Test Bank International Business f f f
A global company is an organization with multicountry affiliates, each of w
f f f f f f f f f f f
hich formulates its own business strategy based on perceived market diff
f f f f f f f f f f
erences.
False
One variable commonly used to measure where and how fast internation
f f f f f f f f f f
alization takes place is the increase in total foreign direct investment.
f f f f f f f f f f
True
The forces in the foreign environment operate the same way as those in th
f f f f f f f f f f f f f
e domestic environment except that they occur in foreign nations.
f f f f f f f f f
False
An international manager has two choices on what to do with a concept or
f f f f f f f f f f f f f f
technique employed in domestic operations: (1) transfer it intact or (2) ad
f f f f f f f f f f f
apt it to local conditions.
f f f f
False
Financial, economic, and distributive forces are examples of controllable
f f f f f f f f f
forces influencing the life and development of a firm.
f f f f f f f f
False
All the following are true about a global company except that it:
f f f f f f f f f f f
A)maintains a presence in key markets around the world. f f f f f f f f
B)looks for differences among markets. f f f f
C)integrates its operations worldwide. f f f
D)standardizes operations worldwide in one or more of the firm's function f f f f f f f f f f
al areas.f
B. Looks for differences among markets
f f f f f
The major globalization drivers include all of the following except:
f f f f f f f f f
A)political.
B)social.
C)technological.
D)market.
B. Social f
Due to the expanding importance of foreign-
f f f f f f
owned firms in local economies, host governments have made their polici
f f f f f f f f f f
es toward these companies _____.
f f f f
A)more strict f
B)more liberal f
,C)less powerless f
D)more confronting f
B. More liberal
f f
Management has no direct control over the external environment of the fir f f f f f f f f f f f
m but can exert influence by:
f f f f f
A)heavy promotion of new products to change cultural attitudes. f f f f f f f f
B)focusing on the strategic plan. f f f f
C)increasing the number of people. f f f f
D)exerting control over the inventory. f f f f
A. heavy promotion of new products to change cultural attitudes
f f f f f f f f f
Unconscious reference to one's own cultural values when judging behavi f f f f f f f f f
oral actions of others in a new and different cultural environment is called:
f f f f f f f f f f f f
A)self-reference culture. f
B)self-reference values. f
C)self-reference criterion. f
D)self-reference environment. f
C. self-reference criterion
f f
The Heckscher- f
Ohlin theory states that differences in production costs occur because of
f f f f f f f f f f f
differences in the supply of production factors. f f f f f f
False
An important outcome of Leontief's work was recognizing the potential for
f f f f f f f f f f
differences in the kinds of labor as well as differences in natural and capit
f f f f f f f f f f f f f f
al resources.
f
True
Recent research on the first mover theory also confirms that firms moving
f f f f f f f f f f f f
first into a market soon dominate it.
f f f f f f
False
Internalization theory suggests that to obtain a higher return on its invest f f f f f f f f f f f
ment, a firm should transfer its superior knowledge in the open market rat
f f f f f f f f f f f f
her than selling it to a foreign subsidiary.
f f f f f f f
False
The eclectic theory of international production is sometimes referred to a
f f f f f f f f f f
s the OLI model.
f f f
True
Adam Smith claimed that: f f f
A)government, not market forces, should determine the direction, volum f f f f f f f f
e, and composition of international trade.
f f f f f
B)a nation could trade advantageously if it had a comparative advantage.
f f f f f f f f f f
C)market forces, not government controls, should determine the directio f f f f f f f f
n, volume, and composition of international trade.
f f f f f f
D)customers' tastes are affected by income levels. f f f f f f
C. market forces, not government controls, should determine the directio
f f f f f f f f f
n, volume, and composition of international trade.
f f f f f f
, Which of the following is not true about the international product life cycle?
f f f f f f f f f f f f
A)Concerns the role of innovation in trade patterns. f f f f f f f
B)Can be applied to new product introduction by firms in any of the industr
f f f f f f f f f f f f f
ialized nations. f
C)Views a product as going through a full life cycle from the standardizatio
f f f f f f f f f f f f
n stage to internationalization.
