Question 1

When conducting global business,companies should attempt to identify the two types of political risk that are political uncertainty and economic uncertainty.

Accepted Answer

Political risk and economic risk are distinct; political risk involves changes in government or policy, while economic risk involves changes in economic conditions.

Question 2

Toasty Inc.,a chain of fast food restaurants,uses the same recipes,menu,and policies in all its branches throughout the world.This is an example of global consistency.

Accepted Answer

The statement correctly describes the application of global consistency by Toasty Inc. which involves the use of the same standardized policies, recipes, and menu in all its branches globally.

Question 3

_____ are specific limits on the number or volume of imported products.
A) ​Tariffs 
B) ​Quotas 
C) ​Subsidies 
D) ​Embargoes

Accepted Answer

Quotas are specific limits on the number or volume of imported products. Tariffs are taxes on imported goods, subsidies are financial incentives given by governments to domestic producers, and embargoes are complete bans on trade with a particular country.

Question 4

Which of the following statements is true of global consistency? 
A) ​It modifies a company's standard operating procedures. 
B) ​It occurs when two existing companies collaborate to form a third company. 
C) ​It allows managers to adapt to differences in foreign customers. 
D) ​It simplifies decisions for managers at company headquarters.

Accepted Answer

Global consistency refers to the standardization of management practices across countries in order to simplify decision making for managers at company headquarters. It involves ensuring that all policies, procedures, and practices are aligned with the company's overall strategy and goals, and that they are applied consistently worldwide. It does not modify standard operating procedures, involve collaboration between existing companies, or necessarily adapt to differences in foreign customers.

Question 5

Which of the following statements is true of the World Trade Organization? 
A) ​It ensures that trade flows as predictably and freely as possible. 
B) ​It transforms different economies and currencies into one common economic market. 
C) ​It aims to create a unified South America by permitting free movement between nations. 
D) ​It aims to establish regions in Europe as a single market by eliminating all tariffs by 2019.

Accepted Answer

The World Trade Organization's main goal is to oversee and liberalize international trade by ensuring that trade flows as predictably and freely as possible. It does not aim to create a unified South America or a single market in Europe.

Question 6

The North American Free Trade Agreement (NAFTA)is a regional trade agreement between the United States,Canada,and Mexico.

Accepted Answer

NAFTA is a regional trade agreement between the United States, Canada, and Mexico.

Question 7

_____ is selling domestically produced products to customers in foreign countries.
A) ​Domestic trade 
B) ​Free trade  
C) ​Importing 
D) ​Exporting

Accepted Answer

Exporting is the act of selling domestically produced goods and services to customers residing in foreign countries.

Question 8

Purchasing power is an agreement in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country.

Accepted Answer

Purchasing power refers to the ability to buy goods and services with a certain amount of money, and has nothing to do with a foreign business owner paying a fee to conduct business in a specific country. The correct term for this concept is a "franchise agreement."

Question 9

Global new ventures are foreign offices,facilities,and manufacturing plants that are 100 percent owned by the parent company.

Accepted Answer

The answer of Global new ventures are foreign offices,facilities,and manufacturing...

Question 10

_____ is a government's use of trade barriers to shield domestic companies and their workers from foreign competition.
A) ​Protectionism 
B) ​Developmentalism 
C) ​Economic nationalism 
D) ​Centralism

Accepted Answer

Protectionism refers to the use of trade barriers such as tariffs, quotas, and subsidies to protect domestic industries from foreign competition. The rationale behind this approach is to boost local industries and protect jobs, even at the expense of efficiency and lower prices for consumers.

Question 11

Which of the following trade barriers is established to protect the health and safety of citizens? 
A) ​Tariffs 
B) ​Quotas 
C) ​Government import standards 
D) ​Voluntary export restraints

Accepted Answer

Government import standards are established to ensure that imported products meet the health and safety regulations of the importing country. This can include regulations regarding food safety, environmental protection, and product quality. Tariffs and quotas are trade barriers established to protect domestic industries, while voluntary export restraints are agreements made between countries to limit or reduce exports of a particular product.

Question 12

Two factors that help companies determine the growth potential of foreign markets are purchasing power and foreign competitors.

Accepted Answer

Purchasing power and foreign competitors are both important factors to consider when determining the growth potential of foreign markets. Higher purchasing power can indicate a larger potential customer base with more resources to spend, while competition from foreign companies can impact a company's ability to succeed in the market.

Question 13

The criteria for choosing an office location are the same as the criteria for entering a foreign market.

Accepted Answer

Choosing an office location typically involves factors like cost, accessibility, and local amenities, while entering a foreign market involves broader considerations such as market potential, legal regulations, and cultural differences.

