IBA FINAL EXAM QUESTIONS & ANSWERS
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? - Answer -Small enterprise
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?
- Answer -Language facilitates communication and sheds light on people's value
systems.
When companies systematically engage in increasing the international dimension of
their business activities it is known as ________ - Answer -Internationalization
Why would firms internationalize to earn higher margins and profits? - Answer -Market
growth in mature countries is often flat, and foreign markets may be underserved.
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? - Answer -It demonstrates social responsibility and good environmental
practices.
Which type of investment is the passive ownership of foreign securities for the purpose
of generating financial returns? - Answer -International portfolio investment
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
________. - Answer -better serving clients that have moved into foreign markets
Companies primarily internationalize for the purpose of ________. - Answer -Gaining a
competitive advantage
What is the LEAST likely motive for international expansion? - Answer -Learning about
a new culture
Which of the following would be a cross-cultural risk in internationalization? - Answer -
Different languages
A focal firm is a company that ________. - Answer -initiates international business
transactions
Faced with declining sales in the U.S, what strategy has Harley Davidson adopted? -
Answer -A focus on foreign markets
,Education and healthcare are two examples of _________ in international business. -
Answer -Nongovernmental organizations
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 international business, and what type of risk
is he taking? - Answer -To gain access to less costly factors of production; commercial
risk
A macro trend of intense economic interconnectedness among the nations of the world
is called ________. - Answer -Globalization
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? - Answer -Country risk
A business student in Texas is considering learning a foreign language. Why might she
benefit from studying a language such as Russian or Chinese? - Answer -Both Russia
and China feature fast-growing economies.
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
likely agree? - Answer -To develop a network of people and increase business in the
future
Which of the following is NOT a reason to study international business? - Answer -
Global markets are decreasing
________refers to the performance of trade and investment activities by firms across
national borders. - Answer -International business
________ include businesses, institutions, and governments. - Answer -Organizational
buyers
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? - Answer -Country 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? - Answer -Foreign direct investment
Which of the following is a critical employability skill? - Answer -Cultural awareness
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 ________. -
Answer -born global firm
Which of the following is NOT an economic integration bloc? - Answer -World Trade
Organization (WTO)
What is one reason companies use social media such as Snapchat and Twitter? -
Answer -To communicate with connected individuals in new markets
In South Carolina, Jackson Mills, a longstanding textile plant, shut down and thousands
of workers lost their jobs. Jackson Mills learned that it could source textiles of equal
quality at a lower price from suppliers in Asia. This is an example of ________. -
Answer -relocating value-adding activities to achieve cost advantages
In Africa, the majority of people live on less than $5 a day. According to the author of
the text, what is one of the most effective ways to reduce African poverty? - Answer -
Develop more business-based models of development
Why can many global products and services be standardized? - Answer -There is a
convergence of consumer lifestyles and preferences worldwide.
What is one of the most typical reason for locating value-chain activities abroad? -
Answer -To reduce the costs of R&D and production
There have been five phases of globalization since the 1800s. The most current phase
was triggered by ________. - Answer -the rise of digital technologies
________ have opened up one-third of the world to increased international trade,
including many Asian economies such as India and South Korea. - Answer -Free
market reforms
Globalization of services can be seen in the international expansion of ________. -
Answer -the banking, hospitality, and retailing industries
Advances in ________ have resulted in an expansion of the global marketplace for
small- and medium-sized enterprises (SMEs). - Answer -communication technologies
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? - Answer -Small enterprise
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?
- Answer -Language facilitates communication and sheds light on people's value
systems.
When companies systematically engage in increasing the international dimension of
their business activities it is known as ________ - Answer -Internationalization
Why would firms internationalize to earn higher margins and profits? - Answer -Market
growth in mature countries is often flat, and foreign markets may be underserved.
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? - Answer -It demonstrates social responsibility and good environmental
practices.
Which type of investment is the passive ownership of foreign securities for the purpose
of generating financial returns? - Answer -International portfolio investment
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
________. - Answer -better serving clients that have moved into foreign markets
Companies primarily internationalize for the purpose of ________. - Answer -Gaining a
competitive advantage
What is the LEAST likely motive for international expansion? - Answer -Learning about
a new culture
Which of the following would be a cross-cultural risk in internationalization? - Answer -
Different languages
A focal firm is a company that ________. - Answer -initiates international business
transactions
Faced with declining sales in the U.S, what strategy has Harley Davidson adopted? -
Answer -A focus on foreign markets
,Education and healthcare are two examples of _________ in international business. -
Answer -Nongovernmental organizations
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 international business, and what type of risk
is he taking? - Answer -To gain access to less costly factors of production; commercial
risk
A macro trend of intense economic interconnectedness among the nations of the world
is called ________. - Answer -Globalization
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? - Answer -Country risk
A business student in Texas is considering learning a foreign language. Why might she
benefit from studying a language such as Russian or Chinese? - Answer -Both Russia
and China feature fast-growing economies.
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
likely agree? - Answer -To develop a network of people and increase business in the
future
Which of the following is NOT a reason to study international business? - Answer -
Global markets are decreasing
________refers to the performance of trade and investment activities by firms across
national borders. - Answer -International business
________ include businesses, institutions, and governments. - Answer -Organizational
buyers
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? - Answer -Country 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? - Answer -Foreign direct investment
Which of the following is a critical employability skill? - Answer -Cultural awareness
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 ________. -
Answer -born global firm
Which of the following is NOT an economic integration bloc? - Answer -World Trade
Organization (WTO)
What is one reason companies use social media such as Snapchat and Twitter? -
Answer -To communicate with connected individuals in new markets
In South Carolina, Jackson Mills, a longstanding textile plant, shut down and thousands
of workers lost their jobs. Jackson Mills learned that it could source textiles of equal
quality at a lower price from suppliers in Asia. This is an example of ________. -
Answer -relocating value-adding activities to achieve cost advantages
In Africa, the majority of people live on less than $5 a day. According to the author of
the text, what is one of the most effective ways to reduce African poverty? - Answer -
Develop more business-based models of development
Why can many global products and services be standardized? - Answer -There is a
convergence of consumer lifestyles and preferences worldwide.
What is one of the most typical reason for locating value-chain activities abroad? -
Answer -To reduce the costs of R&D and production
There have been five phases of globalization since the 1800s. The most current phase
was triggered by ________. - Answer -the rise of digital technologies
________ have opened up one-third of the world to increased international trade,
including many Asian economies such as India and South Korea. - Answer -Free
market reforms
Globalization of services can be seen in the international expansion of ________. -
Answer -the banking, hospitality, and retailing industries
Advances in ________ have resulted in an expansion of the global marketplace for
small- and medium-sized enterprises (SMEs). - Answer -communication technologies
