WGU D080 Managing in a Global Business Environment Exam Questions With Complete Solutions Graded A+

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 - Cultural training What happens to consumer surplus when tariffs and quotas are discontinued? - They increase Which type of tariff is put in place to specifically ensure that domestic industries are given an advantage? - Protective What is a benefit of implementing a system of free trade? - Reduced tariffs would result in lower costs of imported raw materials. How are free trade agreements handled differently than treaties in the United States? - 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. - 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. - 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? - Trade surplus Country A has been criticized by other countries for giving generous tax credits to its corn farmers, which in turn, enables the country's farmers to sell corn on the international markets cheaper than all other countries. Which term is used by other countries to describe this practice? - Government subsidies A farmer knows that it takes 100 hours of labor to produce 100 bushels of corn. It only takes 50 hours of labor to produce 100 bushels of soy. Currently, a bushel of corn is selling at three times a bushel of soy. Which type of cost should the farmer use to determine what to plant? - Opportunity A country produces goods more efficiently than all other countries in the same industry. Which type of advantage does this country have? - Absolute Country A exports farming equipment to Country B, while Country B exports car manufacturing equipment to Country A. Both countries are highly developed and could develop these industries separately but instead made the decision to export and import these products from each other. Which unique condition caused this practice between the two countries? - Skill specialization A company produces the same product over and over, and it has caused the manufacturing cost of the product to become cheaper and more competitive in international markets than similar products in the industry. Which approach is this company using to achieve this ability? - Economies of scale A country with a new economy implemented trade protectionism in relation to countries with more developed economies. Why did the country take this action? - To restrict international economic trade How do anti dumping laws protect a domestic market? - They prevent foreign companies from selling goods and services at or below cost. How do Congress and the Department of Agriculture use quotas to their advantage? - To increase domestic prices to specific levels to make products profitable Which strategy should a government use to offset the cost of manufacturing domestically? - Subsidies Which type of globalization refers to the international movement of goods, capital, and services? - Economic 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? - 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? - 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? - Cost 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? - Infrastructure Which argument is used by critics who wish to discourage movement towards globalization? - It increases the wealth of the rich rather than the poor Anarchism - Individuals control political activities, and the government has no control over these activities Totalitarianism - A centralized government creates oppressive policies based on ideas from powerful leadership. Direct democracy - The government provides a method of voting for the people of a country, not for elected officials. What is a free trade zone? - A geographic region in which a county will reduce restrictions that might prevent or reduce trade Which term describes a government giving a tax break to a producer to increase their global competitiveness? - Subsidies Industrialized - Prevalent formation of new markets with possibility of saturation Less-developed - Focus on agriculture and raw materials with limited imports Developing country - Growing population which leads to long-term growth potential. Which type of economy is decentralized and allows firms and households to participate in global trade with minimum governmental interference? - Market What type of economy is centered on families or tribes where little to no global trade is practiced? - Traditional Socialism - a system in which the government owns and operates a country's means of production Capitalism - A system in which the means of production is controlled by private owners who can choose to participate in global trade. Communism - A system in which all property is publicly owned and the government controls global trade. Which type of law system is based on a code and focuses on how the law is applied to the facts? - Civil Which law is based on tradition and precedent given that judicial rulings can stand as precedents for future cases? - Common Which law system can vary from community to community and is found in countries without strong formal justice systems? - Customary In which law system does a judge decide the applicable law for the case as a jury determines the facts? - Common Which activity of the International Monetary Fund (IMF) impacts policy making? - Being owned and directed by the governments of the member nations What is a characteristic of the International Monetary Fund (IMF)? - The IMF is a cooperative institution and provides more effective currency exchange. What was the initial purpose of the International Monetary Fund (IMF) in phase one, prior to 1973? - Regulated currency exchange between nations How does the International Monetary Fund (IMF) impact international organizations and governments? - It reduces funding for social programs. What is a common name for the International Bank for Reconstruction and