IBA 350 FINAL EXAM QUESTIONS AND ANSWERS
Which of the following would be a cross-cultural risk in internationalization? - Answers
:Different languages
A business student in Texas is considering learning a foreign language. Why might she
benefit from studying a language such as Russian or Chinese? - Answers :Both Russia
and China feature fast-growing economies
Pioneer Systems is a young entrepreneurial company that has engaged in international
business from the day it opened its doors. Pioneer is categorized as a ________. -
Answers :born global firm
Starbucks sells coffee from a nonprofit organization that promotes the interests of the
coffee growers. Why is this example important to you as a student of international
business? - Answers :it demonstrates social responsibility and good environmental
practices
Education and healthcare are two examples of _________ in international business. -
Answers :nongovernmental organizations
If a firm is operating in a foreign country, what type of risk does it face from the country's
political, legal, and economic environment? - Answers :country risk
What is the LEAST likely motive for international expansion? - Answers :learning about
a new culture
________ include businesses, institutions, and governments. - Answers :organizational
buyers
In international business, cross-cultural risk can come from differences in language and
culture. Which statement best explains why language is an important aspect of culture?
- Answers :language facilitates communication and sheds light on peoples value
systems
India is entering the global age and has a growing middle class. An Indian car
manufacturer wants to offer a car for the average citizen of India, but does not have the
technology available to create an inexpensive car that meets the laws that the Indian
government is considering imposing. The company sets out to find a U.S. hybrid and
electric car manufacturer that is willing to work with them. Why would a U.S. firm most
likelyagree? - Answers :to develop a network of people and increase businesses in the
future
Why would firms internationalize to earn higher margins and profits? - Answers :market
growth in mature countries is often flat, and foreign markets may be underserved
,A U.S. mining operation opens a mine in Canada. The owner knows that it is easier and
less expensive to acquire mining equipment in the Klondike, an area of Canada, than
elsewhere. The owner of the mine goes to the Klondike and meets locals who offer to
partner with him. Why is this miner seeking internationalbusiness, and what type of risk
is he taking? - Answers :to gain access to less costly factors of production; commercial
risk
Carol wants to expand her recycled toy business abroad because demand for recycled
products is much higher in Europe and Asia than in the United States. She locates three
suppliers in Europe and three in Asia, and creates one factory in Germany and one in
Singapore. She seeks ways to advance her machinery to meet the needs of her
production as well as her eco-friendly business model. In what type of international
business has Carol engaged? - Answers :foreign direct investment
A focal firm is a company that ________. - Answers :initiates international business
transactions
Which of the following is a critical employability skill? - Answers :cultural awareness
Custom Cars, a painting and auto modification company, has expanded operations into
South America. The first problem Custom Cars encountered was determining the
applicable laws in the new country. Next, Custom Cars was informed by the local mayor
that the firm will be shut down if it does not prepay its taxes in cash. Which risk in
international business is Custom Cars encountering? - Answers :country risk
When companies systematically engage in increasing the international dimension of
their business activities it is known as ________. - Answers :internationalization
________refers to the performance of trade and investment activities by firms across
national borders. - Answers :international business
A macro trend of intense economic interconnectedness among the nations of the world
is called ________. - Answers :globalization
\When Nissan opened its first factory in the United Kingdom, many Japanese auto parts
suppliers followed, establishing their own operations there. This is an example of
________. - Answers :better serving clients that have moved into foreign markets
Which type of investment is the passive ownership of foreign securities for the purpose
of generating financialreturns? - Answers :international portfolio investment
Yemna, a recent business school graduate, loves adventure, so she is seeking a job in
a foreign country to expand her sense of the world of business. She is being recruited
by a company that has 50 employees and is looking to hire additional personnel to
oversee the firm's exporting branch in Vietnam. What type of international business is
recruiting Yemna? - Answers :small enterprise
, Which of the following is NOT a reason to study international business? - Answers
:global markets are decreasing
Faced with declining sales in the U.S, what strategy has Harley Davidson adopted? -
Answers :a focus on foreign markets
Companies primarily internationalize for the purpose of ________. - Answers :gaining a
competitive advantage
There have been five phases of globalization since the 1800s. The most current phase
was triggered by________. - Answers :the rise of digital technologies
________ refers to the gradual integration and growing interdependence of national
economies. - Answers :globalization of markets
Which of the following is a societal consequence of globalization? - Answers :offshoring
and the flight of jobs
________ is the sequence of value-adding activities performed to develop, produce,
market, and service a product. - Answers :a value chain
Which of the following is a likely cause of globalization? - Answers :many emerging
markets are now value-adding producers
Which of the following drivers of globalization has MOST helped change low-value-
adding commodity producers to competitive producers? - Answers :Industrialization,
economic development, and modernization
What is one reason why regional economic integration blocs have developed? -
Answers :decreased trade barriers
________ have opened up one-third of the world to increased international trade,
including many Asian economies such as India and South Korea. - Answers :free
market reforms
One of the tasks of the World Trade Organization (WTO) is to ________. - Answers
:facilitate a reduction in trade barriers
Advances in ________ have resulted in an expansion of the global marketplace for
small- and medium-sized enterprises (SMEs). - Answers :communication technologies
Nigeria's telecom infrastructure has increased telephone usage to over 30 million
cellular subscribers. What is the most likely benefit Nigeria will realize from adding
telephones? - Answers :Improved living standards
Which of the following would be a cross-cultural risk in internationalization? - Answers
:Different languages
A business student in Texas is considering learning a foreign language. Why might she
benefit from studying a language such as Russian or Chinese? - Answers :Both Russia
and China feature fast-growing economies
Pioneer Systems is a young entrepreneurial company that has engaged in international
business from the day it opened its doors. Pioneer is categorized as a ________. -
Answers :born global firm
Starbucks sells coffee from a nonprofit organization that promotes the interests of the
coffee growers. Why is this example important to you as a student of international
business? - Answers :it demonstrates social responsibility and good environmental
practices
Education and healthcare are two examples of _________ in international business. -
Answers :nongovernmental organizations
If a firm is operating in a foreign country, what type of risk does it face from the country's
political, legal, and economic environment? - Answers :country risk
What is the LEAST likely motive for international expansion? - Answers :learning about
a new culture
________ include businesses, institutions, and governments. - Answers :organizational
buyers
In international business, cross-cultural risk can come from differences in language and
culture. Which statement best explains why language is an important aspect of culture?
