International Business Test Ch. 1-6 Exam Practice
Questions with Verified Answers
Globalization of Markets - Answer Merging of separate markets into one huge global marketplace
Globalization of production - Answer Sourcing of goods and services from locations around the globe to
take advantage of national differences in the cost and quality of factors of production.
Foreign direct investment (FDI) - Answer occurs when a firm invests resources in business activities
outside its home country.
-Greater than 10% investment.
4 stylized facts that describe the demographic changes of the global economy - Answer 1. The changing
world output and world trade picture.
2. The changing foreign direct investment picture.
3. The changing nature of the multinational enterprise
4. The changing world order.
Individualism - Answer Individuals should have freedom in his/her economic and political pursuits
Collectivism - Answer Political system that stresses the primary of collective goals over individuals goals
Totalitarianism - Answer Form gov't where one person or political party exercises absolute control over
all spheres of human life and prohibits opposing political parties.
Democracy - Answer Political system where gov't is run by the people
Communists - Answer Believe that socialism could be achieved through violent revolution and
totalitarian dictatorship.
Social Democrats - Answer Turned their backs on violent revolution and dictatorship
, Communist Totalitarianism - Answer Deny many basic civil rights to people
Theocratic Totalitarianism - Answer Political power is monopolized by a party, group or individual that
governs according to religious principles
Tribal Totalitarianism - Answer When a political party that represents the interests of a particular tribe
monopolizes power.
Right-wing totalitarianism - Answer Permits some individual economic freedom, but restricts individual
political freedom
Market Economies - Answer -All productive activities are privately owned and production is determined
by supply and demand.
- No gov't interaction
Command Economies - Answer Gov't plans the goods and services that a country produces, its quantity
that is produced, and the prices that they are sold at.
Mixed Economies - Answer Certain parts of the economy are left to private ownership and free market.
-A mix of private ownership and gov't intervention.
Common Law - Answer Based in tradition, precedent, and custom.
Civil Law - Answer Based on detailed set of laws.
Theocratic Laws - Answer Laws are based on religious teachings.
Questions with Verified Answers
Globalization of Markets - Answer Merging of separate markets into one huge global marketplace
Globalization of production - Answer Sourcing of goods and services from locations around the globe to
take advantage of national differences in the cost and quality of factors of production.
Foreign direct investment (FDI) - Answer occurs when a firm invests resources in business activities
outside its home country.
-Greater than 10% investment.
4 stylized facts that describe the demographic changes of the global economy - Answer 1. The changing
world output and world trade picture.
2. The changing foreign direct investment picture.
3. The changing nature of the multinational enterprise
4. The changing world order.
Individualism - Answer Individuals should have freedom in his/her economic and political pursuits
Collectivism - Answer Political system that stresses the primary of collective goals over individuals goals
Totalitarianism - Answer Form gov't where one person or political party exercises absolute control over
all spheres of human life and prohibits opposing political parties.
Democracy - Answer Political system where gov't is run by the people
Communists - Answer Believe that socialism could be achieved through violent revolution and
totalitarian dictatorship.
Social Democrats - Answer Turned their backs on violent revolution and dictatorship
, Communist Totalitarianism - Answer Deny many basic civil rights to people
Theocratic Totalitarianism - Answer Political power is monopolized by a party, group or individual that
governs according to religious principles
Tribal Totalitarianism - Answer When a political party that represents the interests of a particular tribe
monopolizes power.
Right-wing totalitarianism - Answer Permits some individual economic freedom, but restricts individual
political freedom
Market Economies - Answer -All productive activities are privately owned and production is determined
by supply and demand.
- No gov't interaction
Command Economies - Answer Gov't plans the goods and services that a country produces, its quantity
that is produced, and the prices that they are sold at.
Mixed Economies - Answer Certain parts of the economy are left to private ownership and free market.
-A mix of private ownership and gov't intervention.
Common Law - Answer Based in tradition, precedent, and custom.
Civil Law - Answer Based on detailed set of laws.
Theocratic Laws - Answer Laws are based on religious teachings.
