Deck 1: An Overview of International Business

Question 1

Business transactions between parties from more than one country are known as international business.

Answer 1

True

Question 2

Sony's suppliers deliver necessary inputs as they are needed by Sony. Sony is most likely using a(n) ________ system.

A) cross-functional
B) just-in-time
C) inventory management
D) on-demand delivery

Answer 2

B

Question 3

Just-in-time systems are used by firms to ________.

A) store important data
B) manage inventory
C) monitor production
D) screen job applicants

Answer 3

B

Question 4

According to the CAGE Model, which of the following refers to the physical, communications, and transportation links between countries?

A) cultural distance
B) administrative distance
C) geographic distance
D) economic distance

Question 5

Which of the following has most likely triggered the increase of small businesses involved in international business?

A) e-commerce
B) economic recession
C) foreign-made materials
D) increased cultural literacy

Question 6

The growth of FDI and MNCs first started during the American colonial period.

Question 7

The Internet has helped small businesses compete in global markets because it ________.

A) allows them to establish a physical presence in each country
B) avoids transactions involving foreign exchange
C) eliminates price controls
D) reduces entry costs

Question 8

Trade between nations can be traced back as far as ________.

A) 2000 BC
B) 500 BC
C) 1200
D) 1600

Question 9

Which country was a significant focal point for international business during the Middle Ages?

A) China
B) England
C) Italy
D) Russia

Question 10

International business is more complex than domestic business.

Question 11

Which of the following would be considered an international business transaction?

A) purchasing products in one country and assembling them in the same country
B) recruiting employees internationally
C) borrowing money from a major bank to finance capital improvements
D) shipping finished products from one country to another for retail sale.

Question 12

International business differs from domestic business in several ways. Identify at least three of these differences and describe their implications for companies.

Question 13

Just-in-time systems were created in ________.

A) the United States
B) Japan
C) Germany
D) China

Question 14

A boundary less economy is one in which ________.

A) exported goods are predominant
B) regional borders are significant
C) trade laws are strictly enforced
D) national borders are irrelevant

Question 15

Capital supplied by residents of one country to residents of another is known as ________.

A) international investments
B) host-country financing
C) international franchising
D) domestic inversion financing

Question 16

How does international business differ from domestic business? Why is it important for business students to learn about international business?

Question 17

Individuals should most likely study international business to ________.

A) comply with graduate school certification requirements
B) ensure that an employer has a global online presence
C) remain current on the latest business methods
D) obtain bilingual business experience

Question 18

How are the Olympic Games symbolic of international business?

Question 19

Which of the following is a primary source of revenue for the IOC during the Olympics?

A) television coverage
B) public donations
C) real estate sales
D) international loans

Question 20

Small businesses are usually not involved in international business given the cost restrictions.

Question 21

Exports account for about ________ of Germany's gross domestic product?

A) 31.2 percent
B) 27.0 percent
C) 50.3 percent
D) 15.2 percent

Question 22

The international business activity called ________ occurs when capital is supplied by residents of one country to residents of another country.

A) international investment
B) global direct investment
C) portfolio financing
D) state capitalism

Question 23

________ are investments made for the purpose of actively controlling property, assets, or companies located in host countries.

A) Licensing investments
B) Portfolio investments
C) Foreign direct investments
D) Indirect global investments

Question 24

Black and Decker produces tools at a plant in North Carolina and ships the tools to retailers in England. This is an example of which type of international business activity?

A) merchandising
B) importing
C) exporting
D) trading

Question 25

Siemens is headquartered in Germany but maintains operations in the United States. The United States is the ________ country.

A) home
B) host
C) parent
D) subsidiary

Question 26

If a company is headquartered in Taiwan, then Taiwan is the company's ________.

A) host country
B) home country
C) dominant country
D) competitive country

Question 27

The British term for the trading of intangible goods is ________.

A) visible trade
B) invisible trade
C) merchandise exports and imports
D) service exports and imports

Question 28

The British term for the trading of tangible goods is ________.

A) visible trade
B) invisible trade
C) merchandising
D) service franchising

Question 29

International business originally consisted of ________.

A) FDI
B) international trade
C) licensing
D) contract manufacturing

Question 30

You are a manager at a small business, and the firm's CEO wants the firm to globalize. What suggestions would you offer to accomplish this task? Should the firm globalize? Why or why not?

Question 31

Why is it relevant for today's business students to study international business and to become culturally literate?

Question 32

Boeing, an American firm, sells commercial aircraft to Lufthansa in Germany. This is an example of ________.

A) exporting
B) importing
C) licensing
D) franchising

Question 33

Sam's Club purchases kalamata olives from Greece for sale in its stores. Which international business activity does this represent?

A) exporting
B) importing
C) merchandising
D) franchising

Question 34

Which term refers to the location of a parent company's headquarters?

A) host country
B) home country
C) third country
D) local country

Question 35

It is important to study international business because you may work for a firm that is owned by a corporation that is headquartered in another country.

Question 36

Why are small businesses becoming more involved in international business? What is the simplest way for a small business to globalize?

Question 37

The ________ is where a company operates but is not headquartered.

A) host country
B) home country
C) parental country
D) third party country

Question 38

________ is the buying of products made in other countries for use or resale in one's own country.

A) Exporting
B) Importing
C) Merchandising
D) Transporting

Question 39

Which of the following could be considered a major reason that a city would want to host the Olympic Games?

