Title: Global Environment
Course: Demo 1

Q: A global economy is one where companies actively compete with businesses located:
- only in their county
- within their jurisdiction
- all around the world
A: all around the world

Q: International business includes the global exchange of:
- goods and services
- intellectual property
- contractual assets or liabilities
A: goods and services; intellectual property

Q: Globalization is driven by:
- advances in technologies that speed communication and transport
- competitive factors
- an agreement by governments around that globe that free exchange is preferable
A: advances in technologies that speed communication and transport; competitive factors

Q: If a company that produces and sells goods in an industrialized country moves production to a developing country, which of the following may happen?
- Job opportunities in the developing country may increase.
- Workers in the industrialized country may lose their jobs.
- Costs may increase in the industrialized country.
A: Job opportunities in the developing country may increase.; Workers in the industrialized country may lose their jobs.

Q: Which of the following are impacts of a company moving production from an industrialized country to a developing country?
- jobs are lost in the industrialized country as facilities and processes are relocated
- increased opportunities for employment are created in the developing company
- costs will increase in the industrialized country
A: jobs are lost in the industrialized country as facilities and processes are relocated; increased opportunities for employment are created in the developing company

Q: Costs of production are lower in developing countries because:
- wages are lower.
- workers do not have government and company benefits similar to those in industrialized countries.
- companies do not have to pay for raw materials to produce their goods.
A: wages are lower.; workers do not have government and company benefits similar to those in industrialized countries.

Q: Costs of production are higher in industrialized countries because:
- workers receive benefits from their employers such as health insurance
- companies may have to import raw materials required for production
- there are few regulations or laws protecting workers from unsafe working conditions
A: workers receive benefits from their employers such as health insurance; companies may have to import raw materials required for production

Q: Globalization provides:
- an unequivocally positive benefit to the global community
- an unequivocally damaging impact on the global community
- costs and benefits that must be weighed and managed carefully
A: costs and benefits that must be weighed and managed carefully

Q: A company acquires goods or products from another country and sells them in domestic markets. This is an example of:
- exporting
- transferring
- importing
A: importing

Q: Exports are an important source of what for many countries?
- marketing ventures
- corporate connections
- revenue
A: revenue

Q: In the video “Chinese Manufacturing for American Products,” what benefits does Mike Tomberlin cite for manufacturing cars in China?
- access to existing manufacturing infrastructure
- an ability to focus on the brand and channel/work flow
- lower wages for the workers
A: access to existing manufacturing infrastructure; an ability to focus on the brand and channel/work flow

Q: In the video “Chinese Manufacturing for American Products,” Mike Tomberlin manufactures its cars in China. What do his partners cite as important factors to manage due to this decision?
- the channel or workflow of the delivery process
- market perceptions of being one of the few auto manufacturers in China
- ensuring workers have technical skills to produce a quality product
A: ensuring workers have technical skills to produce a quality product

Q: A company produces goods or products locally and sells them in foreign markets. This is called:
- importing
- transferring
- exporting
A: exporting

Q: In international business, the balance of trade is the:
- value of the goods a country exports and the value of its margins.
- value of the goods a country imports and the value of its holdings.
- difference between the value of the goods a country exports and the value of the goods it imports.
A: difference between the value of the goods a country exports and the value of the goods it imports.

Q: In 2015, the fictional country Globopolus had $2.5 billion in imports and $2.7 billion in exports. Its balance of trade is:
- $200 million deficit
- $5.2 billion surplus
- $200 million surplus
A: $200 million surplus

Q: In 2015, the fictional country Sunshine Island had $1.8 billion in imports and $1.2 billion in exports. Its balance of trade is:
- $600 million surplus
- $3 billion surplus
- $600 million deficit
A: $600 million deficit

Q: Which of the following are included in the calculation of the balance of payments?
- foreign investment
- foreign aid
- goods exchanged
A: foreign investment; foreign aid

Q: A nation has an absolute advantage if:
- it is the only source of a product
- it can make more of a product using fewer resources than other countries
- it has a lower opportunity cost than other countries
A: it is the only source of a product; it can make more of a product using fewer resources than other countries

Q: If an organization can produce more of a product with fewer resources than anyone else it has a(n) ________.
- comparative advantage
- labor advantage
- absolute advantage
A: absolute advantage

Q: When determining which country has a comparative advantage in producing a good or service, one must consider:
- balance of trade
- balance of payments
- opportunity cost
A: opportunity cost

