MANAGING IN A GLOBAL BUSINESS
ENVIRONMENT (D080) EXAM QUESTIONS AND
ANSWERS CURRENTLY TESTED AND GRADED A+
The CEO of an international company reminds the executive vice presidents
that while the company may do good while performing corporate social
responsibilities, the business has one ultimate goal since it is engaged in
commercial activities with corporate shareholders.
Which ultimate goal is the CEO emphasizing to the executive vice presidents? -
-CORRECT ANSWER--Profitability
A CEO decides to expand the company's business internationally by purchasing
production capability in another country, including the foreign country's
buildings and equipment.
Which type of market entry is the CEO using? --CORRECT ANSWER--Direct
investment
A CEO seeks to better use the economies of scale and scope of production to
increase the international company's profits.
Which type of globalization driver is the CEO seeking to use? --CORRECT
ANSWER--Cost
Page 1 of 75
,A CEO is discussing an expansion of production of a company's highly
perishable dairy line in a country that can offer low labor costs and good
internet connections. The country has no highways, and roads are poorly
maintained.
Which challenge to international business expansion do the road conditions
present? --CORRECT ANSWER--Infrastructure
Which argument is used by critics who wish to discourage movement towards
globalization? --CORRECT ANSWER--It increases the wealth of the rich rather
than the poor
Anarchism --CORRECT ANSWER--Individuals control political activities, and
the government has no control over these activities
Totalitarianism --CORRECT ANSWER--A centralized government creates
oppressive policies based on ideas from powerful leadership.
Direct democracy --CORRECT ANSWER--The government provides a method
of voting for the people of a country, not for elected officials.
What is a free trade zone? --CORRECT ANSWER--A geographic region in
which a county will reduce restrictions that might prevent or reduce trade
Page 2 of 75
,Which term describes a government giving a tax break to a producer to increase
their global competitiveness? --CORRECT ANSWER--Subsidies
Industrialized --CORRECT ANSWER--Prevalent formation of new markets
with possibility of saturation
Less-developed --CORRECT ANSWER--Focus on agriculture and raw
materials with limited imports
Developing country --CORRECT ANSWER--Growing population which leads
to long-term growth potential.
A company is considering establishing a subsidiary in a new host country and
wishes to prepare its expatriates to adapt to the local environment.
How should this company prepare its expatriates?
Negotiation
Operational training
Repatriation
Cultural Training --CORRECT ANSWER--Cultural training
What happens to consumer surplus when tariffs and quotas are discontinued? --
CORRECT ANSWER--They increase
Page 3 of 75
, Which type of tariff is put in place to specifically ensure that domestic
industries are given an advantage? --CORRECT ANSWER--Protective
What is a benefit of implementing a system of free trade? --CORRECT
ANSWER--Reduced tariffs would result in lower costs of imported raw
materials.
How are free trade agreements handled differently than treaties in the United
States? --CORRECT ANSWER--Treaties must be approved by the Senate,
whereas a free trade agreement must pass both houses of Congress.
Treaties must be approved by the Senate, whereas a free trade agreement must
pass both houses of Congress. --CORRECT ANSWER--Tariffs
An airplane manufacturer outsources the manufacture of some its parts and sub-
assemblies. They are then returned to the manufacturer's main plant for final
assembly. --CORRECT ANSWER--Value chain
Country A exports more goods to Country B than it imports from Country B.
Country A receives more monetary gain by using this practice.
Which relationship does Country A have with Country B? --CORRECT
ANSWER--Trade surplus
Page 4 of 75
ENVIRONMENT (D080) EXAM QUESTIONS AND
ANSWERS CURRENTLY TESTED AND GRADED A+
The CEO of an international company reminds the executive vice presidents
that while the company may do good while performing corporate social
responsibilities, the business has one ultimate goal since it is engaged in
commercial activities with corporate shareholders.
Which ultimate goal is the CEO emphasizing to the executive vice presidents? -
-CORRECT ANSWER--Profitability
A CEO decides to expand the company's business internationally by purchasing
production capability in another country, including the foreign country's
buildings and equipment.
Which type of market entry is the CEO using? --CORRECT ANSWER--Direct
investment
A CEO seeks to better use the economies of scale and scope of production to
increase the international company's profits.
Which type of globalization driver is the CEO seeking to use? --CORRECT
ANSWER--Cost
Page 1 of 75
,A CEO is discussing an expansion of production of a company's highly
perishable dairy line in a country that can offer low labor costs and good
internet connections. The country has no highways, and roads are poorly
maintained.
Which challenge to international business expansion do the road conditions
present? --CORRECT ANSWER--Infrastructure
Which argument is used by critics who wish to discourage movement towards
globalization? --CORRECT ANSWER--It increases the wealth of the rich rather
than the poor
Anarchism --CORRECT ANSWER--Individuals control political activities, and
the government has no control over these activities
Totalitarianism --CORRECT ANSWER--A centralized government creates
oppressive policies based on ideas from powerful leadership.
Direct democracy --CORRECT ANSWER--The government provides a method
of voting for the people of a country, not for elected officials.
What is a free trade zone? --CORRECT ANSWER--A geographic region in
which a county will reduce restrictions that might prevent or reduce trade
Page 2 of 75
,Which term describes a government giving a tax break to a producer to increase
their global competitiveness? --CORRECT ANSWER--Subsidies
Industrialized --CORRECT ANSWER--Prevalent formation of new markets
with possibility of saturation
Less-developed --CORRECT ANSWER--Focus on agriculture and raw
materials with limited imports
Developing country --CORRECT ANSWER--Growing population which leads
to long-term growth potential.
A company is considering establishing a subsidiary in a new host country and
wishes to prepare its expatriates to adapt to the local environment.
How should this company prepare its expatriates?
Negotiation
Operational training
Repatriation
Cultural Training --CORRECT ANSWER--Cultural training
What happens to consumer surplus when tariffs and quotas are discontinued? --
CORRECT ANSWER--They increase
Page 3 of 75
, Which type of tariff is put in place to specifically ensure that domestic
industries are given an advantage? --CORRECT ANSWER--Protective
What is a benefit of implementing a system of free trade? --CORRECT
ANSWER--Reduced tariffs would result in lower costs of imported raw
materials.
How are free trade agreements handled differently than treaties in the United
States? --CORRECT ANSWER--Treaties must be approved by the Senate,
whereas a free trade agreement must pass both houses of Congress.
Treaties must be approved by the Senate, whereas a free trade agreement must
pass both houses of Congress. --CORRECT ANSWER--Tariffs
An airplane manufacturer outsources the manufacture of some its parts and sub-
assemblies. They are then returned to the manufacturer's main plant for final
assembly. --CORRECT ANSWER--Value chain
Country A exports more goods to Country B than it imports from Country B.
Country A receives more monetary gain by using this practice.
Which relationship does Country A have with Country B? --CORRECT
ANSWER--Trade surplus
Page 4 of 75
