Test Bank for Introduction to Global Business 3e Julian E. Gaspar James W. Kolari Katherine T. Smith

Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

TEST BANK Introduction to Global Business 3e Julian E. Gaspar James W. Kolari Katherine T. Smith Leonard Bierman L. Murphy Smith Antonio Arreola-Risa

TABLE OF CONTENTS Part I: FOUNDATIONS OF GLOBAL BUSINESS 1. The Rise of Globalization.

2. The Evolution of International Business.

3. Regional Economic Integration.

4. The International Flow of Funds and Exchange Rates.

Part II: GLOBAL BUSINESS ENVIRONMENT. 5. The Cultural Environment of Global Business.

6. The Legal, Economic and Political Environment of Global Business.

7. Corruption and Ethics in Global Business.

Part III: GLOBAL BUSINESS STRATEGY AND ORGANIZATION. 8. Entry Strategies in Global Business.

9. Control of Global Business.

10. The Organization of Global Business.

Part IV: MANAGING GLOBAL BUSINESS. 11. Global Human Resource Management.

12. Global Marketing.

13. Global Operations and Supply-Chain Management.

14. Global Financial Management.

15. Global Accounting and Taxation.

Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

TEST BANK FOR Introduction to Global Business 3e Julian E. GasparJames W. KolariKatherine T. SmithLeonard BiermanL. Murphy SmithAntonio Arreola-Risa Chapter 1-15 Chapter 1 True / False 1. With business becoming increasingly global, its success, fortunately, depends only on the domestic environment. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 2. Key aspects of globalization include the elimination of barriers to trade and information technology. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

3. The world economy is quickly shifting away from countries with emerging economies. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 4. The “soft” qualities essential to globalization include openness, protectionism, accountability, connectivity, democracy, and centralization. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: What Is Globalization?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

5. A sustainable decoupling process would eventually lead to a multi-polar world—a world economy in which the engines of growth could comprise the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: What Is Globalization?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 6. The openness and proliferation of globalization and free trade rules can best be attributed to the interwar period between World War I and II. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/13/2022 12:15 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

7. As part of the World Bank’s Strategic Framework, there are five focus areas that accommodate and facilitate the globalization process including its analytical and advisory role supporting national policies to strengthen free market institutions and infrastructure that has provided the potential for creating large gains from trade. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 8. For the World Trade Organization, increasing trade barriers has been one of the most simple ways to encourage trade and globalization. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

9. The foundations of the globalized business world are political—and so are the biggest threats to the system. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Institutional Structure and Its Impact on Globalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 10. Countries that have successfully adapted to globalization realize that they cannot succeed without high-quality government management at home. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Effective Policy Measures That Promote Globalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/13/2022 12:16 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

11. In communist and state-controlled economies like those in Central Asia property rights either do not exist or are not well defined, which discourages domestic and foreign investors from making long-term commitments in these countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Effective Policy Measures That Promote Globalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 12. Globalized economies like New Zealand and Singapore rank at the top in index for absence of corruption by Transparency International. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Effective Policy Measures That Promote Globalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

13. Text messaging will likely be an unimportant component of emerging economies' mobile phone usage because most people in these countries cannot read or write. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 14. Critics argue that open trade and foreign direct investment always take jobs from workers in developing economies and transfer them to workers in advanced industrial countries, which leave the workers in the developing country out of work. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Globalization Controversy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 06 - LO: 01-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

15. There appears to be a clear connection between economic freedom and political freedom. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Making Globalization Work for All QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 07 - LO: 01-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 16. Covid-19 and the financial crisis of 2008 provide illustrative examples of the complex economic structure within globalization. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 4/4/2022 7:48 PM DATE MODIFIED: 4/5/2022 8:44 PM Multiple Choice

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

17. Brazilian Juice, a manufacturer of healthy fruit juices in Brazil, sells juice in six different countries including the United States. Brazilian juice is engaging in a. economic development in the United States. b. exercising nontariff barriers in Brazil. c. unfair trade practices. d. globalization.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM 18. Countries that have been moving toward more open trade and free market policies are known as a. emerging economies. b. open-door economies. c. industrialized countries. d. globalized economies.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Knowledge KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:30 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

19. Increasingly, emerging economies are a. innovative and technologically advanced. b. sources of inexpensive labor. c. largely agricultural. d. simply copying the technologies used in more advanced economies.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 20. A sustainable decoupling process would eventually lead to a. a multi-polar world. b. globalization. c. outsourcing. d. transparency.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

21. A world economy in which the engines of growth could comprise the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone can be described as a(n) a. interdependent world. b. industrialized world. c. globalized economy. d. multi-polar world.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Globalization?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 22. Growth rates for emerging markets are higher than those of advanced economies, which is likely attributed to a. their willingness to accept risk. b. a coupled approach to globalization. c. their dependency on developing nations. d. the size of the domestic market.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: What Is Globalization?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 8:37 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

23. Which of the following is a central purpose of the IMF? a. Provide long-term low-interest social sector and infrastructure loans b. Lobby local governments for exchange rate control c. Control exchange rates through policy reform d. Promote exchange rate stability ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 24. What was the initial primary role of the World Bank? a. To aid in the reconstruction of Europe after World War II b. To provide low-interest mortgage loans to minorities c. To avoid a repetition of the disastrous economic policies that had contributed to the Great Depression d. To deal primarily with tariff negotiations ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

25. The International Bank for Reconstruction and Development performs which of the following functions? a.Provides long-term low-interest social sector and infrastructure loans to the poorest members, utilizing foreign aid funds provided by rich nation members b Provides loans and takes equity positions in private companies of developing countries, and works toward . developing capital markets in those economies c.Supports the reconstruction and restructuring of member countries, utilizing funds raised in international capital markets d Provides political risk coverage for private investments made in developing countries .

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 26. The Multilateral Investment Guarantee Agency performs which of the following functions? a. Provides long-term low-interest social sector and infrastructure loans to the poorest members, utilizing foreign aid funds provided by rich nation members b Provides loans and takes equity positions in private companies of developing countries, and works toward . developing capital markets in those economies c.Supports the reconstruction and restructuring of member countries, utilizing funds raised in international capital markets d Provides political risk coverage for private investments made in developing countries .

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

27. The International Finance Corporation (IFC) performs which of the following functions? a. Provides long-term low-interest social sector and infrastructure loans to the poorest members, utilizing foreign aid funds provided by rich nation members b Provides loans and takes equity positions in private companies of developing countries, and works toward . developing capital markets in those economies c.Supports the reconstruction and restructuring of member countries, utilizing funds raised in international capital markets d Provides political risk coverage for private investments made in developing countries .

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 28. Which of the following is an objective of the WTO? a. Controlling inflation within member countries b. Reviewing interest rates on international loans c. Acting as a forum for trade negotiations d. Naming commissioners to local trade organizations ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 8:37 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

29. The five principles of the multilateral trading system include trade without discrimination, freer trade, predictability, promotion of fair competition, and a. integrated capital markets. b. encouragement of economic reform in developing countries. c. liberalization of the trading system. d. nontariff trade.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 30. In Brazil, if there are government organizations that create strong incentives for private investment and operate under a system of checks and balances that function best in a democratic system of government, they could be classified as which of these? a. Transparent organizations b. Antitrust corporations c. Adaptive institutions d. Emerging markets ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutional Structure and Its Impact on Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

31. To sustain globalization, nations must build institutions that support a. dollarization. b. command economies. c. democratic systems of government. d. fixed tax rate systems.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Institutional Structure and Its Impact on Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Evaluation STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 32. The most recent devices that enable the greatest ease in portability and accessibility of information are a. magazines. b. newspapers. c. advertisements. d. smartphones.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 8:38 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

33. In India, several politicians are working very hard toward a system of full disclosure and openness that aims to avoid any semblance of corruption and cronyism. These efforts can be described as creating a system focused on a. politics. b. integrity. c. accountability. d. transparency.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Institutional Structure and Its Impact on Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 34. Which of the following statements regarding competitive markets is true? a. Successfully globalized economies strive to attain competitive markets abroad. b. Governments try to minimize the role of privately owned enterprises in market economies. c. Regulations that promote command economies also tend to promote globalization. d. Successfully globalized economies strive to attain competitive markets at home.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Effective Policy Measures That Promote Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

35. Illicit dealings undermine economic performance by a. reducing transparency. b. decreasing costs. c. eliminating competition. d. increasing inflation.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Effective Policy Measures That Promote Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 04 - LO: 01-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 36. ABC Technology touts in their advertisements that their technology can transfer huge amounts of data and other information in a second via the Internet. ABC is spotlighting their a. bandwidth. b. digital server. c. digital divide. d. gigabytes.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 8:40 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

37. The rapid fall in prices of digital IT equipment and services may a. reduce the importance of IT in the global economy. b. spell the end of the digital era. c. make the digital divide a myth. d. reduce the availability of bandwidth in developed economies.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 38. Of the following, which is true regarding the Internet and cell phone era? a. Developing countries may "leapfrog" an entire generation of technology. b. The majority of users will be from advanced countries. c. Text messaging will be ineffective in emerging countries. d. The next billion users will be vastly different from the first billion.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

39. Which of the following arguments is pro-globalization? a. Globalization may lead to an increase in the appearance of old industries. b. Globalization may lead to a loss of control over economic policies and developments. c. Globalization may lead to an erosion of communities. d. Globalization can be a force of exploitation and injustice.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Globalization Controversy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 06 - LO: 01-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 40. The only way workers in industrialized countries can compete with their counterparts in the developing world will be through increased a. use of the cost leadership strategy. b. diversity within the organization. c. empowerment of employees. d. productivity by using technologically intensive manufacturing technologies.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Globalization Controversy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 06 - LO: 01-06 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

41. An office using printer paper made primarily of recycled paper illustrates what kind of policy? a. Future sourcing policy b. Sustainable development policy c. Next-generation consumer hook policy d. Digital divide policy ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Globalization Controversy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 06 - LO: 01-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 42. Which of the following is true regarding results from a survey by the World Bank on corporate social responsibility (CSR)? a. FDI is sparking a “race to the bottom” for investment opportunities. b. 40% of the companies surveyed have board-approved policies on environmental management. c. CSR practices are now a significant factor in determining where multinational companies conduct business. d. With regard to foreign direct investment, CSR issues lie at the bottom of selection criteria.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Globalization Controversy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 06 - LO: 01-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

43. Successive waves of globalization include characteristics such as the expansion of trade, the diffusion of technology, extensive migration, and a. improvements in country infrastructure. b. increased employee morale. c. cross-fertilization of diverse cultures. d. financial independence.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Making Globalization Work for All QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 07 - LO: 01-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 44. Which of the following statements regarding globalization is true? a. Export barriers may need to be imposed by the WTO to help regulate the actions of multinational companies. b. Globalization guarantees an increase in quality of life for host nations. c. Advanced nations win from the effects of globalization; only developing nations lose. d. All multinational companies utilize globalization to pay substandard wages to the workers they employ in developing countries.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Making Globalization Work for All QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 07 - LO: 01-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

45. Which one of the following countries can be considered a globalization "loser"? a. China b. North Korea c. India d. Brazil ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Making Globalization Work for All QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.01 07 - LO: 01-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM Completion 46. What refers to a fundamental global shift in which industrialized country-dependent developing economies begin to grow based on their own underlying economic strengths rather than the ups and downs of the world’s richest countries?

ANSWER: Decoupling POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

47. A world economy in which the engines of growth could comprise several major industrialized and emerging market economies such as the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone is called .

ANSWER: multi-polar world POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Globalization?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 01 - LO: 01-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 48. In 1944, the World Bank was conceived at a conference in .

ANSWER: Bretton Woods POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

49. A stock exchange where long-term financial instruments such as stocks and bonds can be bought and sold refers to .

ANSWER: capital markets POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 50. The rules, enforcement mechanisms, and organizations that support market transactions are called ANSWER: institutions POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Institutional Structure and Its Impact on Globalization QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

51. A system of responsibility in which an authority, such as the government, is answerable for its actions refers to .

ANSWER: accountability POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Institutional Structure and Its Impact on Globalization QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 52. National laws aimed at maintaining competition in all sectors of the economy and preventing monopolistic behavior of firms are called .

ANSWER: antitrust laws POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Effective Policy Measures That Promote Globalization QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

53. The period of transformation that adjusts lifestyles to make the Internet and wireless technologies a part of everyday life refers to the .

ANSWER: digital era POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 54. The is a system of interlinked documents contained and accessed via the Internet.

ANSWER: web POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

55. Economic development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs, whether environmentally, socially or economically is called .

ANSWER: sustainable development POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Globalization Controversy QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 06 - LO: 01-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM Subjective Short Answer Scenario – Innovative Computing Saleh Zurami and Idina Roderick started a small computer business ten years ago in Rapid City, South Dakota. Armed only with determination and innovative designs, Saleh and Idina were driven to achieve success for their company, Innovative Computing. Their hard work has indeed paid off; since the inception of the company, the two owners have watched their business grow and demand for their products increase.

Four years ago due to this high product demand, they went international with their business operations. Saleh and Idina now have international business operations in Singapore, France, Turkey, and Great Britain. Further operational expansion is anticipated within the next year, and the company plans to begin operations in Spain, Greece, and Italy.

The owner’s hard work and dynamic ideas have proven quite profitable for the company. Saleh and Idina are pleased with how their operation has grown into becoming a major international business worthy of competing with Intel and Microsoft. Innovative Computing may well be the next giant recognized in the field of computer software.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

56. Innovative Computing is conducting international business operations in world areas that have recently undergone financial turmoil. Of the following, which organization is most likely to provide assistance in providing global financial stability? a.

The International Monetary Fund b.

The United Nations c.

The World Bank d.

The Global Center for Financial Restructuring ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Innovative Computing LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 57. Which one of the following would Innovative Computing least expect to be a negative influence from the sovereign governments within the nations where their business operations are located? a.

Military hostilities b.

Protectionist policies c.

Promotion of economic growth and job creation d.

Stiff environmental standards ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Innovative Computing LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

58. Innovative Computing plans to begin operations in areas that recently needed financial assistance and undergone certain levels of reconstruction and reorganizing to their economies. Which organization listed below is most likely to have played an integral part in this? a.

The World Trade Organization b.

The World Bank Group c.

The International Development Association d.

The International Finance Corporation ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Innovative Computing LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM Scenario – The Everline Corporation The Everline Corporation is a multinational business that provides state-of-the-art digital communication capabilities to its global customers. Originally operating as a U.S. domestic business based in Duluth, Minnesota, Everline quickly seized on the opportunity provided by international expansion. Within two years, the corporation had expanded into fourteen foreign nations found throughout the Middle East, Europe, Asia, and South America.

Everline understands the vital importance of offering effective and affordable communication products to its customers. It realizes the value consumers place on being able to communicate with businesses without delays or hassles. The corporation recognizes that its customers need to quickly and efficiently communicate with others in the global marketplace of today.

Fueled by its staff of innovative and highly skilled communication engineers, the future for Everline looks more and more promising. Communication needs around the globe continue to grow and this business stands ready to fill the demand. With net profits expected to reach one billion dollars in the next year, this company is decidedly reaping the rewards of its hard work.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

59. The Everline Corporation is currently conducting its international communication business during a period of time that is experiencing rapid changes and challenges. Individuals and organizations are adjusting their lifestyles and methods of operations to fully utilize the modern communication technologies available in the marketplace. The time period Everline is currently operating under is best classed as which one of the following terms? a.

Digital proliferation b.

The modern communication era c.

The digital era d.

The communication decade ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Everline Corporation LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 60. The Everline Corporation’s future business plans include expanding into foreign markets where the use of mobile Web browsing is growing rapidly. Which one of the following countries would this organization be least likely to consider including in their future expansion plans? a.

Vietnam b.

Kenya c.

India d.

Germany ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Everline Corporation LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 8:42 AM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. The managers of the Everline Corporation attribute their company’s continued profitability to the idea that globalization and information technology are closely related to one another. They acknowledge that the information technology revolution has occurred almost instantaneously. Which one of the following would not be considered a benefit derived from this so-called revolution?

Societal hierarchies have grown in number to better accommodate information a. technology changes. b.

A more free flow of capital across national boundaries has occurred. c.

Operating costs have decreased for many businesses. d.

The production of goods and services has become globalized.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Everline Corporation LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 8:43 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

62. There is a perceived economic gap among the various foreign customers of the Everline Corporation. This is thought to be mainly the result of the level of access or lack thereof to modern digital information technologies experienced within these individual countries. Considering this perceived economic gap, Everline’s operations may be experiencing influence identified as which of the following? a.

Digital stagnation b.

The digital era c.

The digital divide d.

The bandwidth technology era ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM Scenario – The Renna Company Established in 1956, the Renna Company has always maintained its operations within the boundaries of the United States. Originally based in Lexington, Kentucky, this company has now expanded operations into thirteen other U.S. states. While its inexpensive and efficient cooling and heating products are in high demand even in foreign markets, this company contends it has no desire for international expansion.

Conducting operations strictly within the U.S. borders does not appear to have been much of a limitation on this company, which has realized net profits of two billion dollars last year and provided gainful employment for over four thousand workers. The leaders of the Renna Company realize greater profits could be attained through international expansion. However, they stand in agreement when they state, “It is not always the money that best defines the worth of an organization.”

The company desires to stay true to its mission statement, which claims that “It will serve the marketplace of the United States with its superior products and provide job opportunities with a fair wage for its employees.” The Renna Company is very proud of its products and enjoys the fact they are produced and sold in the United States of America. This company truly reflects the success possible when holding to the fact that “Made in America” is still a winner.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. Which one of the following statements is least likely to be a rationale explaining why the Renna Company staunchly desires to avoid global expansion? a.

Globalization can create a wearing away of old industries. b.

Globalization brings into play the concept of sustainable development. c.

Globalization can contribute to an increase in environmental degradation.

Global expansion often leads to greater integration and interdependence among d. economies and societies, which can bring about injustices.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Globalization Controversy QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Renna Company LEARNING OBJECTIVES: MGMT.GASP.23.01 06 - LO: 01-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 64. Which of the following counterarguments for keeping the operations of the Renna Company strictly within the borders of the United States is the least convincing or least valid?

Global expansion affords a strong potential for costs of both product production a. and product purchase to decrease.

Life expectancy may increase for members of the population within the nations b. involved in globalization due to the increased quality of life. c.

Globalization contributes to faster economic growth for the nations involved.

The wage levels of each nation may become stagnant and some workers may d. become displaced, having been replaced by less expensive foreign labor.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Globalization Controversy QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 07 - LO: 01-07 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

65. The Renna Company has a clear understanding of the benefits of economic development. Economic development which meets the needs of the present generation without compromising the ability of future generations to meet their own needs, whether environmentally, socially or economically is best identified as which one of the following? a.

Sustainable development b.

Reform process c.

Trade liberalization d.

Corporate social responsibility ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Globalization Controversy QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 06 - LO: 01-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM Essay 66. Differentiate between the International Monetary Fund and the World Bank as institutions facilitating globalization.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Key International Institutions That Facilitate Globalization QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 02 - LO: 01-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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67. Analyze the impact of transparency on globalization.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Institutional Structure and Its Impact on Globalization QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 03 - LO: 01-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Create DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 68. Identify and describe any two key policy measures that make globalization sustainable.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Effective Policy Measures That Promote Globalization QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 04 - LO: 01-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

69. Given the rapid advancements in technology in developed countries and the fast pace of globalization, it is not possible to bridge the global digital divide. Do you agree with this statement? Why or why not? Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Impact of Information Technology on Globalization QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 05 - LO: 01-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM 70. What are the best ways industrialized countries can support globalization's "losers"? Support your position using examples.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Making Globalization Work for All QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.01 07 - LO: 01-07 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 8:44 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Chapter 02 - The Evolution of International Business 1. The growth trends in China and India today illustrate the impact that international business has on blue-collar and white-collar workers in wealthy countries as relatively low-skill factory jobs as well as high-skill service profession jobs migrate overseas. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/13/2022 12:11 PM 2. One way international trade benefits consumers is by providing lower living standards. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

3. It is estimated that for every billion dollars' worth of exports from the United States, 100,000 domestic jobs are created. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM 4. Foreign direct investment (FDI) in a country brings funds and business culture from abroad, creates new wellpaying jobs, introduces innovative technologies, and enhances the skills of domestic workers. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

5. The decoupling of world economic order and the move to a multipolar world helps explain why China is now the world's largest recipient of FDI. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM 6. Singapore, a regional center for global companies, continues to attract sizable amounts of foreign investment given its strategic location, world-class infrastructure, and productive workforce. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

7. Mercantilists believed that for a nation to become wealthy, that nation must export as much as possible and, in turn, import as little as possible. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM 8. Factor price equalization theory states that when factors are allowed to move freely among trading nations, efficiency increases, which leads to superior allocation of production of goods and services among countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

9. Porter exemplifies China as a powerhouse for consumer electronics because of the quality and quantity of its engineers, and the ability and willingness of Chinese consumers to try out new electronic products that are perfected and later exported. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM 10. Porter stresses the importance of domestic demand for goods and services when determining a nation’s competitive advantage. When domestic demand remains high, the number of suppliers will also be high. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM

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11. Competitive industrial structures are unlikely to create innovative or dynamic firms willing to compete abroad.

However, a monopolistic industry will foster innovative, cost efficient, aggressive firms that can adjust to changing economic conditions at home and will be well prepared to compete abroad. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM 12. Tariffs are oftentimes used as a proactive move to protect early-stage local producers from foreign competitors. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Practice of Trade Policy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM

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13. Under a preferential duties system, goods imported from a country outside the preferred group are subject to a higher tariff. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Practice of Trade Policy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM 14. The infant industry argument is part of the socio-economic category of managed trade. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

15. Developed countries often resort to managed trade for reasons of unethical labor practices and violation of basic human rights. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM th

16. The world’s two largest economies in terms of national income in the early-19 century were a. China and India. b. the United States and Canada. c. Japan and China. d. India and Japan.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Perspective QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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17. As of 2019, what is the order of the world’s largest economies starting with the greatest? a. India, the United States, and China b. China, the United States, and India c. Japan, China, and Mexico d. India, Japan, and Canada ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Cultural Perspective QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 18. In 3,000 B.C., Sumerian farmers realized that the grain surplus they produced could be used as barter for things they did not have. Therefore, the Sumerians obtained copper from Sinai Desert traders who were located several hundred miles to the west in order to make weapons and repel nomadic raiders. The Sumerians engaged in a. international business. b. in-border business. c. environmental business. d. national business.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:01 PM

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19. International trade enhances the lives of people living in the countries involved by a. generating jobs in both the export and import sectors of an economy. b. creating sustainable ethical manufacturing practices for both host and home countries. c. guaranteeing a larger return on investment than strictly domestic production can earn. d. eliminating barriers to trade in all developing nations.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 20. Which of the following statements regarding trade is true? a. Trade does not influence culture. b. All countries benefit from open trade. c. Open trade allows for quality among commerce. d. The gains from open trade are always greater than the losses.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

21. For every billion dollars' worth of exports from the United States, how many domestic jobs are estimated to have been created? a. 5,000 b. 20,000 c. 100,000 d. 500,000 ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 22. Which of the following nations was one of the top recipients of net inflows of FDI in 2019? a. Russia b. Germany c. Singapore d. The United Kingdom ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:02 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

23. Harbow Electronics decided to move production of their ceiling fans to Bangladesh in an effort to reduce costs; this illustrates which type of trade initiative? a. Outsourcing b. Exporting c. Importing d. Foreign investment ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 24. Which of the following statements about foreign direct investment is true? a. FDI brings its home country trade policies with it, eliminating bureaucratic tape. b. FDI limits the amount of choices for local consumers, creating monopolies. c. Foreign investors have little faith in high-income economies such as Canada's. d. FDI in a country brings funds and business culture from abroad.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

25. Which of the following would be considered a factor of production? a. Supply b. Trade c. Wages d. Capital ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 26. The oldest form of trade theory is called a. mercantilism. b. factor equalization. c. Machiavellianism. d. absolute advantage.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

27. Which of the following would a mercantilist value the MOST? a. Labor b. A trade surplus c. Absolute advantage d. A trade deficit ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:02 PM 28. Which of the following statements about mercantilism is true? a. Mercantilism was practiced as North America emerged from the feudal systems of the Middle Ages and moved toward nationalism. b. Mercantilism benefited everyone; even those poor in natural resources. c. Mercantilists believed that for a nation to become wealthy, that nation must export as much as possible

and, in turn, import as little as possible. d. Mercantilists were very focused on the big picture approach to wealth management.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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29. Which mid-18 century British economist, who came to be known as the father of free market and open trade systems, recognized the absurdity of Mercantilism? a. Bertil Ohlin b. Eli Heckscher c. Adam Smith d. Henry Ford ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 30. Assume that because of soil and climatic conditions, Brazil is more efficient in the production of coffee than the United States. At the same time, the United States is more efficient in the production of apples than Brazil. Each of these countries can be said to have a(n) a. absolute advantage. b. comparative advantage. c. factor endowment destruction in land. d. bartering disadvantage.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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31. The ability of one country that has an absolute advantage in the production of two or more goods (or services) to produce one of them relatively more efficiently than the other is called a(n) a. opportunity cost. b. comparative advantage. c. factor price. d. factor endowment.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 32. The key assumptions for the H-O theory to work are: (1) perfect immobility of factors of production among countries; and (2) a. perfect competition in the workplace. b. superior allocation of production of goods and services. c. very small labor force. d. the existence of a trade surplus.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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33. Which theory states that when factors are allowed to move freely among trading nations, efficiency increases, which leads to price of factors becoming equal among countries? a. Factor-price equalization theory b. Diamond theory c. Trade policy theory d. Managed trade theory ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 34. Which of the following serve(s) as a basis for both the theory of comparative advantage and the H-O theory for international trade? a. Factor endowments b. Trade surplus theory c. Foreign direct investment d. Managed trade theory ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:03 PM

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35. How does Porter’s model of national competitive advantage differ from the Heckscher-Ohlin theory? a. It looks more closely at the quality of factor endowments. b. It examines only a country’s imports. c. It examines only a country’s exports. d. It does not encourage trade.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 36. According to Porter's "Diamond" model, the success or competitive advantage of a nation at the global stage depends upon the interaction between which of the following? a. The global pricing index and world production b. Financial stability with inflation and interest rates c. Sustainability factors in the marketplace d. Firm strategy, structure, and rivalry ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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37. Until January 1, 2012, the price for ethanol consumers in the United States was higher than world free-market price by $0.54 per gallon because of the $0.54 per gallon tariff imposed by the U.S. government on ethanol imports.

This is an example of a(n) a. customs tariff. b. ad valorem tariff. c. specific tariff. d. preferential tariff.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Practice of Trade Policy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 38. Licensed brokers mitigate risk for importers and collect taxes on imported goods; another name for these taxes is a. custom duties. b. ad valorem tariffs. c. specific tariffs. d. preferential tariffs.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Practice of Trade Policy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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39. Which of the following describes the trade initiative designed to spur economic development in poor countries through trade? a. A custom duty b. An ad valorem agreement c. An export agreement d. The generalized system of preferences ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Practice of Trade Policy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 40. The U.S. government may require that apparel imported into the United States should use U.S. cotton or a certain amount of American labor. This is an example of a a. quantitative restriction. b. qualitative restriction. c. domestic content provision. d. voluntary export restriction.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Practice of Trade Policy QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:04 PM

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41. Agreements, sometimes temporary, between countries (or a group of countries) that aim at achieving certain trade outcomes are known as a. quantitative agreements. b. qualitative agreements. c. managed trade agreements. d. voluntary export agreements.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 42. Suppose the United States exports automobiles to Saudi Arabia and agrees to import a corresponding value of oil from Saudi Arabia. This is an example of a. a trade deficit. b. the infant industry argument. c. countertrade. d. a domestic content provision.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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43. Someone who believes in the infant industry argument would be MOST likely to support which of the following choices for a new industry? a. High tariffs b. Illegal trade c. An export cartel d. An embargo ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 44. Which of the following is in the geo-political category of managed trade? a. Strategic industries b. Economic reform c. Land grants d. Cartels ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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45. Because of that country's annexation of Crimea and military action in east Ukraine, the United States, the European Union, and Australia imposed various trade sanctions on a. Poland. b. Bulgaria. c. Turkey. d. Russia.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:05 PM 46. If the United States limited the number of Chinese car imports to 3 million per year, it would be an example of a(n) .

ANSWER: import quota POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Practice of Trade Policy QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:05 PM

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47. Mercantilism refers to a theory of international trade that supports the premise that a nation could only gain from trade if it had a trade .

ANSWER: surplus POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 48. International trade tools which are overwhelmingly pro-producer and anti-consumer are ANSWER: nontariff barriers POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Practice of Trade Policy QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:07 PM

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49. The ability of one country that has an absolute advantage in the production of two or more goods (or services) to produce one of them relatively more efficiently than the other refers to .

ANSWER: comparative advantage POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Major Theories of International Trade QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 50. When a country has a in the production of a good, they should produce that good because they can do so more efficiently.

ANSWER: comparative advantage POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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51. Consumers of a product in an exporting country experience a decrease in their quality of life. This is called a(n) .

ANSWER: export subsidy POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Practice of Trade Policy QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:09 PM 52. The 2.5% tax imposed on passenger cars imported to the Unites States is an example of a(n) ANSWER: ad valorem tariff POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Practice of Trade Policy QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:09 PM

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53. Regulations requiring that a certain percentage of the value of import be sourced domestically refers to ANSWER: domestic content provisions POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Practice of Trade Policy QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

.

54. An agreement in which an exporter of goods or services to another country commits to import goods or services of corresponding value from that country is called .

ANSWER: countertrade POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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55. The objective is to sacrifice some economic efficiency for the greater good of the country in terms of national security, protection of critical industries, and international commerce.

ANSWER: geopolitical POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 56. Defend the following statement: Trade and foreign investment are good for society.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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57. Explain why mercantilism fell out of favor as a theory of international trade.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 58. Differentiate between H-O theory and factor price equalization theory.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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59. Explain Porter’s “Diamond” model of national competitive advantage.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Major Theories of International Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 02 - LO: 02-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 60. Defend the infant industry argument, using specific examples.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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Scenario – Power Trip Unlimited, LLC Is it hurricane season? Is there a tsunami warning? Did an earthquake take place somewhere in the world? While these are not pleasant questions to ask, the Miami, Florida-based business Power Trip Unlimited needs to be ready to quickly respond to such events. This unique company offers a vast line of emergency generators and supplies to help individuals caught in the devastation these types of natural occurrences can create. Staffed by experts in the generator field, Power Trip Unlimited has assisted numerous people as they began the recovery process in the aftermath of calamity. In the past year alone, sales for this company have surpassed every set goal. This financial boom occurred while the company conducted sales only in the U.S. market.

Power Trip’s management team now realizes that foreign markets such as India and China offer incredible opportunities for the company. Both foreign nations desire to engage in trade with the company in exchange for allowing its products to be introduced within their borders. India and China have agreed to supply Power Trip with several necessary components for its generators in exchange for allowing the company free operations inside their national boundaries. Power Trip realizes there are numerous challenges facing the company in the foreign market arena. But guided by the belief in the expertise of its staff and the quality of its products, it is ready to face any challenges foreign markets put in front of them. This company stands eagerly poised awaiting its first international sale.