Q: Adam’s Apple Farm provides apples to the local markets in Hooverville. Betty’s Apple Farm also provides apples to the market. Adam has just reduced his labor force by 25% because he found a way to put wheels on the ladders of his workers. This smaller work force can now they can pick more apples per day than Betty’s workers. Adam’s Apple Farms has a(n):
- comparative advantage
- labor advantage
- absolute advantage
A: absolute advantage

Q: Rare earth minerals are used in the manufacture of electronic devices such as computers and cell phones. These minerals are exactly what their name implies “rare” and the vast majority of them are mined in China. When considering the mining of these minerals, China has a(n):
- comparative advantage.
- competitive advantage.
- absolute advantage.
A: absolute advantage.

Q: ________ is the value of choices not selected.
- Absolute cost
- Balance of payments
- Opportunity cost
A: Opportunity cost

Q: Liam has an opportunity to work on Friday night where he will make $60. Instead he chooses to go to a movie with his friends that costs $12, and he spends $6 on popcorn. The opportunity cost of the movie for Liam is:
- $18
- $42
- $60
A: $60

Q: Two countries, Shoeland and Podtopia, are participating in trade. Both countries are capable of making athletic shoes and digital music playing devices, but they are not equally effective at both. If Shoeland spends all its time on a single product, it can either produce 100 pairs of shoes or 5 digital music devices. If Podtopia spends all its time on a single product, it can produce either 150 pairs of shoes or 30 digital music devices. The table below shows reflects these production possibilities. What is Shoeland’s opportunity cost for producing one digital music device?

Product | Shoeland | Podtopia
Pair of Shoes | 100 | 150
Digital Music Devices | 5 | 30
- 10 pairs of shoes
- 100 pairs of shoes
- 20 pairs of shoes
A: 20 pairs of shoes

Q: Two countries, Shoeland and Podtopia, are participating in trade. Both countries are capable of making both athletic shoes and digital music playing devices, but they are not equally effective at both. If Shoeland spends all its time on a single product, it can either produce 100 pairs of shoes or 5 digital music devices. If Podtopia spends all its time on a single product, it can produce either 150 pairs of shoes or 30 digital music devices. The table below shows reflects these production possibilities. What is Podtopia’s opportunity cost for producing one digital music device?

Product | Shoeland | Podtopia
Pair of Shoes | 100 | 150
Digital Music Devices | 5 | 30
- 15 pairs of shoes
- 150 pairs of shoes
- 5 pairs of shoes
A: 5 pairs of shoes

Q: Two countries, Shoeland and Podtopia, are participating in trade. Both countries are capable of making both athletic shoes and digital music playing devices, but they are not equally effective at both. The table below shows what each country is capable of producing if all labor is focused on a single product. Which statement(s) below are correct?

Product | Shoeland | Podtopia
Pair of Shoes | 100 | 150
Digital Music Devices | 5 | 30
- Shoeland has an comparative advantage in both products
- Shoeland has an comparative advantage in shoes and Podtopia has an absolute advantage in digital music devices.
- Podtopia has an comparative advantage in both products
A: Podtopia has an comparative advantage in both products

Q: ________ is the language of international business.
- French
- Japanese
- English
A: English

Q: ________ is the system of shared beliefs, values, customs, and behaviors that govern the interactions of members of a society.
- Humanity
- Organization
- Culture
A: Culture

Q: Relying on translators and interpreters can put international businesspeople at a disadvantage because:
- it forces you to rely on other people’s interpretations of the messages you are getting, rather than making your own first-hand judgments
- it increases the likelihood of misreading the intentions of people you work with
- translators and interpreters generally cannot be trusted
A: it forces you to rely on other people’s interpretations of the messages you are getting, rather than making your own first-hand judgments; it increases the likelihood of misreading the intentions of people you work with

Q: In order to best navigate cultural differences in business, you should:
- invest in learning about the cultures in which you will do business
- treat each person as an individual
- use generalized cultural stereotypes to gain a broad understanding
A: invest in learning about the cultures in which you will do business; treat each person as an individual

Q: The Foreign Corrupt Practices Act:
- prohibits U.S. companies from paying bribes
- makes it difficult for U.S. companies to do business effectively in some countries
- prevents foreign companies from engaging in corrupt business practices
A: prohibits U.S. companies from paying bribes; makes it difficult for U.S. companies to do business effectively in some countries

