BUSN 501 Moulard Exam 1 UPDATED
ACTUAL QUESTIONS AND CORRECT
ANSWERS
What are the five most important trends affecting global business? - CORRECT ANSWER 1.
Growth of WTO and regional free trade areas. 2. Acceptance of the free market system. 3. Growing
middle class in developing countries. 4. Impact of global media on national borders. 5. Mandate to
manage resources and the global environment.
How has the internationalization of U.S. business affected competition? - CORRECT
ANSWER It has increased competition for U.S. companies as many U.S. companies are now
foreign-owned and many foreign companies manufacture in the U.S.
What is the definition of international marketing? - CORRECT ANSWER The performance of
business activities designed to plan, price, promote, and direct the flow of a company's goods and
services to consumers in more than one nation for profit.
What are the controllable elements in international marketing? - CORRECT ANSWER Firm
characteristics, Price, Product, Promotion, and Channels of distribution.
What are the domestic uncontrollable elements affecting international marketing? - CORRECT
ANSWER Political/legal forces, Economic climate, and Competitive structure.
What factors are included in foreign uncontrollable elements? - CORRECT
ANSWER Political/legal forces, Economic forces, Competitive forces, Level of technology,
Structure of distribution, Geography and infrastructure, and Cultural forces.
What is the Self-Reference Criterion (SRC) in international marketing? - CORRECT
ANSWER An unconscious reference to one's own cultural values and experiences, which can
hinder success in international marketing.
What is ethnocentrism and why is it problematic in international marketing? - CORRECT
ANSWER The belief that one's own culture knows best how to do things, which can lead to
misunderstandings and ineffective marketing strategies.
,What are the risks of not controlling SRC in international marketing? - CORRECT ANSWER It
can lead to failure in adapting the marketing mix for foreign markets, resulting in business failures.
What is global awareness in the context of international marketing? - CORRECT
ANSWER Tolerance of cultural differences and knowledge of global economic, social, and
political trends.
What are the five stages of international marketing involvement? - CORRECT ANSWER 1. No
Direct Foreign Marketing. 2. Infrequent Foreign Marketing. 3. Regular Foreign Marketing. 4.
International Marketing. 5. Global Marketing.
What characterizes the 'No Direct Foreign Marketing' stage? - CORRECT ANSWER Products
reach foreign markets indirectly through trading companies or foreign customers.
What happens during the 'Infrequent Foreign Marketing' stage? - CORRECT
ANSWER Temporary surpluses of goods may lead to occasional marketing overseas without
continuous market representation.
What defines the 'Regular Foreign Marketing' stage? - CORRECT ANSWER The firm has
dedicated production capacity for foreign markets and depends on profits from these markets.
What does 'International Marketing' involve? - CORRECT ANSWER Full commitment to
international marketing activities, including seeking global markets and possibly production on
foreign soil.
What is the 'Global Marketing' stage? - CORRECT ANSWER The firm views the world as one
market, segmenting based on global factors rather than national borders.
What was the impact of the Great Depression on world trade in the first half of the 20th century? -
CORRECT ANSWER It disrupted world trade and led to the U.S. Smoot-Hawley Act, which
raised tariffs and provoked retaliation from other countries.
How did the U.S. contribute to world trade after WWII? - CORRECT ANSWER By spreading
capitalism through initiatives like the Marshall Plan and establishing trade agreements such as GATT
and WTO.
, What is the Balance of Payments? - CORRECT ANSWER A system of accounts that records a
nation's international financial transactions, which must always be in balance.
What does the Current Account in the Balance of Payments record? - CORRECT
ANSWER Exports, imports, services, and funds; it is the most important account for
international business.
What does the Capital Account in the Balance of Payments record? - CORRECT
ANSWER Investments and short-term capital.
What does the Capital Account record? - CORRECT ANSWER Investments and short-term
capital.
What does the Reserves Account include? - CORRECT ANSWER Gold, foreign exchange, and
liabilities.
What is a trade surplus? - CORRECT ANSWER When a country sells more goods/services than
it buys.
What is a trade deficit? - CORRECT ANSWER When a country buys more goods/services than
it sells.
What can a persistent trade deficit lead to? - CORRECT ANSWER A decline in a country's
currency value, making imports more expensive and exports cheaper.
What is protectionism? - CORRECT ANSWER Attempts by a country to inhibit the entry of
foreign products/services by imposing trade barriers.
Name one argument for protectionism. - CORRECT ANSWER Protection of the home market.
What is the economic impact of protectionism on U.S. consumers? - CORRECT ANSWER It
costs about $70 billion per year in higher prices.
