Question 1

The trade agreement that represented the most significant change to the regulations governing global trade during the 1990s was the:&#10;A) Maastricht Treaty of Europe&#10;B) North American Free Trade Agreement&#10;C) General Agreement on Tariffs and Trade&#10;D) Mercosur&#10;E) Asian Free Trade Arrangement

Accepted Answer

C

Question 2

The two general kinds of trade barriers are:&#10;A) government import standards and industry import standards&#10;B) qualitative and quantitative barriers&#10;C) voluntary and involuntary barriers&#10;D) nationalistic and geocentric barriers&#10;E) tariff barriers and nontariff barriers

Accepted Answer

The two general kinds of trade barriers are tariff barriers and nontariff barriers. Tariff barriers are taxes imposed on imported goods, while nontariff barriers include any other restrictions or regulations that make it more difficult or expensive for foreign companies to compete in a local market. Examples of nontariff barriers include quotas, subsidies, import licenses, and technical barriers to trade.

Question 3

Hofstede's research has shown there are:&#10;A) no cultural differences among nations in which Spanish is the national language&#10;B) two distinct methods for dealing with cultural differences--adaptation and continuation&#10;C) direct relationships existing between type of infrastructures and growth potential&#10;D) five consistent dimensions of cultural differences across countries&#10;E) four factors upon which a company should base its decision to globalize

Accepted Answer

Hofstede's research has identified five consistent dimensions of cultural differences across countries, which include power distance, individualism vs. collectivism, uncertainty avoidance, masculinity vs. femininity, and long-term vs. short-term orientation.

Question 4

A country or region that has an attractive business climate for companies that want to go global has:&#10;A) a large population of unskilled workers&#10;B) an effective and cost-efficient place to build an office or manufacturing site&#10;C) a small youth population&#10;D) natural boundaries&#10;E) all of these

Accepted Answer

An effective and cost-efficient place to build an office or manufacturing site is the most important factor for companies to establish a global presence. A large population of unskilled workers, a small youth population, and natural boundaries may have some impact on business climate, but they are not the primary considerations for companies going global.

Question 5

What are the strategies that can be used to minimize or adapt to the political risk inherent to global business?&#10;A) protectionist, avoidance, and offensive strategies&#10;B) creative, cooperative, and defensive strategies&#10;C) cooperative, customary, and nationalistic strategies&#10;D) avoidance, protectionist, and guerrilla strategies&#10;E) control, avoidance, and cooperative strategies

Accepted Answer

The three strategies that can be used to minimize or adapt to the political risk inherent to global business are control, avoidance, and cooperative strategies. Control strategy involves establishing control over the political environment by investing in lobbying or political campaigns, while avoidance strategy involves reducing exposure to political risks by choosing not to invest in politically unstable countries. Cooperative strategy involves building partnerships with local authorities, trade unions, and NGOs to reduce political uncertainties. These strategies are more effective in mitigating political risks than protectionist, offensive, or nationalistic strategies, which may generate more political friction and reduce global cooperation.

Question 6

In a multinational firm, managers at company headquarters typically prefer an emphasis on __________ because it simplifies decisions.&#10;A) local consistency&#10;B) local adaptation&#10;C) global adaptation&#10;D) global consistency&#10;E) domestic adaptation

Accepted Answer

Managers at company headquarters prefer an emphasis on global consistency because it simplifies decision-making. This approach allows the firm to maintain standardized products, systems, and procedures across all markets, resulting in greater efficiency and cost savings. It also enables better control and coordination from headquarters. While local adaptation may be necessary for some markets, too much emphasis on local consistency or domestic adaptation can lead to fragmented strategies and inefficiencies.

Question 7

Historically, companies have generally followed the phase model of globalization.

Accepted Answer

The phase model of globalization, also known as the Stages of Internationalization model, has been a common framework used by companies for expanding globally since the 1970s. It involves four phases - domestic, international, multinational, and global - each with increasing levels of involvement and integration with foreign markets.

Question 8

An expatriate is someone who:&#10;A) claims dual citizenship&#10;B) lives and works outside of his or her own country&#10;C) believes strongly in nationalization&#10;D) is unhappy with his or her present residence&#10;E) desires to be employed in a country outside of his or her own

Accepted Answer

An expatriate is someone who lives and works outside of his or her own country. This term is commonly used to refer to individuals who are temporarily or permanently residing in a foreign country for work or other reasons.

Question 9

Export restraints, government subsidies, and quotas are all examples of nontariff trade barriers.

Accepted Answer

These are all examples of nontariff trade barriers that can hinder international trade.

Question 10

Which of the following represents the correct sequence for the phase model of globalization?&#10;A) exporting; wholly owned affiliates; cooperative contracts; strategic alliances&#10;B) exporting; cooperative contracts; wholly owned affiliates; strategic alliances&#10;C) exporting; cooperative contracts; strategic alliances; wholly owned affiliates&#10;D) exporting; strategic alliances; cooperative contracts; wholly owned affiliates&#10;E) home country sales; exporting; job ventures; strategic alliances, and direct investment

Accepted Answer

The correct sequence for the phase model of globalization is exporting, followed by cooperative contracts, then strategic alliances, and finally wholly owned affiliates. The other choices do not follow this sequence. Choice E includes "home country sales" which is not part of the phase model of globalization.

Question 11

More than any other regional trade agreement, the Maastricht Treaty of Europe liberalizes trade between countries so that businesses can plan to operate in a single market instead of multiple national markets.

Accepted Answer

The answer of More than any other regional trade agreement,...

Question 12

Two factors help determine the growth potential of foreign markets. They are foreign competition and:&#10;A) communications and transportation systems&#10;B) purchasing power&#10;C) political stability&#10;D) creative differences&#10;E) product diffusion rate

Accepted Answer

The answer of Two factors help determine the growth potential...

Deck 8: Global Management: Part A