International Management Culture, Strategy, and Behavior Luthans 9th Edition Test Bank

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Chapter 01
Globalization and International Linkages

True / False Questions

1. Despite claims by Facebook, social media has not significantly connected people across the globe.

True False

2. The process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural environments is called international management.

True False

3. Multinational corporations can be defined as firms having operations in more than one country, international sales, and a nationality mix of nationalities among managers and owners.

True False

4. Internationalization is the vision of creating one world unit, a single market entity.

True False

5. Nongovernmental organizations believe that everyone benefits from globalization, as evidenced in lower prices, greater availability of goods, better jobs and access to technology.

True False

6. Procter & Gamble (P&G) has strategically leveraged social media to improve its long-term brand image.

True False

7. Marketers must be responsive to social networks.

True False

8. NAFTA is a free trade agreement among the United States, Canada, and Mexico that has in essence removed all barriers to trade and investment among the three nations.

True False

9. NAFTA is better integrated as a single market than the EU or the allied Asian countries.

True False

10. The countries of the Association of Southeast Asian nations are challenging China’s position as destinations for low-cost production and export.

True False

11. Foreign direct investment fell dramatically over the last decade in most regions of the world.

True False

12. United States multinationals have more foreign direct investment in Germany than any other country.

True False

13. In recent years, Canadian firms have begun investing heavily in the United States.

True False

14. Mexico believes that the United States is its most important market and that little effort should go into expanding trade with Europe and Asia at least for now.

True False

15. One of the ways that Russia is attempting to get its economy going is by removing many administered prices and subsidies and letting free market forces take over.

True False

16. The ultimate objective of the EU is to eliminate all trade barriers among member countries.

True False

17. Like most South American economies, Brazil’s economy is faced with grave economic problems. Its GDP through 2011 continued to fall, and inflation and unemployment increased.

True False

18. The report of the Goldman Sachs global economics team estimated that the economies of the four BRIC nations will surpass the collective economies of the G7 nations by 2032.

True False

19. As a result of some continuing problems, the international business climate in Poland has not done well.

True False

20. Emerging markets are developing economies that exhibit sustained economic reform and growth.

True False

Multiple Choice Questions

21. Which form of social media is not known for significantly changing how consumers search for products and services?

A. Linkdin

B. Epicurious

C. Facebook

D. Twitter

22. Which of the following statements about social media is untrue?

A. Social networks have rapidly diffused from the United States and Europe to every region of the world.

B. Social media networks have accelerated technological integration among the nations of the world.

C. Social media such as Facebook are powerful, but they cannot leverage networks to achieve greater success.

D. Social networks serve as inexpensive, effective means of marketing directly to businesses’ target audiences.

23. The process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural environments is:

A. Strategic management

B. Internationalization

C. Globalization

D. International management

24. To qualify as a multinational corporation, a firm must meet all of the following criteria except:

A. Operations in more than one country

B. International sales

C. A nationality mix of managers and owners

D. Sales of at least one million dollars per year

25. Globalization:

A. Is the growth of interstate trade, spurred on by the progress toward free-market policies

B. Is the subcontracting of activities to endogenous organizations that had previously been performed within the firm

C. Is the process of social, political, economic, cultural, and technological integration among countries around the world

D. Is the process of a business crossing national and cultural borders

26. Identify the statement that is false of globalization.

A. It can be defined as the process of social, political, economic, cultural, and technological integration among countries around the world

B. It is the process of a business crossing national and cultural borders

C. Evidence of globalization can be seen in increased levels of trade, capital flows, and migration

D. It has been facilitated by technological advances in transnational communications, transport, and travel

27. The subcontracting or contracting out of activities to external organizations that had previously been performed by the firm is called:

A. Homesourcing

B. Insourcing

C. Offshoring

D. Outsourcing

28. The process by which companies undertake some activities at offshore locations instead of in their countries of origin is:

