of business. She is being recruited by a company that
has 50 employees and is looking to hire additional personnel to oversee the firm's exporting
branch in Vietnam. What type of international business is recruiting Yamna? - correct answer
✔✔Small enterprise
In international business, cross-cultural risk can come from differences in language and culture.
Which statement best explains why language is an important aspect of culture? - correct answer
✔✔Language facilitates communication and sheds light on people's value systems.
When companies systematically engage in increasing the international dimension of their
business activities it is known as ________ - correct answer ✔✔Internationalization
Why would firms internationalize to earn higher margins and profits? - correct answer
✔✔Market growth in mature countries is often flat, and foreign markets may be underserved.
Starbucks sells coffee from a nonprofit organization that promotes the interests of the coffee
growers. Why is this example important to you as a student of international business? - correct
answer ✔✔It demonstrates social responsibility and good environmental practices.
Which type of investment is the passive ownership of foreign securities for the purpose of
generating financial returns? - correct answer ✔✔International portfolio investment
When Nissan opened its first factory in the United Kingdom, many Japanese auto parts suppliers
followed, establishing their own operations there. This is an example of ________. - correct
answer ✔✔better serving clients that have moved into foreign markets
,Companies primarily internationalize for the purpose of ________. - correct answer ✔✔Gaining
a competitive advantage
What is the LEAST likely motive for international expansion? - correct answer ✔✔Learning
about a new culture
Which of the following would be a cross-cultural risk in internationalization? - correct answer
✔✔Different languages
A focal firm is a company that ________. - correct answer ✔✔initiates international business
transactions
Faced with declining sales in the U.S, what strategy has Harley Davidson adopted? - correct
answer ✔✔A focus on foreign markets
Education and healthcare are two examples of _________ in international business. - correct
answer ✔✔Nongovernmental organizations
A U.S. mining operation opens a mine in Canada. The owner knows that it is easier and less
expensive to acquire mining equipment in the Klondike, an area of Canada, than elsewhere. The
owner of the mine goes to the Klondike and meets locals who offer to partner with him. Why is
this miner seeking international business, and what type of risk is he taking? - correct answer
✔✔To gain access to less costly factors of production; commercial risk
A macro trend of intense economic interconnectedness among the nations of the world is called
________. - correct answer ✔✔Globalization
Custom Cars, a painting and auto modification company, has expanded operations into South
America. The first problem Custom Cars encountered was determining the applicable laws in
,the new country. Next, Custom Cars was informed by the local mayor that the firm will be shut
down if it does not prepay its taxes in cash. Which risk in international business is Custom Cars
encountering? - correct answer ✔✔Country risk
A business student in Texas is considering learning a foreign language. Why might she benefit
from studying a language such as Russian or Chinese? - correct answer ✔✔Both Russia and
China feature fast-growing economies.
India is entering the global age and has a growing middle class. An Indian car manufacturer
wants to offer a car for the average citizen of India, but does not have the technology available
to create an inexpensive car that meets the laws that the Indian government is considering
imposing. The company sets out to find a U.S. hybrid and electric car manufacturer that is
willing to work with them. Why would a U.S. firm most likely agree? - correct answer ✔✔To
develop a network of people and increase business in the future
Which of the following is NOT a reason to study international business? - correct answer
✔✔Global markets are decreasing
________refers to the performance of trade and investment activities by firms across national
borders. - correct answer ✔✔International business
________ include businesses, institutions, and governments. - correct answer
✔✔Organizational buyers
If a firm is operating in a foreign country, what type of risk does it face from the country's
political, legal, and economic environment? - correct answer ✔✔Country risk
Carol wants to expand her recycled toy business abroad because demand for recycled products
is much higher in Europe and Asia than in the United States. She locates three suppliers in
Europe and three in Asia, and creates one factory in Germany and one in Singapore. She seeks
ways to advance her machinery to meet the needs of her production as well as her eco-friendly
, business model. In what type of international business has Carol engaged? - correct answer
✔✔Foreign direct investment
Which of the following is a critical employability skill? - correct answer ✔✔Cultural awareness
Pioneer Systems is a young entrepreneurial company that has engaged in international business
from the day it opened its doors. Pioneer is categorized as a ________. - correct answer
✔✔born global firm
Which of the following is NOT an economic integration bloc? - correct answer ✔✔World Trade
Organization (WTO)
What is one reason companies use social media such as Snapchat and Twitter? - correct answer
✔✔To communicate with connected individuals in new markets
In South Carolina, Jackson Mills, a longstanding textile plant, shut down and thousands of
workers lost their jobs. Jackson Mills learned that it could source textiles of equal quality at a
lower price from suppliers in Asia. This is an example of ________. - correct answer
✔✔relocating value-adding activities to achieve cost advantages
In Africa, the majority of people live on less than $5 a day. According to the author of the text,
what is one of the most effective ways to reduce African poverty? - correct answer ✔✔Develop
more business-based models of development
Why can many global products and services be standardized? - correct answer ✔✔There is a
convergence of consumer lifestyles and preferences worldwide.
What is one of the most typical reason for locating value-chain activities abroad? - correct
answer ✔✔To reduce the costs of R&D and production
