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INB300 QUIZ 1

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An international business, unlike a multinational enterprise:

A. need not customize its products to the requirements of national markets

B. needs to have manufacturing units in at least two foreign nations

C. need not invest directly in operations in other countries

D. needs to manufacture products or provide services that target a global market
C. need not invest directly in operations in other countries

An international business is any firm that engages in international trade or investment. A firm does not have to become a multinational enterprise, investing directly in operations in other countries, to engage in international business, although multinational enterprises are international businesses.
Which of the following is a measure that is developed by the United Nations to measure the quality of life in different nations?

A. Gross domestic product

B. Human Development Index

C. Purchasing power parity

D. Gross national income
B. Human Development Index

Sen's influential thesis has been picked up by the United Nations, which has developed the Human
Development Index (HDI) to measure the quality of human life in different nations.
Since the 1960s, which of the following has been a notable trend in the demographics of the multinational enterprise?

A. The decline of multinational companies in the manufacturing sector

B. The growth of mini-multinationals

C. The growth of government-owned multinational enterprises

D. The decline of non-U.S. multinationals
B. The growth of mini-multinationals

Since the 1960s, two notable trends in the demographics of the multinational enterprise have been (1) the rise of non-U.S. multinationals and (2) the growth of mini-multinationals.
A political system that prioritizes the needs of the society over individual freedoms is called _____.

A. egalitarianism

B. collectivism

C. capitalism

D. totalitarianism
B. collectivism

Collectivism refers to a political system that stresses the primacy of collective goals over individual goals. When collectivism is emphasized, the needs of society as a whole are generally viewed as being more important than individual freedoms.
Since the late 1980s, there has been a spread of democracy. This is because _____.

A. in many countries the middle and working classes have become less powerful

B. a state's ability to control access to uncensored information has increased

C. the socialist model failed to deliver economic progress to the vast bulk of their populations

D. in many countries state-ownership of firms has encouraged innovation and entrepreneurship
C. the socialist model failed to deliver economic progress to the vast bulk of their populations

Many totalitarian regimes failed to deliver economic progress to the vast bulk of their populations. In looking for alternatives to the socialist model, the populations of these countries could not have failed to notice that most of the world's strongest economies were governed by representative democracies.
Globalization of markets results in markets becoming _____.

A. less competitive

B. less interdependent

C. less diverse

D. more protected
C. less diverse

As markets become global, greater uniformity replaces diversity. In an increasing number of industries, it is no longer meaningful to talk about "the German market," "the American market," "the Brazilian market," or "the Japanese market"; for many firms there is only the global market.
In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning.

A. mixed

B. command

C. market

D. private
A. mixed

In a mixed economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning.
A free market economy in which property rights are protected leads to subsequent economic growth, which often leads to the establishment of:

A. a democratic regime.

B. government owned enterprises.

C. a socialist economy.

D. a planned economy
A. a democratic regime.

While it is possible to argue that democracy is not a necessary precondition for a free market economy in which property rights are protected, subsequent economic growth often leads to establishment of a democratic regime.
Design and names by which merchants or manufacturers designate and differentiate their products are known as _____.

A. trademarks

B. copyrights

C. patents

D. licenses
A. trademarks

Trademarks are designs and names, often officially registered, by which merchants or manufacturers
designate and differentiate their products (e.g., Christian Dior clothes).
A _____ system is based on a very detailed set of laws organized into codes.

A. common law

B. traditional law

C. civil law

D. theocratic law
C. civil law

A civil law system is based on a detailed set of laws organized into codes. When law courts interpret civil law, they do so with regard to these codes.
Which of the following statements is true about an international business?

A. An international business needs to have homogenous practices across countries.

B. An international business needs to invest directly in operations in other countries.

C. An international business must find ways to work within the limits imposed by government intervention.

D. An international business can be managed in the same way that a domestic business is managed.
C. An international business must find ways to work within the limits imposed by government

Conducting business transactions across national borders requires understanding the rules governing the international trading and investment system. Managers in an international business must also deal with government restrictions on international trade and investment.
Which of the following statements about the legal systems of countries is NOT true?