A) to prevent the economic growth of competing nations
B) the long-term benefits of tourism
C) to test the capacity of national infrastructure
D) to promote international harmony

Question 40

Ford Motor Company is based in Detroit, Michigan. It also has offices in Germany, England, and China. Which of the following is Ford's home country?

A) Germany
B) England
C) China
D) United States

Question 41

McDonald's has licensed its brand name, operational systems, and trademarks to individual restaurant owners in Europe. This is called international ________.

A) leasing
B) marketing
C) franchising
D) diversifying

Question 42

Kraft purchased all of the common stock of Cadbury PLC. This is an example of ________.

A) foreign portfolio investment
B) foreign direct investment
C) international expansion
D) global licensing

Question 43

Walt Disney permits a German clothing manufacturer to market children's pajamas embroidered with Mickey Mouse in return for a percentage of company sales. This is an example of ________.

A) franchising
B) licensing
C) leasing
D) piracy

Question 44

Licensing usually involves permission to use which of the following?

A) real estate
B) trademarks
C) labor leasing
D) production facilities

Question 45

Which of the following is not considered a dominant institution in the Era of Globalization?

A) World Trade Organization
B) International Olympic Committee
C) World Bank
D) International Monetary Fund

Question 46

Any organization that engages in cross-border commercial transactions with individuals, private firms, and/or public sector organizations is a(n) ________.

A) multinational corporation
B) multinational enterprise
C) international business
D) international franchise

Question 47

________ is a contractual arrangement in which a firm in one country allows the use of its intellectual property by a firm in a second country in return for a royalty payment.

A) Leasing
B) Franchising
C) Licensing
D) Merchandising

Question 48

The International Red Cross is an example of a(n) ________.

A) international business
B) multinational enterprise
C) multinational organization
D) multinational corporation

Question 49

The primary benefit of worldwide partnership is the right to use the Olympic logo on all advertising by the sponsor.

Question 50

Which of the following is considered a BRIC nation?

A) Britain
B) Russia
C) Indonesia
D) Chile

Question 51

Which of the following is a common activity of MNCs?

A) training of international managers
B) buying resources in various countries
C) inventing goods in a variety of countries
D) establishing foreign exchange rates

Question 52

If a Dutch pension fund purchases 1,000 shares of Sony's stock, the Dutch company has most likely ________.

A) made a foreign direct investment
B) made a foreign portfolio investment
C) earned a higher return on assets
D) earned a lower rate of return

Question 53

International nonprofit organizations are called ________.

A) multinational corporations
B) multinational organizations
C) multinational enterprises
D) multinational nonprofits

Question 54

Toyota, ExxonMobil, General Electric, and Volkswagen are all examples of ________.

A) multinational corporations
B) management contracts
C) portfolio investments
D) franchised firms

Question 55

The term ________ is used to identify firms that have extensive involvement in international business.

A) global operation
B) multinational corporation
C) international conglomerate
D) multidomestic organization

Question 56

A(n) ________ involves a firm in one country agreeing to operate facilities for a firm in another country for an agreed fee.

A) franchising agreement
B) licensing agreement
C) management contract
D) indirect investment

Question 57

The highest profile level in corporate sponsorship of the Olympics is that of worldwide partner.

Question 58

________ are purchases of foreign financial assets for a purpose other than control.

A) Foreign direct investments
B) Global business investments
C) Foreign portfolio investments
D) Indirect investments

Question 59

Compared to Thailand, the United Kingdom has a ________ level of exports of goods and services as a percentage of GDP.

A) slightly lower
B) slightly higher
C) significantly lower
D) significantly higher

Question 60

By 500 B.C.E., ________ merchants were exporting silk and jade to India and parts of Europe.

A) American
B) Chinese
C) Japanese
D) Greek

Question 61

What is a portfolio investment? How does it differ from foreign direct investment?

Question 62

The ratio of international trade to economic activity has been falling steadily in recent years.

Question 63

The International Olympic Committee is a multinational enterprise.

Question 64

International licensing occurs when a firm in one country authorizes a firm in another country to use its operating systems, brand name, trademark, and logo in return for a royalty payment.

Question 65

Exports are relatively unimportant to the GDP of the Netherlands and Thailand but extremely important to India and Brazil.

Question 66

Multinational corporations engage in FDI and own or control value-adding activities in multiple countries.

Question 67

The British call merchandise exports and imports visible trade.

Question 68

Political change has provided greater access to international markets in recent times.

Question 69

A well-developed web-site can draw the business of consumers throughout the world without the need to establish a physical presence in each country.

Question 70

What is an international management contract? Provide an example to illustrate your answer.

Question 71

Selling products made in one's own country for use or resale in other countries is known as importing.

Question 72

What is the difference between the home country and the host country?

Question 73

The host country is where a foreign firm operates.

Question 74

The desire for control is the primary difference between foreign direct investments and portfolio investments.

Question 75

What types of business activities are undertaken by MNCs?

Question 76

Explain the difference among the terms multinational corporation, multinational enterprise, and multinational organization.

Question 77

What is the difference between exporting and importing?

Question 78

The Internet has facilitated the entry of small businesses into international markets.

Question 79

What is the difference between licensing and franchising?

Question 80

Into what two categories can international investments be divided?