A. Homesourcing

B. Insourcing

C. Offshoring

D. Globalization

29. Antiglobalization activists:

A. Contend that even within the developing world, it is protectionist policies, not trade and investment liberalization, that result in environmental and social damage

B. Believe globalization will force higher-polluting countries such as China and Russia into an integrated global community that takes responsible measures to protect the environment

C. Assert that if corporations are free to locate anywhere in the world, the world’s poorest countries will relax or eliminate environmental standards and social services in order to attract first-world investment and the jobs and wealth that come with it

D. Believe that industrialization will create wealth that will enable new industries to employ more modern, environmentally friendly technology

30. The global organization of countries that oversees rules and regulations for international trade and investment, including agriculture, intellectual property, services, competition and subsidies is the:

A. WTO

B. NAFTA

C. WIPO

D. ITO

31. A free-trade agreement among the United States, Canada, and Mexico that has removed most barriers to trade and investment is:

A. AFTA

B. CEFTA

C. CAFTA

D. NAFTA

32. The World Trade Organization (WTO) meeting in Cancún in September of 2003 was led by:

A. India and Brazil

B. The U.S. and Japan

C. The U.K. and France

D. EU members

33. The World Trade Organization (WTO) meeting in Doha in November of 2001 was referred to as:

A. The “Annecy Round”

B. The “Development Round”

C. The “Tokyo Round”

D. The “Torquay Round”

34. The United States, Canada and Mexico make up the _____, which in essence has removed all barriers to trade between these countries and created a huge North American market.

A. General Agreement on Tariffs and Trade

B. North American Common Market

C. North American Free Trade Agreement

D. North American Trade Union

35. Agreements like NAFTA and CAFTA:

A. Not only reduce barriers to trade but also require additional domestic legal and business reforms in developing nations to protect property rights

B. Do not include supplemental commitments on labor and the environment to encourage countries to upgrade their working conditions and environmental protections like the FTAA

C. Rely exclusively on MNCs exporting or setting up operations locally rather than buying out a domestic firm

D. Provide firms with enough security so they cannot go out of business, which simply encourages a lack of efficiency or incentive to monitor costs

36. The NAFTA agreement and the CAFTA-DR agreement are examples of:

A. Defunct bilateral agreements

B. Regional trade agreements

C. Plurilateral agreements

D. Proposed bilateral agreements

37. Due to the stalled progress with the WTO and FTAA, the United States has pursued _____ with a range of countries, including, Australia, Bahrain, Chile, Colombia, Israel, Jordan, Malaysia, Morocco, Oman, Panama, Peru, and Singapore.

A. Plurilateral trade agreements

B. Multilateral trade agreements

C. Bilateral trade agreements

D. Regional trade agreements

38. The Asian economic block, made up of Indonesia, Malaysia, the Philippines, Singapore, Brunei, Thailand, Cambodia, Myanmar, and Vietnam is referred to as:

A. Association of Southeast Asian Nations (ASEAN)

B. Southeast Asia Free Trade Agreement (SWAFTA)

C. Southeast Asia Common Market

D. Asian Economic Union

39. A method which adjusts GDP to account for different prices in countries is called:

A. Cumulative distribution function

B. Nominal GDP

C. Current currency exchange rate

D. Purchasing power parity

40. The following are characteristics of the BRIC economies except:

A. Demand for higher priced goods is expected to continue to be low in the future

B. The BRIC economies share of world growth is expected to rise to about 40 percent by 2025

C. Per capita income in the BRIC countries is rising

D. Demand for basic goods will be strong

41. The Goldman Sachs global economics team:

A. Estimates that Chile will occupy a dominant role in the global economic system and will surpass the United States in output by 2035

B. Reports that the economic potential of Brazil, Russia, India, and China is such that they may constitute four of the top five most dominant economies by the year 2050

C. Estimates that the BRIC economies’ share of world growth could rise from 40 percent in 2000 to more than 70 percent in 2025

D. Reports that Germany, followed by India a decade later, will overtake the United States as the world’s largest car market

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