61. The agreement between Power Trip Unlimited, China, and India to engage in foreign trade will ultimately provide greater opportunities for consumers of Power Trip’s products. Which one of the following is least likely to be considered a benefit of this trade agreement?

Consumer choices may be limited by government restrictions on the operational a. capacity of the various products. b.

There will be a greater amount of choice for consumers. c.

Consumers may be offered a lower price on the goods. d.

Consumers will be afforded a higher living standard.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Benefits of Trade and Foreign Direct Investment QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Power Trip Unlimited, LLC LEARNING OBJECTIVES: MGMT.GASP.23.02 01 - LO: 02-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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62. Which one of the following would be the least restrictive way in which India and China could impede sales of Power Trip’s products within their borders despite the agreement to allow free operations of the company within their nations’ boundaries? a.

Place a tariff on the products b.

Establish an ad valorem tariff for the products c.

Establish a generalized system of preferences (GSP) d.

Establish a very high specific tariff ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Practice of Trade Policy QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM 63. The agreement reached between Power Trip and the two foreign nations where they would sell components to Power Trip in exchange for allowing sales of its products within their borders most closely resembles which one of the following? a.

Engagement in countertrade b.

Establishing a generalized system of preferences c.

Development of a domestic content provision d.

Establishment of a quantitative restriction (QR) ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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Scenario – The Audrey Firm The Audrey Firm is an international trade consulting firm currently providing its services in eight foreign nations.

The primary goal of this company is to prevent trade missteps from taking place between foreign nations conducting business with each other. The participating nations prefer to seek counsel with this firm before any of their actions result in major international involvement or World Trade Organization intervention.

In the past, the Audrey Firm’s team of experts has handled international situations having the potential to create serious unrest between neighboring countries. Their guidance and expertise have been successful in keeping trade operating freely in several areas of the globe. The Audrey Firm is receiving an award for their exemplary service later this year in Washington D.C. 64. As one of the Audrey Firm’s more prestigious clients, OPEC, which exemplifies an export cartel, requires constant oversight to ensure that it complies with the agreement arranged for export cartels. Which one of the following items is least likely to appear on this type of agreement? a.

Substitutes for the goods being offered must not be available. b.

Demand for the product in question must be elastic.

There needs to be a strong demand for the product in question at basically any c. price. d.

There must be no cheating on the stated agreement by the agreeing members.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Audrey Firm LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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65. Many of the clients engaging the services of the Audrey Firm practice managed trade. All of the following would most likely be a practice these nations engage in when conducting trade with other nations except which one? a.

Giving free rein to strategic industries in their trade practices b.

Adherence to stringent guidelines concerning the use of child labor c.

Paying close attention to the safety of products produced d.

Employing embargoes to punish nations engaging in offensive practices ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Current Practice of "Managed" Trade QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Audrey Firm LEARNING OBJECTIVES: MGMT.GASP.23.02 04 - LO: 02-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/20/2022 1:11 PM 66. The clients of the Audrey Firm use various techniques to restrict imports to their countries. Which one of the following assigns a fixed amount of tax for every physical unit imported? a.

Import quota b.

Voluntary export restraint c.

Ad valorem tariff d.

Specific tariff ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Practice of Trade Policy QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.02 03 - LO: 02-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:31 PM DATE MODIFIED: 4/5/2022 11:25 PM

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1. One could argue that regional and global integration are not complements, but substitutes to economic development of a particular region. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Introduction QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 2. Both common markets and economic unions abolish restrictions on factor movements. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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3. The World Bank’s World Development Report (WDR), titled “Reshaping Economic Geography,” analyzes trade and regional economic integration through the lens of economic geography (i.e., market size, location, and openness to trade). The WDR concludes that positive changes within these three categories are essential for successful regional integration. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 4. The appropriate approach for countries interested in regional integration could include the following three fundamentals: start small, think global, and compensate the least fortunate. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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5. Generally, countries within trading blocs that have significantly lowered trade barriers have done better economically than others. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 6. Remote regions with small local markets which Paul Collier calls the “bottom billion,” are located in Central Asia; East, Central and West Africa; and the Pacific Islands. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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7. With uncertainty surrounding the outcome of the Doha Round of trade negotiations, countries (large and small) are clamoring for bilateral or regional trade agreements to meet their specific agendas causing economists to be concerned about the prospects of creating a truly open global economic system that benefits all countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Does Regional Integration Confound Global Trade?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 03 - LO: 03-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 8. The origins of the European Union (EU) can be traced to the creation of the North Atlantic Treaty Organization (NATO) in 1949. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The European Union QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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9. Through various treaties (e.g, the Treaty of Rome, Maastricht Treaty, Copenhagen Treaty, Treaty of Nice, the Lisbon Treaty), the EU is deepening and strengthening its institutional linkages; it is hoped that this will enable the EU to act as one country that will effectively compete with the U.S. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The European Union QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 10. All 27 EU countries are permitted to use the euro as their currency. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The European Union QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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11. USMCA is a comprehensive free-trade agreement among Canada, United States, and Mexico that addresses issues ranging from protection of workers’ rights and the environment to phased reduction of tariff and non-tariff trade barriers, which were finally eliminated in 2009. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The United States-Mexico-Canada Agreement QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 12. ASEAN, headquartered in New Delhi, India, was established in August 1967 by five founding members: India, Malaysia, the Philippines, Singapore, and Thailand. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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13. In 2003, ASEAN leaders agreed to establish an ASEAN Community based on three pillars: ASEAN Security Community; ASEAN Economic Community; and ASEAN Socio-Cultural Community. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 14. A growing ASEAN concern is the economic ascendancy of Turkey, which as a major low-cost manufacturing center, has been one of the world’s most attractive destinations for foreign direct investment. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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15. In 1969, frustrated by the lack of progress in LAFTA, Bolivia, Chile, Colombia, Ecuador, and Peru joined in creating the Andean Group, which aimed to create economic integration through reduced taxes, a common external tariff, and investment in the poorer industrial areas of their respective countries. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Regional Integration in Latin America QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 07 - LO: 03-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 16. Customizing geographic distribution of business activities, such as border security and/or customs work, is an example of a. regional integration. b. spatial transformations. c. free trade. d. economic integration.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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17. Three countries, X, Y, and Z, are part of a member area where they have eliminated all barriers to trade such as tariffs and quotas, as well as nontariff barriers like border restrictions. At the same time, they have kept their own external tariffs against nonmembers. This illustrates what type of area? a. Regional area b. Spatial area c. Free trade area d. Embargo area ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 1:22 PM 18. According to the text, which of the following is the second stage of regional integration? a. A customs union b. An economic union c. A free trade area d. A common market ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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19. The members of the Gulf Cooperation Council (GCC) are all run by monarchies, they all share common trade policies with non-members, and they share tax codes. The GCC is an example of a(n) a. customs union. b. economic union. c. free trade area. d. common market.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 20. The EU, with its common currency, trade policies, and central bank, represents the closest example of which level of regional economic integration? a. Customs union b. Political union c. Free trade area d. Common market ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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21. USMCA is in which stage of the economic integration process? a. First stage (free trade area) b. Second stage (customs union) c. Third stage (common market) d. Fourth stage (economic union) ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 22. Which of the following is a cost of regional integration? a. Enhancing the flow of capital, labor, and technology b. Enhancements from cultural and social differences c. Reducing the powers of the national government d. Increased national sovereignty and identity ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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23. The World Bank’s (2009) World Development Report concludes that successful regional integration depends on positive changes within a. comparative and absolute advantage. b. market size, location, and openness to trade. c. government control over the economy. d. the relationship between employers and employees.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 24. Which of the following statements about regional integration is true? a. Regional integration may reduce the powers of the national government. b. Regional integration should create unconnected or isolated countries. c. Regional integration should not compensate the least fortunate. d. Regional integration should initially address a broad, ill-defined area of cooperation.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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25. When the various regional integration blocs are analyzed from an economic geography perspective, they fall under three general categories: regional blocs close to major world markets, remote regions with large local markets, or a. urban regions with small local markets. b. urban regions with large local markets. c. urban regions with no local markets. d. remote regions with small local markets.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 26. According to the text, which of the following countries is a regional bloc close to world markets? a. Russia b. North Korea c. Vietnam d. Zimbabwe ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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27. Which of the following is an example of a regional bloc close to major world markets, thereby permitting them privileged access to US markets? a. PAFTA b. GCC c. EU d. CARICOM ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 28. The members of the Maghreb Union a. all have similar political and economic systems. b. hope to form an economic and political union in North Africa. c. all suffer under enormous amounts of debt. d. are losing their competitiveness against EU countries.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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29. Which of the following is a primary reason why countries are now seeking to pursue regional integration at the expense of multilateral trade liberalization? a. Uncertainty surrounds the global housing market. b. USMCA is pushing the EU to pursue regional integration. c. Some governments may initiate regional pacts. d. Some countries are solely interested in green marketing initiatives.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Does Regional Integration Confound Global Trade?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 03 - LO: 03-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 30. In which country is the EU headquartered? a. Belgium b. France c. Germany d. Italy ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The European Union QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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31. Which of the following statements about the EU is true? a. Its founding members consisted of ten countries. b. It is a perfect example of a political union. c. Its eastward enlargement reflects a common past. d. Its origins can be traced to the creation of the Greater European Alliance.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The European Union QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 32. Based on religious and socioeconomic factors/conditions, as well as questionable human rights advocacy, which country has been a controversial candidate-only member of the EU? a. Bulgaria b. Malta c. Turkey d. Serbia ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The European Union QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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33. Which of the following statements regarding the euro is true? a. The euro was introduced on January 1, 1999. b. The euro was modeled after the Italian lira. c. All 27 countries trade the euro. d. Denmark and Sweden use the euro as their currency.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The European Union QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 34. Which of the following is an objective of USMCA? a. The elimination of sunset clauses, or continuous review b. The creation of a uniform currency in North America c. Increasing the reliance on external global supply chains d. Protection of intellectual property rights ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The United States-Mexico-Canada Agreement QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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35. In which country is ASEAN headquartered? a. Indonesia b. Vietnam c. Canada d. Japan ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 36. ASEAN’s current membership stands at how many countries? a. 5 b. 10 c. 2 d. 25 ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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37. What is the goal of the ASEAN Security Community (ASC)? a. To ensure that countries in the region live in peace with one another b. To come to the aid of member nations in time of war c. To ensure that the ASEAN workforce is prepared to benefit from economic integration d. To oversee the construction of roads and railways between member nations ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 38. ASEAN has two main objectives: 1) to accelerate economic growth, social progress, and cultural development in the region; and 2) a. to trade with USMCA. b. to promote regional peace and stability. c. to convince Asian countries to use the euro. d. to create more countries in Asia.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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39. How does ASEAN differ from the EU? a. It does not call for the free movement of labor across member states. b. It maintains both tariff and non-tariff barriers among member states. c. It calls for the establishment of a single market. d. It calls for the establishment of a production base.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 40. Which community within ASEAN focuses on investments in basic and higher education? a. Sociocultural b. Security c. Educational d. Literacy ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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41. Which of the following is true about the future of ASEAN? a. China is slated to become a member state. b. It will be the second largest trade area, following the EU. c. ASEAN's Vision 2040 calls for aggressive outward-looking economic policies. d. A growing ASEAN concern is the economic ascendancy of North Korea.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 42. The Treaty of Montevideo created a. the EU. b. ASEAN. c. LAFTA. d. USMCA. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Integration in Latin America QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 07 - LO: 03-07 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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43. With the anticipated success of the (now) USMCA, formal discussions to establish a Free Trade Area of the Americas began under which administration? a. Obama b. Bush c. Clinton d. Reagan ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Integration in Latin America QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 07 - LO: 03-07 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 1:27 PM 44. Venezuela became a member of MERCOSUR in July 2012 and is considered a key member because of its a. low tax rates and absence of tariffs. b. large population of educated, highly skilled workers. c. vast energy resources and significant domestic market. d. high-tech economy, the most advanced in South America.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Integration in Latin America QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 07 - LO: 03-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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45. As a means to push USMCA south of Mexico, the Bush administration began free-trade talks with which of the following countries? a. Venezuela b. Belize c. Haiti d. Honduras ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Regional Integration in Latin America QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.03 07 - LO: 03-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 46. Implementation of a multitude of economic and/or political steps by member states to increase their global competitiveness, including preferential trade access refers to .

ANSWER: regional integration POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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47. The process of allowing efficient geographic distribution of business activities within and among countries refers to .

ANSWER: spatial transformations POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 48. An area in which two or more countries agree to eliminate all barriers to trade such as tariffs, quotas, and nontariff barriers like border restrictions, while at the same time keeping their own external tariffs (within WTO guidelines) against nonmembers is a(n) .

ANSWER: free-trade area POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 1:29 PM

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49. A group of free trade member countries that have adopted a common external tariff with nonmember countries refers to a(n) .

ANSWER: customs union POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 50. A market formed when member countries of a customs union remove all barriers to allow the movement of capital and labor within the customs union is called a(n) .

ANSWER: common market POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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51. When members of a common market agree to implement common social programs and coordinate macroeconomic policies that would lead to the creation of a single regional currency, this illustrates a(n) ANSWER: monetary union POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

.

52. A union created when member countries of an economic and monetary union work closely with one another to arrive at common defense and foreign policies and behave as a single country is called a(n) .

ANSWER: political union POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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53. The study of principles that govern the efficient spatial allocation of economic resources and the resulting consequences refers to .

ANSWER: economic geography POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 54. In 1957, the European Economic Community (EEC) was established by the Treaty of .

ANSWER: Rome POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The European Union QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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55. USMCA is a free-trade agreement among Canada, the United States, and .

ANSWER: Mexico POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The United States-Mexico-Canada Agreement QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 56. Describe briefly the form and stages of regional integration.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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57. Explain the pros and cons of regional integration.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 58. If you are hired as an advisor for countries interested in regional integration, what would be your recommendation for the appropriate approach for these countries? Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Economic Geography of Regional Integration QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 02 - LO: 03-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Create DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

59. Compare and contrast EU and USMCA as regional integration blocs.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The European Union The United States-Mexico-Canada Agreement QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 04 - LO: 03-04 MGMT.GASP.23.03 05 - LO: 03-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 60. Some argue that Asia may become the most important free trade region for this century. Do you agree? Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM Scenario – Sarten Gas Company Established in Salt Lake City, UT in 1975, the Sarten Gas Company (SGC) has grown to be a recognized name in the industry. Since its inception, this company has been able to withstand serious economic downturns in the economy. It has been able to remain financially stable when many others in the industry have struggled with financial losses. The expertise and knowledge of its leaders has led the SGC to be one of the few companies in the industry able to report continued growth.

This excellent track record has inspired the owners of SGC into embracing the idea of expansion. Sarten plans to begin trading with Canada this year and to include trading with Mexico within the next three years. The leaders of Sarten Gas feel confident these new trade deals will prove successful for the company and its shareholders.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. Which one of the following represents a trade agreement most likely to impact the Sarten Gas Company and its proposed trading partners? a.

USMCA b.

ASC c.

ASEAN d.

CAFTA ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The United States-Mexico-Canada Agreement QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Sarten Gas Company LEARNING OBJECTIVES: MGMT.GASP.23.03 05 - LO: 03-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 62. Which of the following is a free trade policy impacting Sarten Gas Company? a.

Phased elimination of all embargoes b.

Protection of capital investments c.

Phased elimination of all trade barriers d.

Stringent immigration policies ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The United States-Mexico-Canada Agreement QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 05 - LO: 03-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. Given that SGC’s home country, the United States, is part of a regional integration bloc that is based on purely economic goals, benefits to these countries would include all but which one of the following? a.

Increasing the global competitiveness of each member b.

The surrendering of sovereignty of each member c.

Providing a free trade area for the members d.

Eliminating tariffs and non-tariff barriers to trade for the members ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: What Is Regional Economic Integration?

QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 01 - LO: 03-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM Scenario – The Astra Company The Astra Company was founded in 2005 by Putri and Eka Astra. It is currently based in Jakarta, Indonesia and plans to remain in the region due to the potential for continued market growth. The company provides modern office equipment to customers throughout Southeast Asia and has seen a steady rise in need for its products.

Last year, Astra grossed over five million dollars in sales. It anticipates gross sales to more than double this year.

The Astra Company is pleased by the ample supply of workers from the local region available to help the company.

The owners realize this area of the world has the potential to become an important global market.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

64. Which one of the following would most likely set guidelines for the Astra Company to follow as it conducts its business in Southeast Asia? a.

European Union b.

USMCA c.

ASEAN d.

MERCOSUR ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Astra Company LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 65. The regional bloc affecting Astra a. has abolished tariffs and quotas among members. b. uses a common currency among members. c. allows for the free movement of labor among members. d. uses a common language for trade among members.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

66. Which one of the following is not considered a main objective of the regional bloc affecting Astra? a.

To accelerate economic growth b.

To increase cultural development in the region c.

To encourage regional peace d.

To diminish relationships with major powers ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM 67. The Astra Company’s plan to continue its operations within the Asia market offers many benefits as well as challenges. Which one of the following would provide the least degree of challenge for the stability of this company’s business operations? a.

Development of a free trade agreement with China b.

The economic rise of China c.

Ability to tap China’s declining business market d.

Job loss prevention through a free trade agreement with China ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Association of Southeast Asian Nations QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.03 06 - LO: 03-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/6/2022 3:54 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Chapter 04 - The International Flow of Funds and Exchange Rates 1. One factor affecting change in currency values is different price levels in different countries for the same goods and services. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 2. In flow of funds analysis, money moving into a country is a debit (negative sign), while money leaving the same country is a credit (plus sign). a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 3. Whether the trade balance is positive (surplus) or negative (deficit) is important because it provides a measure of the financing needs of a particular country. Hence, the trade balance is more important than current account balance. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

REFERENCES: The Balance of International Payments QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 4. The statistical discrepancy line reconciles any remaining imbalance to ensure that all debit and credit entries in the BOP statement sum to zero. This line captures statistical inconsistencies in the recording of the credit and debit entries as well as illegal trade. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 5. Security investments have little impact on the BOP's financial account. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE MODIFIED:

4/20/2022 2:03 PM

6. The forex markets trade only the five most widely traded global currencies: the dollar, the euro, the yuan, the yen, and the pound. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 7. Indirect quotes give the number of dollars per one unit of foreign currency. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 8. If the dollar was expected to appreciate in the 60-day forward market against the Japanese yen, it would be selling at a premium. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 9. An example of inflation is, if the amount of money in a country doubled, but the production of goods and services stayed the same, the price of all goods and services would decline by about half, assuming that other factors, such as external trade, were constant. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Monetary Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 10. The International Monetary Fund (IMF) was established under the Bretton Woods Agreement to help ensure the stability of the international monetary and financial system. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Monetary Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

11. The EMU introduced the euro as a new currency to replace the currencies of the member countries in the Eurozone, which has since grown to 27 members. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Monetary Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 12. Together, the dollar, euro, and yen account for around 60 percent of the world economy. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Monetary Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 13. According to the law of one price, identical goods should sell for the same price in different countries according to the local currencies. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Flows of Goods and Capital QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 14. According to the Big Mac Index, the dollar interest rate on U.S. and European bonds should be the same.

Otherwise, there would be no arbitrage opportunities for investors. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: International Flows of Goods and Capital QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 15. One forecasting approach is to use a multiple regression model to estimate the relationship between changes in spot rates and fundamental factors. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Forecasting Exchange Rates QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 16. Which of the following variables were present in both the global financial crisis of 2008–2009 and the Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

global economic crisis of 2020–2021? a. A higher valued US dollar b. A pandemic c. Increases in world trade d. US exports exceeding imports ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Perspective QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 17. According to the text, which of the following is a reason why currency values can change? a. The law of one price b. WTO mandates c. Varying interest rates across countries d. Price imbalances caused by differential inflation ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 18. Which of the following illustrates the effects of disequilibrium in the balance of payments? a. Primary trading partners are more inclined to invest. b. The economic credibility of a country goes down. c. The reserve accounts of forex markets increase. d. The economic growth and prosperity of a country rises.

ANSWER: b Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 19. Which of the following is a subaccount of the current account? a. Financial account b. Primary balance c. Deficit balance d. Net transfers ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 20. The net of services exports and imports is called the a. trade balance. b. services balance. c. income balance. d. services deficit.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 21. Which of the following represents the top trading partner of the United States? a. Canada b. Mexico c. Germany d. Japan ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 22. According to the income balance, the “+” sign and the “-” sign (respectively) refer to a. when foreigners use services in a country; when foreign services are used. b. earnings from overseas investment; payments sent overseas. c. incoming dollars; merchandise imports. d. merchandise imports; incoming dollars.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

23. According to the trade balance, the “+” sign and the “-” sign (respectively) refer to a. when foreigners use services in a country; when foreign services are used. b. when foreign services are used; when foreign services are used. c. dollars coming in when merchandise is exported; dollars that leave the country to pay for imports. d. merchandise imports; incoming dollars.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 24. Saleh works in Dubai but is a citizen of the USA; therefore, his earned income contributes to which of the following accounts? a. Services balance b. Income balance c. Trade balance d. Balance of transfers ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 25. Which of the following is true about the current account balance? a. It is the sum of the financial, temporal, income from domestic land grants, and trade balance accounts. b. If foreign capital will not be available to finance the U.S. current account deficit, it can be predicted that the dollar will become stronger. c. It is the sum of the trade, services, income, and net transfers balance.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

d. The United States has had large account surpluses in recent years.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 26. A US-based global soft drink manufacturer acquired a domestic company in Brazil. This purchase would fall under which account? a. Equity b. Financial c. Risk d. Services ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 27. The financial account of the BOP consists of three subaccounts: (1) U.S.-owned assets abroad, (2) foreignowned assets in the U.S., and (3) a. a foreign direct investment. b. a financial account. c. a risk premium. d. net financial derivatives.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 28. Fatima is a buyer for a US-based private equity firm. She recently oversaw the purchase of a large asset for one of her companies. Since the country she bought it from is rated high risk, she would most likely pay a(n) a. asset protection fee. b. current account premium. c. risk premium. d. balance transfer fee.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 29. Acquisitions of a foreign company, creation of new manufacturing or research facilities abroad, and expansion of an existing plant in a foreign country are all examples of a. foreign direct investment. b. a current balance account. c. a risk premium. d. a balance of transfers.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 30. Illicit drug trade activity would be identified in which of the following subaccounts of the balance of payments? a. Foreign direct investment b. Net errors and omissions c. Security investment d. Risk premium ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 31. According to the text, exports are growing the fastest for countries on which continent? a. North America b. South America c. Asia d. Africa ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

32. Which of the following factors contributed to London being the world’s largest foreign exchange market? a. British exchange markets being open 24 hours a day b. The British pound being the most stable currency on the globe c. Britain's involvement in both world wars d. The history of Britain's longstanding presence in global trade ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 33. In this system, a currency's value depends partly upon active government intervention in the foreign exchange market. a. Independent floating exchange rate system b. WTO exchange rate system c. Fixed exchange rate system d. Managed floating exchange rate system ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 34. The system in which a country pegs its currency at a fixed rate to a major currency or basket of currencies, while the exchange rate fluctuates within a narrow margin around a central rate is called a(n) a. spot market. b. fixed exchange rate system. c. independent floating exchange rate system. d. managed floating exchange rate system.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 35. The forex market consists of spot, forward, and which other market? a. Exchange b. Futures c. Independent d. Balance ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Foreign Exchange Market QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 36. Which of the following investment markets hedges risk by guaranteeing an exchange rate now for a purchase of goods or services in the future? a. Forward b. Spot c. Futures d. Independent ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 37. A British firm may need dollars to pay for U.S. imports. It can work with banks in London to exchange pounds for dollars to make this payment via electronic transfer. Which market investment rate does this illustrate? a. Exchange rate b. Futures rate c. Independent rate d. Spot rate ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Foreign Exchange Market QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 38. “Buy low, sell high” best represents which component of the foreign exchange market? a. Exchange rate b. Bid-ask spread c. Forward rate d. Premium ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Apply 11/12/2021 1:32 PM 4/20/2022 2:03 PM

39. Jericho sold yen at today’s current rate because he anticipates that the currency will depreciate in 60 days.

His transaction illustrates which of the following? a. Gaming the exchange rate b. Cheating the bid-ask spread c. Forward rate speculation d. Selling at a premium ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 40. Which of the following is true about the Bretton Woods System? a. The IMF was established under the Bretton Woods Agreement. b. It was established in 1975 in Bretton Woods, New Hampshire. c. It eliminated currency pegging as a stabilizer of global currency. d. It abandoned the concept of a gold standard for equalizing global currency.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: International Monetary Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 41. Which of the following is a key principle of the Jamaica Agreement? a. Members could adopt their own exchange systems.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

b. All countries would adopt the European Exchange Rate Mechanism. c. Gold would be the common denominator of the global monetary system. d. The primary reserve asset became a 1:1 peg with the US dollar and the British pound.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: International Monetary Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 42. What is dollarization? a. Using the dollar or some other foreign currency together with or instead of a domestic currency b. Pegging the value of a foreign currency against the U.S. dollar c. Pegging the value of a domestic currency against the market value of gold d. Increasing the price of goods based on the supply of money ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Monetary Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 43. Which of the following statements regarding potential problems with the Interest Rate Parody Theory (IRP) is true? a. There are no consistent problems with IRP, rendering it to be the best global currency equalizer. b. Herd behavior can cause large purchases or sales of a particular currency that drive values beyond their normal bounds, resulting in problems such as currency crises. c. Transaction costs are eliminated, thereby removing a positive revenue stream. d. Deviations from IRP may be more likely due to economic risk associated with bond stability.

ANSWER: b Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Flows of Goods and Capital QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 44. In the equation “F=S(1+P),” “F” is defined as what? a. Forward rate b. Spot rate c. Forward premium d. Financial rate ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Forecasting Exchange Rates QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 05 - LO: 04-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 45. The spot rate for the USD/EUR is currently .88 USD/EUR. If the one-month forward rate was 1.40 USD/EUR, would the dollar be selling at a discount or premium relative to the spot rate?

ANSWER: discount POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

KEYWORDS: DATE CREATED: DATE MODIFIED:

Bloom's: Analyze 11/12/2021 1:32 PM 4/20/2022 2:03 PM

46. Historically, technologically advanced countries investing in their service sectors, such as software development and film production, contribute to a trade surplus in the .

ANSWER: services balance POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 47. The US imports more goods from China than it exports. This illustrates a .

ANSWER: trade deficit POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 48. The financial account consists of domestic-country-owned assets abroad, foreign-owned assets in the domestic country, and net .

ANSWER: financial derivatives POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Completion HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04-01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 49. Exchange rates between the US dollar, euro, pound, and yen are market determined. This type of exchange rate system is called a(n) .

ANSWER: independent floating exchange rate system POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 50. Insurance that reduces future risk is referred to as a(n) .

ANSWER: hedge POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Foreign Exchange Market QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 51. An increase in the prices of goods and services caused by the supply of money exceeding the demand for goods and services is referred to as .

ANSWER: inflation POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04-02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 52. Clean float currency is a monetary system with minimal government intervention. This currency is largely .

ANSWER: market determined POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 53. The price for an economy ticket from London to New York is $1800USD, but the same ticket from New York to London is $1400USD. The difference between the two goods, assumed to be the same, is attributed to exchange rate differentials. This is an example of the law of .

ANSWER: one price POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Flows of Goods and Capital QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE MODIFIED:

4/20/2022 2:03 PM

54. Buying goods in a lower priced market and selling them in a higher priced market to make profits is referred to as .

ANSWER: arbitrage POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Flows of Goods and Capital QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 55. Identify the four subaccounts of the current account and give specific examples of each.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 56. Describe the different components of a forex market.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Understand 11/12/2021 1:32 PM 4/20/2022 2:03 PM

57. Explain why the United States abandoned the gold system.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: International Monetary Systems QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 58. Differentiate between hard and soft currencies. Provide an example of each.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Monetary Systems QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 59. Differentiate between purchasing power parity and interest rate parity.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: International Flows of Goods and Capital QUESTION TYPE: Essay HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04-04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM

Scenario – S & I Creations Sven and Ingrid Allgertson developed the idea for their thriving business while awaiting the birth of their first child, Olga. Finding nowhere to purchase fine handmade baby clothing and other items, the couple decided to start their own business. Neither Sven nor Ingrid imagined just how successful this endeavor would turn out to be for them. Their designer baby clothes and products were an instant hit in the world marketplace. And even though the baby items are quite expensive to purchase, shoppers from around the world are only too happy to spend large sums of money on their beloved children.

Originally S & I Creations only sold products within Sweden, but soon global demand necessitated the company offer its products in several other foreign markets. Now the proud parents of baby Olga are also the proud owners of a $10 billion per year business. Sven and Ingrid cannot wait to see what the future holds for their family and their business operations.

60. When S & I Creations exports its products to foreign marketplaces, which one of the following is most likely to be affected for the country of Sweden? a.

The income balance of Sweden b.

The services balance of Sweden c.

The World Bank d.

The trade balance of Sweden ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Balance of International Payments QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: S & I Creations LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 61. S & I Creations has over ten thousand customers from London, England. The currency of England is not valued the same as the currency of Sweden. Which one of the following would S & I Creations be most Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

interested in when it comes to currency value?

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

a. b. c. d.

The currency exchange rate The gold standard The Bretton Woods system The International Monetary System

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: S & I Creations LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 62. Donna surveyed the secondary market for baby pajamas created by S & I Creations and found a seller in Dubai. Which US national account would see a debit as a result of her purchase? a.

The surplus account b.

The current account c.

The financial account d.

The capital account ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: S & I Creations LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Scenario – The Whoppler Firm The Whoppler Firm is an experienced financial specialist firm that advises thousands of clients regarding

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

foreign investments and transactions. It takes pride in the accuracy of the financial advice that is provided to its clients and strives to increase the wealth of each participant. According to the records of the Whoppler Firm, the financial expertise of the company has saved its clients over five million dollars in the last year alone.

63. One of the many factors closely watched by the Whoppler Firm is currency values. This firm understands these values can change frequently and quickly. Which one of the following is least likely to be a cause for a currency value to change? a.

Price level differences for the same goods and services b.

Varying interest rates across countries c.

Varying economic prospects of differing countries d.

Stable economic and pricing conditions between differing nations ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Balance of International Payments QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Whoppler Firm LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 64. When the experts at the Whoppler Firm suggest to a client that it is advisable to engage in arbitrage, what exactly are the experts recommending their client to do? a.

Sell goods in lower priced markets to move material throughout the globe Buy goods in a lower priced market and sell them in a higher priced market in b. order to make a profit c.

Sell identical goods for the same prices in differing markets d.

Buy and sell using only what are considered hard currencies ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Flows of Goods and Capital QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 04 - LO: 04-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE CREATED: DATE MODIFIED:

11/12/2021 1:32 PM 4/20/2022 2:03 PM

65. When a new client signs on with the Whoppler Firm, its financial experts attempt to provide an educational orientation on finance for their newest customer. One of the many financial items discussed is the recommended primary reserve asset of the international monetary system. Which one of the following is most likely being discussed? a.

Dirty float currency b.

Purchasing power parity c.

Clean float currency d.

Special drawing right ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Monetary Systems QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 03 - LO: 04-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM 66. Many investors seeking assistance from the Whoppler Firm wish to use the forward market to lock in future exchange rates and ensure against uncertain future currency movements Which of the following best identifies what these investors are seeking? a.