A. They can affect the attractiveness of a country as an investment site or market.

B. They are almost the same for all countries.

C. They are influenced by the prevailing political system of the country.

D. They are of immense importance to international business.
B. They are almost the same for all countries.

The legal system of a country refers to the rules, or laws, that regulate behavior along with the processes by which the laws are enforced and through which redress for grievances is obtained. The legal environments of countries differ in significant ways.
A market economy encourages innovation because _____.

A. the prices of goods and services, including new products, are fixed by government

B. economic freedom leads to greater incentives for innovation

C. state ownership of enterprises reduces risks of innovation

D. government-owned and funded research centers become hubs of innovation
B. economic freedom leads to greater incentives for innovation

The economic freedom associated with a market economy creates greater incentives for innovation and entrepreneurship than either a planned or a mixed economy. In a market economy, any individual who has an innovative idea is free to try to make money out of that idea by starting a business (by engaging in entrepreneurial activity).
The World Trade Organization promotes _____.

A. infrastructural development in poor nations through low-interest loans

B. state ownership of major enterprises

C. lowering of barriers to cross-border trade and investment

D. regulation of national economies
C. lowering of barriers to cross-border trade and investment

The WTO is also responsible for facilitating the establishment of additional multinational agreements between WTO member states. Over its entire history, and that of the GATT before it, the WTO has promoted the lowering of barriers to cross-border trade and investment.
Many states in Asia, Latin America, and Western Europe have shifted away from a mixed economy to a market-based economy. Which of the following measures is most likely to be promoted by such states?

A. Lowering competition

B. Deregulation of the economy

C. Fixing of prices by the government

D. State-ownership of enterprises
B. Deregulation of the economy

Many states in Asia, Latin America, and Western Europe have sold state-owned businesses to private investors (privatization) and deregulated their economies to promote greater competition.
An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a _____.

A. command economy

B. market economy

C. closed economy

D. planned economy
B. market economy

In the archetypal pure market economy, all productive activities are privately owned, as opposed to being owned by the state. Production is determined by the interaction of supply and demand and signaled to producers through the price system.
Supporters of globalization maintain that the apparent decline in real wage rates of unskilled workers:

A. is due to the migration of low-wage manufacturing jobs offshore.

B. can be checked by limiting free trade and foreign investment.

C. can be checked by increasing government ownership of enterprises.

D. is due to technological changes that create greater demand for skilled workers.
D. is due to technological changes that create greater demand for skilled workers.

Supporters of globalization maintain that the weak growth rate in real wage rates for unskilled workers owes far more to a technology-induced shift within advanced economies away from jobs where
the only qualification was a willingness to turn up for work every day and toward jobs that require significant education and skills.
GNI per person figures can be misleading because _____.

A. they don't consider differences in the cost of living

B. they provide a dynamic picture of development

C. they also include barter agreements

D. they don't consider exchange rate
A. they don't consider differences in the cost of living

One common measure of economic development is a country's gross national income (GNI) per head of population. GNI per person figures can be misleading because they don't consider differences in the cost of living.
Which of the following statements about individualism is NOT true?

A. Individualism advocates for a democratic political system.

B. Individualism creates an anti-business environment.

C. Individualism promotes private entrepreneurship.

D. Individualism promotes free market economics.
B. Individualism creates an anti-business environment.

In practical terms, individualism translates into an advocacy for democratic political systems and market economics, which in general creates a more favorable environment for international businesses to operate in.
The sale of state assets through an auction is most likely to lead to _____.

A. nationalization

B. trade certification

C. market regulation

D. privatization
D. privatization

Privatization transfers the ownership of state property into the hands of private individuals, frequently by the sale of state assets through an auction.