International Business Test Preparation
Course Introduction
International Business explores the strategies, operations, and challenges faced by companies engaged in cross-border commercial activities. The course examines topics such as global trade theories, cultural dynamics, international market entry methods, financial considerations, international marketing and management, and the impact of political, economic, and legal factors on global business. Students gain a comprehensive understanding of how firms adapt to different international environments, assess foreign market opportunities, and develop sustainable competitive advantages in a rapidly changing global landscape.
Recommended Textbook
International Logistics Management of International Trade Operations 3rd Edition by David
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17 Chapters
907 Verified Questions
907 Flashcards
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Chapter 1: Introduction
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Sample Questions
Q1) NAFTA is a free-trade agreement between the countries of
A) North Africa.
B) North America.
C) North Atlantic.
D) North Asia.
E) None of the above
Answer: B
Q2) Russia can produce 25 tons of steel or 5 automobiles using the same amount of resources.Using the exact same amount of resources,India can produce 18 tons of steel and 3 automobiles.According to the theory of comparative advantage,at what price will Russia and India trade chairs?
A) India will buy automobiles as long as the price is lower than 6 tons of steel
B) India will sell automobiles as long as the price is higher than 5 tons of steel
C) Russia will buy automobiles as long as the price is lower than 6 tons of steel
D) Impossible to determine with the information given
E) None of the above
Answer: A
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Chapter 2: International Supply Chain Management
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Sample Questions
Q1) Companies increasingly are designing products so that they can gain a competitive advantage through reverse logistics.Returned products are
A) refurbished for resale in secondary markets.
B) reused (packaging or containers).
C) remanufactured (restored to their original performance standards).
D) discarded.
E) All of the above
Answer: E
Q2) Who was the person who popularized the idea of sea-going containers that could be loaded directly onto a ship,a truck,or a railroad car?
A) Peter Maersk
B) Malcom McLean
C) Joseph Battaglia
D) Hapag Lloyd
E) None of the above
Answer: B
Q3) Logistics management encompasses ____________________ activities than does supply chain management.
Answer: fewer,less
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Page 4
Chapter 3: International Logistics Infrastructure
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Sample Questions
Q1) There are sometimes problems with electrical supply in A) Sub-Sahara Africa.
B) Saudi Arabia.
C) some parts of a developed country like the United States.
D) All of the above
E) None of the above
Answer: D
Q2) The infrastructure of pipelines is declining,meaning more energy needs of the world must be transported by ships,trucks,and railroads.
A)True
B)False
Answer: False
Q3) In the European Union,the goal for mail delivery sent to a national address is A) two days.
B) three days.
C) D + 1.
D) D + 2.
E) None of the above
Answer: C
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Page 5
Chapter 4: Methods of Entry into Foreign Markets
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Sample Questions
Q1) Attempts to reduce business practices that include corruption and bribery have been made by the
A) W.O.F.E.
B) sogo shosha.
C) Organisation for Economic Co-operation and Development.
D) foreign labor laws that protect agents.
E) None of the above
Q2) Joint ventures were developed as ways to partner with a politically well-connected company in a foreign country to help prevent things like nationalization of a foreign company by the host government.
A)True
B)False
Q3) Because of action by the World Trade Organization to lower tariffs in the future,there should be an increase in the importance of foreign trade zones.
A)True
B)False
Q4) In a franchising arrangement,the ____________________ pays fees to the company that owns the bundle of intellectual property items.
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Chapter 5: International Contracts
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Sample Questions
Q1) An agent can negotiate prices,delivery,or other sales terms with the buyer (importer)without direction from the exporter.
A)True
B)False
Q2) The contract clause that spells out if a representative will be an agent or distributor is usually the first clause of the contract and is called the _____________________ of appointment clause.
Q3) The "facilities and activities" clause of a contract between an exporter and an agent/distributor spells out what kind of docking arrangements will be made when the goods arrive by ship into the agent/distributor's country.
A)True
B)False
Q4) Normally,an exporter pays the agent's commission when the ___________________ pays the exporter.
Q5) The European Union tends not to recognize exclusive territories that limit an agent or distributor to one country.