- Answers :language facilitates communication and sheds light on peoples value
systems
India is entering the global age and has a growing middle class. An Indian car
manufacturer wants to offer a car for the average citizen of India, but does not have the
technology available to create an inexpensive car that meets the laws that the Indian
government is considering imposing. The company sets out to find a U.S. hybrid and
electric car manufacturer that is willing to work with them. Why would a U.S. firm most
likelyagree? - Answers :to develop a network of people and increase businesses in the
future
Why would firms internationalize to earn higher margins and profits? - Answers :market
growth in mature countries is often flat, and foreign markets may be underserved
,A U.S. mining operation opens a mine in Canada. The owner knows that it is easier and
less expensive to acquire mining equipment in the Klondike, an area of Canada, than
elsewhere. The owner of the mine goes to the Klondike and meets locals who offer to
partner with him. Why is this miner seeking internationalbusiness, and what type of risk
is he taking? - Answers :to gain access to less costly factors of production; commercial
risk
Carol wants to expand her recycled toy business abroad because demand for recycled
products is much higher in Europe and Asia than in the United States. She locates three
suppliers in Europe and three in Asia, and creates one factory in Germany and one in
Singapore. She seeks ways to advance her machinery to meet the needs of her
production as well as her eco-friendly business model. In what type of international
business has Carol engaged? - Answers :foreign direct investment
A focal firm is a company that ________. - Answers :initiates international business
transactions
Which of the following is a critical employability skill? - Answers :cultural awareness
Custom Cars, a painting and auto modification company, has expanded operations into
South America. The first problem Custom Cars encountered was determining the
applicable laws in the new country. Next, Custom Cars was informed by the local mayor
that the firm will be shut down if it does not prepay its taxes in cash. Which risk in
international business is Custom Cars encountering? - Answers :country risk
When companies systematically engage in increasing the international dimension of
their business activities it is known as ________. - Answers :internationalization
________refers to the performance of trade and investment activities by firms across
national borders. - Answers :international business
A macro trend of intense economic interconnectedness among the nations of the world
is called ________. - Answers :globalization
\When Nissan opened its first factory in the United Kingdom, many Japanese auto parts
suppliers followed, establishing their own operations there. This is an example of
________. - Answers :better serving clients that have moved into foreign markets
Which type of investment is the passive ownership of foreign securities for the purpose
of generating financialreturns? - Answers :international portfolio investment
Yemna, a recent business school graduate, loves adventure, so she is seeking a job in
a foreign country to expand her sense of the world of business. She is being recruited
by a company that has 50 employees and is looking to hire additional personnel to
oversee the firm's exporting branch in Vietnam. What type of international business is
recruiting Yemna? - Answers :small enterprise
, Which of the following is NOT a reason to study international business? - Answers
:global markets are decreasing
Faced with declining sales in the U.S, what strategy has Harley Davidson adopted? -
Answers :a focus on foreign markets
Companies primarily internationalize for the purpose of ________. - Answers :gaining a
competitive advantage
There have been five phases of globalization since the 1800s. The most current phase
was triggered by________. - Answers :the rise of digital technologies
________ refers to the gradual integration and growing interdependence of national
economies. - Answers :globalization of markets
Which of the following is a societal consequence of globalization? - Answers :offshoring
and the flight of jobs
________ is the sequence of value-adding activities performed to develop, produce,
market, and service a product. - Answers :a value chain
Which of the following is a likely cause of globalization? - Answers :many emerging
markets are now value-adding producers
Which of the following drivers of globalization has MOST helped change low-value-
adding commodity producers to competitive producers? - Answers :Industrialization,
economic development, and modernization
What is one reason why regional economic integration blocs have developed? -
Answers :decreased trade barriers
________ have opened up one-third of the world to increased international trade,
including many Asian economies such as India and South Korea. - Answers :free
market reforms
One of the tasks of the World Trade Organization (WTO) is to ________. - Answers
:facilitate a reduction in trade barriers
Advances in ________ have resulted in an expansion of the global marketplace for
small- and medium-sized enterprises (SMEs). - Answers :communication technologies
Nigeria's telecom infrastructure has increased telephone usage to over 30 million
cellular subscribers. What is the most likely benefit Nigeria will realize from adding
telephones? - Answers :Improved living standards