A hedge b.

A discount c.

A spot rate d.

A bid-ask spread ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Foreign Exchange Market QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.04 02 - LO: 04-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE CREATED: DATE MODIFIED:

11/12/2021 1:32 PM 4/20/2022 2:03 PM

67. Which of the following is an example of a foreign direct investment? a. The creation of new manufacturing facilities abroad b. Exporting American computers to an Indian investor c. A licensing agreement purchased by a foreign entity to use a global brand d. A home country hiring expatriates to perform manufacturing duties ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Balance of International Payments QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.04 01 - LO: 04-01 NATIONAL STANDARDS: United States - BUSPROG Communication, Ethics - Ethics STATE STANDARDS: United States - AK - DISC - Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:32 PM DATE MODIFIED: 4/20/2022 2:03 PM

Chapter 05 - The Cultural Environment

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

1. Parents, friend groups, church, and media all play a role in a person's cultural framework. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Culture and Its Influence on Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 2. A US-based clothing manufacturer changed its advertising strategy as well as several of its in-country HR policies in order to conform to local cultural norms. This is an example of acculturation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Culture and Its Influence on Business True / False QUESTION TYPE: HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05-01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

3. Backward translation is a powerful tool used to avoid cultural gaffes when translating marketing materials in a foreign language. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Elements of Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 4. Islam prohibits the drinking of alcoholic beverages. Although Turkey is a Moslem country, the Turkish government has allowed the consumption of alcohol. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

5. In Arab countries, business executives will often digress from the primary purpose of the meeting, then eventually return to the topic initially discussed. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 6. Latin American negotiators will frequently engage in long periods of silence, or may have peripheral discussions among one another while ignoring foreign business people in the room. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Elements of Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

7. The level of education held by people in foreign countries must be such that high-tech products can be accepted because the market knows how to use them. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 8. Power distance refers to the strength of a culture’s social hierarchy. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

9. Hofstede’s masculine vs. feminine dimension is the extent to which a society values traditionally masculine attributes (assertiveness, competition) or traditionally feminine ones (modesty, caring for others). a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 10. According to the GLOBE Project, the lowest level of institutional collectivism existed for the Anglo group. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

11. Ironically, studies have shown that people who have lived and worked abroad are not particularly good sources of information about the cultures of various countries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Sources of Cultural Information QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 04 - LO: 05-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 12. When doing business in Japan, it is appropriate to look directly into the eyes of your hosts. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

13. Guanxi refers to the relationship between subordinates and superiors. It denotes friendship among unequals involving unlimited exchanges of favors; thus, it is not based upon sentiment. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 14. Latin Americans are not as conscious about time as are North Americans. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

15. The use of jargon is especially useful when conducting business meetings with foreign personnel. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Importance of Culture for Managing and Marketing in Overseas Markets QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 06 - LO: 05-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 16. Which of the following is an important characteristic of culture for global companies to recognize? a. Culture is learned, not inherited. b. It is possible to change an entire country’s culture, so long as you move quickly. c. Culture can be imposed from home country to host country. d. Companies need to send native employees to foreign markets in order to ensure cultural compliance.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Defining Culture and Its Influence on Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

17. Mexican business executives who buy business-to-business products from U.S. suppliers indicate that “knowledge of the Mexican culture” and “enthusiasm” were the most important cultural variables determining from which supplier they purchased. This example of which of the four characteristics of culture which is important for global companies to recognize? a Culture is learned, not inherited. . b It is nearly impossible to change an entire country’s culture. . c It is the responsibility of the global firm to ascertain the level of importance of various aspects of culture . in the foreign markets it serves. d Companies’ operations, chiefly marketing and management, need to recognize and adjust to the cultural . environment existing in the countries the global company serves.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Defining Culture and Its Influence on Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 18. Disney’s success in Tokyo was a good example of acculturation, while their Paris park ignored a. verbal cues. b. manners and customs. c. informal cues. d. formal customs.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

19. When a message is translated from English to another language and then someone skilled in that foreign language translates it back into English, this second translation can be compared to the original English version.

This process illustrates a. vertical translation. b. horizontal translation. c. forward translation. d. backward translation.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/20/2022 4:55 PM 20. Janatus is traveling to Korea to visit a potential client. He is bringing with him several small gifts to distribute when meeting with the executive team. This is an example of understanding a. values. b. attitudes. c. manners and customs. d. stances.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

21. In some countries, a high premium is placed upon foreigners and foreign items, as they are associated with sophistication—Belgian chocolate, for example, or Swedish automobiles. In other countries, there is subtle resistance to foreign items. This is an example of a cultural a. value. b. social institution. c. custom. d. stance.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 22. Change, while necessary, can be construed as suspicious in certain foreign markets. This is an example of cultural a. values. b. attitudes. c. manners. d. customs.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

23. In Arab countries, business executives will often digress from the primary purpose of the meeting, then eventually return to the topic initially discussed. This is an example of cultural a. aesthetics. b. attitudes. c. manners and customs. d. social institutions.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 24. In China, consumers drink soup, which usually contains rice, and do not use a spoon. This is an example of cultural a. value. b. attitude. c. manners and customs. d. stance.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

25. Matt is an operations manager for a company interested in manufacturing abroad. When he visits potential sites for building a new plant, he knows to look at the local housing provisions, close medical facilities, and neighboring colleges. All of these cultural attributes represent a. material availability. b. technological prowess. c. social infrastructure. d. financial stability.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 26. The color black in the United States indicates mourning, but in Japan white is the color of mourning. Green is an acceptable color in Muslim countries; all flags of those countries contain green. These are examples of which of the following? a. Material culture b. Aesthetics c. Social institutions d. Stratification ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/20/2022 4:55 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

27. An important element of cultural marketing is identifying consumers’ reference groups. Consumers are influenced by people that influence opinions and behaviors, a component of a. material culture. b. aesthetics. c. social institutions. d. stratification.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/20/2022 4:56 PM 28. According to Hofstede, the United States is considered a(n) a. authoritarian country. b. highly individualistic country. c. high power distance country. d. feminine country.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

29. According to Hofstede, which of the following countries is best described as a highly feminine culture? a. Mexico b. Belgium c. Greece d. Norway ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 30. Customer loyalty to global brands is stronger in countries with high a. individualism vs. collectivism. b. power distance. c. masculine vs. feminine cultural characteristics. d. uncertainty avoidance.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

31. Which of the following is true regarding Hofstede’s cultural dimensions? a. Being a largely collective society, US consumers behave similarly. b. Denmark has been described as a highly feminine culture. c. The US is a low power distance culture. d. Being risk averse has nothing to do with uncertainty avoidance.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 32. Which of the following is one of the nine cultural variables researched by the GLOBE Project? a. Passive aggressive behavior b. Emotionality c. Social orientation d. Humane orientation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

33. According to the GLOBE Project research, which of the following countries was ranked first on power distance? a. Germanic Europe b. Southern Asia c. Eastern Europe d. The Arabic group ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/20/2022 5:09 PM 34. According to the GLOBE Project research, which of the following countries has emerged as the group that was the most in favor of uncertainty avoidance? a. Germanic Europe b. Southern Asia c. Eastern Europe d. The Arabic group ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/20/2022 5:09 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

35. Which of the following is a primary or secondary source that can be used to learn about foreign countries’ cultures? a. The U.S. Department of Education Guide b. The Economist’s Starbucks Index c. Forbes's Countries of the World d. Culture Grams ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Sources of Cultural Information QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 04 - LO: 05-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 36. Which of the following is a cultural aspect of doing business in Korea? a. The number 4 is good, whereas the number 1 signifies death. b. The number 1 is good, whereas the number 4 signifies death. c. Business card etiquette is the most important aspect of closing the deal. d. “Guanxi” refers to the noble class, who oftentimes make up the E-suite.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

37. In Arab countries, it is crucial for a visitor to a. use the left hand to exchange greetings. b. avoid sitting so that the sole of one’s shoe is shown. c. praise his or her hosts effusively. d. insist on staying on-topic at all times.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 38. When doing business in China, it is important to remember that a. exchanges are often uneven, working to the advantage of weaker members in the relationship. b. persons of low rank never have any influence or power in a relationship. c. an emotional appeal to superiors will almost always be successful. d. one must never give in to any demands of the Chinese hosts.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

39. In which country are teachers so revered that walking in their shadows is viewed as impolite? a. Mexico b. Korea c. Russia d. Saudi Arabia ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 40. Korean business leaders treat their subordinates with respect and oftentimes perform wellness checks to verify workplace harmony. This is an illustration of which philosophy? a. Guanxi b. Inwha c. Yangban d. Stratification ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

41. In which country's business environment is it important to understand that potential customers want to develop a personal relationship before doing business with foreign executives, dinner exchanges and lunch meetings provide a good time for executives to get to know one another better, and dinners most often occur in the late evening, at 9 or 10pm?

a. China b. Japan c. Korea d. Latin America ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 42. In which country might an American businesswoman find her hosts especially reluctant to work with her? a. Germany b. Mexico c. Saudi Arabia d. Canada ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

43. Which of the following is true about managing and marketing in overseas markets? a. Culture has an impact on communication styles. b. Only one management style needs to be used. c. Advertising campaigns must be tailored to the home culture. d. Global brands will often escape the need to “act local.”

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Importance of Culture for Managing and Marketing in Overseas Markets QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 06 - LO: 05-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/20/2022 5:10 PM 44. A management style that stresses competition among workers and among companies would likely not work well in a. China. b. Germany. c. Canada. d. the United States.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Importance of Culture for Managing and Marketing in Overseas Markets QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 06 - LO: 05-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

45. Which of these expressions should an American businessperson avoid in a meeting with foreign business representatives? a. "Today we will be discussing the new contract." b. "It is my pleasure to meet with you today." c. "Let's run this idea up the flagpole." d. "I look forward to working with you."

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Importance of Culture for Managing and Marketing in Overseas Markets QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.05 06 - LO: 05-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 46. Luiz is a Mexican business executive who buys goods from US suppliers on a regular basis. He often selects vendors based on their knowledge of Mexico’s business climate and their enthusiasm to do business. This illustrates the importance of .

ANSWER: culture POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Defining Culture and Its Influence on Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

47. Uncertainty avoidance examines the extent to which societies tolerate .

ANSWER: risk POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 48. Within power distance exists a cultural dimension that refers to authority vs.

ANSWER: egalitarianism POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

49. The extent to which a society emphasizes short-run or long-run time horizons is known as time ANSWER: orientation POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 50. Trompenaars’s cultural variable that refers to the importance of rules vs. relationships is ANSWER: universalism vs. particularism POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/20/2022 5:11 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

51. The variable defined by Trompenaars to describe the extent to which a society expresses itself emotionally is .

ANSWER: neutral vs. emotional POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 52. The variable that describes the degree to which a society compartmentalizes roles is ANSWER: specific vs. diffuse POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

53. The variable that refers to how rewards in a society are handed out is .

ANSWER: achievement vs. ascription POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 54. Color, form, and music are all components of .

ANSWER: aesthetics POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Elements of Culture QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

55. The Chinese philosophy that denotes friendship among unequals and unlimited exchanges of favors is referred to as .

ANSWER: guanxi POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 56. Briefly describe the four characteristics of culture important for global companies.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Defining Culture and Its Influence on Business QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 01 - LO: 05-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

57. Briefly describe any four elements of culture. Provide an example of each.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 58. Would you characterize the United States as a "masculine" or "feminine" country? Defend your answer.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Clustering Countries and Regions by Culture QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 03 - LO: 05-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

59. Differentiate between the cultural dimensions of doing business in Latin America and Arab countries.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 60. Based on what you have learned about culture, which management styles do you think would work best when working with clients from the Middle East? Explain your answer.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries The Importance of Culture for Managing and Marketing in Overseas Markets QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 MGMT.GASP.23.05 06 - LO: 05-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Scenario – Rodriguez Enterprises Rodriguez Enterprises was founded in 1985 by Francisco and Juan Rodriguez. Initially, this company was based solely in Santa Fe, New Mexico and sold products only in the U.S. market. Now, this organization has grown to become fifth in the fine glassware industry in the world. It proudly claims the distinction of having 14 manufacturing facilities located on foreign soil and currently provides its delicate and refined glass products to 24 foreign marketplaces around the world.

Juan continues to work in the field and feels his expertise in foreign relations is a large part of the reason the company has known such global success. While Francisco believes that the factories and workers located on foreign soil should not be treated differently from those in Santa Fe, Juan contends that it is important to know how the other countries operate. Even with the differences in business philosophies and beliefs between the two owners, Rodriguez Enterprises remains a multi-billion-dollar operation with a promising future ahead of it.

61. Francisco has decided that Juan makes a valid point when he states the importance of knowing the culture of the foreign country in which they wish to conduct business. Francisco has decided to learn as much as he can about the culture of Japan in order to be better prepared for the company’s business endeavors there. Which of the following would be a valued source of information for Francisco about foreign cultures? a.

Country Report from the Economist b.

Discussion with home nationals about Japan c.

Crain’s Business d.

U.S. Department of the Interior ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Sources of Cultural Information QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Rodriguez Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.05 04 - LO: 05-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

62. Juan is quite knowledgeable about the foreign cultures where Rodriguez Enterprises conducts its operations. He understands the vital characteristics surrounding a country’s culture. Which one of the following is one of these characteristics? a.

Culture is learned through associations and family. b.

Culture is inherited from others living within the society. c.

Culture is not dynamic and changes slowly over a long period of time.

Culture can be overlooked when GDP of the foreign nation exceeds that of the d. domestic market.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Defining Culture and Its Influence on Business QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Rodriguez Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.05 01 - LO: 05-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. Rodriguez Enterprises has its second largest manufacturing facility located in South America. Which one of the following would not be an important cultural fact Juan and Francisco should know before conducting business meetings there? a.

Formal manners and attire are valued at dinner business meetings. b.

Business dealings must be discussed first and decisions made quickly. c.

Development of a personal relationship should come before conducting business.

Time is not an essential entity in that culture for it is believed there is always d. tomorrow.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Rodriguez Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM Scenario – The Sandman Group The Sandman Group is a multinational pharmaceutical business, which provides needed medications to a variety of foreign markets around the globe. It has recently acquired a new customer that is based in Saudi Arabia. This area of the world is new to the company. Sandman plans to send ten representatives and managers to the Saudi region to better serve this new client’s needs. The company feels confident in its products and its people and believes strongly they will be able to accommodate the needs of this client.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

64. The Sandman Group realizes the business must be able to adjust to the vastly different Saudi culture quickly in order to retain this new client. Which of the following best describes what the Sandman Group needs to accomplish? a.

Proliferation b.

Ascription c.

Acculturation d.

Guanxi ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Defining Culture and Its Influence on Business QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Sandman Group LEARNING OBJECTIVES: MGMT.GASP.23.05 01 - LO: 05-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM 65. The representatives of Sandman must be aware of cultural do’s and don’ts of the Saudi Arabia region. Which one of the following would be considered unacceptable or inappropriate for them to do during a business meeting? a.

Maintaining good posture b.

Not inquiring about the wives of foreign businessmen c.

Not overly praising the possessions of the Arab host d.

Sitting with the sole of the shoe showing ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Cultural Dimensions of Conducting Business in Individual Countries QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Sandman Group LEARNING OBJECTIVES: MGMT.GASP.23.05 05 - LO: 05-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM CopyrightCengageLearning.PoweredbyCognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

66. The Sandman Group is determined to be successful in its business dealings with its newest Saudi customer. It has been working diligently with the ten representatives and managers it plans to send into the region. Sandman wants each one to be well versed in the culture of the region before they depart on their assignment. Which one of the following would not be of high concern for those individuals to learn before leaving the United States? a.

Effective verbal communication skills b.

Awareness of non-verbal language and its meanings c.

Food for eating must be prepared in the halal way d.

Financial infrastructure of the region ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Elements of Culture QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Sandman Group LEARNING OBJECTIVES: MGMT.GASP.23.05 02 - LO: 05-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:33 PM DATE MODIFIED: 4/11/2022 4:32 PM

Chapter06-TheLegalandPoliticalEnvironmentofGlobalBusiness 1. Totalitariangovernmentreferstoaformofgovernmentinwhichtotal(all)citizenryhavethe right to vote. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty:Easy REFERENCES: PoliticalSystems QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-01-LO:06-01 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Remember DATECREATED: 11/12/20211:33PM CopyrightCengageLearning.PoweredbyCognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATEMODIFIED:

4/11/20227:40PM

2. The openness of democratic countries, and the protections such countries tend to generally provide for propertyrightsand freedomofexpression, usuallymakethosecountries morehospitableplacesto conduct global business than countries with totalitarian or semi-totalitarian political regimes. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalSystems QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-01-LO:06-01 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Evaluate DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 3. Singaporehistoricallyhas hadahighlyanti-businesspoliticalsysteminaparliamentarymodelcontext, with one ruling party in power since 1959. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalSystems QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-01-LO:06-01 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/20/20225:14PM 4. UnderCommunisteconomicideology, collectivisticrightsgivewayintheextremetoindividualrights. a. True b. False ANSWER: False CopyrightCengageLearning.PoweredbyCognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: NationalEconomicIdeologies QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-02-LO:06-02 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 5. Verylittlerole forgovernmentexists inapurelycapitalisticor“freemarket”economicsystem. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: NationalEconomicIdeologies QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-02-LO:06-02 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

6. China,withitsstrong individualistic, entrepreneurial, free-market spirit,historicallyhasbeenviewedasthe leading economically capitalistic economy in the world. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: NationalEconomicIdeologies QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-02-LO:06-02 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Evaluate DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 7. Whenacountryrestrictstheamount ofcurrencythat canbetradedwithinaspecifictimeperiod, itis reducing economic risk. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 8. Fortunatelyforglobalbusinesses, economicrisksareindependentofpoliticalrisks. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption CopyrightCengageLearning.PoweredbyCognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 9. Prolongedcivilwarinapoliticallyunstablecountryisanexampleofamacropoliticalrisk. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 10. Rankings of countries throughout the world by potential political risks typically place Scandinavian and EuropeancountriessuchasNorway, Sweden, Switzerland, Luxembourg, andDenmark nearthetopofthe list, meaning that companies engaging in business in these countries face the least number ofpotentialpolitical risks. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Evaluate CopyrightCengageLearning.PoweredbyCognero.

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DATECREATED: DATEMODIFIED:

11/12/20211:33PM 4/11/20227:40PM

11. TheriseofISIShasincreasedthepoliticalrisk ofMiddle EasterncountriesdoingbusinesswiththeUnited

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States. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 12. Intheworldtoday, Islamic law, as followed incountriessuchasIranandSaudiArabia, isaprimary example of theocratic law in operation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 13. Taxlaw isthebodyoflawgoverning legallyenforceableagreementsbetweenpartiesto engage ineconomic exchange. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment CopyrightCengageLearning.PoweredbyCognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 14. IntheUnitedStates,companiesgenerallyoperate underaregime ofcaveatemptor,or"buyerbeware." a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 15. Patentrightsgenerallyremainenforceablefor5–20years,dependingontheinventionandthe country. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: IntellectualPropertyProtections QUESTION TYPE: True/False HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-05-LO:06-05 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM CopyrightCengageLearning.PoweredbyCognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

16. Underwhich formofgovernmentdoallcitizensvotedirectlyonmattersaffecting the community? a. Atheniandemocracy b. Totalitarianism c. Representativedemocracy d. Egalitariandemocracy ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalSystems QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES: MGMT.GASP.23.06 01-LO:06-01 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 17. Atruedemocracyworksbest inverysmallpopulationsand isone inwhicheveryperson’svoice isheard. Rather than true democracies, democratic nations of today employ a. Atheniandemocracy. b. symbolicdemocracy. c. representativedemocracy. d. egalitariandemocracy.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalSystems QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES: MGMT.GASP.23.06 01-LO:06-01 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 18. Whichofthefollowingstatementsaboutdemocraciesistrue? a. DemocracyisGreekfor“listento thepeople.” b. Somedemocracies,suchasinJapan, Spain,andGreatBritain, alsohaveceremonialmonarchs. c. Alldemocracies are verystable,giventheauthoritativepowerofcitizenvotingmechanisms. d. Aconstitutionalmonarchy isasynonymfor representative democracy.

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ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalSystems QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-01-LO:06-01 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 19. Whichofthefollowingstatementsabouttotalitariangovernmentsistrue? a. Totalitariangovernmentsrulewithoutthesupportorconsent ofthecitizens. b. Acountryrun byaprimeministerwould be anexampleofa totalitariangovernment. c. Totalitariangovernmentsrulebasedonelitevotingmethods. d. Themajorityofemergingmarkets arerunbytotalitarian regimes.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalSystems QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-01-LO:06-01 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 20. Whichisthe largestnationintheworldwitha communisteconomicideology? a. China b. Russia c. Vietnam d. India ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: NationalEconomicIdeologies CopyrightCengageLearning.PoweredbyCognero.

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QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-02-LO:06-02 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 21. FrenchcarmanufacturerRenaultis heavilyownedandoperatedbytheFrenchgovernment.Thisrepresents a. totalitarianism. b. socialism. c. communism. d. capitalism.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: NationalEconomicIdeologies QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-02-LO:06-02 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/20/20225:15PM 22. Whichofthefollowingstatementsaboutsocialism istrue? a. Socialism involvesaneconomic ideologyinwhichthegovernment orstateplaysa minor role inthe economy. b. ManyEuropeancountrieshavestrongsocialisticorientations. c. Countrieswithsocialisteconomiesaspiretobe"classless." d. ManyAsiancountrieshavestrongsocialistic orientations.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: NationalEconomicIdeologies QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-02-LO:06-02 : CopyrightCengageLearning.PoweredbyCognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 23. Whichofthefollowingstatementsaboutcapitalism istrue? a. Verylittleroleforgovernmentexistsinapurelycapitalisticor“freemarket”economic system.

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b. Extensiverolesforgovernmentexistinapurelycapitalisticor“free market”economicsystem. c. PassageofthePatient Protectionand AffordableCareAct markedtheUnitedStates'movement away from capitalism. d. Collectiveincentivesareatthecoreofcapitalisticeconomicideology.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: NationalEconomicIdeologies QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-02-LO:06-02 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 24. A countrythat has particularly militant labor unions known for frequent unplanned or wildcat strikes, or perhapsacountryknownfor holdingcorporate executiveshostageuntiltheir demandsare met, isanexampleof which kind of risk? a. Political b. Environmental c. Individual d. Economic ANSWER: d POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 25. Tradebarriers enactedbylocalpoliticians can incite tradewarsamong nations, therebycreatingwhichtype of global risk? a. Political b. Environmental CopyrightCengageLearning.PoweredbyCognero.

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c. Individual d. Economic ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 26. Acountry’spotentialnationalizationofcompaniesintheautomobileindustrywould represent a. marketingrisk. b. environmentalrisk. c. micropoliticalrisk. d. macropoliticalrisk.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 27. Unlawfulacts ofviolencethreateningthephysicalsafetyofothersis called a. blackmail. b. extortion. c. economicrisk. d. terrorism.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty:Easy CopyrightCengageLearning.PoweredbyCognero.

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REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Remember DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 28. Whichofthe following lawsprovides for(afteracertaindeductible)USgovernment insurancecoverage for the risk of a US business or property being attacked by a “foreign person or foreign interest”? a. ForeignCorruptPracticesAct b. OverseasPrivateInvestmentAct c. TerrorismRiskInsuranceAct d. Antitrust Act ANSWER: c POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/20/20225:15PM 29. Whichofthe following isaUSgovernment agencythat sellspoliticalrisk insuranceto USbusinesses operating in countries with which the US has a bilateral investment treaty? a. ForeignCorruptCorporation b. OverseasPrivateInvestmentCorporation c. TerrorismRiskCorporation d. Antitrust Corporation ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False CopyrightCengageLearning.PoweredbyCognero.

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LEARNINGOBJECTIVES: MGMT.GASP.23.06-03-LO:06-03 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 30. Whichofthefollowingisanexampleofcorruption? a. Payingabribetoacompanyexecutiveinorderto beawardeda contract b. Damagingequipmentinafactorytoprotesttreatmentofworkers c. Lobbyingacongresswomantovoteforataxcutforbusiness d. Urgingunionworkersto goonstrikeinordertogain concessions ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Ethics STATESTANDARDS: UnitedStates-AK-DISC:EthicalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/20/20225:16PM 31. Corruption, oftensupportedbymafias, stillexists today, controllingsupplychainsand infrastructure through “facilitation payments.” Mafias are examples of a. public corruption. b. privatecorruption. c. open corruption. d. elitecorruption.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Ethics STATESTANDARDS: UnitedStates-AK-DISC:EthicalResponsibilities CopyrightCengageLearning.PoweredbyCognero.

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KEYWORDS: DATECREATED: DATEMODIFIED:

Bloom's:Apply 11/12/20211:33PM 4/11/20227:40PM

32. Blackmailingagovernmentofficialinordertoobtainapublicbusinesscontractwould constitute a. greasepaymentcorruption. b. civilcorruption. c. communistcorruption. d. public corruption.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 33. Paying “protectionmoney”orgivingsaleskickbacksto anorganizedcrimegroupwouldrepresent which kind of corruption? a. Public b. Private c. Open d. Closed ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Ethics STATESTANDARDS: UnitedStates-AK-DISC:EthicalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM CopyrightCengageLearning.PoweredbyCognero.

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34. A US firmsecured four contracts in Nigeria valued at more than $6 billion. However, investigations revealedthatthecontractsweretheresult of$51millionofbribespaidto Nigeriangovernment officials. Which US act would this violate? a. TerrorismRiskInsuranceActof2002 b. ForeignCorruptPracticesAct c. MutualLegalAssistanceinCriminalMattersAct d. ForeignAidCompetition Act ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Ethics STATESTANDARDS: UnitedStates-AK-DISC:EthicalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 35. Accordingtothetext regardingastudyofcorporatebriberyindevelopedcountriesconductedby Transparency International, which of the following nations had the most corporate bribery? a. Russia b. TheUnited States c. Hong Kong d. Japan ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Ethics STATESTANDARDS: UnitedStates-AK-DISC:EthicalResponsibilities KEYWORDS: Bloom's:Evaluate DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/20/20225:16PM 36. Corruptionattheborderofacountryposesathreatto nationalsecurity. Commonactsbygovernment officials at the border include drug trafficking and alien smuggling. Which type of corruption does this illustrate?

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a. Public b. Private c. Open d. Closed ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Ethics STATESTANDARDS: UnitedStates-AK-DISC:EthicalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 37. Whichofthese isaU.S. lawthat prohibitsU.S.companies frombribingorotherwisecorrupting foreign governmentofficialsto winforeigngovernment contractsorobtainotherforeigngovernment assistance for their businesses? a. ForeignCorruptPracticesAct b. OverseasPrivateInvestmentAct c. TerrorismRiskInsuranceAct d. Antitrust Act ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Easy REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-03-LO:06-03 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Remember DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/20/20225:17PM 38. Inacivillaw country,therealpowerlieswith a. laborunionsandpublicworksemployees. b. thelegislativebranchofgovernment. c. thejudiciary.

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d. corporationsand banks.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: TheLegalEnvironment QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Ethics STATESTANDARDS: UnitedStates-AK-DISC:EthicalResponsibilities KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 39. AFrenchjudge presiding inacourt casehas littlepower;theysimplyenforce therulesthat havebeen written. This illustrates which type of law? a. Civil b. Common c. Theocratic d. Representative ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 40. AUSjudgepresiding inacourtcaseenforcestherulesthat have beenwritten, usingprecedent and interpretation. This illustrates which type of law? a. Civil b. Common c. Theocratic d. Representative ANSWER: b POINTS: 1 CopyrightCengageLearning.PoweredbyCognero.

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DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 41. Whichofthefollowingstatementsaboutcommonlawlegalsystemsistrue? a. Somesaythatincommonlawcountriesitisoftenappointedjudgeswho“makethelaw”rather than

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electedlegislators. b. Akeyadvantageofcommonlawsystems isthat judgesneednotbe present withinthe judiciary system. c. Onedownsideofthecommonlawapproach isthat judgescannot interpretthelawastheyseefit. d. CommonlawlegalsystemsoriginatedinChinaundertheMing Dynasty.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: TheLegalEnvironment QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 42. Apartywishing to sella givenpiece ofcommercialrealestateto another partywould enter into arealestate agreement with the other party. This is an example of which type of law? a. Tax b. Common c. Contract d. Theocratic ANSWER: c POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 43. Lawstopromote“faircompetition” amongbusinessesareknownaswhichtypeoflaws? a. Tax b. Common CopyrightCengageLearning.PoweredbyCognero.

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c. Antitrust d. Theocratic ANSWER: c POINTS: 1 DIFFICULTY: Difficulty:Easy REFERENCES: TheLegalEnvironment QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-04-LO:06-04 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Remember DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 44. “Coca-Cola,”theNike“swoosh”logo,andthe“goldenarches”ofMcDonald’sareexamplesof a. intellectualproperty. b. patents. c. trademarks. d. generalizedtrademarks.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: IntellectualPropertyProtections QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-05-LO:06-05 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 45. Thewords“aspirin,”“escalator,”and“zipper” areexamples of a. intellectualproperty. b. patents. c. trademarks. d. generalizedtrademarks.

ANSWER: d POINTS: 1 CopyrightCengageLearning.PoweredbyCognero.

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DIFFICULTY: Difficulty:Moderate REFERENCES: IntellectualPropertyProtections QUESTION TYPE: MultipleChoice HASVARIABLES: False LEARNINGOBJECTIVES MGMT.GASP.23.06-05-LO:06-05 : NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 46. What typeofdemocracywaspracticed inancient Rome, permittingallnon-slave malecitizenstovoteinall matters of the community?

ANSWER: Athenian POINTS: 1 DIFFICULTY: Difficulty:Easy REFERENCES: PoliticalSystems QUESTION TYPE: Completion HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 01-LO:06-01 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Remember DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 47. Whichtype ofpoliticalsystemhasseenarapiddeclineinthelasttwo orthreedecades?

ANSWER: Communism POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: NationalEconomicIdeologies QUESTION TYPE: Completion HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 02-LO:06-02 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM CopyrightCengageLearning.PoweredbyCognero.

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48. Taxhavencountries are countries with little orno tax .

ANSWER: transparency POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: Completion HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 49. Amongbusinesses, antitrustlawsaredesigned topromote“fair .”

ANSWER: competition POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: Completion HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 50. Thepracticeofcompaniesacting ina mannerwhichsecretlythwartscompetitionamongstthemselves is known as .

ANSWER: collusion POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: Completion HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply CopyrightCengageLearning.PoweredbyCognero.

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DATECREATED: DATEMODIFIED:

11/12/20211:33PM 4/11/20227:40PM

51. Luxotica isthesoleworldmanufacturerofeyeglasses.Theyowntheentirevaluechain,makingthema .

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ANSWER: monopoly POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: Completion HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 52. IntheUS, sellersoftobacco andother productsarerequiredto explicitlywarnconsumersabouttheir potential health risks. This is an example of .

ANSWER: sellerbeware POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: Completion HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 53. Theorange background colorona Reese’sPeanutButterCupwrapperisprotected bya ANSWER: trademark POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: IntellectualPropertyProtections QUESTION TYPE: Completion HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 05-LO:06-05 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply CopyrightCengageLearning.PoweredbyCognero.