A)True
B)False
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Chapter 6: Terms of Trade or Incoterms
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Sample Questions
Q1) Under the Delivered Duty Unpaid Incoterm,unloading costs are borne by the A) railroad.
B) ship line.
C) exporter.
D) harbor.
E) None of the above
Q2) Under the CIF Incoterm,the proof of delivery is an ocean bill of lading or a sea waybill.
A)True
B)False
Q3) Use of Electronic Data Interchange (EDI)is still fairly new and limited to developed countries.
A)True
B)False
Q4) Conceptually,the CPT Incoterm is the same as the CFR Incoterm,except it applies to goods shipped by means other than ocean transport,or shipped by sea without being handed over the ship's rail (roll-on-roll-off cargo or intermodal containers).
A)True
B)False
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8
Chapter 7: Terms of Payment
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Sample Questions
Q1) A letter of credit is more secure than cash in advance.
A)True
B)False
Q2) In attempting a credit check of a foreign firm,a basic problem is
A) deciphering the business's organization and name.
B) most international banks are corrupt.
C) most countries avoid international trade.
D) All of the above
E) None of the above
Q3) Among the following terms of payment,which is the one which is the most customer-friendly and still protects the exporter from the risk of non-payment?
A) a letter of credit
B) open account
C) open account with credit insurance
D) international forfeiting
E) None of the above
Q4) The less developed an area of the world is,the more likely it is that an exporter will use a ____________________ term of payment.
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Chapter 8: Currency of Payment (Managing Transaction
Risks)
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Sample Questions
Q1) The Ex-Im Bank is the curator of the SDR.
A)True
B)False
Q2) The risk resulting from possible fluctuations in currency exchange rates is called
A) hedging.
B) transaction exposure.
C) the direct quote.
D) floating.
E) None of the above
Q3) Market-based forecasting of exchange rates
A) is based on the premise that "the market knows best."
B) attempts to capture the collective knowledge of sophisticated speculators in the future spot rate of a currency.
C) does not take into account government interventions.
D) All of the above
E) None of the above
Q4) Technical forecasting methods are essentially based upon time-series analysis. A)True
B)False
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Chapter 9: International Commercial Documents
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Sample Questions
Q1) A product not on the Commerce Control List,or whose Export Control Classification Number does not call for an export license,is classified as
A) NLR.
B) SED.
C) BIS.
D) UCC.
E) None of the above
Q2) The pro forma invoice
A) is identical to the commercial invoice.
B) must be written with extreme care to avoid discrepancies between the letter of credit and the commercial invoice.
C) does not need an expiration date.
D) All of the above
E) None of the above
Q3) Export quotas can be used to control scarce resources or prices of products for which a country has a monopoly.
A)True
B)False
Q4) The United States requires a(n)____________________ Export Declaration.
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Chapter 10: International Insurance
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Sample Questions
Q1) The liability of a single P&I club is limited to A) cargoes of crude oil.
B) $7 million.
C) an international fund.
D) All of the above
E) None of the above
Q2) Most cargo sent by air has ____________________ value.
Q3) It is rare for cargo to fall overboard from ships.
A)True
B)False
Q4) The three ways companies can manage risk are through risk retention,risk amalgamation,and through a mixed approach.
A)True
B)False
Q5) If an exporter in a developing country sells to an importer in a developed country on a CIF,the responsibility transfers from exporter to importer at the ship's rail.If there is then a loss,the exporter may suffer a cash flow problem while filing the insurance claim.
A)True
B)False
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Chapter 11: International Ocean Transportation
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Sample Questions
Q1) Post-Panamax ships have capacities that can reach A) 120,000 TEUs
B) 12,000 TEUs
C) 1,200,000 TEUs
D) 1,200 TEUs
E) None of the above
Q2) Countries with an open registry often provide A) secondary registries.
B) flags of convenience.
C) more strict regulation of ships.
D) an opportunity for ship owners from developing countries to register their ships in the United States.
E) None of the above
Q3) Ships too large to pass through the Panama Canal are called A) tramps.
B) Panamax ships.
C) post-Panamax ships.
D) capesize ships.
E) None of the above
Q4) A long ton is ____________________ pounds.
Page 13
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Chapter 12: International Air Transportation
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Sample Questions
Q1) On international airfreight shipments,the volume-weight conversion uses
A) 6000 inches per kilogram.