f f f
D)The initial innovation stage of the cycle borrows from the Linder theory.
f f f f f f f f f f f
C. Views a product as going through a full life cycle from the standardizati
f f f f f f f f f f f f f
on stage to internationalization.
f f f
Economies of scale and the experience curve effect are important for inte f f f f f f f f f f f
rnational trade because: f f
B)they allow a nation's industries to become low-
f f f f f f f
cost producers without requiring that the nation have an abundance of a c
f f f f f f f f f f f f
ertain class of production factors.
f f f f
To sum up international trade theory, we can say that the primary reason f
f f f f f f f f f f f f f
or trade is:
f f
A)similarities in endowments of the factors of production. f f f f f f f
B)differences in interest rates for investments. f f f f f
C)the existence of price differentials among nations.
f f f f f f
D)effective utilization of factor intensities. f f f f
C. the existence of price differentials among nations
f f f f f f f
Dunning's Eclectic Theory of International Production states that if a firm i
f f f f f f f f f f f
s going to invest in production facilities abroad, it must have the following k
f f f f f f f f f f f f f
inds of advantages: f f
A)ownership-specific, location-specific, and internationalization. f f f
B)strategic, location-specific, and technological. f f f
C)ownership-specific, location-specific, and internalization. f f f
D)technological, financial, and ownership-specific. f f f
C. ownership-specific, location-specific, and internalization
f f f f
The national culture is a key determinant for the evaluation of managers.
f f f f f f f f f f f
True
Legal characteristics and political structures are components of culture.
f f f f f f f f
True
The demonstration effect is a result of the backward-
f f f f f f f f
bending labor supply curve. f f f
False
Generally, the greater the difference between an old and a new method or f f f f f f f f f f f f f
product, the easier it is for the firm to gain acceptance of a change.
f f f f f f f f f f f f f
False
According to Hofstede, power distance is the extent to which members of
f f f f f f f f f f f f
a society accept the unequal distribution of power among individuals.
f f f f f f f f f
True
A global company is an organization with multicountry affiliates, each of w
f f f f f f f f f f f
hich formulates its own business strategy based on perceived market diff
f f f f f f f f f f
erences.
False
One variable commonly used to measure where and how fast internation
f f f f f f f f f f
alization takes place is the increase in total foreign direct investment.
f f f f f f f f f f
True
The forces in the foreign environment operate the same way as those in th
f f f f f f f f f f f f f
e domestic environment except that they occur in foreign nations.
f f f f f f f f f
False
An international manager has two choices on what to do with a concept or
f f f f f f f f f f f f f f
technique employed in domestic operations: (1) transfer it intact or (2) ad
f f f f f f f f f f f
apt it to local conditions.
f f f f
False
Financial, economic, and distributive forces are examples of controllable
f f f f f f f f f
forces influencing the life and development of a firm.
f f f f f f f f
False
All the following are true about a global company except that it:
f f f f f f f f f f f
A)maintains a presence in key markets around the world. f f f f f f f f
B)looks for differences among markets. f f f f
C)integrates its operations worldwide. f f f
D)standardizes operations worldwide in one or more of the firm's function f f f f f f f f f f
al areas.f
B. Looks for differences among markets
f f f f f
The major globalization drivers include all of the following except:
f f f f f f f f f
A)political.
B)social.
C)technological.
D)market.
B. Social f
Due to the expanding importance of foreign-
f f f f f f
owned firms in local economies, host governments have made their polici
f f f f f f f f f f
es toward these companies _____.