.

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DATECREATED: DATEMODIFIED:

11/12/20211:33PM 4/11/20227:40PM

54. Differentiatebetweencommunism,capitalism, andsocialismaseconomicideologiesaffectingglobal businesses.

ANSWER: Student answerswill vary.

POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: NationalEconomicIdeologies QUESTION TYPE: Essay HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 02-LO:06-02 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 55. Describetheeconomicandpoliticalrisksfacedbycompaniesdoingbusinessintheglobalarena.

ANSWER: Student answerswill vary.

POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: Essay HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 03-LO:06-03 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 56. Explainthe three primarykindsoflegalsystems.

ANSWER: Student answerswill vary.

POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: Essay HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 CopyrightCengageLearning.PoweredbyCognero.

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NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Apply DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 57. Whatisdisputesettlementlaw?Nameanddescribethetwobasictypesofdisputeresolutionprocesses.

ANSWER: Student answerswill vary.

POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: Essay HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 58. Describehowpatents,trademarks, andcopyrightshelpprotect intellectualproperties intoday'sglobal business environment. Give specific examples.

ANSWER: Student answerswill vary.

POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: IntellectualPropertyProtections QUESTION TYPE: Essay HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 05-LO:06-05 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM

Scenario–BrittonManufacturing BrittanyandBrandiBrittonrecentlytookoverthefamilybusiness, BrittonManufacturing, after their father and company founder retired. The company manufactures the finest bed linens and has grownto be recognized as sixthinthe industryfor sales. BrittonManufacturing’sproductshavebeenproducedandsoldstrictlywithinthe CopyrightCengageLearning.PoweredbyCognero.

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continental United States until this point in time. Now, the new owners desire to change things and plan to

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beginexportingthecompany’sproductstoEngland,France,Norway, Greece, Egypt, China,andGermany.

BothBrittanyand Brandihavegraduated college withdegrees in businessand are looking forwardto putting their educations to good use in growing the company. Theyrealize there is much to learn and are looking forward tothe challenges facing their international endeavor. They have projected an increase insales by15 milliondollars inthe first year aswellasemployment opportunities for anadditional500workersintheU.S. 59. Oneoftheinternational marketsinwhichBrittonManufacturing planstosellitsproductsisChina. All but which one of the following identifies a significant challenge facing the company in this international marketplace? found withinthe United a. TheproductlawsofChinaareverysimilartothose States. isconsideredacommunist countryinwhichthegovernmentownsor controls b. China most of the factors of production. isthepossibilityoftheChinesegovernment confiscatingtheassets(the c. There products) of Britton Manufacturing. part,thegovernment ofChinacontinuesto maintaincontrolofthe d. Forthemost unions within China.

ANSWER: POINTS: DIFFICULTY: REFERENCES:

a 1 Difficulty:Challenging NationalEconomicIdeologies PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: SubjectiveShortAnswer HASVARIABLES: False STUDENTENTRYMODE: Basic PREFACE NAME: BrittonManufacturing LEARNINGOBJECTIVES: MGMT.GASP.23.06 02-LO:06-02 MGMT.GASP.23.06 03-LO:06-03 NATIONALSTANDARDS: UnitedStates- BUSPROG: ReflectiveThinking STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Evaluate DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 60. Entering foreignmarketplacesposesmanychallengesto companies likeBrittonManufacturing.Whichone ofthe following would Britton Manufacturing least expect to be a challenge in its international business expansion?

Thepotential forthecompany’sexecutivestobekidnappedandheldfor ransom a. whileonforeignsoil b. TheconstantfluctuationofforeigncurrenciesinrelationtotheU.S.dollar inmanyexperienced workers c. TheeconomicdownturnintheUnitedStatesresulting being unemployed or underemployed d. Theinstabilityand volatilityofsomeforeigngovernmentsaroundtheworld ANSWER: POINTS: DIFFICULTY: REFERENCES:

c 1 Difficulty:Moderate PoliticalRisks,EconomicRisks,andCorruption

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QUESTION TYPE: SubjectiveShortAnswer HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06-03-LO:06-03 NATIONALSTANDARDS: UnitedStates- BUSPROG: ReflectiveThinking STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 61. BrittonManufacturing facesmanylawsandregulationsthat willimpactthecompanywhile it conducts business on foreign soil.Which one ofthe following is least likely to be ofconcern to Britton in the international marketplace? a. Contractlaw b. U.S.laborlaws c. Taxlaw d. Productsafetylaws ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: SubjectiveShortAnswer HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 NATIONALSTANDARDS: UnitedStates- BUSPROG: ReflectiveThinking STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Evaluate DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/20/20225:20PM

Scenario–TheRochesterCorporation The Rochester Corporation is a multinational import-export firm with headquarters in New York, USA. It currently has thirteen offices located on foreign soil and plans to open seven more bythe end ofthe year.

Rochester isquiteproudofthefactthatit reached over four billiondollars inrevenue last year. Theofficersof the corporation are expecting to net over six billion per year with the projected expansion.

The Rochester Corporation considers itself an experienced veteran when it comes to dealing with foreign governmentsandnations.Thecompanymaintainsstrict guidelines foremployeesandwillonlyhirethosewho have expatriate experience ofat least three years. The owners ofRochester attribute the company’s continued success to the experience and knowledge of its employees.

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62. IftheRochester Corporationexperiencedunresolved legalproblemswithoneofitscustomers locatedina foreign country, allof the following except which one would be a potential way to remedy the problem? a. Engageinarbitration b. ObtainanexecutiveorderfromtheUSAttorneyGeneral'soffice c. Use theservicesofamediatororan arbitrator d. Bringaboutlitigationinthereigning courtoflaw ANSWER: b POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: TheLegalEnvironment QUESTION TYPE: SubjectiveShortAnswer HASVARIABLES: False STUDENTENTRYMODE: Basic PREFACE NAME: TheRochesterCorporation LEARNINGOBJECTIVES: MGMT.GASP.23.06 04-LO:06-04 NATIONALSTANDARDS: UnitedStates- BUSPROG: ReflectiveThinking STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM 63. Indealing withsuchavariednumber ofcustomers fromvirtuallyall major pointsintheworld, the RochesterCorporationissubjectedto manyrisks. Whichoneofthe followingwould beconsideredan economic risk Rochester potentially faces in its global dealings? a. Lackofappropriate vendorsintheforeigncountry b. Thevaluationofforeigncurrencyinthehomemarket c. Lackofconsumerinterestinthecompany'sproducts d. Repatriationrestrictions ontheforeigncurrency ANSWER: c POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: SubjectiveShortAnswer HASVARIABLES: False STUDENTENTRYMODE: Basic PREFACE NAME: TheRochesterCorporation LEARNINGOBJECTIVES: MGMT.GASP.23.06 03-LO:06-03 NATIONALSTANDARDS: UnitedStates- BUSPROG: ReflectiveThinking STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Evaluate DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/11/20227:40PM CopyrightCengageLearning.PoweredbyCognero.

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64. The Rochester Corporation has three products that were created by its employees. These products have received patents from both the United States and twenty foreign nations. All three products are currently exportedto allofthecompany’scustomers. Whichoneofthe following reflectsguidelinesorrulesgoverning these patents? a. Thepatentrightsdonotapplytovendorswhomayreverseengineer the product.

Modificationstotheproduct byothersareallowedafter oneyearandwith b. governmentconsent.

Patentexpirationdatesineachcountryare protectedbythe domesticpatent c. timeline.

Patentshaveanexpirationdatesetsometimeinthefuture dependingon the d. invention.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty:Moderate REFERENCES: IntellectualPropertyProtections QUESTION TYPE: SubjectiveShortAnswer HASVARIABLES: False STUDENTENTRYMODE: Basic PREFACE NAME: TheRochesterCorporation LEARNINGOBJECTIVES: MGMT.GASP.23.06 05-LO:06-05 NATIONALSTANDARDS: UnitedStates- BUSPROG: ReflectiveThinking STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Analyze DATECREATED: 11/12/20211:33PM DATEMODIFIED: 4/20/20225:21PM 65. WhatliesattheheartofChina’scommunistideology?

ANSWER: Student answerswill vary.

POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: PoliticalRisks,EconomicRisks,andCorruption QUESTION TYPE: Essay HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 03-LO:06-03 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: UnitedStates-AK-DISC:EnvironmentalInfluence KEYWORDS: Bloom's:Evaluate DATECREATED: 4/11/20227:22PM DATEMODIFIED: 4/20/20225:21PM 66. Whyistherenosuchthingasaninternational copyrightlaw?

ANSWER: Student answerswillvary.

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POINTS: 1 DIFFICULTY: Difficulty:Challenging REFERENCES: IntellectualPropertyProtections QUESTION TYPE: Essay HASVARIABLES: False STUDENTENTRYMODE: Basic LEARNINGOBJECTIVES: MGMT.GASP.23.06 05-LO:06-05 NATIONALSTANDARDS: United States-BUSPROG:Diversity STATESTANDARDS: United States-AK-DISC:LegalResponsibilities KEYWORDS: Bloom's:Evaluate DATECREATED: 4/11/20227:27PM DATEMODIFIED: 4/11/20227:40PM

Chapter 07 - Corruption and Ethics in Global Business 1. The four basic steps in ethical decision making are: define all the facts and circumstances, identify the people affected, determine the alternative decisions and consequences, and make the decision and carry it out. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Ethics?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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2. In the business world, the purpose of ethics is to direct business men and women to make as much money as they can any way possible. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Ethics?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 3. Corruption is unknown in countries with low CPI scores. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ethics in Business and Society QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 02 - LO: 07-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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4. Corporate social responsibility refers only to the company’s obligations to its stockholders and investors. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 5. Well-designed corporate ethics codes guarantee that employees will always make the ethical choice. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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6. The Sarbanes-Oxley Act of 2002 set “green” standards for companies. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 7. Enron Corporation is a perfect example of effective social and ethical responsibility in the financial sector. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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8. In 2005, Bernie Ebbers of WorldCom was recognized by the Better Business Bureau for his company being a leader in social responsibility. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 9. Vivendi, a French-based multinational corporation, gained international scorn when it was discovered they cooked their books to make their performance appear better than it actually was for the purpose of making a number of acquisitions. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financial Scandals QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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10. The five fundamentals of ethics education proposed by AACSB are: personal integrity, responsibility of business in society, ethical decision making, ethical leadership, and corporate governance. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Can Ethics Be Taught?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 05 - LO: 07-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 11. The global slave trade that exists today is referred to as human trafficking. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Can Ethics Be Taught?

QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 05 - LO: 07-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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12. Internal control procedures fit into two categories: (1) preventing accidental errors and intentional misrepresentations and (2) identifying errors and irregularities after they occur so that corrective action may be taken. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internal Controls QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 13. Under the terms of the Foreign Corrupt Practices Act, it is illegal to give a bribe to a foreign official or foreign political party, but permissible to give a bribe to a businessperson if bribery is considered "an integral part of doing business in the country's environment." a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internal Controls QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

14. SOX requires that the CEO and the CFO of a publicly traded corporation must certify in each periodic report containing financial statements that the report fully complies with the Securities Exchange Act of 1934 and that the information fairly represents the company’s financial condition and results of operations. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internal Controls QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 15. Production quality control and internal auditing are examples of feedback controls. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internal Controls QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

16. The branch of philosophy that addresses the values pertaining to human behavior, with regard to the “rightness” and “wrongness” of actions and to the “goodness” and “badness” of the intent and results of such actions, is called a. ethics. b. integrity. c. values. d. morals.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Ethics?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:23 PM 17. Which of the following statements about ethics and integrity is true? a. Ethics, integrity, and morality are all synonyms. b. Ethics is not personal; rather, it is rooted in national demographics. c. A person of integrity has the courage to do what is right. d. There are five basic steps in ethical decision making.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Ethics?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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18. A person of integrity has two essential characteristics: (1) knowledge about what morally constitutes the right thing to do, and (2) a. the capacity to follow the steps of ethical decision making. b. the ability to solve an ethical dilemma. c. the courage to do what is right. d. the ability to evaluate goals and objectives.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Ethics?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:53 PM 19. The FIRST basic step in ethical decision-making is to a. identify who will be affected by the situation. b. determine how the decision will benefit you. c. define all the facts and circumstances. d. identify alternate decisions and consequences.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Ethics?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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20. Power permitted by a federal, state, and local authority to identify, acquire, and convert a property for public use or purpose on meeting certain conditions falls under which ethical principle? a. Essence b. Governance c. Imperative d. Utilitarian ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 21. You find a valuable piece of jewelry while shopping at a retail store. Instead of turning it in to lost and found, you put it in your pocket under the principle that “Everyone else would take it, too.” Which ethical principle does this illustrate? a. Libertarian b. Generalization c. Universal d. Religious ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

22. The government can force an individual to sell their land so that a road can be built for the benefit of the public as a whole. This is an example of which ethical principle? a. Essence b. Governance c. Imperative d. Utilitarian ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 23. The THIRD step of ethical decision-making is to a. identify the alternative decisions and consequences. b. make the decision. c. define all the facts and circumstances. d. identify the people affected by the situation.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Ethics?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:54 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

24. The FINAL step of ethical decision-making is to a. identify the alternative decisions and consequences. b. make the decision. c. define all the facts and circumstances. d. identify the people affected by the situation.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Ethics?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:55 PM 25. Which of the following is a value described in the BBB Code of Business Practices? a. Build trust b. Make the decision c. Define all the facts and circumstances d. Identify the people affected by the situation ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Ethics?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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26. Which of the following is true about the CPI and Transparency International? a. The CPI tracks private action rather than public action, so it is subjective at best. b. The CPI considers murder rates, gun violence, and bribes to foreign officials in its ratings. c. A score of 78 means that you have a high corruption rating. d. Comparatively, Israel is safer than Turkey when considering corruption ratings.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ethics in Business and Society QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 02 - LO: 07-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 27. Milton Hershey owned a chocolate empire but he was also a philanthropist, funding many programs that supported disadvantaged youths. His company was also one of the first to spend a portion of their profits on employee wellness, instituting exercise programs, employee gyms, and basic housing. This illustrates a. utilitarianism. b. corporate social responsibility. c. ethics. d. integrity.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

28. Which of the following is a mandate that companies practicing corporate social responsibility strive to do? a. Provide a warranty for every product sold b. Maintain a high level of sustainability involving green marketing c. Treat its employees with dignity and respect d. Meet its obligations based solely on foreign legal requirements ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 29. Asking oneself “Would I want others to treat me this way?” is an application of the principle of a. consistency. b. utilitarianism. c. respect. d. fairness.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

30. You can make an ethical choice by asking yourself which of the following questions? a. "What does the law say about this?" b. "It is ethical, but is it profitable?" c. "What are competitor policies on this issue?" d. "What's in it for me?"

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 31. Which of the following was the principal contributing factor to Enron’s demise? a. Enron’s CEO, Jeffry Epstein, was involved in serious scandals. b. Enron recorded future profits immediately, as if they were already earned. c. Enron partnered with WorldCom and hedged too much economic risk. d. Enron defaulted on loans backed by the SEC. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

32. Which of the following is true of the Enron financial scandal? a. It was a key event leading the SEC to pass the Terrorism Risk Insurance Act of 2002. b. It was a key event leading the U.S. Congress to pass the Sarbanes-Oxley Act of 2002. c. The scandal surprised no one because Enron was always regarded as an unethical company. d. The company’s former president, Jeffrey Epstein, led Enron to abuse accounting GAAP. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 33. Which of the following statements about WorldCom is true? a. It began in 1999 as Long Distance Discount Services, Inc. b. Five techniques were used to cook its books. c. WorldCom filed for Chapter 11 bankruptcy in 2002. d. They overreported the line costs by recording them as liabilities.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

34. Which financial scandal was associated with the presidency of Warren G. Harding? a. The Edison Power scandal b. The Teapot Dome scandal c. The Vivendi scandal d. The Parmalat scandal ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:55 PM 35. He perpetrated a financial scandal in the 1920s by using money received from later investors to provide early investors with returns on their investment. a. Warren G. Harding b. Kenneth Lay c. Charles Ponzi d. Bernard Madoff ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financial Scandals QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

36. To prepare business leaders for the 21st century, the Association to Advance Collegiate Schools of Business suggests all but which of the following fundamentals of ethics education? a. Personal integrity b. Objectivist theory c. Ethical leadership d. Corporate governance ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Can Ethics Be Taught?

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 05 - LO: 07-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 37. Joaquin works as an auditor for a large corporation. Recently, they introduced software designed to create an audit trail to track sales, credits, refunds, or returns of merchandise. This is an example of a(n) a. internal control. b. external control. c. environmental control. d. global control.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:56 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

38. A telecom company recently spent a large sum of money on a security system designed to protect its servers.

This is an example of what kind of accounting control? a. Preventative b. Feedback c. Protection d. External ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 39. Which of the following is an example of a preventative control? a. Utilizing green marketing b. Production quality control c. Extensive internal auditing d. Hiring competent and ethical employees ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:56 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

40. Internal auditing is an example of which type of control? a. Feedforward b. Feedback c. Vertical d. Horizontal ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 41. Which of the following statements regarding the Foreign Corrupt Practices Act is true? a. It has an anti-bribery provision. b. It is a U.S. federal law that contains six parts. c. It was passed in 1952. d. It has a green component designed to encourage lower carbon footprints.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

42. By how many years did the Sarbanes-Oxley Act increase the potential prison sentence for fraud? a. 5 b. 10 c. 15 d. 25 ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 43. The average computer crime has been estimated to cost almost a. $750,000. b. $3 million. c. $10 million. d. $13 million.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

44. Which of the following causes MOST problems associated with computer security? a. Natural disasters b. Government spying c. Dishonest employees d. Accidental errors ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 45. Computer crime became commonplace with the development of the World Wide Web in the a. 1960s. b. 1970s. c. 1980s. d. 1990s.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internal Controls QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

46. If you act according to absolute moral rules, which principle must you follow?

ANSWER: imperative POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 47. The branch of philosophy that addresses the values pertaining to human behavior, with specific regard to the “rightness” and “wrongness” of actions and to the “goodness” and “badness” of the intent and results of such actions, is .

ANSWER: ethics POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Ethics?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

48. Adherence to moral and ethical principles, soundness of moral character, and honesty demonstrates ANSWER: integrity POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Ethics?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:57 PM

.

49. The Corruption Perceptions Index is a report published each year by Transparency International, providing metrics to the potential corruption risk for 174 countries ranging on a scale from 0 to .

ANSWER: 100 POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Ethics in Business and Society QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 02 - LO: 07-02 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

50. A company’s obligations to society, including the welfare of people and places affected by company activities, is also known as .

ANSWER: corporate social responsibility POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 51. Lou Pearlman, the man behind platinum-selling boy bands 'NSYNC and the Backstreet Boys, swindled investors and banks out of more than $300 million on the basis of companies that only existed on paper. His deception illustrates a(n) .

ANSWER: Ponzi scheme POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

52. When a company shows the value of its securities in today’s market value, this illustrates ANSWER: mark to market accounting POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

.

53. A system of rules and procedures within a business designed to ensure the accuracy and reliability of financial and accounting information are .

ANSWER: internal controls POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internal Controls QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:58 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

54. A U.S. federal law that consists of two parts––an anti-bribery provision and a requirement to maintain an adequate internal control system over financial books and records––is called the .

ANSWER: Foreign Corrupt Practices Act POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internal Controls QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:58 PM 55. The exchange of goods or services using an electronic infrastructure is known as electronic ANSWER: business POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Internal Controls QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

56. Briefly explain the relationship between ethics and integrity.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Ethics?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 57. Discuss the various ways to resolve an ethical question.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

58. Briefly describe how a Ponzi scheme works.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Scandals QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 04 - LO: 07-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM 59. Do you believe ethics can be taught? Why or why not? Explain your answer with specific examples.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Can Ethics Be Taught?

QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 05 - LO: 07-05 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

60. Compare and contrast the two categories of internal control procedures.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internal Controls QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM Scenario – Bradley Corporation The Bradley Corporation manufactures packaged food items that are sold around the globe. Baby food is the prominent product line currently produced by the corporation. Many of the customers for these products are located in third world countries where infant nutrition is a serious problem.

Bradley has recently decided to change its internal management structure. New managers for the corporation are now in place; however, these new leaders do not appear to have the same value system as the former leaders. The former leaders embraced the idea of product safety and exhibited integrity in the production of the corporation’s product lines. While the new managers claim these are important to them also, it seems the bottom-line profit has become a higher priority for them.

These changes have created concern within the company, and there is strong disapproval for the way the company is conducting its business at the present time. The Board of Directors for Bradley is facing the serious question of whether profit is the only thing that matters now to the corporation.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. The Bradley Corporation is faced with a decision that involves selling an outdated product such as baby food to foreign markets to make a large profit versus losing money by destroying outdated products. Which of the following best identifies what the Bradley Corporation is experiencing? a.

A financial predicament b.

An ethical dilemma c.

The actions of a profitable business d.

A matter for internal decision making ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: What Is Ethics?

QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Bradley Corporation LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

62. Corporate social responsibility is defined as a company’s obligations to society, including the welfare of people and places affected by the company’s activities. Which one of the following would not demonstrate the Bradley Corporation’s adherence to its corporate social responsibility?

All Bradley employees, regardless of position, have a say in new human resource a. policies before they are implemented.

The Bradley Corporation is engaged with green technologies to eliminate b. potential environmental damage.

The Bradley Corporation makes certain a significant return on investment is c. provided to its stockholders regardless of what must be sacrificed.

The corporation maintains a reputation for dealing fairly and honestly with its d. suppliers.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Corporate Social Responsibility?

QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Bradley Corporation LEARNING OBJECTIVES: MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. There is a distinct difference in the value systems between the original managers of the Bradley Corporation and the new ones. All but one of the following represent a key issue in ethics education which, if reinforced to the new managers, could strengthen their current value systems. Which does not represent a key issue in ethics education? a.

Reinforcement of corporate governance b.

Reinforcement of ethical decision-making c.

Identification of ethical leadership d.

Recognition for the necessity of vast profits ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: What Is Ethics?

Ethics in Business and Society What Is Corporate Social Responsibility?

QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Bradley Corporation LEARNING OBJECTIVES: MGMT.GASP.23.07 01 - LO: 07-01 MGMT.GASP.23.07 02 - LO: 07-02 MGMT.GASP.23.07 03 - LO: 07-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 5:59 PM Scenario – GCD Industries GCD Industries is a multinational organization that produces heavy equipment. It supplies many foreign nations with the necessary equipment to conduct reconstruction after natural disasters. One of the company’s largest sales resulted from the devastation that occurred in Japan after a tsunami. GCD is committed to helping nations recover from destruction brought about by natural phenomena.

GCD prides itself on conducting its business in an honest and ethical manner. It does not wish to deal with countries that engage in corrupt business practices, but realizes that all nations have differing business practices. When the need arises for its products, this company strives to impart integrity into all of its business deals with foreign nations, regardless of that nation’s accepted practices.

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64. As part of its pursuit of ethical business conduct, GCD investigates the foreign nations in which it operates so it will be aware of any upcoming business practice differences, such as corruption levels the company may face. Which one of the following is the most likely source of the information sought by GCD Industries? a.

CPI b.

WTO c.

CSR d.

WHO ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Ethics in Business and Society QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: GCD Industries LEARNING OBJECTIVES: MGMT.GASP.23.07 02 - LO: 07-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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65. GCD Industries acknowledges it is under the guidelines of the Foreign Corrupt Practices Act whenever it has dealings in the foreign marketplace. Which one of the following is not addressed by this Act? Making the offer to pay money to a foreign official for special privilege afforded a. to the company Establishing pay scales for employees of the company while working on foreign b. soil Offering a gift to the head of the foreign political party of the nation where work is c. being performed Making a promise of payment to government officials for directing business to the d. company ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Internal Controls QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: GCD Industries LEARNING OBJECTIVES: MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

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66. GCD Industries employs a set of internal controls within its operations to help ensure ethical behavior and to help prevent financial impropriety. Which one of the following is least likely to be used as an internal control by this company?

All funds due the company and all checks for expenditures are handled by the a. same person. b.

All documentation and records are maintained adequately and accurately. c.

Financial and accounting records are periodically audited.

The company has written policies and procedures in place for all members to d. follow.

ANSWER: POINTS: DIFFICULTY: REFERENCES:

a 1 Difficulty: Moderate Can Ethics Be Taught?

Internal Controls QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: GCD Industries LEARNING OBJECTIVES: MGMT.GASP.23.07 05 - LO: 07-05 MGMT.GASP.23.07 06 - LO: 07-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 1:50 PM

Chapter 08 - Entry Strategies in Global Business

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1. A fundamental consideration that must be made in business is the risk-return trade-off. In general, the greater the risk (loss of capital invested) entrepreneurs are willing to take, the greater the rewards (profit) they are likely to reap. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 2. Interestingly, licensing and franchising typically leads to the penetration of international markets without significant capital investment abroad by the parent company. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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3. When it comes to franchising, the parent company’s objective is to make sure that when a customer visits its franchisee in any country, the quality of products and services provided are similar in every store. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 4. Strategic alliances are primarily aimed at enhancing goodwill. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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5. When Coca-Cola acquired major assets of Parle Exports in India, it instantly received access to Parle’s huge national bottling and distribution network. This is an example of an international joint venture in global markets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 6. Subsidiaries require major marketing efforts to penetrate the international market because of cultural differences and because the entrant is new and relatively unknown. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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7. Microsoft (United States), Toyota (Japan), Lenovo, (China), and Petrobras (Brazil) are just a few of the hundreds of large multinational enterprises that are based in one country but own and operate establishments in others. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Enterprises (MNEs) QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 8. MNEs can never successfully enter foreign markets as traders, licensors, or franchisors. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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9. When MNEs go abroad, they generally do so for two major reasons. There could be massive competition in the home market or firms may genuinely identify new business opportunities abroad based upon the company’s competitive advantage in production, technology and management. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 10. The only profitable way for foreign firms to enter trade-restricted markets is through FDI rather than through exports. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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11. Trade barriers lead to decreased competition from abroad, and raise prices and profits of domestic firms.

Interestingly, such protection over time will often lead to higher-quality domestic products and services. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 12. A major reason why growth-oriented MNEs establish operations abroad is to diversify and minimize risk so that overall corporate cash flows and earnings will be relatively stable. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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13. A relatively simple approach to diversification is to identify overseas projects that have performance levels that are highly correlated to domestic cash flows or project returns over time. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 14. Mexico consistently has been the world’s largest recipient of FDI capital in the world averaging some $200 billion a year in net FDI inflows since 2005. Mexico has been made more globally competitive as a consequence of such FDI flows. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Host Country Perspective of Foreign Direct Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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15. The level of corruption in a country is usually a good indicator of the degree of good or poor governance in that country. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Improving Host Country's Investment Climate QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 16. According to the text, which of the following entry strategies has the highest degree of risk? a. Licensing b. Wholly-owned foreign subsidiary c. Foreign acquisition d. Joint venture ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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17. According to the text, which of the following entry strategies has the lowest degree of risk? a. Licensing b. Wholly-owned foreign subsidiary c. Foreign acquisition d. Joint venture ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 18. Which of the following statements about the export-import business is true? a. The opportunity to participate in export-import business is significant. b. The export-import business is a relatively high-risk operation. c. The export-import business is a contractual agreement, thereby increasing foreign ownership. d. The opportunity to participate in export-import business depends on a country’s GDP. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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19. Which of the following statements about licensing is true? a. The license fee could be based on a percentage of final sales revenue of the product or the number of units sold. b. The license fee is eliminated once a negotiated threshold has been reached. c. When a product is licensed, the foreign partner will use the licensor’s technology as a guide for home country business operations. d. Licensees have the opportunity to expand the license and expand into additional brand avenues at will.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 20. Which industry is especially well known for franchising? a. The agricultural industry b. The fast food industry c. The airline industry d. The automotive industry ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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21. The practice in which the parent firm is obligated to provide its brand name as well as specialized equipment and/or service, and to sometimes fund certain startup costs to another firm in return for an annual fee is known as a. licensing. b. franchising. c. a foreign acquisition. d. a joint venture.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 22. Which of the following is true about franchising? a In franchising, the parent firm assumes relatively less risk than with licensing. . b Franchisees receive trade analysis assistance along with market expansion training. . c In franchising, the parent firm assumes a lot more risk than with licensing. . d The parent company’s objective is to make sure that when a customer visits a franchise in any country, the . quality of the products and services provided are unique.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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23. An agreement between two or more firms that do not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period of time is called a(n) a. license. b. franchise. c. foreign acquisition. d. strategic alliance.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 24. A challenge faced by strategic alliances is that a. they are illegal in most international markets. b. they involve the creation of a separate entity with joint ownership. c. environmental sustainability is difficult to achieve. d. any member could prematurely quit the alliance.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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25. A business that is jointly owned and operated by two or more firms that pool their resources to penetrate host country markets, generate and split profits, and share commercial risk is called a(n) a. license. b. franchise. c. foreign acquisition. d. international joint venture.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 26. The ultimate objective of most joint ventures is a. acquiring other companies. b. making a brand name. c. developing a sustainable environment. d. using joint production and sales distribution networks to increase revenue.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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27. Coca-Cola has built 43 bottling plants and two concentrate manufacturing plants with three separate partners in China since 1979. This is an example of a(n) a. license. b. international joint venture. c. foreign acquisition. d. strategic alliance.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:05 PM 28. The combination of medical treatment in a foreign country with rest and recreation is called a. medical tourism. b. a health-cation. c. a medi-vac. d. medical transport.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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29. The purchase of established firms abroad with the goal of using the existing production, marketing, and distribution networks, and of having instant access to foreign markets that fit the purchasing firm’s global strategy is known as a(n) a. subsidiary. b. multinational enterprise. c. foreign acquisition. d. strategic alliance.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 30. A new facility built and operated overseas that requires large investments of capital is an example of a a. subsidiary. b. multinational enterprise. c. foreign acquisition. d. strategic alliance.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

31. Which of the following statements about mergers and acquisitions is true? a. Mergers and acquisitions are relatively low risk. b. The company being acquired should be a start-up or new competitor so as to allow for maximum change. c. Corporate cultural differences may inhibit smooth integration of the two organizations. d. Corporate cultural differences can be eliminated by mainstreaming the home culture into the foreign market.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 32. General Electric, Microsoft, Sony, Toyota, and BMW are examples of a. subsidiaries. b. multinational enterprises. c. foreign acquisitions. d. strategic alliances.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Enterprises (MNEs) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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33. Which of the following is an emerging market? a. Albania b. Afghanistan c. Argentina d. Austria ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Enterprises (MNEs) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 34. In a free enterprise system, the overriding objective of firms wanting to invest abroad is to a. acquire other companies. b. make a brand name. c. maximize shareholder wealth. d. use joint production and sales distribution networks to increase revenue.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:06 PM

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35. The so-called BRIC countries consist of a. Brazil, Russia, India, and China. b. Belgium, Romania, Iran, and Canada. c. Bulgaria, Russia, Iraq, and Cuba. d. Brazil, Russia, Israel, and Chile.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 36. Brazil is one of the world’s lowest cost producers of ethanol and soybeans. Japanese corporations have heavily invested in Brazil to lease large tracts of land to grow soybeans for export to Japan, where they are used to derive products such as soy sauce and chicken feed. These Japanese companies are cutting costs by a. minimizing factor input costs. b. generating revenue. c. acquiring other companies. d. exploring joint ventures.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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37. U.S. corporations have been pouring investments into China to build manufacturing facilities to produce goods for the local and export markets. Since economists expect the Chinese yuan to appreciate against the dollar in the future, the forthcoming Chinese yuan profits of U.S. MNEs when converted to U.S. dollars will be high. This is an example of U.S. companies cutting costs by a. minimizing factor input costs. b. reacting to exchange rate movements. c. acquiring other companies. d. exploring joint ventures.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 38. The Coca-Cola company has operations in more than 140 countries and generates more that 55 percent of its profits from its overseas operations. Coca-Cola’s annual profits are, therefore, more stable than those of a firm that focuses on the U.S. market alone. Coca-Cola is engaging in a. importing. b. diversification. c. a merger. d. a joint venture.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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39. The first stage of the product life cycle is a. decline. b. introduction. c. growth. d. maturity.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 40. The second stage of the product life cycle is a. decline. b. introduction. c. growth. d. maturity.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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41. In what stage of the PLC are typewriters classified? a. Decline b. Introduction c. Growth d. Maturity ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 42. Who identified three key economic “advantages” that firms should have for FDI to occur? a. Hawthorne b. Maslow c. Dunning d. Ford ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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43. Which type of advantages refers to the mode of entry abroad? a. Ownership, or firm-specific b. Locational, or country-specific c. Internalization d. Externalized ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:07 PM 44. A firm that has a patent for manufacturing a particular brand-name drug will have monopoly rights to use that brand name abroad to produce goods profitably. This is an example of what type of advantage? a. Ownership, or firm-specific b. Locational, or country-specific c. Internalization d. Externalized ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:07 PM

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45. Which of the following is a cost of foreign direct investment? a. Multinational firms may exploit the labor force in host countries. b. Multinational firms may exploit the labor force in home countries. c. FDI accelerates regional economic development. d. Host countries have greater influence over multinational enterprises investing in their country.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Host Country Perspective of Foreign Direct Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 46. The potential financial loss that entrepreneurs are willing to take in a business is also known as ANSWER: risk profile POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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47. A relatively low-risk business operation that involves penetrating foreign markets (by exporting) or importing merchandise at competitive prices for domestic consumption refers to .