Development? - World Bank What was the first loan that the World Bank made after the end of World War II? - To France to rebuild its infrastructure Which criticism is associated with the World Bank? - The developed countries of U.S. and Europe have too much control over its decisions. Which criticism is made about the World Bank? - It does not consider how funding projects will affect the environment. What was one of the results of the Uruguay Round of the World Trade Organization negotiations? - Decrease in tariffs Which organization was formed after World War II to encourage international commerce? - World Trade Organization Which criticism is made about the World Trade Organization (WTO)? - It protects developed countries more than developing countries. Which strategic network was established to work towards decreasing tariff rates and protecting commerce and intellectual property globally? - World Trade Organization (WTO) Which aspect of the International Monetary Fund (IMF) will assist the newly elected leader in paying the deficit in U.S. dollars, if agreed on by both countries? - The IMF provides a means for effective currency exchange between countries. Which strategy is used by governments to limit the foreign direct investment in a country? - Creating foreign ownership restrictions in the country Which activity is considered a foreign direct investment (FDI) by a multinational corporation? - Setting up manufacturing plants in the host country Company A is located outside the home country of Company B. Company B has acquired Company A with the intent of controlling and managing Company A's assets. Which practice is being used by Company B? - Foreign direct investment Why does a company engage in foreign direct investment? - The company wants to control organizational assets in another country. What is a benefit of foreign direct investment? - The inflow of capital benefits global and local economies What is a potential disadvantage of foreign direct investment from a host government's perspective? - The host country's natural resources may be depleted. What is a reason for companies to engage in foreign direct investments? - To take advantage of tax exemptions offered by the host country Which country characteristic is most important to foreign direct investors according to a study by the World Bank? - Political stability and security How does the existence of a multinational corporation (MNC) affect a country's engagement in political conflict? - It would make countries less likely to go to war. What is an accurate characterization of the relationships between multinational corporations (MNCs) and the host country governments in which they operate? - The relationships are mixed because MNCs can cause, but also solve, problems for the host country. What is a potential influence of the existence of multinational corporation (MNC) on international relations? - Improves relations between countries where the MNC operates What is the result of the existence of multinational businesses? - Economic integration among countries Which level of economic integration presents an alliance of all policies by a common organization? - Political union Which level of economic integration is formed when trade barriers are removed between member countries but there is no mutual policy on trading with nonmember countries? - Free trade area Which level of economic integration permits the formation of economically integrated exchanges of goods and services between parties from member countries? - Common market Which economic integration stage offers economic collaboration by removing trade barriers between member countries and establishing a mutual trading policy with nonmembers? - Customs union Which drawback is involved when regional agreements are created? - Member countries will trade less with nonmember countries. What is a benefit of creating a regional economic integration agreement? - Improved financial growth What is an advantage of regional economic integration? - Flexibility on labor movement develops job opportunities. What is a disadvantage of regional economic integration? - The exclusion of external countries reduces global free trade. Which agreement was created in 1981 among Arab states, to expand trade, economic growth, and development and to promote social welfare, peace, and stability? - GCC Which agreement was formalized in 1993 to create a political and economic union to help a large group of countries cooperate and coordinate key aspects of their economic policy? - EU Which agreement was implemented in 1994 and helped form a free-trade zone between Canada, the United States, and Mexico by decreasing tariffs and trade barriers? - NAFTA Which agreement was established in 1988 and now has both political and economic goals to keep peace and stimulates economic growth in South American countries? - MERCOSUR Which economic actor benefits as the U.S. dollar weakens? - A U.S. investor abroad Which economic actor benefits as the U.S. dollar strengthens? - A foreign firm exporting to the U.S. Which exchange rate regime allows a currency's value to fluctuate according to the foreign exchange market? - Floating Which economic actors are suppliers of U.S. dollars? - Foreign firms exporting to the U.S How is global business positively affected by intercultural exchange? - It increases worldwide connections that support commodity trading. How does globalization support tolerance for different people and ideas? - By increasing the access to information A business has recently started selling in a new global marketplace. Shortly after the company made this global expansion, the new country opted to implement ad valorem tariffs. How will this change affect the company? - It will levy a variable tax based on the value of goods imported. Which business component does the TRIPS