1.

International business is different from domestic business because

of the following factors, EXCEPT:

A. the use of currency

B. legal system

C. culture

D. raw materials

E. advanced countries

2. _____________ is an investment implemented to control properties or operation of a company

located in a foreign country.

A. Foreign direct investment

B. Licensing

C. Franchising

D. Management contract

E. Export

3. One of the contributing factors of the international business development is _______________.

A. changes in the top management of a company.

B. changes in the administration of a company.

C. changes in the culture practised by the society of a country.

D. changes in the legal system of a country.

E. market development.

5. ___________ is when an organisation gets involved in commercial transactions out of the border
with individuals, private companies

and/or public organisations.

A. Internationalisation

B. Multidomestic firm

C. Transnational firm

D. Global firm

E. Local firm

C2
Mixed economy is ____________.

A. capitalism market where the government owns specific sources

B. socialism market where the government states its own specific sources but the distribution is
controlled by market price mechanism

C. capitalism and socialism market where the government determines the distribution of specific
sources

D. socialism market where the government will determine what is produced and how much to
produce

E. socialism and capitalism market practised by countries which practise communism

2. Most of the data in the World Bank are obtained from

________________.

A. advanced countries

B. developing countries

C. advanced and developing countries

D. socialism countries

E. geographical area
_________ consists of people with shared beliefs, values and attitudes.

A. Moral

B. Culture

C. Identity

D. Self-concept

2. Silent language includes all of the following EXCEPT

A. Handshake

B. Body language

C. Colour symbols and associations

D. Facial expressions

4. Which of the following religion prohibits paying or receiving interest on business transactions?

A. Christianity

B. Buddhism

C. Islam

D. Hinduism

5. _________ pis the belief that one’s own culture is superior to others.

A. Geocentrism

B. Polycentrism

C. Ethnocentrism

D. Regiocentrism

5. Which of the following statements regarding culture is TRUE?

A. Building cultural awareness is an easy task.

B. International business managers are expected to understand the variations of business practices
in every country.

C. All companies have the same degree of cultural awareness.

D. Companies that are new to international business may need only a minimum level of cultural
understanding and sensitivity.

6. In which of the following situations do companies find their best marketing successes when
emphasising advertisements that express group values?

A. High individualism

B. High collectivism
C. High masculinity

7. Which of the following is NOT a cultural variable?

A. Career choice

B. Aesthetics

C. Social interaction in family unit

D. Religion

8. Which of the following is NOT a masculine value?

A. Quality of life

B. Assertiveness

C. Achievement

D. Status

C4
1. Political risks can happen because of _____________.

A. privatisation policy

B. inflation

C. war

D. export pricing downfall

E. opinions of political leaders

2. Macro political risk is _____________.

A. political action which affects foreign investorsÊ spectrum

B. political action which affects the country

C. political action which affects export of local firms

D. political action which affects collaboration between local and foreign firms

E. government policy that does not encourage foreign investors to invest in its country

3. An individualistic paradigm believes that a government should

_____________.

A. interfere with its economic system

B. not interfere with its economic system

C. attract the attention of foreign investors to invest in its country

D. protect local firms from competing with international firms

E. protect local workers from being fired by foreign firms

4. Legal environment is closely related to the_____________ system of a country.

A. political

B. social

C. economic

D. industrial

E. cultural

5. The main legal challenge facing global companies is dealing with the issue of _____________.

A. product liability

B. marketing and promotion

C. technology

D. employee recruitment

E. local resources
C7
Forward vertical foreign direct investment means _____________.

A. foreign direct investment that enters a foreign market and competes with other companies in that
foreign country

B. foreign direct investment that enters a foreign market and collaborates with other companies in
that foreign country

C. foreign direct investment that enters a foreign market with the purpose of collaborating with
other companies in that foreign country

