Chapter 5 Flashcards
What is globalization in the context of business?
A) Focusing solely on local markets
B) The expansion of business operations worldwide
C) Decreasing trade barriers and local partnerships
D) Outsourcing high-wage jobs to lower-cost regions
b
What is the primary role of emerging markets in the global economy?
A) They are primarily consumers, not producers
B) They offer new sources of information technology
C) They provide new opportunities for growth and expansion
D) They mainly provide labor for multinational corporations
c
What are the BRICS nations?
A) Brazil, Russia, India, China, South Africa
B) Belgium, Romania, Iceland, Canada, Sweden
C) Bolivia, Romania, Indonesia, Chile, Singapore
D) Bangladesh, Rwanda, Iran, Colombia, Serbia
a
How does international business differ from domestic business?
A) It deals only with services, not goods
B) It includes cross-border transactions
C) It is simpler and involves fewer regulations
D) It does not involve currency exchange
b
What is a trade barrier?
A) A method to increase domestic competition
B) Any regulation or policy that restricts international trade
C) A physical barrier like a wall along a country’s border
D) An agreement between two countries to stop trading
b
What is the purpose of a tariff?
A) To increase global trade
B) To protect domestic industries from foreign competition
C) To enhance international relations
D) To reduce the price of imported goods
b
What role does the World Trade Organization (WTO) play in global trade?
A) It only helps developed nations
B) It regulates international stock trades
C) It provides loans to poor countries
D) It promotes trade and settles trade disputes
d
What is a multinational corporation (MNC)?
A) A company that operates in one country but trades stocks internationally
B) A company that only imports products from other countries
C) A company that has facilities and other assets in at least one country other than its home country
D) A government-owned company that trades internationally
c
What is foreign direct investment (FDI)?
A) Investing in stock markets of foreign countries
B) A company’s investment in establishing operations in a foreign country
C) Lending money to foreign businesses without any stake
D) Direct investment in foreign real estate only
b
What are the potential risks of doing business internationally?
A) Lower profits due to higher costs
B) Currency fluctuations, political instability, and different legal systems
C) Simplified logistics and operations
D) Increased domestic competition
b
Which aspect of international business is least influenced by cultural differences?
A) Negotiation styles
B) Legal and regulatory compliance
C) Marketing strategies
D) Product pricing
b
Emerging markets play a crucial role in global business due to their:
A) High labor costs.
B) Large and growing consumer bases.
C) Decreasing influence in the global economy.
D) Focus on exporting raw materials only.
b
Which is NOT a barrier to international trade?
A) Tariffs and trade quotas
B) Universal product standards
C) Nationalistic sentiments
D) Political instability
b
In terms of global marketplaces, which statement is true?
A) The European Union represents a single country market.
B) BRICS nations are considered fully developed economies.
C) NAFTA primarily facilitates trade between Asian countries.
D) The USMCA aims to enhance trade relationships between North American countries.
d
Direct foreign investment is least likely to:
A) Increase a home country’s political influence abroad.
B) Be subject to foreign exchange risks.
C) Affect the exporting country’s balance of payments.
D) Guarantee business success in the host country.
d
The main purpose of the World Trade Organization (WTO) is to:
A) Promote unilateral trade agreements.
B) Facilitate the implementation of global tariffs.
C) Promote free trade by regulating and facilitating international trade agreements.
D) Protect domestic industries in developing countries.
c
Which factor is least likely to drive a company’s decision to engage in international business?
A) To diversify its market exposure
B) To gain access to lower-cost labor
C) To avoid competition in domestic markets
D) To reduce its environmental impact
d
Exchange rates influence international business by:
A) Ensuring that all countries adopt a similar monetary policy.
B) Affecting the cost of exporting and importing goods.
C) Mandating universal product standards.
D) Reducing the need for trade agreements.
b
A multinational corporation (MNC) minimizes its risk of international trade by:
A) Centralizing all its operations in one country.
B) Diversifying its operations across various countries.
C) Limiting its operations to developed markets.
D) Engaging only in domestic trade.
b
Global supply chains are primarily vulnerable to:
A) Uniform product demands.
B) Localized marketing strategies.
C) Disruptions in logistics and international politics.
D) High levels of domestic production.
c