agreement help protect for member nations? - Intellectual property protection for all member nations A business, operating globally, wants to increase its overall productivity. Which strategy should the business use? - Increase process technology Which international activity allows a nation, such as Singapore, to create a sustainable economy without the abundance of natural resources? - Foreign direct investment Countries A, B, and C have a trade agreement. Country C imposes high tariffs on all raw materials imported from Country A, and Country B imposes a lower tax on the same raw materials. These raw materials are unique to Countries B and C and essential to Country A. What is the effect of this set of actions on these countries? - Country A will do more business with Country B. What is enhanced when creating regional trade agreements? - Economic opportunity A farmers market has many vendors and consumers who all sell and buy the same produce at the same price. Which type of market is represented? - Pure competition A sole, national telephone company was found violating antitrust laws and was forced to separate into regional companies. What caused the violation of the antitrust laws? - Reduced competition Which issue was the main purpose of the creation of the European Union? - Natural resources Many countries from several geographic regions are accused of dumping steel into the U.S. market at unfairly low prices. Which entity can the United States appeal to in order to correct this apparent market manipulation? - World Trade Organization Which of these agreements or treaties was to combat increased temperatures of global climate change? Versailles Paris Antarctic Maastricht - Paris Which governmental entity was created to provide regulatory authority regarding pollution by industry? - Environmental Protection Agency Which type of duty is required to take care of the collective environment across the nation? Shared Assigned Customs Individual - Shared What makes the enforcement of United Nations Environmental Program regulations difficult? Sovereign rights of nations Peacekeeping missions of nations World Food Program distributions Pure competitive markets - Sovereign rights of nations Which action is used by companies wishing to avoid working with vendors who use sweatshops? Sending a whistle blower to the job sites to ensure the vendor practices safe working conditions Allowing vendor practices to be flagged by nongovernmental organizations such as the National Labor Committee Establishing national child labor laws and requiring vendors to comply with them Developing and imposing a company internal code of conduct for vendor labor practices - developing and imposing a company internal code of conduct for vendor labor practices A major footwear brand company is contracting the manufacturing of its products to a contractor's manufacturing plant overseas. The footwear company has been accused of turning a blind eye to sweatshop practices at other overseas contract locations before. How should the footwear company ensure that the contractor will comply with the standards set forth in the code of conduct that explicitly prohibit this practice? - Require that the factories be available for inspections What did the Worst Forms of Child Labor Convention, 1999 define? - The age at which a person becomes an adult Which convention protects decent working hours for a cruise ship director who travels in international waters? Equal Remuneration Convention Forced Labor Convention Maritime Labor Convention, 2006 Domestic Workers Convention, 2011 - Maritime Labor Convention, 2006 Which result occurs when a legally enforceable contract between two businesses from different countries is broken? - The party who has been affected can seek damages. Which two primary sources of law govern contracts in the United States? - The common law and the Uniform Commercial Code How is contract law structured as it applies to global business among nations? - Horizontal Which condition is part of a contract between international companies that are based in different nations? - A choice of law clause Which laws must a U.S. company follow when engaging in business with other countries? The host country's, but not the United States' laws Both the United States and the host country's laws The United States, but not the host country's laws The business chooses which laws to adopt - Both the United States and the host country's laws Which law allows organizations damaged by an oil spill to ask for compensation and file a civil lawsuit? Safe Drinking Water Act Petroleum Sector Refinery Rule Clean Water Act Oil Pollution Act - Oil Pollution Act Which type of laws deals with the rules for securing and enforcing legal rights to inventions, designs, and artistic works? Intellectual property Personal property International property Real property - Intellectual property Which type of intellectual property law protects a company's brand? Trade secret Trademark Patent Copyright - Trademark How does the Sarbanes-Oxley Act (SOX) attempt to increase the public's trust in American companies? By enforcing companies' compliance with a dual listing on the U.S exchange By requiring public companies to have and reveal a code of business conduct and ethics By refusing to protect persons who report behaviors that are illegal or unethical in a public company By strengthening disclosure of insider transactions and permitting loans to executives - By requiring public companies to have and reveal a code of business conduct and ethics Which act affects the global business landscape by clarifying auditor independence issues, accountability of senior executives, disclosure of insider trading, and intellectual property rights? Federal Trade Commission Act Sarbanes-Oxley Act National Environmental Policy Act Sherman Antitrust