Chapter 1
All commercial transactions between two or more countries are known
as ________.
globalization
foreign trade
international business
the balance of payments
Which of the following is not a reason to study international business?
All business taking place outside your home country is international.
International business comprises a large and growing portion of the world's total
business.
The conditions within foreign countries affect the best way to conduct business
there.
A company operating internationally may engage in modes of business that differ
from those it is accustomed to domestically.
A difficulty in comparing the globalization of business over time is that
________.
companies adopt different operating forms
shifting borders obsolesce figures on what is international
many private companies were once government owned
countries differ in their extent of globalization
Which of the following has been a major force behind recent
globalization?
Lower tax rates on incomes.
The slower rise of prices in general than prices of transportation and
communications.
Greater prohibitions on the placement of capital in countries with secretive bankholding laws.
Institutional development of services that aid foreign trade and investment.
Which of the following is a result of the recent expansion of
transportation technology?
Producers from farther away are competing for sales in a given market.
Transportation costs have risen more rapidly than costs in general.
Companies have lessened their dependence on producing components in multiple
countries.
Governments have increased restrictions to prevent competition among carriers
from different countries.
Which of the following is a reason for recent governmental decreases
in restrictions on cross-border trade or resource movements?
Governments hope to induce other nations to reduce their barriers in return.
Most countries face shortages of workers; thus they compete to attract foreign
workers so they can produce more.
Consumers increasingly want to buy goods and services produced in their own
countries, thus making restrictions less necessary.
Governments believe this will decrease the need to make their own companies
more innovative.
Potential pressures of increased foreign competition can persuade
companies to ________.
use more domestic inputs in their production
seek fewer barriers to imports
expand their business into international markets
raise prices to improve the quality-image of their products
Which of the following is a reason why governments cooperate through
treaties, agreements, and consultation?
To gain a division of labor, such as by performing research and development in
one country and production in another.
To deal with areas of concern that lie outside the territory of all countries.
To be in compliance with United Nations' requirements.
To assure that all countries get an equitable share of taxes from multinational
enterprises.
All of the following are major criticisms of
globalization except ________.
globalization creates winners and losers, thus leading to greater inequality
countries lose control to act in their own best interest
globalization increases the cost of production
globalization brings economic growth that uses too many nonrenewable resources
and despoils the environment
The major argument companies use to support off-shoring is that it
________.
helps poor countries improve their economies
saves costs
reduces pollution
reduces home-country unemployment
An advantage that an international company may have over a purely
domestic one is that it can ________.
deal with a less complex external environment
acquire cheaper resources to use in production
more easily control its opening units
save transportation costs
An example of a Mexican merchandise export would be a shirt made
______ and sold _______.
in the United States by a Mexican company; outside the United States
in Mexico by either a Mexican or a U.S. company; in Mexico
in Mexico by either a Mexican or a U.S. company; outside Mexico
in the United States by a Mexican company; in the United States
When a company owns foreign bonds or bills, this is an example of a
________.
direct investment
joint venture
portfolio investment
transnational corporation
A company that takes a global approach to foreign markets and
production is called a _______.
strategic alliance enterprise
multinational enterprise
multiglobal company
collaborative participant
In Japan, baseball games may end in a tie; in the United States, teams
play until one wins. This difference is most likely due to ________
factors.
economic
geographic
behavioral
legal
All commercial transactions between two or more countries are known
as globalization.
True
False
Understanding some of the complexities of international business help
you to make more informed decisions in support of government
policies.
True
False
World production has grown more rapidly than world trade in almost
every year since World War II.
True
False
Globalization of business has been stimulated by consumers' greater
efficiency in using the Internet to compare prices worldwide.
True
False
As a result of expansions in transportation technology, more countries
can compete for sales in a given market.
True
False
Countries have reduced import trade barriers because they believe
their domestic producers will become more efficient as a result of
foreign competition.
True
False
A born-global company is one that starts out with a global focus.
True
False
Governments cooperate through treaties, agreements, and consultation
to assure that they all get an equitable share of taxes from
multinational enterprises.
True
False
People favoring globalization contend that the biggest problem of
environment despoliation occurs in the countries that are least
globalized.
True
False
The major argument companies use to support off-shoring is that it
saves costs.
True
False
The televising of sports competition to viewers in multiple countries is
an example of an international objective of sales expansion.
True
False
The production by a U.S. company in Canada for sale in Canada is a U.S.
merchandise export.
True
False
A direct investment occurs when foreign ownership is in private rather
than government securities.
True
False
Stateless company is a term used by the United Nations as a synonym
for multinational enterprise.
True
False
Managers need a working knowledge of their physical and societal
environments to help them understand the aggregate of conditions
outside their companies that influence their success.
True
False