Question 14

Which of the following best defines a tariff? 
A) ​It is a specific limit on the volume of imported goods. 
B) ​It is a direct tax on imported goods. 
C) ​It is a complete ban on trade of a certain item. 
D) ​It is a limit on the number of products exported to a particular country.

Accepted Answer

A tariff is a tax imposed on goods that are imported into a country. It is designed to make imported goods more expensive compared to domestically produced goods, and this is intended to protect local industries and jobs. Choice A is incorrect because a quota refers to a specific limit on the volume of imported goods, while choice C is incorrect because a complete ban on trade of a certain item is known as an embargo. Choice D is incorrect because a limit on the number of products exported to a particular country is known as an export quota.

Question 15

Local adaptation is typically preferred by managers who are charged with making the international business successful in their countries,whereas managers at company headquarters value global consistency because it simplifies decisions.

Accepted Answer

Local adaptation is preferred by managers at the local level because they have a better understanding of the local market, culture, and preferences. In contrast, managers at company headquarters value global consistency because it facilitates decision-making and resource allocation across different markets.

Question 16

If companies focus too much on local adaptation,they run the risk of: 
A) ​using management procedures poorly suited to particular countries' markets, cultures, and employees. 
B) ​losing the cost effectiveness and productivity that result from using standardized rules and procedures throughout the world. 
C) ​losing control over the quality of the product or service sold by the foreign licensee.  
D) ​failing to benefit from an active global strategy.

Accepted Answer

Focusing too much on local adaptation can lead to loss of cost effectiveness and productivity that can be achieved by using standardized rules and procedures throughout the world. Companies should balance local adaptation with a global strategy to achieve success in international markets.

Question 17

According to the World Trade Organization,voluntary export restraints are legit and cannot be questioned.

Accepted Answer

The World Trade Organization allows countries to negotiate voluntary export restraints, but they can still be subject to scrutiny and challenge under certain circumstances. The use of voluntary export restraints is generally viewed as a temporary measure and can have negative effects on both importing and exporting countries.

Question 18

Which of the following is a regional trade agreement between most European countries? 
A) ​The Maastricht Treaty of Europe 
B) ​The Single European Act 
C) ​EEC and EURATOM treaties 
D) ​Brussels Treaty

Accepted Answer

The answer of Which of the following is a regional...

Question 19

Which of the following statements is true of the Maastricht Treaty of Europe? 
A) ​Its purpose was to liberalize trade between countries so that businesses could plan for one market rather than for three separate markets. 
B) ​Its purpose was to transform twelve different economies and currencies into one common economic market with one common currency. 
C) ​Its purpose was to eliminate most product tariffs and prevent the member countries from increasing existing tariffs or introducing new ones. 
D) ​Its purpose was to permit free movement between nations, creating a common infrastructure that includes an interoceanic highway.

Accepted Answer

The Maastricht Treaty, also known as the Treaty on European Union, was signed in 1992 with the purpose of creating a common economic market with a single currency, the Euro. It aimed to transform the twelve different economies and currencies of member countries into one common economic market with one common currency.

Question 20

Adaptability screening is used to assess how well managers and their families are likely to adjust to foreign cultures.

Accepted Answer

Adaptability screening is a process used to evaluate an individual's potential to adjust or adapt to foreign cultures. It is often used for expatriate managers and their families to assess their ability to function and thrive in a new cultural environment.

Quiz 8: Global Management

When conducting global business,companies should attempt to identify the two types of political risk that are political uncertainty and economic uncertainty.

Toasty Inc.,a chain of fast food restaurants,uses the same recipes,menu,and policies in all its branches throughout the world.This is an example of global consistency.

_____ are specific limits on the number or volume of imported products.

Which of the following statements is true of global consistency?

Which of the following statements is true of the World Trade Organization?

The North American Free Trade Agreement (NAFTA)is a regional trade agreement between the United States,Canada,and Mexico.

_____ is selling domestically produced products to customers in foreign countries.

Purchasing power is an agreement in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country.

Global new ventures are foreign offices,facilities,and manufacturing plants that are 100 percent owned by the parent company.

_____ is a government's use of trade barriers to shield domestic companies and their workers from foreign competition.

Which of the following trade barriers is established to protect the health and safety of citizens?

Two factors that help companies determine the growth potential of foreign markets are purchasing power and foreign competitors.

The criteria for choosing an office location are the same as the criteria for entering a foreign market.

Which of the following best defines a tariff?

Local adaptation is typically preferred by managers who are charged with making the international business successful in their countries,whereas managers at company headquarters value global consistency because it simplifies decisions.

If companies focus too much on local adaptation,they run the risk of:

According to the World Trade Organization,voluntary export restraints are legit and cannot be questioned.

Which of the following is a regional trade agreement between most European countries?

Which of the following statements is true of the Maastricht Treaty of Europe?

Adaptability screening is used to assess how well managers and their families are likely to adjust to foreign cultures.