ANSWER: export-import business POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 48. The practice in which a company or individual provides a foreign partner with the technology to manufacture and sell products or services in a target country for an annual fee is called .

ANSWER: licensing POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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49. McDonald's, Burger King, and Subway are all examples of businesses that operate as .

ANSWER: franchises POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 50. An agreement between two or more firms that do not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period of time refers to .

ANSWER: strategic alliances POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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51. A business that is jointly owned and operated by two or more firms that pool their resources to penetrate host country markets, generate and split profits, and share commercial risk is an .

ANSWER: international joint venture POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 52. New facilities built and operated overseas that require large investment of capital to tailor to the exact needs of the home country firm are known as .

ANSWER: subsidiaries POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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53. Firms that are headquartered in one country but own and control manufacturing, services, research and development facilities, or other business entities on foreign soil are multinational .

ANSWER: enterprises POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Enterprises (MNEs) QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 54. In a free enterprise system, the main objective of firms that invest abroad is to maximize the wealth of ANSWER: shareholders POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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55. The way in which countries exercise authority and how efficiently they deliver basic infrastructure services like water, sanitation, roads, electricity, security, etc., for public as well as private firms is described as .

ANSWER: governance POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Improving Host Country's Investment Climate QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:08 PM 56. ABC Manufacturing is exploring entering the global arena. Describe the three lowest risk entry strategies in global business for ABC. ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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57. Differentiate between strategic alliances and international joint ventures.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 58. Companies go global for three possible motives. Describe each of these three motives and the possible strategies available to companies under each motive.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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59. Briefly describe Dunning’s Eclectic Theory of Foreign Direct Investment.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 60. What are the benefits and costs of foreign direct investment from the host country’s perspective? Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Host Country Perspective of Foreign Direct Investment QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM Scenario – Lewis Fabrication Lewis Fabrication was founded in 2001 and is based in Maryland, USA. This company manufactures custom designed motorcycle parts and currently has over two thousand U.S. customers. Due to the growing number of inquiries received from foreign countries such as Japan, Canada, China, and Indonesia, Lewis Fabrication has decided to begin operations on a global scale. The owners realize there is much to learn before undertaking this monumental step. However, financial projections indicate about $1 million in profit is very likely in the first year of going global. The owners are very excited and looking forward to the business expansion.

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61. While Lewis Fabrication has decided to begin operations on a global scale, it realizes there is still much to learn.

One of the fundamental things it must have knowledge on is the manner in which it can begin operations globally.

Which one of the following would not be considered a choice for starting international business operations for this company? a.

Begin as an export-import business b.

License a foreign business partner to produce and sell the company’s products c.

Open wholly owned subsidiaries of the company in the Midwest d.

Sell franchises of the business to foreign buyers ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Lewis Fabrication LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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62. The global markets in which Lewis Fabrication plans to expand provide this company with the opportunity for entering relatively high-growth markets with a product that is in demand. Which one of the following would Lewis Fabrication be least likely to expect to find in this type of market? a.

No government or military influence or intervention for Lewis Fabrication b.

Per capita incomes are rising and expected to continue to rise c.

The middle class is growing in numbers and so is their demand for products A larger percent of the population is financially classed as below middle class in d. certain of these foreign markets ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Lewis Fabrication LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 63. In its quest for global expansion Lewis Fabrication must examine its rationales for wanting to expand into the foreign marketplace. Which one of the following is not a reason why this company would want to expand globally? a.

To maximize shareholder wealth b.

To minimize risk of failure for the business c.

To increase the revenues of the company d.

To cut costs of production for the company ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Lewis Fabrication LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM Copyright Cengage Learning. Powered by Cognero.

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Scenario – Boseman Clothier, Inc. Boseman Clothier, Inc., has been in operation for over 75 years. It is based in South Carolina, USA and is a wellrecognized name in the industry. It produces custom fitted men’s suits that are in high demand throughout the world. The average cost of one of its suits is in excess of five thousand U.S. dollars. Boseman proudly states it has more customer orders than its one store can fill within the next six months. With growing demand from overseas, the company has recently decided to open operations in four foreign markets next year.

Boseman realizes the potential of this move will generate increased revenues for the company. One of the options it is contemplating is exploring forming an international joint venture. Boseman is also entertaining the thought of opening operations differently in each of the four new foreign markets. The company feels the use of different strategies may increase its odds of generating profits in each different market.

64. Boseman Clothier, Inc., has decided to begin international operations using an international joint venture. Which one of the following is not one of the expectations from this type of entry into the foreign market arena? a.

The joint venture partners will have shared company equity. b.

Boseman will maintain all decision-making rights in the foreign market.

The increased risk from operating abroad will be shared with the joint venture c. partner. d.

Use of joint production and distribution will help to increase market share.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Boseman Clothier, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:09 PM

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65. Boseman Clothier, Inc., has indicated it would like to use different entry strategies for each of the four markets it plans to enter. Which of the following would not be considered a benefit from using licensing in the other foreign markets it plans to enter?

This type of relationship is expected to last for years so there must be a high a. level of trust between the companies involved.

Boseman will be subjected to the least amount of risk with this type of entry into b. a foreign market.

Boseman is expected to provide the foreign partner with the processes necessary c. to produce its highly desired suits.

Boseman’s partner is expected to pay an annual license fee to the company for d. the use of its production processes and the ability to sell its products.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Boseman Clothier, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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66. Boseman is also considering making the entry into the international market by engaging in foreign direct investments in the nations. Which one of the following is not a true statement regarding foreign direct investment from the host country’s perspective?

Significant financial inflows always result from engaging in foreign direct a. investment.

Foreign direct investment can create new jobs and generate tax revenues for b. governments.

A concern of the local governments in host countries is the lack of corporate c. social responsibility. d.

There is the potential for exploitation of human labor within certain countries.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Host Country Perspective of Foreign Direct Investment QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Boseman Clothier, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.08 04 - LO: 08-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

Chapter 08 - Entry Strategies in Global Business 1. A fundamental consideration that must be made in business is the risk-return trade-off. In general, the greater the risk (loss of capital invested) entrepreneurs are willing to take, the greater the rewards (profit) they are likely to reap. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM Copyright Cengage Learning. Powered by Cognero.

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2. Interestingly, licensing and franchising typically leads to the penetration of international markets without significant capital investment abroad by the parent company. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 3. When it comes to franchising, the parent company’s objective is to make sure that when a customer visits its franchisee in any country, the quality of products and services provided are similar in every store. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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4. Strategic alliances are primarily aimed at enhancing goodwill. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 5. When Coca-Cola acquired major assets of Parle Exports in India, it instantly received access to Parle’s huge national bottling and distribution network. This is an example of an international joint venture in global markets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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6. Subsidiaries require major marketing efforts to penetrate the international market because of cultural differences and because the entrant is new and relatively unknown. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 7. Microsoft (United States), Toyota (Japan), Lenovo, (China), and Petrobras (Brazil) are just a few of the hundreds of large multinational enterprises that are based in one country but own and operate establishments in others. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Enterprises (MNEs) QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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8. MNEs can never successfully enter foreign markets as traders, licensors, or franchisors. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 9. When MNEs go abroad, they generally do so for two major reasons. There could be massive competition in the home market or firms may genuinely identify new business opportunities abroad based upon the company’s competitive advantage in production, technology and management. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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10. The only profitable way for foreign firms to enter trade-restricted markets is through FDI rather than through exports. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 11. Trade barriers lead to decreased competition from abroad, and raise prices and profits of domestic firms.

Interestingly, such protection over time will often lead to higher-quality domestic products and services. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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12. A major reason why growth-oriented MNEs establish operations abroad is to diversify and minimize risk so that overall corporate cash flows and earnings will be relatively stable. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 13. A relatively simple approach to diversification is to identify overseas projects that have performance levels that are highly correlated to domestic cash flows or project returns over time. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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14. Mexico consistently has been the world’s largest recipient of FDI capital in the world averaging some $200 billion a year in net FDI inflows since 2005. Mexico has been made more globally competitive as a consequence of such FDI flows. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Host Country Perspective of Foreign Direct Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 15. The level of corruption in a country is usually a good indicator of the degree of good or poor governance in that country. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Improving Host Country's Investment Climate QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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16. According to the text, which of the following entry strategies has the highest degree of risk? a. Licensing b. Wholly-owned foreign subsidiary c. Foreign acquisition d. Joint venture ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 17. According to the text, which of the following entry strategies has the lowest degree of risk? a. Licensing b. Wholly-owned foreign subsidiary c. Foreign acquisition d. Joint venture ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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18. Which of the following statements about the export-import business is true? a. The opportunity to participate in export-import business is significant. b. The export-import business is a relatively high-risk operation. c. The export-import business is a contractual agreement, thereby increasing foreign ownership. d. The opportunity to participate in export-import business depends on a country’s GDP. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 19. Which of the following statements about licensing is true? a. The license fee could be based on a percentage of final sales revenue of the product or the number of units sold. b. The license fee is eliminated once a negotiated threshold has been reached. c. When a product is licensed, the foreign partner will use the licensor’s technology as a guide for home country business operations. d. Licensees have the opportunity to expand the license and expand into additional brand avenues at will.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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20. Which industry is especially well known for franchising? a. The agricultural industry b. The fast food industry c. The airline industry d. The automotive industry ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 21. The practice in which the parent firm is obligated to provide its brand name as well as specialized equipment and/or service, and to sometimes fund certain startup costs to another firm in return for an annual fee is known as a. licensing. b. franchising. c. a foreign acquisition. d. a joint venture.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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22. Which of the following is true about franchising? a In franchising, the parent firm assumes relatively less risk than with licensing. . b Franchisees receive trade analysis assistance along with market expansion training. . c In franchising, the parent firm assumes a lot more risk than with licensing. . d The parent company’s objective is to make sure that when a customer visits a franchise in any country, the . quality of the products and services provided are unique.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 23. An agreement between two or more firms that do not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period of time is called a(n) a. license. b. franchise. c. foreign acquisition. d. strategic alliance.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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24. A challenge faced by strategic alliances is that a. they are illegal in most international markets. b. they involve the creation of a separate entity with joint ownership. c. environmental sustainability is difficult to achieve. d. any member could prematurely quit the alliance.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 25. A business that is jointly owned and operated by two or more firms that pool their resources to penetrate host country markets, generate and split profits, and share commercial risk is called a(n) a. license. b. franchise. c. foreign acquisition. d. international joint venture.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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26. The ultimate objective of most joint ventures is a. acquiring other companies. b. making a brand name. c. developing a sustainable environment. d. using joint production and sales distribution networks to increase revenue.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 27. Coca-Cola has built 43 bottling plants and two concentrate manufacturing plants with three separate partners in China since 1979. This is an example of a(n) a. license. b. international joint venture. c. foreign acquisition. d. strategic alliance.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:05 PM

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28. The combination of medical treatment in a foreign country with rest and recreation is called a. medical tourism. b. a health-cation. c. a medi-vac. d. medical transport.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 29. The purchase of established firms abroad with the goal of using the existing production, marketing, and distribution networks, and of having instant access to foreign markets that fit the purchasing firm’s global strategy is known as a(n) a. subsidiary. b. multinational enterprise. c. foreign acquisition. d. strategic alliance.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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30. A new facility built and operated overseas that requires large investments of capital is an example of a a. subsidiary. b. multinational enterprise. c. foreign acquisition. d. strategic alliance.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 31. Which of the following statements about mergers and acquisitions is true? a. Mergers and acquisitions are relatively low risk. b. The company being acquired should be a start-up or new competitor so as to allow for maximum change. c. Corporate cultural differences may inhibit smooth integration of the two organizations. d. Corporate cultural differences can be eliminated by mainstreaming the home culture into the foreign market.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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32. General Electric, Microsoft, Sony, Toyota, and BMW are examples of a. subsidiaries. b. multinational enterprises. c. foreign acquisitions. d. strategic alliances.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Enterprises (MNEs) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 33. Which of the following is an emerging market? a. Albania b. Afghanistan c. Argentina d. Austria ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Enterprises (MNEs) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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34. In a free enterprise system, the overriding objective of firms wanting to invest abroad is to a. acquire other companies. b. make a brand name. c. maximize shareholder wealth. d. use joint production and sales distribution networks to increase revenue.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:06 PM 35. The so-called BRIC countries consist of a. Brazil, Russia, India, and China. b. Belgium, Romania, Iran, and Canada. c. Bulgaria, Russia, Iraq, and Cuba. d. Brazil, Russia, Israel, and Chile.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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36. Brazil is one of the world’s lowest cost producers of ethanol and soybeans. Japanese corporations have heavily invested in Brazil to lease large tracts of land to grow soybeans for export to Japan, where they are used to derive products such as soy sauce and chicken feed. These Japanese companies are cutting costs by a. minimizing factor input costs. b. generating revenue. c. acquiring other companies. d. exploring joint ventures.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 37. U.S. corporations have been pouring investments into China to build manufacturing facilities to produce goods for the local and export markets. Since economists expect the Chinese yuan to appreciate against the dollar in the future, the forthcoming Chinese yuan profits of U.S. MNEs when converted to U.S. dollars will be high. This is an example of U.S. companies cutting costs by a. minimizing factor input costs. b. reacting to exchange rate movements. c. acquiring other companies. d. exploring joint ventures.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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38. The Coca-Cola company has operations in more than 140 countries and generates more that 55 percent of its profits from its overseas operations. Coca-Cola’s annual profits are, therefore, more stable than those of a firm that focuses on the U.S. market alone. Coca-Cola is engaging in a. importing. b. diversification. c. a merger. d. a joint venture.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 39. The first stage of the product life cycle is a. decline. b. introduction. c. growth. d. maturity.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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40. The second stage of the product life cycle is a. decline. b. introduction. c. growth. d. maturity.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 41. In what stage of the PLC are typewriters classified? a. Decline b. Introduction c. Growth d. Maturity ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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42. Who identified three key economic “advantages” that firms should have for FDI to occur? a. Hawthorne b. Maslow c. Dunning d. Ford ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 43. Which type of advantages refers to the mode of entry abroad? a. Ownership, or firm-specific b. Locational, or country-specific c. Internalization d. Externalized ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:07 PM

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44. A firm that has a patent for manufacturing a particular brand-name drug will have monopoly rights to use that brand name abroad to produce goods profitably. This is an example of what type of advantage? a. Ownership, or firm-specific b. Locational, or country-specific c. Internalization d. Externalized ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:07 PM 45. Which of the following is a cost of foreign direct investment? a. Multinational firms may exploit the labor force in host countries. b. Multinational firms may exploit the labor force in home countries. c. FDI accelerates regional economic development. d. Host countries have greater influence over multinational enterprises investing in their country.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Host Country Perspective of Foreign Direct Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.08 04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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46. The potential financial loss that entrepreneurs are willing to take in a business is also known as ANSWER: risk profile POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

.

47. A relatively low-risk business operation that involves penetrating foreign markets (by exporting) or importing merchandise at competitive prices for domestic consumption refers to .

ANSWER: export-import business POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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48. The practice in which a company or individual provides a foreign partner with the technology to manufacture and sell products or services in a target country for an annual fee is called .

ANSWER: licensing POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 49. McDonald's, Burger King, and Subway are all examples of businesses that operate as .

ANSWER: franchises POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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50. An agreement between two or more firms that do not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period of time refers to .

ANSWER: strategic alliances POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 51. A business that is jointly owned and operated by two or more firms that pool their resources to penetrate host country markets, generate and split profits, and share commercial risk is an .

ANSWER: international joint venture POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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52. New facilities built and operated overseas that require large investment of capital to tailor to the exact needs of the home country firm are known as .

ANSWER: subsidiaries POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 53. Firms that are headquartered in one country but own and control manufacturing, services, research and development facilities, or other business entities on foreign soil are multinational .

ANSWER: enterprises POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Enterprises (MNEs) QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 02 - LO: 08-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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54. In a free enterprise system, the main objective of firms that invest abroad is to maximize the wealth of ANSWER: shareholders POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

.

55. The way in which countries exercise authority and how efficiently they deliver basic infrastructure services like water, sanitation, roads, electricity, security, etc., for public as well as private firms is described as .

ANSWER: governance POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Improving Host Country's Investment Climate QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 05 - LO: 08-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:08 PM

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56. ABC Manufacturing is exploring entering the global arena. Describe the three lowest risk entry strategies in global business for ABC. ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 57. Differentiate between strategic alliances and international joint ventures.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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58. Companies go global for three possible motives. Describe each of these three motives and the possible strategies available to companies under each motive.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 59. Briefly describe Dunning’s Eclectic Theory of Foreign Direct Investment.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

60. What are the benefits and costs of foreign direct investment from the host country’s perspective? Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Host Country Perspective of Foreign Direct Investment QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.08 04 - LO: 08-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM Scenario – Lewis Fabrication Lewis Fabrication was founded in 2001 and is based in Maryland, USA. This company manufactures custom designed motorcycle parts and currently has over two thousand U.S. customers. Due to the growing number of inquiries received from foreign countries such as Japan, Canada, China, and Indonesia, Lewis Fabrication has decided to begin operations on a global scale. The owners realize there is much to learn before undertaking this monumental step. However, financial projections indicate about $1 million in profit is very likely in the first year of going global. The owners are very excited and looking forward to the business expansion.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. While Lewis Fabrication has decided to begin operations on a global scale, it realizes there is still much to learn.

One of the fundamental things it must have knowledge on is the manner in which it can begin operations globally.

Which one of the following would not be considered a choice for starting international business operations for this company? a.

Begin as an export-import business b.

License a foreign business partner to produce and sell the company’s products c.

Open wholly owned subsidiaries of the company in the Midwest d.

Sell franchises of the business to foreign buyers ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Lewis Fabrication LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

62. The global markets in which Lewis Fabrication plans to expand provide this company with the opportunity for entering relatively high-growth markets with a product that is in demand. Which one of the following would Lewis Fabrication be least likely to expect to find in this type of market? a.

No government or military influence or intervention for Lewis Fabrication b.

Per capita incomes are rising and expected to continue to rise c.

The middle class is growing in numbers and so is their demand for products A larger percent of the population is financially classed as below middle class in d. certain of these foreign markets ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Lewis Fabrication LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM 63. In its quest for global expansion Lewis Fabrication must examine its rationales for wanting to expand into the foreign marketplace. Which one of the following is not a reason why this company would want to expand globally? a.

To maximize shareholder wealth b.

To minimize risk of failure for the business c.

To increase the revenues of the company d.

To cut costs of production for the company ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: MNEs and Their Global Strategic Motives QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Lewis Fabrication LEARNING OBJECTIVES: MGMT.GASP.23.08 03 - LO: 08-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Scenario – Boseman Clothier, Inc. Boseman Clothier, Inc., has been in operation for over 75 years. It is based in South Carolina, USA and is a wellrecognized name in the industry. It produces custom fitted men’s suits that are in high demand throughout the world. The average cost of one of its suits is in excess of five thousand U.S. dollars. Boseman proudly states it has more customer orders than its one store can fill within the next six months. With growing demand from overseas, the company has recently decided to open operations in four foreign markets next year.

Boseman realizes the potential of this move will generate increased revenues for the company. One of the options it is contemplating is exploring forming an international joint venture. Boseman is also entertaining the thought of opening operations differently in each of the four new foreign markets. The company feels the use of different strategies may increase its odds of generating profits in each different market.

64. Boseman Clothier, Inc., has decided to begin international operations using an international joint venture. Which one of the following is not one of the expectations from this type of entry into the foreign market arena? a.

The joint venture partners will have shared company equity. b.

Boseman will maintain all decision-making rights in the foreign market.

The increased risk from operating abroad will be shared with the joint venture c. partner. d.

Use of joint production and distribution will help to increase market share.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Boseman Clothier, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/20/2022 6:09 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

65. Boseman Clothier, Inc., has indicated it would like to use different entry strategies for each of the four markets it plans to enter. Which of the following would not be considered a benefit from using licensing in the other foreign markets it plans to enter?

This type of relationship is expected to last for years so there must be a high a. level of trust between the companies involved.

Boseman will be subjected to the least amount of risk with this type of entry into b. a foreign market.

Boseman is expected to provide the foreign partner with the processes necessary c. to produce its highly desired suits.

Boseman’s partner is expected to pay an annual license fee to the company for d. the use of its production processes and the ability to sell its products.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Choice and Implementation: Going International QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Boseman Clothier, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.08 01 - LO: 08-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

66. Boseman is also considering making the entry into the international market by engaging in foreign direct investments in the nations. Which one of the following is not a true statement regarding foreign direct investment from the host country’s perspective?

Significant financial inflows always result from engaging in foreign direct a. investment.

Foreign direct investment can create new jobs and generate tax revenues for b. governments.

A concern of the local governments in host countries is the lack of corporate c. social responsibility. d.

There is the potential for exploitation of human labor within certain countries.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Host Country Perspective of Foreign Direct Investment QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Boseman Clothier, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.08 04 - LO: 08-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:34 PM DATE MODIFIED: 4/13/2022 4:52 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

1. The stakeholder model of strategy formulation believes businesses exist to benefit not just their shareholders, but also all the various groups that have a meaningful stake in their operations. Such groups, for example, might include a company’s employees, customers, and the community where it operates. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Formulation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

2. Operational plans are very short-term. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Implementation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 3. Global companies almost always implement long-term strategic planning. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Implementation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 6:11 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

4. Target Corporation is often accused of being a defender in terms of its market strategies and strategic implementation. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Implementation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 5. Hershey Corporation has expanded and extended its business by developing new products and increasing global reach, but has done so in a very careful manner, avoiding undue risks and protecting its existing business operations.

For this reason, it would fall into the category of an analyzer. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Implementation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

6. When R&D discoveries in the United States operations of Anadarko Petroleum Corporation can easily be communicated to and accepted by its operations in Ghana, it is an example of Anadarko's absorptive capacity. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Coordination QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 7. The president of a small company makes a point to touch base with every employee each day; this is an example of an interpersonal control. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Control Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

8. Steven is a sales rep for a large manufacturer. His boss has given him benchmarking statistics to track and then develop his sales targets for the quarter. Steven is exercising an output control. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Control Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 9. A key output metric for some global businesses is market share, or the percentage of the business in a certain market that is captured by a product or service the organization provides. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Control Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

10. Financial budgets implemented by a global business are a type of bureaucratic control. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Control Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 11. Many large companies have very different types of operating divisions and business units which makes it difficult to have a uniform culture throughout the organization. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

12. Inside-outsiders, or executives that do not necessarily have extensive knowledge of the business model but are trusted adversaries, are often the best agents of change to organizational culture. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 13. CEOs who rise internally within the company, but who have followed a nontraditional path to the executive suite, (e.g., Nancy McKinstry, the CEO of Dutch publishing company Wolters Kluwer NV) are referred to as “outside-insiders.” a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

14. Tacit knowledge is easier to communicate than explicit knowledge. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Coordination QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 15. Smithfield Foods Company, the world’s largest pork producer, has set the clear organizational goal of getting 10 cents profit for each pound of its processed pork products that is sold. This is an example of an output control and measurement. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Control Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

16. A global business explains why it exists and what it plans to accomplish in its a. strategy formulation. b. mission statement. c. annual budget. d. prospectus.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Formulation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 17. “In everything we do, we’re driven by a common mission: saving people money so they can live better.” This is an example of Wal-Mart’s a. vision statement. b. mission statement. c. business plan. d. flow chart.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Formulation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

18. A company following a shareholder model of strategy formulation would be MOST focused on its a. customers. b. owners. c. suppliers. d. employees.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Formulation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 19. Which kind of strategy formulation does the Starbucks Corporation employ? a. Customer-based b. Stakeholder c. Profit-oriented d. Shareholder ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Formulation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

20. Anadarko Petroleum Corporation, a large oil exploration company, employs a strategy that places a very clear emphasis on how its business decisions will help deliver an ongoing and competitive rate of return to its owners.

This is an example of which kind of strategy formulation? a. Supplier b. Environmental c. Global d. Shareholder ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Formulation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 21. An operational plan is a. less than one year. b. one to three years. c. three to five years. d. five to seven years.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

22. Organizations that have basic strategic implementations involving extending their success through global expansions and finding new market opportunities are called a. defenders. b. prospectors. c. reactors. d. analyzers.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 23. To make sure it has enough employees on hand during the busy holiday season, Target plans to hire thousands of temporary, seasonal help for the final three months of the calendar year. Which kind of plan does this illustrate? a. Intentional b. Operational c. Strategic d. Tactical ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 6:19 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

24. A plan for Best Buy to build and open 50 new stores in the United States and Canada within the next two and a half years would be an example of which kind of plan? a. Reactionary b. Standing c. Strategic d. Tactical ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 25. Anadarko Petroleum Corporation may decide that the best long-term way to implement its strategic goal of providing financial returns to its shareholders could be to explore for oil in other parts of the world where it has not yet explored, such as Africa. Which typology by Miles and Snow does this illustrate? a. Defender b. Prospector c. Reactor d. Analyzer ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

26. Altria Group, Inc., may feel that the importance of “fiscal discipline” in its stated mission mandates that it reduce its operations and concentrate upon making its existing U.S.-based Marlboro operations as efficient and profitable as possible. In short, Altria will be most concerned with maintaining its existing strategic position. Which typology by Miles and Snow does this illustrate? a. Defender b. Prospector c. Reactor d. Analyzer ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 27. Companies that take a middle ground between being prospectors and defenders are called a. neutrals. b. maintainers. c. reactors. d. analyzers.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

28. Hershey Corporation has assiduously expanded and extended its business by developing new products and increasing global reach, but it has done so in a very careful manner, avoiding undue risks and protecting its existing business operations. Which typology by Miles and Snow does this illustrate? a. Defender b. Prospector c. Reactor d. Analyzer ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 29. Knowledge that is codifiable and easy to communicate or write down is called a. tacit. b. explicit. c. absorptive. d. working.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Coordination QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

30. A top salesperson "just knows how to sell" but has a difficult time communicating how she does it. Her ability to sell is an example of a. tacit knowledge. b. explicit knowledge. c. absorptive capacity. d. working capacity.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Coordination QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 31. A lamp manufacturing company has a written, ten-step process that describes how to put together its best-selling table lamp. This is an example of a. tacit knowledge. b. explicit knowledge. c. absorptive capacity. d. working capacity.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Coordination QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Individual Dynamics KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

32. Which of the following statements about knowledge management and systems is true? a. The ability of organizations to recognize, assimilate, and apply new knowledge is called expressive capacity. b. Knowledge that is easy to communicate or write down is called codifiable knowledge. c. Knowledge that is codifiable and easy to communicate or write down is called explicit knowledge. d. A global business's absorptive capacity created by technology such as Zoom has little effect on systems.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Coordination QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 33. A rule which states that all employees in the organization (including the CEO) must fly coach when they travel on commercial airlines represents which type of control technique within an organization? a. Interpersonal b. Intrapersonal c. Bureaucratic d. Output ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Control Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Leadership Principles KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

34. Which type of control technique involves establishing specific goals on given metrics and then measuring to what extent these goals are being achieved at certain time intervals? a. Interpersonal b. Intrapersonal c. Organic d. Output ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Control Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 35. Former General Electric CEO Jack Welch was well known for regularly meeting one-on-one with all senior managers and business unit heads. Welch was practicing which type of control technique? a. Interpersonal b. Intrapersonal c. Bureaucratic d. Output ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Control Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Leadership Principles KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

36. Las Vegas hotelier MGM Mirage recently spent $8.5 billion on a new resort that adds almost 5,000 new rooms to a market that some argue is already saturated. Which of the following output controls and measurement is MGM Mirage using? a. Profits b. Employee turnover c. Growth d. Productivity ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Control Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 37. In the banking industry, a particular bank’s efficiency ratio is a closely monitored metric. If one bank can achieve a profit of $2 million per year with 90 employees, and another bank needs to employ 200 employees to achieve the same level of profits, the first bank’s employees are more efficient than the second. Which of the following output controls and measurement is the banking industry using? a. Profits b. Quality control c. Growth d. Productivity ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Control Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

38. An organizational initiative that aims to limit defects or problems to 3.4 per million is a(n) a. Six Sigma initiative. b. bureaucratic control. c. growth measurement. d. interpersonal control.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Control Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 39. With the core values of having a “Warrior Spirit” and a “Servant’s Heart,” Southwest Airlines asks employees to embody hard work, perseverance, proactive customer service, and lighthearted fun in everything they do.

Managers are encouraged to hire for attitude and train for skill. This illustrates a. a strong organizational culture. b. a strong background. c. strong cultural traditions. d. strong customs.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Group Dynamics KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

40. What type of change involves implementation of a different business or cultural path for an organization? a. Culture change b. Organizational change c. Rightsizing change d. Economic change ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 41. Shareholders are the owners of a given business; which individuals or groups have a vested interest in the business? a. Employees b. Customers c. Stakeholders d. Angel investors ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Formulation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

42. The CEO of a company met with his executive team to discuss their 3-year financial goals. In the meeting, he stressed the company’s values and strategic plan to maximize long-term investments and a focus on high yield. This illustrates which type of strategy formulation? a. Stakeholder b. Shareholder c. Bureaucratic d. Tactical ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Formulation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 43. ABC Manufacturing focuses on implementing a basic market strategy of concentrating upon existing operations and protecting their home turf. ABC can be described as a(n) a. defender. b. prospector. c. reactor. d. analyzer.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

44. If Dunkin Donuts (DD) were to follow the actions of Starbucks and copy all of their strategies and pricing, DD could be described as a(n) a. defender. b. prospector. c. reactor. d. analyzer.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Implementation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 45. One output control measure frequently used by global businesses is productivity or a. employee turnover. b. quality control. c. maturity. d. efficiency.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Control Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

46. Which model of strategy formulation operates from the premise that the key strategic purpose of a business is to maximize financial returns for its owners?

