Question 1

Carnival Cruise Lines lowers its taxes by all of the following EXCEPT ________.

Accepted Answer

Hiring host-country nationals who pay no taxes does not directly lower a company's taxes; it's more related to employment practices rather than tax reduction strategies. The other options (B, C, D) are legitimate strategies companies use to lower their tax liabilities.

Question 2

A flag of convenience is ________.

Accepted Answer

A flag of convenience refers to the practice of registering a ship in a country that offers favorable tax or regulatory treatment, even if the ship's owners are based elsewhere. This allows companies to take advantage of lower costs and avoid stricter regulations in their home countries.

Question 3

Some observers feel that international institutions and the people working in them cannot adequately handle the complexities of an interconnected world.Based on this,these observers believe that ________.

Accepted Answer

The answer of Some observers feel that international institutions and...

Question 4

The same automobile company produces Fiats and Ferraris.The company builds an engine plant in China with low production costs for Fiats but not Ferraris.The probable reason is that ________.

Accepted Answer

The reason the company built an engine plant in China with low production costs was because Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy. Therefore, building an engine plant in China with low costs would benefit Fiat, which targets the mass market, but wouldn't benefit Ferrari as much, which targets a more niche market.

Question 5

Reebok pays a royalty to the German Soccer League to use the team's logo on t-shirts that it sells.Reebok and the German Soccer League most likely have a ________.

Accepted Answer

Reebok and the German Soccer League most likely have a licensing agreement, where the license is granted to Reebok to use the team's logo on t-shirts that it sells in exchange for a royalty payment. A turnkey operation contract and joint venture involve a more extensive and collaborative partnership, while a portfolio investment does not involve a license to use a specific logo or intellectual property.

Question 6

Although the U.S.film industry depends heavily on revenue in foreign countries,revenue from international markets is usually low for a sports-themed film.This is most likely due to ________ factors.

Accepted Answer

The low revenue from international markets for sports-themed films is most likely due to behavioral factors such as cultural differences and varying interests in sports among different countries. Political, geographic, and legal factors are less likely to have a significant impact on the revenue of sports-themed films in foreign markets.

Question 7

The view that globalization is inevitable is most likely based on the belief that ________.

Accepted Answer

The view that globalization is inevitable is often based on the fact that technical advances in transportation and communications are highly persistent and that they will continue to connect people and expand economic and cultural exchanges despite any resistance or opposition.

Question 8

A computer firm has high foreign sales in Asia and wants to expand sales into Europe.Which of the following statements provides the most appropriate advice for Elway executives?

Accepted Answer

Being a leader in one country does not guarantee success in another country. This means that Elway should not assume that their success in Asia will automatically translate to success in Europe. They should conduct market research and adjust their strategies to the European market. The other options are not relevant to the situation and do not provide appropriate advice.

Question 9

In addition to understanding the laws affecting business in countries where their companies operate,it is most important for managers to understand the ________.

Accepted Answer

The answer of In addition to understanding the laws affecting...

Question 10

When companies face the same competitors in almost all countries where they operate,________.

Accepted Answer

When companies face the same competitors in multiple countries, they can learn about each other's strategies and actions, which can be useful in predicting how they will behave in other countries. This knowledge can help companies adapt their own strategies accordingly.

Question 11

Managers who are knowledgeable about ________ are better able to identify the location,quantity,quality,and availability of the world's natural resources.

Accepted Answer

Knowledge of geographic factors such as the location of natural resources, their quantity and quality, and their availability in different regions can help managers make informed decisions about resource allocation and utilization. Understanding political factors, competitive factors, and cultural factors may also be important in certain contexts, but they do not specifically address the location and characteristics of natural resources.

Question 12

Which of the following is NOT a common argument for the slowing of future globalization?

Accepted Answer

Option B is not a common argument for the slowing of future globalization, as technological, transportation, and communication advances are expected to continue advancing in the future. Options A, C, and D are commonly cited arguments for the slowing of future globalization.

Question 13

Some key ________ factors in a company's international business external environment are its product strategy and access to resources.

Accepted Answer

The competitive factors are key in determining a company's success in the international business external environment. This includes both its product strategy and its ability to access resources, such as raw materials and talent. Geographic factors may also play a role, but are not as directly related to product strategy and resource access. Political and behavioral factors can impact a company's international business, but are not specifically related to product or resource considerations.

Question 14

Critics of the view that regionalization will prevail over globalization most likely base their argument on the belief that ________.

Accepted Answer

Critics of the view that regionalization will prevail over globalization base their argument on the belief that regionalization is a transition stage toward globalization. They believe that while regionalization may gain importance in the short term, it ultimately paves the way for a more integrated global economy.

Question 15

The owner of a U.S.football team and the owner of a Canadian hockey team purchase a British soccer team.This is an example of a ________.

Accepted Answer

A joint venture is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. In this case, the owners of the U.S. football team and the Canadian hockey team are forming a joint venture to purchase a British soccer team.

Question 16

Politics,law,culture,and economy are all examples of ________ factors that can affect the ways in which companies produce and sell their products in foreign markets.

Accepted Answer

The answer of Politics,law,culture,and economy are all examples of ________...

Question 17

Which term refers to two or more companies that share ownership of an FDI?

Accepted Answer

Joint venture refers to two or more companies sharing ownership of an FDI. Turnkey operation refers to a foreign entity constructing and transferring a facility to a client, while transnational firm refers to a company that operates in multiple countries with a decentralized management structure. Franchise refers to an arrangement where one party grants another party the right to use its trademark, products, and processes.

Question 18

A foreign direct investment occurs when ________.

Accepted Answer

A foreign direct investment occurs when a company has a controlling interest in a foreign company, meaning they own more than 50% of the foreign company's shares. Ownership of at least 25% (option A) does not necessarily constitute a controlling interest. Private ownership (option C) versus government securities ownership is not the defining factor in a foreign direct investment. A licensing agreement (option D) is a different form of international business arrangement, in which the foreign company grants permission to the domestic company to use its intellectual property or technology in exchange for a fee or royalty.

Question 19

The term used by the United Nations as a synonym for multinational enterprise is ________.

Accepted Answer

The United Nations commonly uses the term "transnational corporation" as a synonym for multinational enterprise. While options A and C are similar and may also be used interchangeably, "transnational" specifically emphasizes the global and borderless nature of these entities. "Born-global" refers to companies that begin with international operations from their inception, making it unrelated to the question.

Question 20

A multinational enterprise (MNE)is best defined as a firm ________.

Accepted Answer

A multinational enterprise (MNE) is a firm that has foreign direct investments, meaning it has invested in and owns businesses in multiple countries. Simply having foreign business partners or being involved in global franchising does not necessarily make a company an MNE. And while many MNEs may be members of the Fortune 500, that alone does not define them as such.

Quiz 1: Globalization and International Business