Act - Sarbanes-Oxley Act Which intellectual property right describes a chemical company's filing on their innovative industrial process invention? Patent Trademark Service mark Copyright - Patent Which organization aims to develop a global intellectual property infrastructure? WRC WIPO WTO TRIPS - WIPO World Intellectual Property Organization An accountant for a transnational company feels pressure from senior management to hide losses from the firm's operational activities. The requested action is legal but certainly does not give an accurate financial picture of the firm's current finances and could influence foreign investment. What type of stimulus is being used in regards to this company's organizational ethics? External Internal Technical Political - Internal What does business ethics implicitly regulate? Employee behavior External stakeholders Consumer preference Consumer action - Employee behavior A company sells products that many have reported on social media to be culturally insensitive, and sales have decreased significantly since the negative publicity began. How are consumers responding to the publicity? By focusing on supply chain By voting with their purchases By notifying government agencies By considering sustainability - By voting with their purchases A global buyer reviews a company's ethical profile and the social responsibility section of its annual report. Understanding that the company's values match the buyer's principles, the buyer purchases the company's products. Which action did the buyer perform regarding the purchase of the company's products? The buyer used organizational ethics. The buyer practiced shareholder activism. The buyer used personal ethics. The buyer practiced ethical consumerism. - The buyer practiced ethical consumerism. A company is reviewing how ethical consumerism is being addressed in the organization. It is hoping to improve its awareness of this factor and how it will influence future business decisions. How does this factor affect business decisions? Companies must remember that their consumers may care about more than just the final product. Companies that hide their production methods can avoid negative impacts of ethical consumerism. Companies that make good financial decisions will be perceived well by the public. Companies must consider the age of the intended audience for a product. - Companies must remember that their consumers may care about more than just the final product. A company that released a new vehicle marketed as being environmentally friendly is found to have cheated when testing the vehicle's total emissions. The company would like to repair damage from the negative publicity by changing its image and catering more to ethical consumers. Which action should the company take to reach this goal? Hire a new leader to send the message that practices have changed Retest the vehicles using its own test environment and protocols Market the original product strongly so ethical consumers receive the information Ask political supporters to modify the environmental emission regulations - Hire a new leader to send the message that practices have changed A business has experienced significant internal and external events, and the owner decides to respond effectively while maintaining the rules of behavior the company has always vocalized as being appropriate. Which component has guided this owner's response? Organizational ethics Ethical conundrum Personal ethics Ethical standardization - Organizational ethics A coffee company received international criticism for an employee negatively responding towards a customer. The response was said to be racially motivated. The company needs to take swift action to improve how all employees in the organization are viewed by ethical consumers. Which course of action should the company take to meet this goal? Fire the worker's supervising manager Give the person affected company gift cards Have employees attend sensitivity training Show instances of employees helping that population - Have employees attend sensitivity training Which term describes the normative beliefs and practices passed from generation to generation that help define a group of people? Office norms Legal norms Cultural norms Graft norms - Cultural norms An American salesperson is attempting to do business in a Middle Eastern country. What is one of the major cultural issues the salesperson needs to understand about this part of the world? It is more relationship-based than the United States. It is more rules-based than the United States. Individualistic culture is stronger in the Middle East than in the United States. Secular culture is stronger in the Middle East than in the United States. - It is more relationship-based than the United States. How can the corruption perceptions index (CPI) be used to understand international business ethics? It identifies nations in which corruption is frequent. It describes the global rules of trade between countries. It provides practical tools to build ethical integrity. It establishes a unified economic and monetary system. - It identifies nations in which corruption is frequent. A global company has warned managers that the country involved in their current business venture typically expects small payments to be made to government officials to expedite decisions and transactions. The company has encouraged managers to avoid this type of unethical practice. Which form of activity is the company concerned about? Unfair competition Grease payments Trade policies Oil payments - Grease payments Which unethical act is addressed by the U.S. Foreign Corrupt Practices Act of 1977? Cronyism Nepotism Bribery Favoritism - Bribery A large corporation deceived regulators with fake holdings and cheated shareholders out of massive amounts of money. Which unethical practice