f f f f
A)more strict f
B)more liberal f
,C)less powerless f
D)more confronting f
B. More liberal
f f
Management has no direct control over the external environment of the fir f f f f f f f f f f f
m but can exert influence by:
f f f f f
A)heavy promotion of new products to change cultural attitudes. f f f f f f f f
B)focusing on the strategic plan. f f f f
C)increasing the number of people. f f f f
D)exerting control over the inventory. f f f f
A. heavy promotion of new products to change cultural attitudes
f f f f f f f f f
Unconscious reference to one's own cultural values when judging behavi f f f f f f f f f
oral actions of others in a new and different cultural environment is called:
f f f f f f f f f f f f
A)self-reference culture. f
B)self-reference values. f
C)self-reference criterion. f
D)self-reference environment. f
C. self-reference criterion
f f
The Heckscher- f
Ohlin theory states that differences in production costs occur because of
f f f f f f f f f f f
differences in the supply of production factors. f f f f f f
False
An important outcome of Leontief's work was recognizing the potential for
f f f f f f f f f f
differences in the kinds of labor as well as differences in natural and capit
f f f f f f f f f f f f f f
al resources.
f
True
Recent research on the first mover theory also confirms that firms moving
f f f f f f f f f f f f
first into a market soon dominate it.
f f f f f f
False
Internalization theory suggests that to obtain a higher return on its invest f f f f f f f f f f f
ment, a firm should transfer its superior knowledge in the open market rat
f f f f f f f f f f f f
her than selling it to a foreign subsidiary.
f f f f f f f
False
The eclectic theory of international production is sometimes referred to a
f f f f f f f f f f
s the OLI model.
f f f
True
Adam Smith claimed that: f f f
A)government, not market forces, should determine the direction, volum f f f f f f f f
e, and composition of international trade.
f f f f f
B)a nation could trade advantageously if it had a comparative advantage.
f f f f f f f f f f
C)market forces, not government controls, should determine the directio f f f f f f f f
n, volume, and composition of international trade.
f f f f f f
D)customers' tastes are affected by income levels. f f f f f f
C. market forces, not government controls, should determine the directio
f f f f f f f f f
n, volume, and composition of international trade.
f f f f f f
, Which of the following is not true about the international product life cycle?
f f f f f f f f f f f f
A)Concerns the role of innovation in trade patterns. f f f f f f f
B)Can be applied to new product introduction by firms in any of the industr
f f f f f f f f f f f f f
ialized nations. f
C)Views a product as going through a full life cycle from the standardizatio
f f f f f f f f f f f f
n stage to internationalization.
f f f
D)The initial innovation stage of the cycle borrows from the Linder theory.
f f f f f f f f f f f
C. Views a product as going through a full life cycle from the standardizati
f f f f f f f f f f f f f
on stage to internationalization.
f f f
Economies of scale and the experience curve effect are important for inte f f f f f f f f f f f
rnational trade because: f f
B)they allow a nation's industries to become low-
f f f f f f f
cost producers without requiring that the nation have an abundance of a c
f f f f f f f f f f f f
ertain class of production factors.
f f f f
To sum up international trade theory, we can say that the primary reason f
f f f f f f f f f f f f f
or trade is:
f f
A)similarities in endowments of the factors of production. f f f f f f f
B)differences in interest rates for investments. f f f f f
C)the existence of price differentials among nations.
f f f f f f
D)effective utilization of factor intensities. f f f f
C. the existence of price differentials among nations
f f f f f f f
Dunning's Eclectic Theory of International Production states that if a firm i
f f f f f f f f f f f
s going to invest in production facilities abroad, it must have the following k
f f f f f f f f f f f f f
inds of advantages: f f
A)ownership-specific, location-specific, and internationalization. f f f
B)strategic, location-specific, and technological. f f f
C)ownership-specific, location-specific, and internalization. f f f
D)technological, financial, and ownership-specific. f f f
C. ownership-specific, location-specific, and internalization
f f f f
The national culture is a key determinant for the evaluation of managers.
f f f f f f f f f f f
True
Legal characteristics and political structures are components of culture.
f f f f f f f f
True
The demonstration effect is a result of the backward-
f f f f f f f f
bending labor supply curve. f f f
False
Generally, the greater the difference between an old and a new method or f f f f f f f f f f f f f
product, the easier it is for the firm to gain acceptance of a change.
f f f f f f f f f f f f f
False
According to Hofstede, power distance is the extent to which members of
f f f f f f f f f f f f
a society accept the unequal distribution of power among individuals.
f f f f f f f f f
True