ANSWER: Shareholder POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Formulation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 47. Which type of plan is typically three years in length and formulated for implementing strategic goals?

ANSWER: Tactical plans POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Implementation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:10 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

48. Organizations that have a basic strategic implementation involving extending their success through global expansion and finding new market opportunities are referred to as .

ANSWER: prospectors POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Implementation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 49. Organizations that have a strategic implementation involving responding to strategic actions initiated by competitors are called .

ANSWER: reactors POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Strategy Implementation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

50. Knowledge that is informal in nature and difficult to communicate is known as ANSWER: tacit POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Coordination QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

.

51. The ability of organizations to recognize, assimilate, and apply new knowledge is also known as ANSWER: absorptive capacity POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Coordination QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

52. Systems of rules and regulations promulgated within a global business are which type of control?

ANSWER: Bureaucratic POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Control Systems QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:11 PM 53. Goals relating to profits, growth, productivity, and market share are all types of which kind of control?

ANSWER: Output POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Control Systems QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

54. What is an important output control for many companies intent on "giving back" to their communities?

ANSWER: Social responsibility POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Control Systems QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 55. What involves implementation of a different business or cultural path for an organization?

ANSWER: Organizational change POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

56. Differentiate between the shareholder and stakeholder model of strategy formulation.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Formulation QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 57. Describe Miles and Snow’s four basic types of longer-term strategic implementation for global businesses.

Provide an example of each.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Implementation QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

58. Differentiate between explicit and tacit knowledge. Explain the role these play in the coordination of strategy implementation for global businesses.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Coordination QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 03 - LO: 09-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 59. Describe how global companies can utilize the various types of control systems. Provide examples.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Control Systems QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 04 - LO: 09-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:14 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

60. Define organizational culture and explain the role it plays in controlling organizational activities.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM Scenario – Blackford Industries, Inc. Blackford Industries, Inc., was established in 2004 by Jeanna and Sean Blackford. The company produces a wide array of restaurant equipment and supplies for restaurant owners throughout the United States. This company has grown substantially year after year since its inception. It attributes its success to having extensive knowledge of the industry it serves. Both owners have advanced culinary degrees from prestigious colleges and feel they understand the needs of their clients thoroughly.

Blackford Industries is led by clearly defined guidelines established by its owners. The company’s philosophy is one of caring for and about each customer. Blackford is known for treating each of its employees as if they were members of their family. Its business practices are honest and trustworthy. The company demonstrates its high level of integrity with each of its business dealings.

Sean and Jeanna are currently considering expanding their business into the European marketplace, as this market is fairly unexplored by competitors with American restaurant supplies. They see the vast potential of this market and are aware of the challenges such a decision presents to them. The decision about the company’s international expansion will be made by the end of this year.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. Blackford Industries realizes that each decision it makes affects many stakeholders of the company. Of the following, which one is least likely to be considered a stakeholder of the company? a.

The board members of the competitors b.

The community the business is located in c.

The customers of the business d.

The employees of the business ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Formulation QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Blackford Industries, Inc LEARNING OBJECTIVES: MGMT.GASP.23.09 01 - LO: 09-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 62. According to Professors Raymond Miles and Charles Snow, under which of their classifications would Blackford Industries, Inc., most likely fall? a.

Reactors b.

Protectionists c.

Prospectors d.

Defenders ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Implementation QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Blackford Industries, Inc LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. One of the remarkable actions of Blackford Industries, Inc., is the treatment of its employees like family.

Additionally, the fair and honest way this company conducts its business transactions and the way it respects and treats its customers is most likely a reflection of which one of the following? a.

Corporate strategy b.

Organizational culture c.

Organizational change d.

Government mandates ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM Scenario – Keegan Enterprises Keegan Enterprises is owned by Stanley Keegan of Wichita, Kansas. Stanley started Keegan Enterprises in 1990 and has watched his company grow to become the second largest producer of van trailers in the world. Keegan Enterprises earned $60 million in profit last year and currently has over 17,000 workers around the globe.

In order to achieve its stated mission and goals, Keegan Enterprises has implemented several changes to its business strategy over the past few years. While accomplishing the necessary changes has not been easy or without challenge, Keegan Enterprises appears to be stronger and more unified today than ever before. Stanley Keegan is looking forward to facing future challenges and watching the forward growth of his business. He would like to see his company in the number one spot as the world’s largest producer of van trailers in the world.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

64. Keegan Enterprises acknowledges it has undertaken changes within the company’s strategy. This organizational change can involve the implementation of a different business or cultural path for the organization. Which one of the following is least likely to be true regarding Keegan’s organizational change? a.

Organizational change is often met with considerable resistance. b.

The most accepted organizational change is led by top management.

At times, organizational change is better accepted if initiated by an outsider of c. the company. d.

Organizational change indicates a company is in serious financial distress.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organization Culture and the Change Control Function QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Keegan Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.09 05 - LO: 09-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM 65. In meeting its strategic goals, Keegan Enterprises plans to buy trailer hitches manufactured in Croatia over the next six months. This business idea is best identified as which one of the following? a.

An operational plan b.

A business strategy c.

A demonstration of organizational change d.

A reactor formulation ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Implementation QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

66. If Keegan Enterprises was characterized as an analyzer by Miles and Snow, which one of the following would be true of this company?

Companies that use the analyzer strategy take steps to maintain their markets a. while avoiding excessive taxes.

Companies using an analyzer strategy take extensive risks to expand into global b. markets.

Companies recognized as analyzers take a high ground between being c. prospectors and reactors.

Companies using an analyzer strategy take extensive risks to expand into global d. markets.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Strategy Implementation QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.09 02 - LO: 09-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/13/2022 10:47 PM

1. Stateless corporations transcend nationality by remaining loyal to their home country in every global market they enter. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Stateless Corporation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

2. Competitive advantages are achieved by succeeding in a myriad of variables, including selecting the correct organizational structure. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Stateless Corporation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 3. Organizational structure determines the boundaries of the organization. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

4. The correct organizational structure can make or break a company, no matter how profitable they may be. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 5. The first step a domestic firm takes when entering an international arena is usually to create an international division. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Export Departments and International Divisions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 03 - LO: 10-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

6. An international division is advantageous because it allows global businesses to concentrate all international efforts and expertise in one location. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Export Departments and International Divisions QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 03 - LO: 10-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 7. Global businesses that use a functional structure usually have a narrow product line. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

8. The reason why some organizations reject a functional organizational structure is because they believe it renders them unable to respond to environmental changes that require coordination between functional areas, and because it offers each employee a restricted view of the organization's primary goal. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 9. The primary advantage of the divisional structure is that it has very low operating and managing costs. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

10. When global companies outgrow an international division, that is when they become a global enterprise requiring a more advanced structure. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 11. A market structure is also called area structure. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

12. Global businesses with a hybrid structure are said to be organized by more than one dimension at the top level. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 13. A global defense contractor needs deep functional skills as well as the ability to coordinate across the functions of each contract or project. For this example, the organizational structure that would best suit their needs would be a matrix structure. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

14. The organizational structure that results from combining functional and divisional structures is called a geographic region structure. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 15. Under a matrix structure, the functional managers and the divisional managers have equal authority within the organization. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

16. Lenovo, the Chinese computer manufacturer, is a corporation for which it is difficult to identify one country as the home country. Lenovo can be described as which type of corporation? a. Domesticated b. Stateless c. Divided d. Hybrid ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 17. While many major corporations have a global presence, stateless corporations are different because they a. have no board of directors. b. are socially responsible. c. are more concerned with human rights. d. attempt to transcend nationality altogether.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:25 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

18. A global U.S. manufacturer decides to open a plant in India. Which stage of globalization would this illustrate? a. First b. Second c. Third d. Fourth ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 19. According to C.K. Prahalad, the first stage of globalization is a. when global firms set up operations in other countries. b. when companies produce goods in one country and export them to other countries. c. when global businesses establish foreign subsidiaries to handle the exports from their home countries. d. when stateless corporations locate their core corporate functions and top executives in different countries.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

20. C.K. Prahalad would say that Chinese computer manufacturer Lenovo is in which stage of globalization? a. First b. Second c. Third d. Fourth ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 21. Some companies are global and so well integrated into the countries where they have a presence that it is difficult, if not impossible, to identify one country as the home country for these corporations. Such companies are called a. domestic companies. b. stateless companies. c. divided companies. d. hybrid companies.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

22. The initial step toward globalization is a. domestication. b. creating statelessness. c. creating a wholly owned subsidiary. d. exporting.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 23. According to C.K. Prahalad, a global firm is in the third stage of globalization when it a. sets up operations in other countries. b. produces goods in one country and exports them to other countries. c. establishes a foreign subsidiary to handle the exports from its home country. d. locates its core corporate functions and top executives in different countries.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

24. Which of the following is listed in the text as a purpose of organizational structure? a. It allows the members of the organization to perform activities based upon hierarchy. b. It guides an organization’s members on how to coordinate their actions and resources to achieve organization goals. c. It allows the members of an organization to develop a cohesive company culture. d. It determines the hierarchy of the organization and regulates its chain of command.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 25. A business subunit that consists of a collection of functions or departments that share responsibility for producing a particular product or service is known as a(n) a. partition. b. division. c. structure. d. union.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

26. A tool that people use to coordinate their actions to obtain something they seek or value is a(n) a. union. b. subunit. c. organization. d. structure.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 27. Which of the following is an advantage of an international division? a. It permits subsidiaries to be concentrated in one geographic location. b. It ensures that the company will be more profitable. c. It fosters a global mindset in the people working within the division. d. It fosters a local mindset in the people working within the home country.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Export Departments and International Divisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 03 - LO: 10-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

28. Which of the following is a disadvantage of an international division? a. Managers in the international division may feel like “second class” citizens. b. It fosters a global mindset in the people working within the division. c. Core competencies and knowledge may be copied. d. It may be challenging to capture economies of scale.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Export Departments and International Divisions QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 03 - LO: 10-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 29. Global businesses with a narrow product line or a highly integrated product mix, such as aircraft manufacturers or oil and gas firms, typically use which kind of organizational structure? a. Functional b. Product c. Geographical region d. Matrix ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

30. Which of the following is an advantage of the functional structure? a. It promotes economies of scale. b. It ensures that organizations will engage in socially responsible efforts. c. It ensures that the company will be more profitable. d. It promotes in-depth skill development of employees.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 31. A special case of the divisional structure where products are grouped into separate divisions according to their similarities or differences is referred to as which kind of structure? a. Matrix b. Product c. Geographical region d. Divisional ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

32. At ExxonMobil, divisions include Upstream, Downstream, and Chemical. The Upstream division includes exploration, development, production, and gas and power marketing. The Downstream division includes refining and supply, fuels and marketing, and lubricants. What structure is ExxonMobil utilizing? a. Matrix b. Product c. Geographical region d. Market ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 33. At IBM, there are five divisions: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. What structure is IBM utilizing? a. Matrix b. Product c. Geographical region d. Market ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

34. Snafu Intl., a Japanese manufacturer of video games, decides to export their games to several international markets. What state of globalization does this illustrate? a. First b. Second c. Third d. Fourth ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:26 PM 35. CEMEX has three divisions: (1) North America; (2) South America and the Caribbean; and (3) Europe, Asia, and the Middle East. What kind of structure does CEMEX utilize? a. Continental b. Geographical region c. Global d. Hybrid ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

36. A defense contractor may need deep functional skills as well as the ability to coordinate across functions for each contract or project. Which type of structure should the contractor use? a. Functional b. Product c. Geographical region d. Matrix ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 37. Utopia Intl., a global manufacturer of women’s athletic apparel, decides to set up a subsidiary in Tokyo, Japan to handle all exports made in Japan. What state of globalization does this illustrate? a. First b. Second c. Third d. Fourth ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Stateless Corporation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

38. Which of the following is an advantage of the matrix structure? a. It makes determining responsibility between functional and divisional managers easier. b. It allows for duplication of efforts due to role ambiguity. c. It eases dual reporting structures when trying to generate efficiency. d. It allows the company to meet multiple demands from the environment.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 39. According to the text, ConocoPhillips placed their ethics office in which part of the organization structure? a. Research and development department b. Manufacturing department c. Maintenance department d. Audit and finance department ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

40. How many typical organizational structures for global business are there? a. Two b. Three c. Four d. Five ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 41. Limited Clothing Inc. has a corporate headquarters with three divisions: North American Division, European Division, and Asia Division. Limited Clothing Inc. has a a. global structure. b. multinational structure. c. geographical region structure. d. continental structure.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

42. A market structure is one where an organization a. groups people together because they hold similar positions in a company, perform a similar set of tasks, or use the same kind of skills. b.groups products into separate divisions according to their similarities or differences. c. groups products into separate divisions according to the needs of the different geographical regions the company serves. d.groups products into separate divisions according to the needs of different customers.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 43. An area structure is one where an organization a. groups people together because they hold similar positions in a company, perform a similar set of tasks, or use the same kind of skills. b.groups products into separate divisions according to their similarities or differences. c. groups products into separate divisions according to the needs of the different geographical regions the company serves. d.groups products into separate divisions according to the needs of different customers.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

44. A global business is organized into four groups: Manufacturing, Research and Development, Finance, and Sales.

What type of structure does this company use? a. Geographic region b. Functional c. Area d. Market ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 45. A product structure is one where an organization a. groups people together because they hold similar positions in a company, perform a similar set of tasks, or use the same kind of skills. b.groups products into separate divisions according to their similarities or differences. c. groups products into separate divisions according to the needs of the different geographical regions the company serves. d.groups products into separate divisions according to the needs of different customers.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:26 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

46. A new phase in the evolution of the multinational corporation where work is sourced wherever it is most efficient and the corporation transcends nationality altogether is a(n) .

ANSWER: stateless corporation POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Stateless Corporation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 47. A tool that people use to coordinate their actions to obtain something they seek or value is a(n) ANSWER: organization POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

48. The formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals is referred to as the .

ANSWER: organizational structure POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 49. A business subunit that consists of a collection of functions or departments that share responsibility for producing a particular product or service is a(n) .

ANSWER: division POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Organizing Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

50. An organizational structure that groups people together because they hold similar positions in a company, perform a similar set of tasks, or use the same kind of skills is a(n) .

ANSWER: functional structure POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 51. Which structure refers to one type of organizational structure in which functions are grouped together to serve the needs of products, markets, or geographical regions?

ANSWER: Divisional structure POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

52. A particular kind of divisional structure that groups products into separate divisions according to their similarities or differences is a(n) .

ANSWER: product structure POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 53. Also called customer structure or customer class structure, what kind of structure is a particular kind of divisional structure that groups products into separate divisions according to the needs of different customers?

ANSWER: Market structure POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

54. The geographic region structure is sometimes referred to as what type of structure?

ANSWER: Area POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 55. Which structures are used only by companies that depend upon rapid product development for their survival?

ANSWER: Matrix POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

56. “For a global business, organizational structure is not important.” Do you agree with this statement? Defend your position.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Organizing Global Business QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 57. Are export departments important for global businesses? How do they differ from international divisions?

Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Export Departments and International Divisions QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 03 - LO: 10-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

58. Differentiate between functional and divisional organizational structures. Provide an example of each.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 59. Explain the advantages and disadvantages of the divisional structure.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

60. How are hybrid structures different from matrix structures? Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM Scenario – Windmere Technologies Windmere Technologies has been in operation since 1984. Today, Windmere is actually considered to be a globallybased firm with corporate offices in thirteen foreign nations. There is not one office of this company with higher authority or more decision-making power than any other of the thirteen in operation. Windmere Technologies is recognized as a business leader in all thirteen nations in which it has corporate offices. According to the CEO of the company, “Windmere considers the world to be its home base.” The management has done a good job of creating its organizational structure where people are grouped simultaneously by function and by division.

Windmere is best known for its work in creating alternative energy sources. As this is of vital concern to all nations of the world today, Windmere’s ideas and products are welcomed by all nations. This business takes in revenues in excess of $8 billion per year and expects it to substantially increase in the future.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. Which one of the following best describes Windmere Technologies claim that the world is its home base? a.

A hybrid structure b.

A functional structure c.

A divisional structure d.

A stateless corporation ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Stateless Corporation QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Windmere Technologies LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 62. Which one of the following would Windmere Technologies claim as a purpose of its organizational structure? a.

It integrates mechanisms, such as formal rules and procedures. b.

It determines the geographic functionality of the organization. c.

It regulates its interactions with the SEC. d.

It serves as a barrier to interactions with other organizations.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Organizing Global Business QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Windmere Technologies LEARNING OBJECTIVES: MGMT.GASP.23.10 02 - LO: 10-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:27 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. Which one of the following organizational structures best identifies the one currently used by Windmere Technologies? a.

Functional structure b.

Matrix structure c.

Divisional structure d.

Market structure ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM Scenario – Mirkhani Mining Supplies Mirkhani Mining Supplies is the industry leader in the production of underground mining equipment. The company has its headquarters in South Africa and has been in operation there since its inception in 1987. Mirkhani is known worldwide for the safety features it incorporates in its equipment. This company conducts its operations with the safety of the underground miner as its guiding objective.

Mirkhani Mining was recently called in to respond to the latest mine accident in China. Mirkhani not only provides safe mining equipment, it also makes superior mine rescue equipment. The company will be receiving a global award for freely rendering the use of its rescue equipment to China during a mine collapse. Mirkhani Mining Supplies will be recognized around the globe as saving the lives of forty underground miners in China. The company states, “Saving those lives is better than receiving a billion dollars for mining machinery.”

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

64. All of the following characteristics would be present if Mirkhani Mining Supplies was considered a stateless corporation except which one? a.

It is almost impossible to identify the home country of the company. b.

It requires the company to maintain its own individuality within the host country. c.

It represents a new phase in the evolution of multinational companies. d.

It sends work to wherever it is performed most efficiently.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Stateless Corporation QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Mirkhani Mining Supplies LEARNING OBJECTIVES: MGMT.GASP.23.10 01 - LO: 10-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:28 PM 65. As the growth of Mirkhani Mining Supplies has taken place, which one of the following is least likely to be a step it has taken in its international advancement? a.

Development of an export division b.

Collaboration between the sales department and the export division Use of advanced marketing techniques for its products within its home country of c.

South Africa d.

Adaptation of its products to better fit the needs of its customers ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Export Departments and International Divisions QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Mirkhani Mining Supplies LEARNING OBJECTIVES: MGMT.GASP.23.10 03 - LO: 10-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

66. Which of the following structure types best identifies the structure Mirkhani Mining Supplies would be using if it grouped its products and services into separate divisions based on the needs of different areas served by the company? a.

Matrix structure b.

Hybrid structure c.

Geographical region structure d.

Market structure ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Four Organizational Structures for Global Business QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.10 04 - LO: 10-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/15/2022 5:12 PM 1. In Thomas Friedman’s famous book, The World is Flat, he posits that the global trade market has reached a plateau from which it will likely not recover. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:33 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

2. The “knowledge economy” refers to the need for today’s employees to understand the economic implications of their web analytics. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 3. An Asian employee is more likely to introduce herself to a new colleague by identifying who she works for, as opposed to an American employee, who would lead with her title. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

4. Reebok transferring the manufacturing of its sneakers to a third-party company in Thailand would be an example of both outsourcing and offshoring. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 5. Mohammed is a Saudi native and works in the capital city of Riyadh for Lubrizol, an American manufacturer of lubricants; as such, he would be considered a host country national. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

6. A U.S. company sending an employee to work for a few years in its Madrid, Spain office while also learning the Spanish language would be an example of training. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 7. A company that has identified an employee with future managerial potential and consequently sends that employee to a three-week university-sponsored program to help develop her leadership skills is an example of development. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

8. In the United States, training and development tends to focus on improving the group, with instruction addressed to small groups and testing focusing upon group questions and answers. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 9. In low power distance countries, strict hierarchies are maintained in the performance appraisal system, and managers simply evaluate subordinate employees. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

10. A computer programmer from India continues to receive his or her Mumbai, India base salary and is kept on the Indian operation's balance sheet. Then the company adds various allowances for cost of living, housing, education to this base salary so that the employee's overall standard of living while working in the company's London, England office will be the same as his or her standard of living in Mumbai thus would be an example of the balance sheet approach. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 11. Abdullah is an executive manager working for Amazon in Cleveland; he earns a bonus based on his performance, which is tied to quarterly goals. This is a common practice among US executives. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

12. US companies who do business with foreign companies that employ child slaves are automatically punishable in US courts under the standards set by The United Nations International Labor Organization (ILO). a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 13. The United States-Mexico-Canada Free Trade Agreement was renegotiated in 2020 by the Trump Administration due to increased traffic at the southern border of the United States. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

14. Many employees working in global manufacturing are protected by a collective bargaining agreement, which trumps international trade laws. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 15. Co-determination is used by companies when there is no labor union present among employees. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

16. Which of the following statements regarding technological implications on human resource management is true? a. Companies based in North America are far more likely to have at least some operations in other countries than in the past. b. The role of human resources and those who manage such resources has become less important in today’s global economy. c. Green marketing initiatives have created what some call a “Kermit economy.” d. Corporate accountants and human resource managers now fulfill more strategic, knowledge-based functions.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 17. Why might Poland be a good country to open an operation for a business that needs a large available labor supply? a. The unemployment rate in Poland has been very high since the 2008 recession. b. The female labor force participation rate in Poland is extremely low. c. The cost of living in Poland is the lowest in the world. d. More than 15 percent of Poles work in agriculture.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

18. In which of the following countries would the general expectation be that women will not be full-time participants in the workforce? a. Denmark b. Japan c. The United States d. Sweden ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:35 PM 19. How many dimensions did Geert Hofstede identify as major determinants of national culture as they apply to human resource management? a. Two b. Three c. Four d. Five ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

20. Which of Hofstede’s dimensions of culture relates to the extent that people think of themselves as members of a group or collective, rather than discrete individuals? a. Power distance b. Uncertainty avoidance c. Individualism vs. collectivism d. Masculinity vs. femininity ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 21. Which of Hofstede’s dimensions of culture relates to values that are traditionally associated with one gender or the other? a. Power distance b. Uncertainty avoidance c. Individualism vs. collectivism d. Masculinity vs. femininity ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

22. Hofstede’s dimension of power distance refers to a. the extent that people think of themselves as members of a group or collective, rather than discrete individuals. b.the degree of equality of authority distribution in a given society and its workplaces, and employee expectations related to the same. c. a culture’s desire for predictability, or the lack of predictability in the workplace and elsewhere. d.values such as competition, assertiveness, and achievement versus values like care for the weak and relationships.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 23. Hofstede’s dimension of long-term vs. short-term orientation refers to a. the extent to which members of a given society value future planning as opposed to a more immediate short-term perspective. b.the degree of equality of authority distribution in a given society and its workplaces, and employee expectations related to the same. c. a culture’s desire for predictability, or the lack of predictability in the workplace and elsewhere. d.values such as competition, assertiveness, and achievement versus values like care for the weak and relationships.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

24. With which statement would Hofstede agree? a. Denmark and the Netherlands are high power distance cultures. b. Mexico and Japan are very masculine cultures. c. Germany and Austria rank low on uncertainty avoidance. d. China and Japan have short-term orientations.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 25. Hofstede’s dimension of individualism vs. collectivism refers to a. the extent that people think of themselves as members of a group or collective, rather than discrete individuals. b.the degree of equality of authority distribution in a given society and its workplaces, and employee expectations related to the same. c. a culture’s desire for predictability, or the lack of predictability in the workplace and elsewhere. d.values such as competition, assertiveness, and achievement versus values like care for the weak and relationships.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

26. Hofstede’s dimension of uncertainty avoidance refers to a. the extent that people think of themselves as members of a group or collective, rather than discrete individuals. b.the degree of equality of authority distribution in a given society and its workplaces, and employee expectations related to the same. c. a culture’s desire for predictability, or the lack of predictability in the workplace and elsewhere. d.values such as competition, assertiveness, and achievement versus values like care for the weak and relationships.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 27. Which of the following statements regarding regulatory issues including immigration and border security is true? a. In Canada, labor relations are primarily regulated at the national level rather than at the local level. b. All countries employ border regulations and detainment camps.

c. Governmental regulations related to immigration and border security are among the most important in the field of international HRM. d. Governmental regulations related to immigration and border security rarely affect the world of global HR management.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

28. A US company that hires another US company, such as Automatic Data Processing Corporation (ADP) to process all of its corporate payroll functions is engaging in a. outsourcing. b. offshoring. c. importing. d. exporting.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 29. A manager who makes occasional trips to a foreign office but who manages mainly through ongoing e-mails, videoconferences, and web-based collaboration can BEST be described as a(n) a. offshore manager. b. virtual expatriate. c. parent country national. d. downsized employee.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:36 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

30. Employees from the home countries who are sent to work for their companies overseas are known as a. host country nationals. b. parent country nationals. c. third country nationals. d. inpatriates.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 31. Jonathan is a US citizen who works for US-based company, XYZ Computers. He was sent by XYZ Computers to France to help open a branch overseas. Jonathan is a a. host country national. b. parent country national. c. third country national. d. trainer.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

32. Which of the following best describes an expatriate? a. Saleh, an accountant in the UAE, is working for a local U.S. manufacturer. b. Hal, a native American, is working in the UAE on a 9-month forensic accounting assignment. c. Angel, a Mexican LEEDs engineer, contracts his services online to an Indian manufacturer focused on green tech. d. Lydia, an American living in Britain, has renounced her U.S. citizenship.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 33. Traditionally, the expatriate failure rate hovers around what percent? a. 15% b. 30% c. 45% d. 60% ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

34. The process that takes place when the expatriate employee returns home is called a. co-determination. b. collective bargaining. c. repatriation. d. expatriate failure.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 35. Which of the following is true of expatriates? a. Host-country national expatriates, in particular, may represent a more expensive source of labor than other alternatives. b. Family immersion in the host country plays a part in expatriate failure. c. Expatriate assignments may provide very useful career development opportunities. d. Host-country national expatriates, in particular, may represent a cheaper source of labor than other alternatives.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

36. A US company sending an employee to work for a few years in its Berlin office would likely see to it that the employee learns to speak a bit of German and understands something about German cultural norms. This is an example of a. co-determination. b. development. c. a needs assessment. d. training.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 37. In which country would it be inappropriate to mix upper and middle managers together in the same training or development program? a. Denmark b. The United States c. Saudi Arabia d. Norway ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Staffing Policies QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/20/2022 7:37 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

38. Sal has been in her new role for nine months. Her boss wants to evaluate her success by speaking to her colleagues about her achievements and evaluating her ability to meet targeted objectives and goals. This will determine if she is eligible for a raise at the end of the quarter. Sal’s boss is performing a a. performance appraisal. b. development protocol. c. needs assessment. d. training exercise.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM 39. Which statement about compensation is accurate? a. Year-end bonuses are almost unheard of outside of the United States. b. Cost of living is generally not a factor when companies make compensation decisions. c. The gap between executive and employee pay has been shrinking steadily over the past two decades. d. Housing allowances are part of the compensation package in many places.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:35 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

40. Which of the following statements regarding cultural differences in performance appraisals is true? a. In Mexico, the norm is to give feedback only when an employee has done something wrong. b. In the US, it is common for employers to tie raises and bonuses to national averages. c. In the US, it is not uncommon for employers to be direct with negative feedback. d. In Japan, performance reviews are typically conducted by one’s immediate supervisor.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 41. What recently ratified agreement establishes free trade between the United States, Canada, and Mexico? a. USMCA b. NAACP c. WTO d. World Bank ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

42. A major complaint about the NAALC process is that a. it is not profitable. b. it lacks any real “teeth.” c. it violates human rights laws. d. it prohibits free trade.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 43. The primary goal of labor unions is to engage in negotiations with a. employers. b. suppliers. c. customers. d. expatriates.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

44. A negotiation in which a number of employers jointly bargain with a given labor union is known as a. mediation. b. repatriation. c. collective bargaining. d. multi-employer bargaining.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 45. Perhaps the most interesting labor relations system in the world exists in a. Canada. b. Great Britain. c. Germany. d. Australia.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: HRM KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

46. What process involves the transfer of an organizational function to another country whether outsourced or not?

ANSWER: Offshoring POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 47. The dimension which deals with the degree of equality of authority distribution in a given society and its workplaces, and employee expectations related to the same is called .

ANSWER: power distance POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/20/2022 7:37 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

48. Employees from a new parent or host country who are being employed in a given foreign country are called .

ANSWER: third country nationals POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Policies QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 49. Employees who are working in countries other than their native countries are called ANSWER: expatriates POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Policies QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

50. Providing employees with skills specific to the job they are going to be doing refers to ANSWER: training POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Policies QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

.

51. Preparing employees for new future assignments or positions is called .

ANSWER: development POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Staffing Policies QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

52. The process of assessing employee performance is called a(n) .

ANSWER: performance appraisal POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 53. Keeping an employee on the home country’s salary structure and also providing additional allowances refers to the .

ANSWER: balance sheet approach POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

54. A contract comprehensively setting forth employee terms and conditions of employment at a given workplace or group of workplaces refers to a(n) .

ANSWER: collective bargaining agreement POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 55. The employee representation on corporate boards in Germany refers to .

ANSWER: co-determination POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

56. Discuss immigration and border security issues regarding employment in the United States.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 57. Discuss expatriate issues as they affect staffing for global businesses.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

58. Compare and contrast the different types of training and development tools that a company can offer its employees.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 59. “Culture does not have any impact on an employee’s performance appraisal.” Do you agree with this statement?

Defend your position.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Performance Appraisal and Compensation QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

60. Discuss the role that labor unions play in global human resource management. Does the influence unions have vary in different countries? Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM Scenario – Symon Enterprises Symon Enterprises is an international construction company with global offices in twenty foreign markets and over 15,000 employees around the world. The company has an excellent record as an employer of choice and was recently voted the number three company to work for in the world by Forbes Magazine.

Symon Enterprises has become very adept at effectively handling its human resources even though there are vast differences in the various countries it services. The company attributes its HR success to the expertise of its HR directors. Symon’s practice has always been to hire human resource managers and directors from the country where they will be working, believing that this gives the company a competitive edge over the competition.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. When Symon Enterprises has work to be performed within a country where workers place a high value on things like competition, assertiveness, and achievement, it can be stated that the company is most likely working within which of Hofstede’s cultural dimensions? a.

Collectivism b.

Masculine dimension c.

Uncertainty avoidance d.

Short-term orientation ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Symon Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

62. Symon Enterprises sends approximately 20% of its workers on overseas assignments. All of the following are considered advantages to be gained by the company from sending expatriates on foreign assignments except which one?

The expatriate failure rate is extremely low if they serve ten-years or more on a. one assignment. b.

It helps the parent company with control related to structure.

Workers from the parent country will help to impose the values of the c. organization on the foreign workplace.