ACTUAL QUESTIONS AND CORRECT
ANSWERS
What are the five most important trends affecting global business? - CORRECT ANSWER 1.
Growth of WTO and regional free trade areas. 2. Acceptance of the free market system. 3. Growing
middle class in developing countries. 4. Impact of global media on national borders. 5. Mandate to
manage resources and the global environment.
How has the internationalization of U.S. business affected competition? - CORRECT
ANSWER It has increased competition for U.S. companies as many U.S. companies are now
foreign-owned and many foreign companies manufacture in the U.S.
What is the definition of international marketing? - CORRECT ANSWER The performance of
business activities designed to plan, price, promote, and direct the flow of a company's goods and
services to consumers in more than one nation for profit.
What are the controllable elements in international marketing? - CORRECT ANSWER Firm
characteristics, Price, Product, Promotion, and Channels of distribution.
What are the domestic uncontrollable elements affecting international marketing? - CORRECT
ANSWER Political/legal forces, Economic climate, and Competitive structure.
What factors are included in foreign uncontrollable elements? - CORRECT
ANSWER Political/legal forces, Economic forces, Competitive forces, Level of technology,
Structure of distribution, Geography and infrastructure, and Cultural forces.
What is the Self-Reference Criterion (SRC) in international marketing? - CORRECT
ANSWER An unconscious reference to one's own cultural values and experiences, which can
hinder success in international marketing.
What is ethnocentrism and why is it problematic in international marketing? - CORRECT
ANSWER The belief that one's own culture knows best how to do things, which can lead to
misunderstandings and ineffective marketing strategies.
,What are the risks of not controlling SRC in international marketing? - CORRECT ANSWER It
can lead to failure in adapting the marketing mix for foreign markets, resulting in business failures.
What is global awareness in the context of international marketing? - CORRECT
ANSWER Tolerance of cultural differences and knowledge of global economic, social, and
political trends.
What are the five stages of international marketing involvement? - CORRECT ANSWER 1. No
Direct Foreign Marketing. 2. Infrequent Foreign Marketing. 3. Regular Foreign Marketing. 4.
International Marketing. 5. Global Marketing.
What characterizes the 'No Direct Foreign Marketing' stage? - CORRECT ANSWER Products
reach foreign markets indirectly through trading companies or foreign customers.
What happens during the 'Infrequent Foreign Marketing' stage? - CORRECT
ANSWER Temporary surpluses of goods may lead to occasional marketing overseas without
continuous market representation.
What defines the 'Regular Foreign Marketing' stage? - CORRECT ANSWER The firm has
dedicated production capacity for foreign markets and depends on profits from these markets.
What does 'International Marketing' involve? - CORRECT ANSWER Full commitment to
international marketing activities, including seeking global markets and possibly production on
foreign soil.
What is the 'Global Marketing' stage? - CORRECT ANSWER The firm views the world as one
market, segmenting based on global factors rather than national borders.
What was the impact of the Great Depression on world trade in the first half of the 20th century? -
CORRECT ANSWER It disrupted world trade and led to the U.S. Smoot-Hawley Act, which
raised tariffs and provoked retaliation from other countries.
How did the U.S. contribute to world trade after WWII? - CORRECT ANSWER By spreading
capitalism through initiatives like the Marshall Plan and establishing trade agreements such as GATT
and WTO.
, What is the Balance of Payments? - CORRECT ANSWER A system of accounts that records a
nation's international financial transactions, which must always be in balance.
What does the Current Account in the Balance of Payments record? - CORRECT
ANSWER Exports, imports, services, and funds; it is the most important account for
international business.
What does the Capital Account in the Balance of Payments record? - CORRECT
ANSWER Investments and short-term capital.
What does the Capital Account record? - CORRECT ANSWER Investments and short-term
capital.
What does the Reserves Account include? - CORRECT ANSWER Gold, foreign exchange, and
liabilities.
What is a trade surplus? - CORRECT ANSWER When a country sells more goods/services than
it buys.
What is a trade deficit? - CORRECT ANSWER When a country buys more goods/services than
it sells.
What can a persistent trade deficit lead to? - CORRECT ANSWER A decline in a country's
currency value, making imports more expensive and exports cheaper.
What is protectionism? - CORRECT ANSWER Attempts by a country to inhibit the entry of
foreign products/services by imposing trade barriers.
Name one argument for protectionism. - CORRECT ANSWER Protection of the home market.
What is the economic impact of protectionism on U.S. consumers? - CORRECT ANSWER It
costs about $70 billion per year in higher prices.