Q: Even though English is the international language of business, language can present obstacles to effective international trade because:
- in many countries, only the best educated speak English, so it is still necessary to do business in the local language, especially for marketing purposes.
- it can be tricky to translate marketing messages so they are effective in the locally spoken language
- it is never desirable for an international company to attempt to do business in the local language
A: in many countries, only the best educated speak English, so it is still necessary to do business in the local language, especially for marketing purposes.; it can be tricky to translate marketing messages so they are effective in the locally spoken language

Q: When doing business in a high-context culture, which of the following activities would be particularly important?
- starting meetings promptly on time, every time
- avoiding conversations with business partners about their personal lives outside of business
- making an effort to get to know business partners as human beings, not just as businesspeople
A: making an effort to get to know business partners as human beings, not just as businesspeople

Q: If a country has a relatively low annual income per citizen:
- it is never an attractive place to do business because there is little opportunity to generate revenue from its people
- it is always an attractive place to do business because there is strong potential for growth
- it may be an attractive place to do business, depending on factors such as whether it has stable financial institutions and strong infrastructure
A: it may be an attractive place to do business, depending on factors such as whether it has stable financial institutions and strong infrastructure

Q: The field of ethics:
- addresses questions about right and wrong
- attempts to set standards for how humans should act
- defines right and wrong from a religious perspective
A: addresses questions about right and wrong; attempts to set standards for how humans should act

Q: Ethics:
- are influenced by culture, values and beliefs
- often vary in different countries, though some ethical standards are fairly universal
- are absolute and do not vary based on culture
A: are influenced by culture, values and beliefs; often vary in different countries, though some ethical standards are fairly universal

Q: In a global business environment:
- culture influences values and beliefs, which in turn impact ethics
- there may be a difference between ethical standards and actual behavior
- individuals from foreign countries have no ethical responsibilities outside of their own country
A: culture influences values and beliefs, which in turn impact ethics; there may be a difference between ethical standards and actual behavior

Q: Global business ethics have been heavily influenced by principles of equality and individual rights. This results in ethical standards that support:
- individuals having equal opportunities
- employees benefiting financially and socially from their work
- embracing local practices in each country rather than trying to apply global ethical standards
A: individuals having equal opportunities; employees benefiting financially and socially from their work

Q: An American company is sending an employee to negotiate the location for a new plant that it will build in Madagascar. Which of the following are important considerations in determining the best employee to send?
- How will the local culture Madagascar influence the credibility of the employee based on gender and race?
- How much respect does the company already command in the Madgascar, and what type of professional image still needs to be established?
- If local practice in Madagascar suggests that a bribe is required to secure the location, which employees are willing to offer a bribe?
A: How will the local culture Madagascar influence the credibility of the employee based on gender and race?; How much respect does the company already command in the Madgascar, and what type of professional image still needs to be established?

Q: Which of the following are accurate statements about corruption in the global business environment?
- In the United States companies must abide by the Foreign Corrupt Practices Act.
- Foreign companies that do business with the US Government are subject to the Foreign Corrupt Practices Act.
- Every country now enforces strict laws that govern and prevent bribery and corruption.
A: In the United States companies must abide by the Foreign Corrupt Practices Act.; Foreign companies that do business with the US Government are subject to the Foreign Corrupt Practices Act.

Q: Global corruption data from 2010 show that:
- wealthy people are more likely to pay a bribe than poor people
- corruption is becoming less prevalent as global standards become more common
- bribes to police and judges have increased
A: bribes to police and judges have increased

Q: The medium of exchange, or money used in a country, is its ________.
- exchange rate
- Note
- currency
A: currency

Q: Shopping online you find a new pair of running shoes that is a brand you have purchased before. They are offered for 1,500 Thai baht. You check the exchange rate and find that the current exchange rate for the baht is $.03 bahts per dollar. What is the price for the shoes in U.S. dollars?
- $4.50
- $450.00
- $45.00
A: $45.00

Q: When the Japanese yen goes up relative to the U.S. dollar:
- Japanese goods will be cheaper for U.S. citizens
- U.S. citizens will receive more Japanese yen for each dollar they exchange
- Japanese goods will be more expensive for U.S. citizens
A: Japanese goods will be more expensive for U.S. citizens

Q: When the Argentine peso goes down relative to the U.S. dollar:
- Argentine goods will be cheaper for U.S. citizens
- U.S. citizens will receive more Argentine pesos per each U.S. dollar
- Argentine goods will be more expensive for U.S. citizens
A: Argentine goods will be cheaper for U.S. citizens; U.S. citizens will receive more Argentine pesos per each U.S. dollar

Q: You are selling an autographed Steve Nash rookie basketball card online for $170. A potential buyer contacts you and offers to pay you $170 Canadian dollars. You quickly check and find the exchange rate is $1 U.S. to $1.25 Canadian. If you take this deal, you will have returned Steve to his homeland and:
- Earned more than if you accept $170 U.S.
- Come out financially equal
- Earned less than if you accept $170 U.S.
A: Earned less than if you accept $170 U.S.

