Question 1

A primary reason why most domestic firms are engaging in global operations is that growth in demand for goods and services outside the USA is considerably higher than inside.

Accepted Answer

Many domestic firms are expanding into global operations because they see higher potential for growth and demand in markets outside of the United States. This is often due to a combination of factors such as population growth, rising incomes, and changing consumer preferences in emerging markets.

Question 2

One aspect of the global challenge faced by U.S. business involves the complications of having to deal with two or more monetary systems.

Accepted Answer

Dealing with multiple monetary systems can be complicated for U.S. businesses operating internationally, particularly when it comes to exchange rates and fluctuating currency values. This can impact pricing, profits, and cash flow, among other factors.

Question 3

Keeping informed about the number and the nature of competitors is easier when doing business internationally.

Accepted Answer

Keeping informed about competitors can be more difficult due to language and cultural barriers, different market structures and regulations, and the sheer number of potential competitors in a global market.

Question 4

In the three Nordic countries of Denmark, Sweden, and Finland about 70 percent of all employees are in unions.

Accepted Answer

According to the International Trade Union Confederation's Global Rights Index 2020 report, Denmark, Sweden, and Finland have high union density rates, with about 68 percent, 69 percent, and 75 percent of their respective workforces being union members. Therefore, about 70 percent of all employees in these Nordic countries are in unions.

Question 5

Although a firm's power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors.

Accepted Answer

The answer of Although a firm's power and prestige in...

Question 6

Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people.

Accepted Answer

Language, culture, and values play a significant role in communication and management styles. When these differ among countries, it can create misunderstandings and difficulties in managing people effectively.

Question 7

Though China has more than 1.3 billion residents, the middle class segment that is able to buy goods and services is rapidly shrinking.

Accepted Answer

This statement is incorrect. In fact, the middle class segment in China is rapidly growing. According to a report by the Brookings Institution, China's middle class is estimated to grow from about 430 million people in 2018 to 780 million people by 2025.

Question 8

Weaknesses of competitors in foreign lands are often underestimated, and strengths are often overestimated.

Accepted Answer

The answer of Weaknesses of competitors in foreign lands are...

Question 9

Shifts in the nature and location of production systems, especially to China and India, are reducing the response time to changing market conditions.

Accepted Answer

Production systems moving to China and India means companies can manufacture and supply products quicker and more efficiently, reducing response time to changing market conditions.

Question 10

The availability, depth, and reliability of economic and marketing information in different countries vary extensively.

Accepted Answer

Economic and marketing information can be influenced by factors such as government regulations, cultural norms, and technological infrastructure, which can differ greatly between countries. This can lead to variations in the availability, depth, and reliability of economic and marketing information across different nations.

Question 11

Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people.

Accepted Answer

Protectionism is the policy of imposing restrictions on trade between countries, such as tariffs, taxes, and regulations, to protect domestic industries and promote local businesses and jobs. This can be a controversial policy, as it may lead to retaliation from other countries and ultimately harm global trade and economic growth.

Question 12

Many countries became less protectionist during the recent global economic recession.

Accepted Answer

During economic recessions, countries tend to become more protectionist as they try to protect their domestic industries and jobs from foreign competition. Therefore, it is unlikely that many countries became less protectionist during the recent global economic recession.

Question 13

Firms are often motivated to initiate international operations because competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

Accepted Answer

Firms may seek international operations to exploit less competitive markets, gaining a first-mover advantage or capturing market share before local competitors emerge.

Question 14

Labor markets have become steadily more international with more and more countries around the world welcoming foreign investment and capital.

Accepted Answer

With globalization and advancements in technology, labor markets have become increasingly interconnected and international. Many countries have opened their economies to foreign investments and capital, leading to greater integration of their labor markets with the rest of the world.

Question 15

Investors are now looking closely at Africa in the wake of low interest rates and slow growth elsewhere on the planet.

Accepted Answer

This statement is true. With low interest rates and slow growth in other parts of the world, many investors have turned to Africa as an area of potential growth and investment opportunities.

Question 16

The drive to improve the efficiency of global business operations is leading to lesser functional specialization.

Accepted Answer

The answer of The drive to improve the efficiency of...

Question 17

Foreign banks currently operate and compete in most parts of the United States.

Accepted Answer

The answer of Foreign banks currently operate and compete in...

Question 18

American firms that seem insulated from foreign competition today may be vulnerable tomorrow.

Accepted Answer

Globalization and advancements in technology have made it easier for foreign firms to compete with American companies. Therefore, any American firm that assumes it is immune from foreign competition is likely to be surprised when it faces fierce competition from foreign firms in the future.

Question 19

A potential advantage to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

Accepted Answer

This statement is true. By expanding into international markets, a company can take advantage of excess capacity in their production facilities and reduce per-unit costs by increasing economies of scale. Additionally, operating in multiple markets can help spread risk and reduce reliance on any one market.

Question 20

Brazil offers skilled labor and technology, while Germany offers abundant natural resources and rapidly developing markets.

Accepted Answer

The statement is incorrect as it has mixed up the strengths of Brazil and Germany. Brazil is known for its abundant natural resources and rapidly developing markets, while Germany is known for its skilled labor and advanced technology.

Quiz 11: Global and International Issues