was used by the corporation? Kickback Bribery Securities fraud Insider trading - Securities fraud The British East India Company used expansionist policies to gain profits in the East Indies by collecting unreasonable taxes from Indians. Which unethical practice was used by this company? Creating fake assets Hiding debt from investors Stealing from the people they ruled Colluding to commit finance fraud - Stealing from the people they ruled A large, publicly traded telecommunications company falsified its earnings report and hid debt. Which unethical practice did the company engage in? Bribery Insider trading Kickback Fraudulent accounting - Fraudulent accounting What is the purpose of internal controls? To ensure irregularities of a system's performance To establish procedures for manufacturing operations To create processes for credentialing accounting staff To create redundancies in a system to ensure it functions properly - To create redundancies in a system to ensure it functions properly How should a company ensure that internal controls are effectively implemented? By performing due diligence with procedures By providing financial data to shareholders By creating systems that are new to the company By simplifying procedures in accounting - By performing due diligence with procedures Which outcome is a result of a company ensuring that shrinkage is reported in accounting? Mismanagement of inventory Customer trust decreased Perishable goods going unrecorded Petty theft being reduced - Petty theft being reduced A company requires one employee to be responsible for maintaining a machine. Another employee is responsible for maintaining accounting records for that machine. Which internal control has the company implemented? Managing inventory Reviewing cash flows Accounting for shrinkage Segregating duties - Segregating duties A cruise ship employs over 200 workers over the course of 18 years. One worker describes terrible living conditions and the limited amount of food that employees are given to eat. Which labor convention is being violated by the employer? Domestic Workers Geneva The Maritime Labour Worst Forms of Child Labour - The Maritime Labour What does Article 2 of the Uniform Commercial Code (UCC) govern? The required conduct of the initiator of a contract The standards for the performance of business activities The required conduct of both parties in accordance with the contract The standards for the countries from which the two businesses originate - The required conduct of both parties in accordance with the contract A company is concerned about source code theft of digital property. The company is reviewing a law that governs this behavior. Which law is being reviewed by this company? - Intellectual property An employee at the U.S. Patent and Trademark Office was casually talking to a friend who worked at Company XYZ. The patent office employee mentioned that a pending patent application for Company XYZ was about to be denied, and the decision would become public in a few days. The public release of the report was likely to result in a severe reduction in the stock price of the company. The friend who worked at Company XYZ then placed an online trade transaction to sell all shares of stock they owned in Company XYZ the next day. Which specific law passed by the U.S. Congress did the Company XYZ employee violate? - Sarbanes-Oxley Act (SOX) Which legislation is aimed at increasing ethical financial transparency in corporate America and affects foreign businesses that want to be listed on a U.S. stock exchange? SOX FCPA FTCA NAFTA - SOX An American employee is working in a Chinese firm in China and notices an ethical violation. The employee tells a colleague, who is Chinese, and the colleague advises the American employee to save face. What does the Chinese colleague mean by this advice? Confront the people who are responsible since they could retaliate Make sure that everyone knows the person who discovered the ethical violation Ensure that the supervisor is aware of the situation to avoid being personally accused Report only if directly asked if a violation occurred - Report only if directly asked if a violation occurred During a training session, the employees are asked to identify irregularities. Which activity should be identified? An employee siphoning funds from the office account An employee taking home office supplies for personal use A data entry technician unintentionally entering incorrect data A grocery store employee forgetting to report rotting produce - An employee siphoning funds from the office account What is the term for the concept that people should purchase goods and services from organizations that match their own values and beliefs? - Ethical purchasing Which action of an organization would change consumer perceptions of the organization's ethical standards? Remedy negative events immediately with change Hold a town hall meeting to discuss events Provide free products to everyone Defend the organization's actions - Remedy negative events immediately with change An employee at the U.S. Patent and Trademark Office was casually talking to a friend who worked at Company XYZ. The patent office employee mentioned that a pending patent application for Company XYZ was about to be denied, and the decision would become public in a few days. The public release of the report was likely to result in a severe reduction in the stock price of the company. The friend who worked at Company XYZ then placed an online trade transaction to sell all shares of stock they owned in Company XYZ the next day. Which specific law passed by the U.S. Congress did the Company XYZ employee violate? Sarbanes-Oxley Act (SOX) Foreign Corrupt Practices Act (FCPA) North American Free Trade Agreement (NAFTA) Freedom of Information Act (FOIA) - Sarbanes-Oxley Act (SOX)