Q: In global finance the term IMF refers to the ________.
- International Money and Finance
- Industrial Monetary Finance
- International Monetary Fund
A: International Monetary Fund

Q: The international monetary community created both the IMF and the World Bank because:
- the community could not agree and required a compromise
- the U.S. established the World Bank solely as a check and balance of the power of the IMF
- the two organizations create an important division of labor
A: the two organizations create an important division of labor

Q: Which of the following is owned by governments of member nations, including most major industrialized nations:
- the International Monetary Fund
- the World Bank
- UNICEF
A: the International Monetary Fund; the World Bank

Q: Which of the following seeks to ensure the health of the economies of member nations:
- the International Monetary Fund
- the World Bank
- the Federal Reserve
A: the International Monetary Fund; the World Bank

Q: Which of the following has primary responsibility for financing economic development on behalf of the international community?
- the International Monetary Fund
- the WTO
- the World Bank
A: the World Bank

Q: Which of the following has as its primary purpose promoting economic and social progress in developing countries:
- the International Monetary Fund
- the General Agreement on Tariffs and Trade
- the World Bank
A: the World Bank

Q: What major economic event motivated nations to set their individual goals aside to reduce volatility (or dramatic, unpredictable change) in the global economy:
- World War II
- the Recession of 2008
- the Great Depression
A: the Great Depression

Q: Members of the IMF agree to:
- the free exchange of currency
- to inform the IMF of monetary policies that will impact the global economy
- to allow the IMF to make corrections to each nation’s policies as needed for global stability
A: the free exchange of currency; to inform the IMF of monetary policies that will impact the global economy

Q: If Guatemala is seeking funding to invest in expanding production and exports that will grow its economy then it would turn to:
- the International Monetary Fund.
- the World Trade Organization.
- the World Bank.
A: the World Bank.

Q: If Haiti is seeking funding to rebuild education and industrial infrastructure after a major earthquake then it would turn to:
- the International Monetary Fund
- the United Nations
- the World Bank
A: the World Bank

Q: If Mexico is seeking credit to stabilize its currency in a major economic disruption then it would turn to:
- the World Bank
- the Federal Reserve
- the International Monetary Fund
A: the International Monetary Fund

Q: If a country is seeking credit to stabilize its banking system to prevent a collapse that would have a global impact then it would turn to:
- the World Bank
- the Federal Reserve
- the International Monetary Fund
A: the International Monetary Fund

Q: Pertaining to international trade, the acronym GATT stands for:
- Georgia Affiliation of Timed Transit
- Global Agency of Textile Trade
- General Agreement on Tariffs and Trade
A: General Agreement on Tariffs and Trade

Q: In 1947, twenty-three countries agreed to a series of rules concerning trade that became:
- the United Nations.
- the International Monetary Fund.
- the General Agreement on Tariffs and Trade.
A: the General Agreement on Tariffs and Trade.

Q: Pertaining to international trade, the acronym WTO stands for:
- Working Trade Organization
- World Transaction Operations
- World Trade Organization
A: World Trade Organization

Q: When it was formed the World Trade organization absorbed:
- the IMF
- the World Bank
- all of GATT’s agreements
A: all of GATT’s agreements

Q: All of GATT’s agreements were absorbed by:
- the IMF
- the World Bank
- the WTO
A: the WTO

Q: The World Trade organization is different from GATT in that it:
- the WTO is an institution charged with expanding free trade
- the WTO has a larger mission that expands the agreements of GATT
- the WTO has a smaller role, with fewer international agreements
A: the WTO is an institution charged with expanding free trade; the WTO has a larger mission that expands the agreements of GATT

Q: GATT is different from the World Trade Organization in that:
- GATT is a series of agreements and the WTO is an institution
- GATT expanded global trade through reduction of trade barriers while the WTO has a broader mission
- the purpose of GATT is to enforce complex bilateral trade agreements
A: GATT is a series of agreements and the WTO is an institution; GATT expanded global trade through reduction of trade barriers while the WTO has a broader mission