B) 6000 cm per pound.
C) 166 cm per kilogram.
D) 166 cubic inches per pound.
E) None of the above
Q2) What distinguishes a passenger aircraft from an airfreighter is the fact that only the airfreighter carries freight on the main deck.
A)True
B)False
Q3) Quick-change aircraft can be easily transformed from carrying one type of cargo to another.
A)True
B)False
Q4) The first air cargo was mail.
A)True
B)False
Q5) The largest cargo airport in the world is Miami,Florida.
A)True
B)False
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Chapter 13: International Land and Multi-Modal Transportation
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Sample Questions
Q1) In the European Union,trucking is often delayed by A) border controls.
B) grossly overloaded trucks.
C) social protests.
D) All of the above
E) None of the above
Q2) The Rotterdam Rules do not address the issues of cargo liability for cargo transported by land.
A)True
B)False
Q3) A ____________________ is the idea that cargo traveling on ocean liners can cross a land obstacle by being unloaded in one port,transferred to a train,carried across the land area by rail,and reloaded onto another ship.
Q4) Double-stacking of containers on railroad cars is the standard practice in both North America and Europe.
A)True
B)False
Q5) River barges mostly carry ____________________ cargo.
Q6) Container ship capacity is measured in ____________________.
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Chapter 14: Packaging for Export
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Sample Questions
Q1) To protect against condensation damage inside a container,the container's interior floor and,ideally,its interior sides should be made of ____________________.
Q2) Consumer packages abroad are generally smaller in countries where retail shopping is done frequently.
A)True
B)False
Q3) Some shippers use old pallets as spacers (dunnage)to keep cargo from shifting.
A)True
B)False
Q4) As opposed to crates,boxes are containers made of wood where the sides are an integral part of the structure of the container.
A)True
B)False
Q5) The strongest type of shipping crates are
A) enclosed in empty crates about 3 percent larger.
B) constructed with three-way corners.
C) constructed of woven polymer fibers such as polyethylene or polypropylene.
D) All of the above
E) None of the above
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Chapter 15: International Logistics Security
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Sample Questions
Q1) In addition to the C-TPAT program,the United States has also created which program(s)or initiative(s)to improve security?
A) Maritime Transportation Security Act
B) Security and Accountability For Every Port Act
C) Transportation Workers' Identification Credential
D) Container Security Initiative
E) All of the above
Q2) Efforts by corporations to reduce the vulnerability of their international supply chain to more traditional criminal activities is called
A) security management.
B) supply chain management.
C) security studies.
D) C-TPAT.
E) None of the above
Q3) Type I errors (identifying a safe shipment incorrectly as dangerous)is less dangerous than Type II errors (identifying a dangerous shipment incorrectly as safe).
A)True
B)False
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Chapter 16: Customs Clearance
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Sample Questions
Q1) According to the Harmonized System of classification,each product in international trade can have a code that uses up to ____________________ digits.
Q2) The Brussels Definition of Value has been replaced by what is called "arbitrary" value.
A)True
B)False
Q3) If an importer has a good reputation regarding its following of Customs regulations,the likelihood that one of its shipments is going to be inspected is minimal,therefore minimizing delays at entry and allowing the importer to organize its supply chain more predictably.This is an application of the concept of A) bonding.
B) stare decisis.
C) Electronic Data Interchange.
D) Customs expediting.
E) None of the above
Q4) The Harmonized System of classification is used to classify both exports and imports. A)True
B)False
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18
Chapter 17: Using International Logistics for Strategic Advantage
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Sample Questions
Q1) The technique developed by the British Broadcasting Corporation to communicate clearly and accurately with non-native English speakers is called
Q2) Writing in International English is simply to follow that every writer knows: use short words that even children know how to spell; for example,"The Cat in the Hat" can be considered to have been written in International English.
A)True
B)False
Q3) For an exporter,a reputation to be careful and thorough in the preparation of paperwork can constitute a strategic advantage.
A)True
B)False
Q4) Which of the following Incoterms is the least customer-friendly?
A) Free On Board
B) Free Alongside Ship
C) Free Domicile
D) Cost, Insurance and Freight
E) None of the above
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