IBA final exam questions and answers
solved correctly to score a+ (348 quiz)
Yemna, 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 Yemna? CORRECT ANSWERS 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 ANSWERS 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 ANSWERS
Internationalization
Why would firms internationalize to earn higher margins and profits? CORRECT
ANSWERS 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 ANSWERS 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 ANSWERS 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 ANSWERS better serving clients that have moved into foreign
markets
Companies primarily internationalize for the purpose of ________. CORRECT
ANSWERS Gaining a competitive advantage
What is the LEAST likely motive for international expansion? CORRECT ANSWERS
Learning about a new culture
Which of the following would be a cross-cultural risk in internationalization? CORRECT
ANSWERS Different languages
,A focal firm is a company that ________. CORRECT ANSWERS initiates international
business transactions
Faced with declining sales in the U.S, what strategy has Harley Davidson adopted?
CORRECT ANSWERS A focus on foreign markets
Education and healthcare are two examples of _________ in international business.
CORRECT ANSWERS 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 ANSWERS 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 ANSWERS 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 ANSWERS 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 ANSWERS
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 ANSWERS 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
ANSWERS Global markets are decreasing
________refers to the performance of trade and investment activities by firms across
national borders. CORRECT ANSWERS International business
, ________ include businesses, institutions, and governments. CORRECT ANSWERS
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 ANSWERS 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 ANSWERS Foreign direct investment
Which of the following is a critical employability skill? CORRECT ANSWERS 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 ANSWERS born global firm
Which of the following is NOT an economic integration bloc? CORRECT ANSWERS
World Trade Organization (WTO)
What is one reason companies use social media such as Snapchat and Twitter?
CORRECT ANSWERS 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 ANSWERS 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
ANSWERS Develop more business-based models of development
Why can many global products and services be standardized? CORRECT ANSWERS
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 ANSWERS To reduce the costs of R&D and production
There have been five phases of globalization since the 1800s. The most current phase
was triggered by ________. CORRECT ANSWERS the rise of digital technologies
solved correctly to score a+ (348 quiz)
Yemna, 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 Yemna? CORRECT ANSWERS 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 ANSWERS 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 ANSWERS
Internationalization
Why would firms internationalize to earn higher margins and profits? CORRECT
ANSWERS 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 ANSWERS 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 ANSWERS 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 ANSWERS better serving clients that have moved into foreign
markets
Companies primarily internationalize for the purpose of ________. CORRECT
ANSWERS Gaining a competitive advantage
What is the LEAST likely motive for international expansion? CORRECT ANSWERS
Learning about a new culture
Which of the following would be a cross-cultural risk in internationalization? CORRECT
ANSWERS Different languages
,A focal firm is a company that ________. CORRECT ANSWERS initiates international
business transactions
Faced with declining sales in the U.S, what strategy has Harley Davidson adopted?
CORRECT ANSWERS A focus on foreign markets
Education and healthcare are two examples of _________ in international business.
CORRECT ANSWERS 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 ANSWERS 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 ANSWERS 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 ANSWERS 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 ANSWERS
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 ANSWERS 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
ANSWERS Global markets are decreasing
________refers to the performance of trade and investment activities by firms across
national borders. CORRECT ANSWERS International business
, ________ include businesses, institutions, and governments. CORRECT ANSWERS
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 ANSWERS 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 ANSWERS Foreign direct investment
Which of the following is a critical employability skill? CORRECT ANSWERS 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 ANSWERS born global firm
Which of the following is NOT an economic integration bloc? CORRECT ANSWERS
World Trade Organization (WTO)
What is one reason companies use social media such as Snapchat and Twitter?
CORRECT ANSWERS 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 ANSWERS 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
ANSWERS Develop more business-based models of development
Why can many global products and services be standardized? CORRECT ANSWERS
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 ANSWERS To reduce the costs of R&D and production
There have been five phases of globalization since the 1800s. The most current phase
was triggered by ________. CORRECT ANSWERS the rise of digital technologies