Expatriates serve to supply the labor market if there are not enough qualified d. workers available to fill the company’s needs.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Staffing Policies QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Symon Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.11 02 - LO: 11-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. Employee compensation, performance appraisals, and benefits vary greatly from culture to culture. Which one of the following would be considered a challenge facing Symon Enterprises when it comes to global compensation and performance management?

Many countries do not permit performance appraisals, as they violate local a. labor laws.

The idea of taxation and tax levels would not be a factor, since only the host b. nation’s tax structure matters. c.

The idea of taxation and tax levels may vary greatly from county to country. d.

Some cultures do not consider social hierarchies during the evaluation process.

ANSWER: POINTS: DIFFICULTY: REFERENCES:

c 1 Difficulty: Challenging Global Strategic Human Resource Management Staffing Policies Performance Appraisal and Compensation QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Symon Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 MGMT.GASP.23.11 02 - LO: 11-02 MGMT.GASP.23.11 03 - LO: 11-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM Scenario – The Campbell Corporation The Campbell Corporation is a multinational business, which currently operates in five foreign markets. It manufactures stuffed toys for children around the world and is very pleased with the quality of its products. At present, this company has about 900 employees split equally between the five markets it serves. Fifty percent of its employees are host country nationals, and this balance seems to work effectively for contributing to the success of the Campbell Corporation.

The Campbell Corporation has faced many difficulties in gaining knowledge about human resource management in foreign marketplaces. Even though the challenges have been considerable, they have not weakened the desire of this company to succeed. The Campbell Company hopes to soon enter its sixth foreign market, Switzerland. Past experiences have taught the owners of this company that it must gain knowledge of the foreign country’s culture prior to entering its marketplace if it hopes to be successful.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

64. Which one of the following would be least likely to be present if the Campbell Corporation found itself manufacturing its products within a foreign country that embraces unionization?

The International Labor Organization has established the right of workers to a. have the freedom of association.

The main goal of labor unions is to negotiate with employers to try and reach a b. collective bargaining agreement acceptable to both sides.

Employees may file grievances if they feel their rights under the contract are not c. maintained.

The host country will set the wage that all workers are to be paid regardless of d. union affiliation.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Trade, Labor Relations, and HRM QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Campbell Corporation LEARNING OBJECTIVES: MGMT.GASP.23.11 04 - LO: 11-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

65. If the Campbell Corporation conducts its business within a country where workers prefer to be evaluated as part of a group, the cultural dimension of that nation most closely resembles which one of the following? a.

Short-term orientation b.

Collectivism c.

Power distance d.

Individualism ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Campbell Corporation LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM 66. If the Campbell Corporation wanted to subcontract one of its production processes to a third party currently in Switzerland, this action would most likely be referred to as which one of the following? a.

Outsourcing b.

Co-determination c.

Multi-employer bargaining d.

Repatriation ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Strategic Human Resource Management QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Campbell Corporation LEARNING OBJECTIVES: MGMT.GASP.23.11 01 - LO: 11-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:36 PM DATE MODIFIED: 4/16/2022 11:02 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

1. Business to Business (B:B) and Business to Consumer (B:C) channels are both represented in consumer markets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Introduction QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 2. Goldman Sachs estimates that the world's middle class is shrinking worldwide. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

3. Changes in the broader economic environment, such as a rise in interest rates, can affect market potential. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 4. Market research is particularly important for companies with a high client turnover. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Marketing Research vs. Marketing Intelligence Systems QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

5. An adaptation approach to foreign markets means that the marketing strategies a company uses in its international operations will be different than those used domestically. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Making the Standardization and Adaptation Decision QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 6. The increased demand for hair and skin care products with Argan oil illustrates how new product ideas can come from unexpected sources. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Product Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

7. The step in the new product development process in which projections of potential revenues and profits for a potential new product are made is referred to as concept testing. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 8. As the case of Blockbuster indicates, products that have reached the decline stage in domestic markets are unsustainable in emerging markets as well. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

9. Product counterfeiting occurs when a company in a foreign country copies an American product as sells it as the "real thing" without the U.S. marketer receiving any compensation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 10. International marketing managers have four main methods of promoting products and services in international markets: advertising, personal selling, sales promotion, and distribution. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Promotion Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 04 - LO: 12-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

11. Agents for companies shipping products overseas who are chiefly involved with physical distribution activities and documentation are called freight forwarders. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Distribution Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 12. A company’s international pricing mix involves consideration of four major objectives: performance objectives, prevention objectives, maintenance objectives, and survival objectives. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Pricing Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

13. The prices a company charges its overseas subsidiaries are known as transfer prices. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Pricing Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 14. Ironically, customer complaints can sometimes result in improved customer service. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Customer Service Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 07 - LO: 12-07 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

15. A diner complains to his server, Alyson, that his meal is not to his liking. Without consulting with her manager, Alyson immediately tells the customer that he will not need to pay for the meal and offers to bring him a different entree at no charge. Alyson is an empowered employee. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Customer Service Mix QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 07 - LO: 12-07 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 16. Which type of potential refers to the total number of units of a product that could possibly be sold by all companies doing business in a specific international market? a. Market potential b. Sales potential c. Vertical potential d. Horizontal potential ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

17. The City of Cleveland police force bought 50 new squad cars to be amortized over the next eight years. This represents which type of market? a. Sales market b. Environmental market c. Government market d. Gray market ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:40 PM 18. The City of New Orleans recently hired consultants to review their watershed plan for a new commercial center.

This type of market is called a(n) a. industrial market. b. environmental market. c. government market. d. gray market.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:41 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

19. When the total value of goods and services that domestic producers sell to foreign countries exceeds the total value of foreign goods and services that domestic consumers buy, which of the following increases? a. GDP b. PCI c. PPP d. PEP ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 20. Mary Beth works as a marketing manager for a foreign subsidiary of a U.S. company. Recently, she has been asked to identify why a particular geographic area has dropped in sales. She is performing a series of focus groups with locals from that zip code. This illustrates which of the following? a. Business analysis b. A concept test c. Marketing research d. A marketing intelligence system ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Marketing Research vs. Marketing Intelligence Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

21. Executives at Mary Kay Cosmetics’ European operations are conducting a study analyzing why households have stopped purchasing certain products. These executives are engaging in a. business analysis. b. a concept test. c. marketing research. d. a marketing intelligence system.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Marketing Research vs. Marketing Intelligence Systems QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 22. KFC sells a number of core items around the world, but offers other items tailored to specific markets. KFC is following what type of strategy? a. Standardization b. Adaptation c. Glocalization d. Marketing research ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Making the Standardization and Adaptation Decision QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

23. Which of the following is an option for companies to consider when marketing their products overseas? a. Lobbying the WTO for most favored nation status in order to gain market share b. Modifying products according to NAICS codes c. Developing a domestic campaign with a standard message d. Modifying products for different countries and regions ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 24. The step in the new-product development process in which the new product idea is presented to a small sample of the international market to gauge its reaction is called a. a global product. b. concept testing. c. business analysis. d. product development.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Product Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

25. Biyu is in marketing research and new product development for a large manufacturer in Singapore. She has been working with her team on developing a new skin cream. They developed a prototype and have consulted with suppliers to get costing and sourcing information. They are now ready for which step in the new product development process? a. Commercialization b. Concept testing c. Business analysis d. Market testing ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 26. The Slinky Dog and Etch-A-Sketch are both examples of products that have moved up and down the PLC through the years. In 1995, the movie Toy Story brought them out of decline and back into a. maturity. b. growth. c. decline. d. introduction.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

27. Beanie Babies, a collectible toy manufactured in the mid '90s, reached their peak in 1995, earning them the title of the “world’s first internet sensation.” Where are they today in the PLC? a. Maturity b. Growth c. Decline d. Introduction ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 28. Which of the following is an advantage of locating R&D facilities in foreign countries? a. The MNC can take advantage of lower tax brackets using local infrastructure grants. b. The new R&D facility will cost less to build. c. Often, the domestic technology can be transferred over to the foreign country. d. The MNC can use the intelligence of foreign scientists and engineers.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

29. Because Nestle had success with its Maggi noodles in South Asia, they were subsequently introduced in Australia. Nestle is using which type of strategy? a. Vertical b. Horizontal c. Backward d. Reverse ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Developing the International Product Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:43 PM 30. Jake is a sales rep for a US company that wants to sell its product in Japan. His boss is sending him to Japan for a month in hopes of getting in front of suppliers and increasing sales. This illustrates which component of the international promotion mix? a. Personal selling b. Advertising c. Sales promotion d. Publicity ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Promotion Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 04 - LO: 12-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

31. Which of the following advertising media is the most focused? a. Television b. Radio c. Direct mail d. Magazines ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Developing the International Promotion Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 04 - LO: 12-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:43 PM 32. Since 1967, Publisher’s Clearing House has dominated the promotional world with their famous sweepstakes, giving away between $3–13 million dollars annually. This is an example of a. personal selling. b. advertising. c. sales promotion. d. publicity.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Promotion Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 04 - LO: 12-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

33. A Brazilian company is looking to expand into a new market. They have decided to use a commission structure with their local distributor in a foreign country to keep costs low during market penetration. What strategy does this illustrate? a. Indirect b. Direct c. Agent d. Public ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 34. An Australian manufacturer wants to increase its market share in Mexico. They have a well-established presence but want to double sales within two years. To accomplish this goal, they have installed a professional sales team in Mexico. What strategy does this illustrate? a. Indirect b. Direct c. Agent d. Public ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

35. A MNC is interested in expanding its market share in a new foreign country. To begin, they have decided to hire a local representative to act on their behalf who will be paid a quarterly commission based on the volume of products sold. They are using a(n) a. freight back-warder. b. freight forwarder. c. agent. d. public channel.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 36. Storage and transportation operations that are used in moving products to a foreign market are called a. freight back-warders. b. physical distributions. c. agents. d. public channels.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:46 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

37. Agents for companies shipping products overseas who are chiefly involved with physical distribution activities and documentation are called a. freight back-warders. b. freight forwarders. c. agents. d. public channels.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 38. Shipping products to overseas markets in trailer-sized containers is called a. pipelining. b. freight forwarding. c. containerization. d. chunking.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

39. Shipping internationally using different modes of transportation is called a. freight lining. b. overnight shipping. c. an intermodal transporter. d. right-timing.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 40. Which pricing objective for international products and services includes bottom-line goals such as net profit, return on investment, market share, and penetration? a. Performance b. Prevention c. Maintenance d. Survival ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Pricing Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

41. A MNC has entered a foreign market with rock-bottom pricing in hopes of keeping all competition out. This illustrates which pricing objective? a. Performance b. Prevention c. Maintenance d. Survival ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Pricing Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 42. Offering a price in a foreign market that undercuts the prices of companies competing there is referred to as a. employing a performance price. b. product elimination. c. containerization. d. dumping.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Pricing Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

43. Unauthorized importers reselling a manufacturer’s product in the manufacturer’s domestic market at a price less than what the manufacturer charges in that domestic market is known as a. counterfeiting. b. arm's length pricing. c. transfer pricing. d. gray marketing.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Pricing Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:48 PM 44. The percentage of purchases in a category that a buyer gives to one vendor is a(n) a. performance price. b. share of wallet. c. market share. d. arm's length price.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Customer Service Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 07 - LO: 12-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

45. The performance of various aspects of customer service that meets customer expectations is referred to as which of the following? a. Integrity b. Reliability c. Authenticity d. Trustworthiness ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Customer Service Mix QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.12 07 - LO: 12-07 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Strategy KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 46. The total number of units of a product that could possibly be sold by all companies doing business in a specific international market is known as .

ANSWER: market potential POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

47. A compromise strategy between standardization and adaptation is called .

ANSWER: glocalization POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Making the Standardization and Adaptation Decision QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 02 - LO: 12-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 48. A formal, written procedure to determine which of the company’s products should be dropped is called ANSWER: product elimination POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Product Mix QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

49. Magazines that target specific industries are .

ANSWER: vertical publications POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Promotion Mix QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 04 - LO: 12-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 50. Stories about a company, its products or services, and its executives that appear in media are examples of ANSWER: publicity POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Promotion Mix QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 04 - LO: 12-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

51. Shipping products to overseas markets in various-sized trailers is called .

ANSWER: containerization POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 52. International shipments using different modes of transportation refers to .

ANSWER: intermodal transportation POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

53. A company that sets a price in a foreign market that undercuts the prices of competitive companies (especially host country firms) may be accused of .

ANSWER: dumping POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Pricing Mix QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 54. The percentage of purchases in a category a buyer gives to one vendor is called ANSWER: share of wallet POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Customer Service Mix QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 07 - LO: 12-07 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

55. The aspect of customer service that allows employees to take care of customer problems is called ANSWER: empowerment POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Developing the International Customer Service Mix QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 07 - LO: 12-07 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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56. Select two aspects of international demographics and explain why this information is important to global companies.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

57. Select an item you believe to be in the decline stage of the PLC. Organize and describe a marketing strategy designed to bring it back into the growth stage.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Developing the International Product Mix QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 58. According to many marketing researchers, today’s international market is homogenized, with no real national identities requiring localized changes. Most target markets have the same characteristics throughout the globe. Do you agree or disagree with this assessment? Defend your response.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Developing the International Promotion Mix QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 04 - LO: 12-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

59. “Channels of distribution have no role in international markets.” Do you agree with this statement? Defend your position.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 60. Global brands are overwhelmingly American. Many critics argue that these brands bring with them the “Americanization of culture” through mass marketing and standardization strategies. Do you agree or disagree?

Defend your response.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Developing the International Pricing Mix QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM Scenario – Atlantic Camera & Film Company The Atlantic Camera & Film Company has been in operation since the early 1970s. Since its inception in Detroit, Michigan, this company has risen to hold the 35th spot in the industry. Its reputation for excellent service and exemplary products has gained this company international recognition. Atlantic currently sells over two hundred products per week to customers from foreign nations.

Atlantic’s organizational leaders recently decided to begin more intense promotion of the company’s products within the international marketplace. They realize this is a golden opportunity to move the company upward in ranking within the industry. While the company will maintain production within the boundaries of the United States, it plans to establish four distribution centers located around the world for its products. The plans include building distribution sites in South America, Europe, Asia, and the Middle East.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. Operations in foreign markets are new to the Atlantic Camera & Film Company. While they have made sales within these markets before, the company has never had distribution points located within foreign borders. Which one of the following is least likely to be of high concern to the company as it begins this new endeavor? a.

Conducting an international demographic survey b.

Discussing the endeavor with the World Trade Organization c.

Deciding what types of markets to sell its product to d.

Studying the income levels of the individuals within the company’s market area ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Marketing Research vs. Marketing Intelligence Systems QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Atlantic Camera & Film Co LEARNING OBJECTIVES: MGMT.GASP.23.12 01 - LO: 12-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 62. The Atlantic Camera & Film Company realizes it has many challenges to face while undertaking its international plan for growth. Which one of the following would be least likely to require the company to adapt to differences in the foreign market arena? a.

Most foreign countries use the metric system of measurement Items are often used differently or for different purposes by foreigners than by b.

U.S. citizens c.

The U.S. maintains an English system of measurement d.

A standardization strategy to be used by the company ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Making the Standardization and Adaptation Decision QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Atlantic Camera & Film Co LEARNING OBJECTIVES: MGMT.GASP.23.12 02 - LO: 12-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. Atlantic is striving to be as successful as possible within the foreign marketplace. Which of the following are options for the company to use as a sales technique?

Lobby the WTO for modified tax codes in countries where they sell their a. products as a way to increase profits. b.

The product can be modified to appeal to foreign markets. c.

The company can select an FDI strategy and maximize profit potential. d.

Wait for the market to adapt to the products offered.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Product Mix QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Atlantic Camera & Film Co LEARNING OBJECTIVES: MGMT.GASP.23.12 03 - LO: 12-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM Scenario – Bridgemont Industries Bridgemont Industries has operated on a global basis for over fifty years. It is one of the world’s top-rated producers of batteries and is renowned for having excellent products and outstanding customer service. In fact, the company is to receive a global award for its products and customer service expertise in the coming year.

Bridgemont is very proud of its employees and acknowledges that without their experience the company would not be rated at the top. The top management has a special reward planned for each customer service representative that will be presented at the global award ceremony in June. Bridgemont feels it is only fair to share a portion of its profits with the ones who helped generate it.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

64. Bridgemont is well versed in conducting operations in the foreign marketplace. Which of the following represents a method the company could use to market its products in the foreign markets? a.

Consumer to consumer marketplace selling b.

Operating in the gray market c.

Holding contests or sweepstakes d.

Selling the company to the local government ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Promotion Mix QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Bridgemont Industries LEARNING OBJECTIVES: MGMT.GASP.23.12 04 - LO: 12-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 65. Distribution of its products has never been a problem for Bridgemont Industries. Which one of the following is a distribution method that is least likely to be used by Bridgemont? a.

Use an indirect strategy of distribution b.

Use distribution channels already in place in the foreign marketplace c.

Use an agent d.

Use local government distribution systems ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Distribution Mix QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Bridgemont Industries LEARNING OBJECTIVES: MGMT.GASP.23.12 05 - LO: 12-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:50 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

66. When Bridgemont is selling its products in foreign markets, it must decide how to price them. Which of the following is least likely to be a factor for consideration when it comes to the pricing of products being sold in foreign markets? a.

Price of product in the United States b.

Attractiveness of competitive products c.

How high the demand is for the product d.

Competitive product prices ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Pricing Mix QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Bridgemont Industries LEARNING OBJECTIVES: MGMT.GASP.23.12 06 - LO: 12-06 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM 67. Bridgemont takes great pride in the expertise of its customer service staff. Which one of the following is least likely to be an attribute demonstrated by this company’s customer service department? a.

Arranging for on-time deliveries b.

Avoiding call-back when problems arise c.

Warranty explanation d.

Honest and reliable installation and service ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Developing the International Customer Service Mix QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Bridgemont Industries LEARNING OBJECTIVES: MGMT.GASP.23.12 07 - LO: 12-07 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 12:24 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

Chapter 13 - Global Operations and Supply-Chain Management 1. Airbus is an example of a global company employing a manufacturing system. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Operations Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 2. Six Flags Entertainment is an example of a company employing a manufacturing system. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Operations Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 3. The activities in operations management can be grouped into four business functions: procurement, production, logistics, and research and development. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 4. In operations management, the acquisition of goods and services is referred to as logistics. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 5. Boeing buying from thousands of suppliers in more than 100 countries, but only having production facilities in the United States is an example of global procurement and domestic production. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Operations Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 6. One advantage of global procurement is that the firm can maximize its flexibility by allocating its orders among suppliers in a dynamic way and the firm has access to more suppliers that can generally provide lower Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

costs than domestic suppliers. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Procurement QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 7. When a firm has been making goods and services in-house, and then decides to buy these goods and services from suppliers is referred to as offshoring. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Procurement QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 8. A major advantage of making components and raw materials in-house is that the firm is not required to honor protections of intellectual property. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Production QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

LEARNING OBJECTIVES: MGMT.GASP.23.13-03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 9. The practice of producing components and raw materials in-house and purchasing them from suppliers is referred to as a supply-chain malfunction. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Production QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 10. When the demand is equal or lower than the minimum efficient scale, multiple production facility locations are preferred. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Location Decision QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 11. When considering the one-versus-many location for production facilities for components and raw materials some of the most important considerations are: fixed costs, minimum efficient scale and its comparison to Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

demand, and the value-to-weight ratio. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Location Decision QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 12. The three major considerations for deciding the location of production facilities for products are: does the product serve the needs of all customers around the world, proximity to market and proximity to suppliers, and the effect on product’s image being produced in that location. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Location Decision QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 13. A supply chain encompasses all the activities associated with the flow and transformation of goods and services from raw material to the end user. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Supply-Chain Management QUESTION TYPE: True / False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13-05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 14. Software packages designed to integrate the majority of a firm’s business processes, execute all transactions related to the firm’s business processes being integrated, store each piece of data only once in an enterprisewide database, allow access to data and information in real time, and operate in a client-server environment, traditional or web-based are called enterprise resource planning systems. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Supply-Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 15. The property of ERP systems to handle the accounting standards of multiple countries is called the multicurrency property. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Supply-Chain Management QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Technology STATE STANDARDS: United States - AK - DISC: Information Technology KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

16. In which type of production system do services dominate the value of the product? a. Production b. Manufacturing c. Service d. Component ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 17. Honda Motor Company, the Boeing Company, and Toshiba Corporation all have which type of production system? a. Production b. Manufacturing c. Service d. Component ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 18. In the production system model, which of the following would be considered inputs? a. Union dues b. Legal fees c. Energy d. Warranty Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 19. Goods and services that integrate a product are called a. production processes. b. production facilities. c. raw materials. d. components.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 20. Steps in the production process are called a. production stages. b. production facilities. c. raw materials. d. components.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

LEARNING OBJECTIVES: MGMT.GASP.23.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 21. Most of the activities in operations management can be grouped into how many business functions? a. Two b. Three c. Four d. Five ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 22. Which of the following functions of business encompasses most of the activities in operations management? a. Legal advising b. Logistics c. Planning d. Human resources ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

23. What type of decision determines which components and raw materials should be produced in-house and which components and raw materials should be acquired from suppliers? a. A sale-or-keep decision b. A manufacture-or-sale decision c. A sink-or-swim decision d. A make-or-buy decision ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Procurement QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 24. Which of the following is an advantage of global procurement? a. The firm does not need to invest the money that is associated with green marketing. b. The firm can focus on the production stages and components with the lowest tax yield. c. The firm can maximize its flexibility by allocating its orders among the suppliers in a dynamic way. d. The firm does not rely upon suppliers on important dimensions such as quality, delivery, and cost.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Procurement QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:53 PM 25. Which of the following is a disadvantage of global procurement? a. Buying from suppliers could unintentionally lead to suppliers becoming competitors. b. The firm may need to compete for the attention of foreign trade consulates. c. The firm has to invest the money that is associated with making products. d. Buying from suppliers could force the local competition out of business.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Procurement QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 26. When the firm doing the outsourcing and the supplier that will provide the outsourced goods and services are located in the same country, it is called a. domestic outsourcing. b. domestic manufacturing. c. insourcing. d. offshoring.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Procurement QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 27. When the firm has been buying goods and services from suppliers, and then decides to make these goods and services in-house, it is called a. insourcing. b. domestic outsourcing. c. global outsourcing. d. offshoring.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Procurement Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13-02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 28. Which of the following is an advantage of making (in-house manufacturing)? a. There is a level of expertise in production surrounding the products being manufactured. b. The firm has more control over trade relations with foreign governments. c. Knowledge of the product may provide efficiency advantages over potential suppliers. d. The firm has more control over tax rates and delivery schedules for foreign buyers.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Production QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 29. Which of the following is a disadvantage of making (in-house manufacturing)? a. The firm would incur both fixed and variable costs. b. Lower costs mean lower tax brackets leading to a shift in scale. c. Quality control is maximized on behalf of the buyer. d. The firm has less control over quality.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Production QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE CREATED: DATE MODIFIED:

11/12/2021 1:37 PM 4/17/2022 3:52 PM

30. Which of the following is a consideration for the one-versus-many production facilities decision? a. Low variable costs b. The local culture c. The value-to-weight ratio d. The transfer effect ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Location Decision QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:53 PM 31. Which of the following has the highest value-to-weight ratio? a. Pickup trucks b. HD televisions c. Personal computers d. Microchips ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Location Decision QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 32. The supply chains of global businesses such as Boeing, Ford, United Airlines, and the pharmaceutical companies Merck and Pfizer are known as which type of supply chain? a. Environmental b. Global Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

c. Enterprise d. Telecommunication ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Supply-Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 33. Collections of computer hardware and software arranged to transmit information from one place to another are known as a. telecommunication networks. b. global networks. c. enterprise networks. d. internetworking networks.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Supply-Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 34. ERP systems aim to a. store all information in multiple databases. b. represent each business function by a module. c. design the system as a collection of functions. d. eliminate the need for internetworking networks.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

REFERENCES: Global Supply-Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13-05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 35. The property of ERP systems to simultaneously operate in multiple languages is known as a. multi-language. b. multi-national. c. multi-currency. d. multi-enterprise.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Supply-Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 36. A Japanese user of Sony's ERP system can view the company's financial information in Japanese yen, while a British user of the system is able to see the same information in British pounds. This ERP system is a. multi-language. b. multi-national. c. multi-currency. d. multi-enterprise.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Supply-Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Operations Management Bloom's: Apply 11/12/2021 1:37 PM 4/17/2022 3:52 PM

37. Ford’s ERP system follows the American accounting standards in its U.S. subsidiaries and follows the Mexican accounting standards in its Mexico subsidiaries. This ERP system is a. multi-language. b. multi-national. c. multi-currency. d. multi-enterprise.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Supply-Chain Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 38. The production process may consist of one or more transformations which could include a. educational transformations. b. technological transformations. c. biological transformations. d. informational transformations.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 39. Sheila is a buyer of raw materials for a local aircraft parts manufacturer. She buys tourmaline and other Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

elements used to make airfoils. She is most likely working for which department in the company? a. Procurement b. Logistics c. Production d. Research and development ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 40. Which of these is responsible for the transformations required by the production process? a. Procurement b. Logistics c. Production d. Research and development ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 41. Which of these is responsible for the movement of materials in the production process? a. Procurement b. Logistics c. Production d. Research and development ANSWER: b Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 42. Roberto works for NASA as an aerospace engineer. He spends most of his time reviewing data and metrics to see if he can design a new type of aeronautical device used in propulsion. He most likely works for which department in the company? a. Procurement b. Logistics c. Production d. Research and development ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 43. The management of the direct resources that are involved in the production system of a business organization is known as a. procurement management. b. operations management. c. logistics management. d. research and development.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Multiple Choice Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 44. Tipton Manufacturing is based in Lexington, Kentucky. The company does not make the gears it uses in its products, but purchases them from a supplier in Hong Kong. Tipton Manufacturing is practicing a. global outsourcing. b. domestic outsourcing. c. insourcing. d. right-sizing.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Procurement QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 45. One production facility will usually be favored when a. fixed costs are high. b. demand is higher than the minimum efficient scale. c. goods have a low value-to-weight ratio. d. unemployment is very low.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Location Decision QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE CREATED: DATE MODIFIED:

11/12/2021 1:37 PM 4/17/2022 3:52 PM

46. When the goods dominate the value of the product, the production system is typically called a(n) ANSWER: manufacturing system POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM

.

47. Goods and services that integrate a product are called .

ANSWER: components POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 48. Suni works for an Indian computer parts manufacturer and spends most of her days combing the internet for the best price on titanium and other raw materials used in the production process. Suni’s work is in _ .

ANSWER: global procurement POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Procurement QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 49. Jared is tasked with locating a better price on a manufactured component part used in the production process of his Australian facility. He finds that it is more economical to buy the part from a New Zealand supplier rather than make it in-house. This process is known as .

ANSWER: offshoring POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Procurement QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 50. A company that only completes product design and outsources all other production process functions is called a(n) .

ANSWER: hollow corporation POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Procurement QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 51. Miguel is a procurement specialist for a manufacturer in Ecuador. He finds that it is most economically efficient to produce some of the key components for his product in-house while also purchasing a small amount from other local suppliers. This is called .

ANSWER: dual sourcing Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Production QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 52. Several employees at Aztec Research are tasked with deciding which of their products should be manufactured in-house and within which of their four facilities. They also are tasked with decisions surrounding the best place(s) for manufacturing in foreign markets. This process is called .

ANSWER: location decision POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Location Decision QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:54 PM 53. Which component of global operations was primarily disrupted by the COVID-19 pandemic?

ANSWER: Global supply chain POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Supply-Chain Management QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE CREATED: DATE MODIFIED:

11/12/2021 1:37 PM 4/17/2022 3:52 PM

54. The heart of the global supply chain, which integrates and coordinates data transmission efforts on a massive scale, is possible thanks to .

ANSWER: telecommunication networks POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Supply-Chain Management QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 55. Pablo, a purchasing executive for a large supplier to the air defense industry, just received authorization to buy a software package that will eliminate the need for multiple applications, as it can handle massive storage, represent a business function by a module, and process information in real-time. Pablo bought a(n) .

ANSWER: ERP system POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Supply-Chain Management QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 56. Consider the global supply chain crises created by the COVID-19 pandemic. Compare and contrast different solutions related to global supply chain management that may assist in eliminating stress to the system.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Operations Management QUESTION TYPE: Essay Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13-01 - LO: 13-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 57. Defend global procurement and its cemented presence in global supply chain operations. Support your defense with examples.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Procurement QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 58. Identify the advantages and disadvantages of making components and raw materials in-house.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Production QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 03 - LO: 13-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 59. Discuss the circumstances that would MOST likely convince a company to use one production facility rather than multiple facilities.

ANSWER: Student answers will vary.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Location Decision QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 60. “Fortunately, ERP does not affect global supply chain management.” Do you agree with this statement?

Defend your position.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Supply-Chain Management QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM

Scenario – Ardella Enterprises Twenty years ago, two people from New Jersey, USA had a dream of building a superior company that would have global operations with an unparalleled supply chain. The idea took root and Ardella Enterprises was born. This company conducts operations across four continents and has earned a reputation for prompt deliveries, accurate shipments, and exemplary customer service. This partnership is quickly taking the lead in the industry and is contemplating further expansion. Ardella Enterprises grossed over $11 billion last year. Its plan for additional expansion and growing Internet influence is projected to increase sales by two billion dollars within the first year.

61. Ardella Enterprises is renowned for its operations management, otherwise described as the management of the direct resources involved in the production system of the company. Which one of the following would be considered a business function associated with the activities of operations management? a. Legal Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

b. Marketing c. Finance

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

d. Logistics ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Operations Management QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Ardella Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.13 01 - LO: 13-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/20/2022 7:55 PM 62. Ardella Enterprises acknowledges the importance of its supply chain. It knows that the company’s operations would not be as successful if the supply chain was less effective. Which one of the following is related to a company’s supply chain and its functions? a. The activities of the supply chain are associated with exchange management as it pertains to global currencies. b. Effective supply chain management will minimize economies of scale and scope. c. Supply chain management involves maximizing shareholder wealth. d. Supply chain management involves maximizing the value of the product to the final user.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Supply-Chain Management QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Ardella Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.13 05 - LO: 13-05 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 63. Which one of the following would describe Ardella Enterprises should it decide to stop purchasing goods and services from suppliers and instead make the goods and services in-house? a. A hollow corporation b. An insourcing firm c. An international development association Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

d. An outsourcing corporation ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Procurement QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Ardella Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM

Scenario – Jenkins and Jones Corporation Michael Jenkins and Emma Jones started the Jenkins and Jones Corporation in 1976 in Kansas, USA. The initial goal of this company was to serve customers throughout the United States. Since the company’s inception, it has grown at an outstanding rate and now serves online customers as well as customers in ten foreign nations. Jenkins and Jones is now looked at as the industry’s benchmark company due to its superior supply chain management skills. Its practices and techniques are used by many other organizations in the industry to improve their own supply chain management skills.