D. foreign direct investment that enters a foreign market with the purpose of selling and distributing
its products
C8

_____________ is a market to convert one nation’s currency to another currency.

A. Foreign exchange market

B. Culture diagonal market

C. Open currency market

D. Currency exchange market

2. Foreign exchange market has two important functions which are _____________.

A. to collect taxes of imported merchandise and to change a national’s currency to another currency

B. to protect a company from foreign trading risks and to determine the rate of benefit to the
international investor

C. to collect taxes of imported merchandise and to determine the rate of benefit to the international
investor

D. to convert a national’s currency to another currency and to protect the nation from foreign
exchange trading risks

3. The value of one currency is determined by _____________.

A. demands and bidding interaction that is relative to the demands and bidding of another currency

B. the international consortium of currency traders

C. the World Trade Organisation (WTO)

D. negotiations between the main banks from the top five industrial supremacy countries

4. The process of buying one unit of currency at a lower price and selling at a higher price is known
as _____________.

A. swapping

B. crawling

C. profit

D. arbitrage

5. Between two major currencies, the spot exchange rate is the rate __________ and the forward
exchange rate is the rate ___________.

A. today; on that date

B. at some specified future date; today

C. on that date; today

D. on that date; at some specified future date

6. Foreign bonds are sold primarily in ______________________.

A. the United States

B. Japan

C. Europe

D. the country of the currency of issue

7. The _____________ established a par value, or benchmark value,

for each currency initially quoted in terms of gold and the US

dollar.

A. Bretton Woods Agreement

B. Jamaican Agreement
C. World Trade Agreement

D. International Monetary Agreement

C9
One of the tools that can be used to make comparisons between countries is ___________.
A. grid
B. matrix
C. subsidy
D. quota

2. Generally, which are the two types of matrix that are usually used by managers when making
comparisons between countries?
A. SWOT matrix and environmentÊs observation matrix
B. Subsidy matrix

C. Opportunity-risk matrix and countryÊs attractiveness- Company’s strength matrix

D. Industrial-non industrial company matrix and company’s strength matrix

3. All of the following are considered as good indicators of market size potential and future sales
EXCEPT:
A. Gross national product (GNP)
B. Population growth
C. Income per capita
D. Cultural values

4. Companies are more likely to pursue joint ventures as an entry strategy in countries where
_________________.
A. the political environment is highly unstable
B. the domestic companies are competitive
C. the cultural value of trust is high
D. the exchange rate is unpredictable

The fastest growing area of international franchising for Western

companies can be found in _____________________.
A. Automobile dealerships
B. Banking services
C. Food services
D. Petrol service stations
1. A Malaysian importer needs to make an immediate payment to its supplier in Argentina for a
shipment of frozen beef that has arrived in Port Klang. What type of rate should the importer use to
exchange ringgit into Argentine pesos for transmission of payment?
A. Arbitrage. B. Fixed. C. Forward. D. Spot.

2.Which transaction would enable international firms to protect themselves from the risk of loss that
can result from fluctuating currency exchange rates?

A. Arbitrage. B. Forward. C. Speculation. D. Spot.

Under the floating exchange rate system, exchange rates of each country’s currency is determined
mainly by:
A. The forces of supply and demand. B. The respective country governments. C. The World Bank. D.
The world’s most powerful economic nations.
The _______________ is the most widely traded currency in the world.

A. US dollar B. German marks C. Japanese yen D. British pound

Which institution was established through the Bretton Woods agreement in 1944?

A.Gold Exchange Standard.

B. International Monetary Fund.
C. United Nations Organisation.
D. World Trade Organisation.
When does preferential trade agreement occur?

A. When member countries agreed to use a common external trade policy.

  B. When member countries affiliated to receive reduced tariffs on certain products.

B. When all trade barriers on products and services between member countries are abolished.

6. What did David Ricardo introduce?

A. Theory of mercantilism
  B. Theory of absolute advantage

C. Theory of comparative advantage

9. When does ‘direct exporting’ occur?

A. When a company sets up its own export organisation and uses a foreign distributor based in a

foreign market to handle its exports.

  B. When a company is using export intermediaries as middlemen in its home market to handle

transportation, documentation and customs claims or sometimes to the extent of handling

marketing and financing exports.

D. When a trading company that buys a firm’s exports directly and resells them in foreign
markets.

What is the advantage when a company chooses joint ventures as an entry mode into other
country?
A. Allows foreign partner greater control over operations.
  B. No risk in investment and able to circumvent trade barriers.
C. No conflicts of control on operations and shared ownership arrangements between the
investing partners.