64. As the Jenkins and Jones Corporation continues to grow, it will face the need to make more and morestrategic decisions. Which one of the following would best describe the corporation if it decided to makepurchases globally versus domestically? a. Global proliferation b. Global procurement c. Domestic outsourcing d. Global production ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Procurement QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Jenkins and Jones Corpora LEARNING OBJECTIVES: MGMT.GASP.23.13 02 - LO: 13-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Operations Management Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

KEYWORDS: DATE CREATED:

Bloom's: Analyze 11/12/2021 1:37 PM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE MODIFIED:

4/17/2022 3:52 PM

65. If Jenkins and Jones would decide to maintain its product production on a domestic basis, there would be certain advantages the company could expect from making this decision. Which one of the following would be considered an advantage of domestic production? a. Better control over translation exposure b. Better control over transaction exposure c. Better control over deliveries d. Better control over repatriated funds ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Production QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Jenkins and Jones Corpora LEARNING OBJECTIVES: MGMT.GASP.23.13 03 - LO: 13-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM 66. As the Jenkins and Jones Corporation continues to grow and expand, one of the strategic decisions it must face is the location of its facilities. Which one of the following relates to the problem of location? a. Number of Internet users b. Economies of scale c. Variable costs d. Factor endowments of countries ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Location Decision QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Jenkins and Jones Corpora LEARNING OBJECTIVES: MGMT.GASP.23.13 04 - LO: 13-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Operations Management KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:37 PM DATE MODIFIED: 4/17/2022 3:52 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

1. When a global company realizes gains in one country and repatriates the funds back home in its home currency, this represents translation risk. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 2. A German exporter realizing gains from the sale of U.S. exports, but also losses from the currency exchange risk associated with the cost to produce the goods abroad, experiences transaction risk. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

3. Marked-to-market involves the trading of futures contracts in major currencies and offering price transparency and efficiency in addition to elimination of counterparty risk due to guaranteed payments on contract. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 4. Eliminating forex risk is not possible using futures and forwards because international money markets do not recognize the risk insurance allocation from foreign banks. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

5. Hedgers are risk-averse and speculators are risk-takers. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 6. Currency swaps are mostly used by stable market economies who hedge risk by using the continuity and relatively low volatility of exchange rate fluctuations over time. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

7. A put option becomes more valuable as the price of the asset decreases. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 8. Call options can be purchased on various assets like stocks, bonds, and commodities, but forwards are reserved for commodities only. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

9. The big difference between a call option and forward contract is that forwards are obligatory. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 10. A hedge fund is the collection of investors who decide on a collection of investments, whereas an investment bank offers advisory services to the businesses that may be part of a fund. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

11. Junk bonds offer high yields to go along with their high risk. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 12. On October 19, 1987 (Black Monday), stock prices in Hong Kong began collapsing and spread throughout the day into Europe and then North America. This is an example of contagion. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

13. A prepaid cell phone is an example of a payment in advance. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 14. The basic calculation for NPV is: 1. project all future cash inflows and outflows associated with an investment, 2. discount all those future cash flows to the present day, and then 3. add them together. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Capital Budgeting QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

15. A company’s weighted average cost of capital will be higher if their debt is rated as risky. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Currency Risk and Stock Valuation QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 16. The impact of random change in the value of one currency with respect to other currencies is called the a. transaction risk. b. exchange rate risk. c. economic risk. d. consolidated risk.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

17. Two kinds of short-term effects of currency movements are risk and a. transactions; translation b. transactions; exchange rate c. economic; translation d. consolidated; economic ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

risk.

18. What type of risk is associated with the short-term effects of currency movements on the consolidated accounting statements of a firm? a. Transactions b. Translation c. Economic d. Consolidated ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

19. Which of the following types of risk is the most difficult to foresee? a. Transactions b. Translation c. Economic d. Consolidated ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 20. A basket of currencies consisting of dollars, euros, pounds, and yen created by the International Monetary Fund is known as the a. Trade Right. b. Special Drawing Right. c. Currency Right. d. Export-Import Bank.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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21. Using currency derivatives to reduce potential transaction, translation, and economic risks of currency movements that could lead to losses for a firm or investor is called a. hedging. b. speculating. c. a short position. d. an organized exchange position.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 22. Buying a currency in a currency futures contract and profiting on an increase in the value of the currency over time is called a. hedging. b. syndicating. c. a short position. d. a long position.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

23. Selling a currency in a currency futures contract and profiting on a decrease in the value of the currency over time is called a. hedging. b. syndicating. c. a short position. d. a long position.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 24. A small commitment fee needed to purchase a futures contract is called a a. margin. b. speculator. c. short position. d. long position.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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25. Losses that are incurred and that cause the participant’s balance to fall below the maintenance margin at the end of the trading day is called a a. margin sell. b. margin call. c. short position. d. long position.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 26. Which is true of forward contracts? a. They are more rigid in the terms of their conditions. b. They are less standardized than futures contracts. c. They cannot be customized to meet the hedging needs of the buyer. d. They are rarely used by hedgers to cut down an asset's volatility.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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27. A derivatives market run by large banks is called a(n) a. margin contract. b. over-the-counter market. c. currency forward contract. d. organized exchange.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 28. A call option a. is not used in spread combinations. b. is free to execute. c. uses a strike price. d. is an obligation to pay.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

29. What allows firms to exchange currencies at a previously agreed exchange rate as a way to hedge exchange rate movements? a. Call options b. Put options c. Premiums d. Currency swaps ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 30. Which of the following is true about international banking and payments? a. A letter of credit backed by an international bank is the safest method of dealing with international banking. b. A commercial letter of credit offers payment protection to both parties. c. Buying on open account is usually best for smaller firms. d. A commercial letter of credit is not irrevocable.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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31. The safest method available to an exporter, but that which exposes the importer to some risk related to delivery of goods, is called a. payment in advance. b. a commercial letter of credit. c. a banker’s acceptance. d. a syndicate.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 32. Which of the following payment types offers payment protection to both exporters and importers, as the importer’s bank writes a guarantee of payment? a. Payment in advance b. A commercial letter of credit c. A banker’s acceptance d. A syndicate ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

33. When a bank sells an LC into the financial marketplace as a money market instrument, it is called a(n) a. payment in advance. b. commercial letter of credit. c. banker’s acceptance. d. syndicate.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 34. A simple agreement wherein the exporter sends an invoice with the goods and the exporter pays upon the receipt is called a(n) a. open account. b. commercial letter of credit. c. banker’s acceptance. d. participation loan.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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35. When large international firms deal in considerable volumes of goods, they often need to obtain specific requirements. What is the name of the requirement obtained from a group of banks known as a syndicate? a. A commercial loan b. A call option c. A banker’s acceptance d. A participation loan ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 36. Moody's and Standard and Poor's issue a. open accounts. b. commercial letters of credit. c. participation loans. d. bond ratings.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

37. Eurobonds are important because a. they allow foreign investors direct access to the European market. b. their low liquidity value makes them good to have in diversified portfolios. c. they usually have high face values, raising big capital quickly. d. they help organizations raise capital by raising capital in another currency.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 38. Home bias tends to a. reduce diversification. b. increase contagion. c. increase diversification. d. reduce contagion.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

39. An Export-Import Bank is a(n) a. organization that provides secure communications for trade documents. b. derivatives market run by a syndicate of large banks. c. organization that provides large, wholesale dollar payments services for governments. d. U.S. government export finance agency that seeks to level international competition.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 40. Which of the following is true about the IMF and World Bank? a. More than 190 countries participate as members of the IMF. b. They aid in dollarizing the economies of foreign nations. c. The IMF provides loaner currency to countries experiencing hardship. d. The IMF lends money to all types of countries, including advanced, emerging, and developing economies.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

41. Bernie, the CEO of a U.S. manufacturer, is considering building a new manufacturing plant. He wants to take the request to the Board of Directors for approval but must first calculate the return on the project in order to justify the cost to build. This calculation is known as the a. net present value. b. cost of debt. c. cost of equity. d. cost of capital.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Capital Budgeting QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 42. The cost of debt a. represents one part of the capital structure; the other is liability management. b. is the average interest paid on all the company’s debt. c. is the average cost that a company pays to maintain its credit. d. only considers the after-tax cost of debt.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Capital Budgeting QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

43. Whether a firm has growth or value, and how this characteristic affects an estimate of the cost of equity, is called the a. net present value. b. value factor. c. cost of equity. d. cost of capital.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Capital Budgeting QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 44. A stock value measured with the coefficient obtained by regressing the stock’s return on a currency’s return over time is known as the a. net present value. b. value factor. c. exchange rate sensitivity. d. cost of capital.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Currency Risk and Stock Valuation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

45. The sensitivity of a stock to market risk affected by currency movements is known as the a. net present value. b. value factor. c. exchange rate sensitivity. d. exchange risk beta.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Currency Risk and Stock Valuation QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.14 05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 46. Short-term changes in exchange rates that can affect the revenues and operating costs of firms engaged in international business activities are referred to as what kind of risks?

ANSWER: Transaction risks POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

47. Generally, a parent company and its subsidiaries will use the same financial accounting framework for preparing statements that are both separate and .

ANSWER: consolidated POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 7:58 PM 48. Holding a long position is a confident view in most instances, except when it comes to ANSWER: put options POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

49. A plain vanilla currency swap is a currency swap combined with a(n) .

ANSWER: interest rate POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 50. Another name for large global banks is a(n) .

ANSWER: money center bank POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing International Trade and Investment QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

51. The safest payment method available to an exporter, but which exposes the importer to some risk related to delivery of goods, is a(n) .

ANSWER: payment in advance POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financing International Trade and Investment QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 52. Jorge, a financial analyst for a global hedge fund, has been tasked with a buy decision surrounding a risky investment for his firm. He will need to access historical and true data and perform a “what if” simulation surrounding the buy. Additionally, Jorge will likely perform a .

ANSWER: sensitivity analysis POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Capital Budgeting QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

53. A holding firm that is common in multinational corporations is also referred to as a(n) ANSWER: conglomerate POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Multinational Capital Budgeting QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 54. A coefficient obtained by regressing a stock’s return on a currency’s return over time is a(n) ANSWER: exchange rate sensitivity POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Currency Risk and Stock Valuation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

55. The sensitivity of a stock to market risk affected by currency movements is a(n) ANSWER: exchange risk beta POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Currency Risk and Stock Valuation QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

.

56. Differentiate between transaction and translation risks. Explain how these risks affect firms and investors.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

57. Differentiate between hedging and speculating.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 58. Compare and contrast the Export-Import (Ex-Im) Bank and Japan's Bank of International Cooperation.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financing International Trade and Investment QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 03 - LO: 14-03 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

59. Explain the domestic versus global cost of capital.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Multinational Capital Budgeting QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 04 - LO: 14-04 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 60. Does exchange rate risk affect a firm’s cash flows and its stock value? Explain.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Currency Risk and Stock Valuation QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.14 05 - LO: 14-05 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM Scenario – Aero, Inc. Aero, Inc., started from the idea of Brad Aerostle of Madison, South Dakota in 1992. Brad earned a degree in finance from Harvard and had watched the financial markets for years. Armed with college credentials and knowledge, he believed he could offer needed services to individuals and companies desiring to conduct business around the globe. From the minute Brad put his idea into motion, his brainchild––Aero, Inc.––proved quite profitable.

Aero, Inc., currently has over five thousand clients ranging from slightly wealthy individuals to very rich and thriving corporations around the world. Brad’s skill at what he does has made his company a sought-after firm by those who want to prosper in the foreign marketplace.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

61. Aero, Inc., likes to make its customers aware of what is taking place within the global financial world. One of the lessons it imparts to its clients is about the International Monetary Fund’s special drawing right. Which of the following best identifies what Aero, Inc., would be discussing with its clients?

The short-term effects of currency movements on the consolidated accounting a. statements of a firm b.

A basket of currencies consisting of dollars, euros, pounds, and yen Buying a currency in a currency futures contract and profiting on an increase in c. the value of the currency over time d.

The Global Center for Financial Restructuring ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Aero, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

62. When Aero, Inc., recommends purchasing futures contracts to its clients, it always informs the clients of the rather small commitment fee that is needed to purchase a futures contract. Which one of the following best identifies what this fee is called? a.

Weighted average cost of capital b.

Margin c.

Put option d.

Beta risk ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Aero, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

63. One of the prominent concerns the clients of Aero, Inc., express is that of currency fluctuations. The clients know that fluctuations in currency can wind up costing them money. Aero, Inc., alleviates its clients’ concerns by suggesting the clients enter into a situation where currencies can be exchanged at a previously agreed upon exchange rate as a way to hedge exchange rate movements. Which one of the following best identifies what Aero, Inc., is likely suggesting? a.

Currency swap b.

Call option c.

Sensitivity analysis d.

Speculation ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Hedging Forex Risk with Derivatives QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Aero, Inc. LEARNING OBJECTIVES: MGMT.GASP.23.14 02 - LO: 14-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM Scenario – The Gayla Corporation The Gayla Corporation is a multinational business that conducts operations in twelve foreign markets. This multimillion-dollar organization is very familiar with currency exchanges and has considerable understanding when it comes to the risks associated with operating in the global market arena. The Gayla Corporation claims it would not be as successful without the expertise of the financial wizards that work for it. The company has not lost money so far and plans to stay that way.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

64. The financial experts of the Gayla Corporation are very much aware of the organization’s cost of debt. Which of the following best identifies what cost of debt means to the corporation? a.

Weighted average of different interest rates paid on long-term borrowings b.

Ways in which long-term exchange rate movements affect firms c.

Sum of the cost of capital and the cost of equity The required rate of return by stockholders in a firm that is estimated by means of d.

CAPM ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Multinational Capital Budgeting QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Gayla Corporation LEARNING OBJECTIVES: MGMT.GASP.23.14 04 - LO: 14-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM 65. The Gayla Corporation must fully understand and effectively handle all the ways in which long-term exchange rate movements affect the firm. Which of the following best identifies what this organization is facing in this situation? a.

Economic risk b.

Beta risk c.

Transactions risk d.

Hedging ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Gayla Corporation LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

66. When the Gayla Corporation conducts its operations in foreign markets, its customers often pay in different forms of currency. Many times, there is a difference in the value of that received currency in comparison to the company’s U. S. currency. Which of the following best identifies what the Gayla Corporation is experiencing? a.

Translation risk b.

Economic risk c.

Short position d.

Exchange rate risk ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Measuring Foreign Exchange Exposure QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Gayla Corporation LEARNING OBJECTIVES: MGMT.GASP.23.14 01 - LO: 14-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 10:27 AM

Chapter 15 - Accounting and Taxation in Global Business 1. Receipts are recorded on the income statement. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Introduction QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 2. An income statement details purchases in cash versus purchases on credit. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Accounting and Financial Reporting in Global Business QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 3. Investors should use cautionary judgment when evaluating changes to a company’s working capital, as some companies try to boost their cash flows before reporting periods. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Accounting and Financial Reporting in Global Business QUESTION TYPE: True / False

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 4. GAAP contrasts pro-forma accounting, a non-GAAP accounting method. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Diversity STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:00 PM 5. Neither U.S. GAAP nor IFRS permit use of the LIFO method. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 6. A main goal of the International Accounting Standards Board is to develop, in the public interest, a single set of high quality, understandable, and enforceable global accounting standards that require transparent and comparable information in general purpose financial statements.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Financial Reporting Standards QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 7. Pressure for the IASB to harmonize its accounting standards is coming from cross-border mergers and acquisitions and rapid growth in international capital markets. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Financial Reporting Standards QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 8. In the United States, an external auditor's opinion on a publicly traded company's financial statements is included in the annual report that the company files with the SEC. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: True / False HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

LEARNING OBJECTIVES: MGMT.GASP.23.15-04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 9. Internal auditors review all aspects of operations in search of improvement, as well as review the internal control structure to determine if they are operating as expected. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 10. A high debt-to-equity (D/E) ratio may make it harder for a company to obtain future financing. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Statement Analysis QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 11. Normally a lower current ratio indicates a better financial position, for it implies that a company has adequate liquidity to carry out business operations. a. True Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Statement Analysis QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 12. The current ratio acts as a litmus test by answering the question: if all your bills were to come due at the same time, would you be able to cover it with the cash you have on hand? a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Statement Analysis QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 13. Economically savvy MNCs use tax havens. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Tax Matters QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Apply 11/12/2021 1:38 PM 4/18/2022 11:40 AM

14. The highest corporate income taxes can be found in the United States and Japan. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Tax Matters QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Impact KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 15. By charging above or below the market price, companies can use transfer pricing to transfer profits and costs to other divisions internally as a way to lessen their tax burden. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Tax Matters QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 16. Which of the following would be listed under "Assets” on a balance sheet? a. Rent b. Marketable securities c. Dividends payable d. Cash spent Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 17. Which of the following line items would be found on an income statement? a. Cost of sales b. Property c. Common stock d. Non-controlling interests ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 18. What are retained earnings? a. The part of earnings generated from operations that is paid to employees b. The sum total of all assets, liabilities, and owners' equity accounts c. The sum total of all inflows and outflows of cash for an organization d. The part of stockholder equity generated from operations and kept for use in future operations ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

LEARNING OBJECTIVES: MGMT.GASP.23.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 19. A firm's financial position at a designated point in time is represented by what? a. Income statement b. Balance sheet c. Statement of retained earnings d. Statement of cash flows ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 20. Liabilities + Owners' Equity = a. Net Income. b. Assets. c. Retained Earnings. d. Operating Cash Flows.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:08 PM Copyright Cengage Learning. Powered by Cognero.

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21. Which of the following external users would require financial statement information, specifically information concerning ability to meet financial obligations? a. Governmental units b. Lenders c. Vendors d. Employees ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Accounting and Financial Reporting in Global Business QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 22. The procedures for dealing with specific accounting matters is provided by a. GIIP. b. ASEAN. c. CPAP. d. SFAS. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Legal Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 23. Of the following, which is the LOWEST level of authoritative accounting literature? a. Accounting textbooks b. AICPA Accounting Interpretations c. AICPA Issues Papers d. Industry accounting practices Copyright Cengage Learning. Powered by Cognero.

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ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 24. Which of the following is the highest level of the primary sources of authoritative accounting literature? a. Interpretations issued by the FASB b. AICPA Accounting Interpretations c. National Association of Tax Preparers (NATP) d. Interpretations issued by the ICPA ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 25. In this GAAP inventory costing method, a company keeps track of the cost of individual inventory items. a. Specific identification b. FIFO c. LIFO d. Weighted average ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Multiple Choice HAS VARIABLES: False Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

LEARNING OBJECTIVES: MGMT.GASP.23.15-02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Understand DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 26. Accountants who work in which type of accounting field need to be licensed as a Certified Public Accountant (CPA) by the state or states in which they work? a. Public b. Non-profit c. Government d. Private ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 27. Differences between U.S. and International GAAP are influenced by a. language. b. taxation. c. taxation language. d. exchange rates.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DATE MODIFIED:

4/18/2022 11:40 AM

28. Which of the following statements is true of the IASB? a. The IASB’s purpose is to work with partner institutions like the World Bank and the IMF to regulate standards. b. The publication of a Standard, Exposure Draft, or final SIC Interpretation requires approval by the SEC. c. The IASB represents accounting and financial organizations from more than 100 countries. d. The publication of a Standard, Exposure Draft, or final SIC Interpretation requires approval by nine of its Board Members.

ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: International Financial Reporting Standards QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 29. An independent, privately funded accounting standard-setter based in London, U.K. that issues International Financial Reporting Standards is called the a. GAAP. b. SFAS. c. IASB. d. IFRS. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Financial Reporting Standards QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 03 - LO: 15-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 30. Which of the following statements about international financial reporting standards is true?

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

a. The IASB represents more than 100 worldwide accounting and financial organizations. b. The IASB is committed to developing enforceable global inventory management controls. c. The IASB represents all standards set in place by the IMF and World Bank. d. Most projects require a minimum of five years from formation to standard issuance.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Financial Reporting Standards QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 03 - LO: 15-03 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 31. In the United States, an external audit must be conducted by a(n) a. certified government accountant. b. independent CPA. c. forensic accountant. d. financial advisor.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 32. The two major categories of auditing are called a. management and financial. b. domestic and international. c. transactional and transformational. d. external and internal.

ANSWER: d POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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Test Bank for Introduction to Global Business 3rd Edition Julian Gaspar James

DIFFICULTY: Difficulty: Easy REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15-04 - LO: 15-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:09 PM 33. The first step of an audit typically is to a. communicate audit results. b. arrive at an audit opinion. c. plan the audit. d. obtain and evaluate evidence.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 04 - LO: 15-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics STATE STANDARDS: United States - AK - DISC: Ethical Responsibilities KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 34. Which of the following would typically be an objective of a financial statement audit? a. Ensuring the existence of shareholder wealth, as indicated in the company’s annual report b. Verifying that all financial statement items are properly presented c. Verifying that all financial statement ratios are in accordance with World Bank regulations d. Evaluating the economy and efficiency with which scarce resources are used ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 04 - LO: 15-04 NATIONAL STANDARDS: United States - BUS PROG: Ethics Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Ethical Responsibilities Bloom's: Analyze 11/12/2021 1:38 PM 4/18/2022 11:40 AM

35. Another name for an internal audit is a(n) a. human resource audit. b. management audit. c. transactional audit. d. competitive audit.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 36. An evaluation of a company’s financial statements in order to identify significant trends or relationships among the items is called a(n) a. relative analysis. b. financial statement analysis. c. domestic analysis. d. management accounting analysis.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financial Statement Analysis QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 37. The relationship of a number on the financial statements to another number is called a Copyright Cengage Learning. Powered by Cognero.

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a. financial ratio. b. financial statement. c. domestic term. d. management accounting marker.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financial Statement Analysis QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 38. Complete the following equation: Debt Ratio = / Total Assets. a. Losses b. Net Profit c. Total Liabilities d. Total Assets ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Financial Statement Analysis QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:10 PM 39. Complete the following equation: Current Assets / Current Liabilities = a. Debt Ratio. b. Net Profit. c. Total Liabilities. d. Current Ratio.

ANSWER: d POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Financial Statement Analysis QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15-05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:14 PM 40. Which of the following statements about financial ratios is true? a. Financial ratios are designed to assess the solvency of the firm’s competition. b. A low current ratio implies that a company has adequate liquidity to carry out business operations. c. A rule of thumb is that companies should have a current ratio between 1 and 2. d. A rule of thumb is that companies should have a current ratio between .5 and 1.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Statement Analysis QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 41. Which of the following statements about tax rates in selected countries is true? a. Countries that have little or no corporate income tax are known as tax havens. b. Tax rates and other business-related information can be obtained from the IMF. c. Most OECD countries are low-income economies. d. Only developed nations impose a corporate income tax.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Tax Matters QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Diversity Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Environmental Influence Bloom's: Analyze 11/12/2021 1:38 PM 4/18/2022 11:40 AM

42. When looking at her pay stub, Sarah noticed approximately 20% of her income had been taxed, leaving her take-home pay much less than her gross income. In addition to state and federal income taxes, she saw FICA taxes and unemployment taxes as well. Those two types of taxes are called a. payroll taxes. b. sales taxes. c. service taxes. d. value-added taxes.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Tax Matters QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Environmental Influence KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:14 PM 43. When members of a corporate family are located in different countries, a. taxes are avoided altogether. b. taxes are handled under international law. c. transfer pricing affects taxes owed and company profits. d. transfer pricing does not affect taxes owed but does affect profits.

ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Global Tax Matters QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM Copyright Cengage Learning. Powered by Cognero.

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44. Which type of pricing refers to the pricing of goods and services that are bought and sold internally between members of a corporate family? a. Mark-up b. Subsidiary c. Transfer d. Arm's length ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Tax Matters QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 45. Which of the following statements about corporate income tax rates and economic activity is true? a. Corporate taxes are used as a mandatory reporting structure to maintain FBI records for white collar crime. b. The income tax is the primary source of revenues for national governments around the world. c. Before the Great Depression, state and local government expenditures in the U.S. were much lower than federal expenditures. d. The great majority of U.S. government expenditures are on defense items.

ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Global Tax Matters QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 46. The recording, summarizing, and reporting of the economic activities and events of an organization is known as .

ANSWER: accounting POINTS: 1 Copyright Cengage Learning. Powered by Cognero.

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DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15-01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 47. What is the name of the financial statement that summarizes the revenues earned and the expenses incurred by a business over a period of time?

ANSWER: Income statement POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 48. On a balance sheet for a corporation, the term owners' equity is replaced by the term .

ANSWER: stockholders' equity POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Introduction QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM Copyright Cengage Learning. Powered by Cognero.

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49. What financial statement shows a firm’s financial position at a designated point in time?

ANSWER: Balance sheet POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 50. The type of accounting which refers to the component of the accounting information system that provides the financial information needed internally by business managers for efficient and effective decision-making is called .

ANSWER: management accounting POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Accounting and Financial Reporting in Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 51. Financial accounting is the component of the AIS that provides financial information needed by investors, lenders, and .

ANSWER: external users POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Accounting and Financial Reporting in Global Business QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Creation of Value Bloom's: Remember 11/12/2021 1:38 PM 4/20/2022 8:16 PM

52. Which inventory method considers the cost of the first inventory unit purchased is assumed to be the first cost transferred out to cost of goods sold?

ANSWER: first-in, first-out First-In, First-Out FIFO POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 53. The independent, privately funded accounting standard-setter based in London is called the .

ANSWER: International Accounting Standards Board (IASB) POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: International Financial Reporting Standards QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:19 PM 54. An evaluation of a company’s financial statements in order to identify significant trends or relationships among the items is called a(n) .

ANSWER: financial statement analysis POINTS: 1 DIFFICULTY: Difficulty: Easy Copyright Cengage Learning. Powered by Cognero.

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REFERENCES: Financial Statement Analysis QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15-05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 55. The current ratio is calculated as current assets divided by current .

ANSWER: liabilities POINTS: 1 DIFFICULTY: Difficulty: Easy REFERENCES: Global Tax Matters QUESTION TYPE: Completion HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 06 - LO: 15-06 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Remember DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:19 PM 56. What impact do you think AI and automation will have on global accounting?

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: Accounting and Financial Reporting in Global Business QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:20 PM 57. Describe and differentiate between the U.S. GAAP and the International GAAP. Copyright Cengage Learning. Powered by Cognero.

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ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:21 PM 58. You have been tasked by the CFO to interview external auditors. You are inclined to see how well the information they present compares to the efforts of a recent internal auditor. You ask the candidate, “How can your planned audit scope be relied upon to detect material errors, fraud, illegal acts, or other material weaknesses through a series of internal controls?” Respond on behalf of the external auditor, citing specific examples.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Challenging REFERENCES: International Financial Reporting Standards QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 03 - LO: 15-03 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:21 PM 59. Explain the different objectives of an external audit and an internal audit.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 04 - LO: 15-04 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic Copyright Cengage Learning. Powered by Cognero.

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STATE STANDARDS: KEYWORDS: DATE CREATED: DATE MODIFIED:

United States - AK - DISC: Creation of Value Bloom's: Analyze 11/12/2021 1:38 PM 4/20/2022 8:21 PM

60. Briefly explain how financial statement analysis can be used to evaluate a company’s financial situation.

ANSWER: Student answers will vary.

POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Financial Statement Analysis QUESTION TYPE: Essay HAS VARIABLES: False STUDENT ENTRY MODE: Basic LEARNING OBJECTIVES: MGMT.GASP.23.15 05 - LO: 15-05 NATIONAL STANDARDS: United States - BUSPROG: Analytic | Technology - BUSPROG: Analytic STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:22 PM

Scenario – Black Hills Enterprises Rapid City, South Dakota has been home to Black Hills Enterprises since 1984. This company is recognized around the world for its superior cutlery and currently ranks as number three within the industry. In 2011, Black Hills Enterprises recorded gross sales of over sixteen million dollars. From its gross sales, the company claimed net profits of four million dollars. Black Hills Enterprises is quite proud of its performance and recognizes that the company’s financial records truly show this organization is doing something right.

61. Black Hills Enterprises maintains accurate and thorough accounting records. Which piece of the company’s accounting records would be needed to identify what cash monies were received and what cash was paid out by the company? a.

Statement of cash flows b.

Income statement c.

Balance sheet d.

Retained earnings statement ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic Copyright Cengage Learning. Powered by Cognero.

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PREFACE NAME: Black Hills Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.15-01 - LO: 15-01

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NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 62. Black Hills Enterprises conducts international business. It realizes there are sometimes different accounting guidelines that need to be followed when dealing on an international level. In essence, there are differences between U.S. and international GAAP. Which one of the following is a factor that would influence the development of accounting and financial reporting? a.

NAICS codes b.

Debt sourcing c.

Inflation d.

SEC filings ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Generally Accepted Accounting Principles (GAAP) QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: Black Hills Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.15 02 - LO: 15-02 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 63. Black Hills Enterprises conducts extensive internal audits to ensure the reliability and accuracy of its accounting records. Which one of the following is least likely to be included as a step in its internal auditing process? a.

Communicate the results b.

Publicize results in the financial news c.

Arrive at an audit opinion d.

Plan the audit ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic Copyright Cengage Learning. Powered by Cognero.

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PREFACE NAME: Black Hills Enterprises LEARNING OBJECTIVES: MGMT.GASP.23.15-04 - LO: 15-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/20/2022 8:22 PM

Scenario – The Williams Company Based in Delaware, USA, the Williams Company has been in operation since 1967. It has five branches located in China, Europe, South America, Mexico, and Canada. Its exquisite product line of fine custom-made jewelry is highly desired throughout the world. The company maintains a very healthy balance sheet.

The Williams Company is known within the industry for integrity and fair business practices. This company maintains an accounting system that is open for any stakeholder to view. It prides itself on being honest and trustworthy. The company feels it is this honesty that has led it to be a billion-dollar organization.

64. The Williams Company places a high value on maintaining integrity in its operations. Part of ensuring this integrity is maintained involves having frequent audits of the company’s accounting records performed. Which one of the following would be considered an objective of a financial statement audit? a.

Ensure financial statements are complete. b.

Ensure dividends are allocated for stakeholders. c.

Ensure there is proper documentation of ISO standards. d.

Ensure expenses are documented in their native currency.

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: The Role of Auditing and the Sarbanes-Oxley Act QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Williams Company LEARNING OBJECTIVES: MGMT.GASP.23.15 04 - LO: 15-04 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Analyze DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 65. If the company’s stakeholders requested to be shown a financial statement that summarized the revenues earned and the expenses incurred by the Williams Company for a given period of time, which one of the following statements would they most likely be requesting? a.

Income statement Copyright Cengage Learning. Powered by Cognero.

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b.

Cash flow statement

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c. d.

Retained earnings statement Balance sheet

ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: Introduction QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Williams Company LEARNING OBJECTIVES: MGMT.GASP.23.15 01 - LO: 15-01 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Apply DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM 66. Which one of the following would the Williams Company expect to establish a set of international accounting standards stating how particular types of transactions and other events should be reported infinancial statements? a.

GAAP b.

AIS c.

SFAS d.

IFRS ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate REFERENCES: International Financial Reporting Standards QUESTION TYPE: Subjective Short Answer HAS VARIABLES: False STUDENT ENTRY MODE: Basic PREFACE NAME: The Williams Company LEARNING OBJECTIVES: MGMT.GASP.23.15 03 - LO: 15-03 NATIONAL STANDARDS: United States - BUS PROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Creation of Value KEYWORDS: Bloom's: Evaluate DATE CREATED: 11/12/2021 1:38 PM DATE MODIFIED: 4/18/2022 11:40 AM

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