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TITLE: Test 2

UNIVERSITY / INSTITUTE: Purdue University

CLASS / COURSE: MGMT 38000

QUESTION DESCRIPTION:

MGMT 38000 INTERNATIONAL BUSINESS

Title: Test 2
 
 
 
1.   The belief by a society that its culture is superior to all others is called: 
 
A.  polycentricity.   
 B.  ethnocentricity.      
C.  monocentricity.   
D.  culterocentricity.   
 
2.   The first step international business managers can take in order to learn to live with other cultures is: 
 
A.  to learn the language.   
B.  to visit the country.   
 C.  to realize that other cultures exist which are different from their own.      
D.  make friends with natives of the country.   
 
3.   . _________ makes it difficult for the marketer to introduce new products in many foreign markets. 
 
A.  The high cost of new products   
B.  The high cost of transportation   
 C.  People's attitude toward change      
D.  The long introductory period   
 
4.   Viewing work as a moral virtue is a part of the 
 
A.  all of the following.    
B.  Confucian work ethic.   
C.  Shinto work ethic.   
D.  Protestant work ethic.   
 E.  B and D.   
 
5.   An individual's position in a caste: 
 
 
 
 A.  is inherited.      
B.  depends on their educational level.   
C.  depends on the person's nationality.   
D.  depends on the family's wealth   
 
6.   _____________ began in India as a reform movement of Hinduism. 
 
 A.  Buddhism      
B.  Jainism   
C.  Shintoism   
D.  Sikhism   
 
7.   _______________ is the indigenous religion of Japan. 
 
A.  Animism   
B.  Confucianism   
C.  Taoism   
 D.  Shintoism      
E.  B and D   
 
8.   Strategic technology leveraging is 
 
A.  the concept of using external technology to complement rather than substitute for internal technology.   
B.  obtaining more efficiency from technology by increasing capital investment.   
C.  using technology to improve a firm's strategy.   
D.  forming competitive alliances in which each partner shares technology.   
 E.  A and D.      
 
9.   Lingua franca: 
 
A.  refers to the French language.   
 B.  is as effective for reaching mass markets as is the native language.   
C.  is a foreign language used to communicate among a nation's diverse cultures.    
D.  is the preferred language for communicating between a manager and a worker.   
 
10.   The extended family includes: 
 
A.  employees and business connections.   
 B.  all blood relatives and relatives by marriage.      
C.  all blood relatives.   
D.  all blood relatives, employees and business connections.   
 
11.   According to Hofstede, the countries that score high on power distance and uncertainty avoidance are: 
 
 A.  Latin American.      
B.  European.   
C.  African.   
D.  North American.   
 
12.   Hofstede's four dimensions give managers a basis for understanding: 
 
A.  that management skills are not culturally specific.   
 B.  a management technique appropriate in one national culture is not necessarily appropriate in another.      
C.  that managers can use the same techniques in different Western nations.   
D.  none of the above.   
 
13.   According to the book, economic analyses become more complex when a firm enters overseas markets because, unlike the situation for a company operating domestically: 
 
A.  the uncontrollable economic variables must be forecast.   
 B.  management must operate in two new environments, foreign and international.      
C.  economists know less about foreign exchange rates.   
D.  analysts must now forecast the values for both socioeconomic and economic variables.   
E.  A and C.   
 
14.   Income distribution studies confirm the belief that, generally, income is more evenly distributed in the: 
 
 A.  richer nations.      
B.  developing nations.   
C.  newly industrialized nations.   
D.  Pacific Rim nations.   
 
15.   Even though a nation's GNI is small, if a small percentage of its population receives a large percentage of that income: 
 
A.  it may be a good market for high-priced industrial products.   
B.  it may be a good market for high-volume, low-priced consumer products.   
C.  it may be a good market for low-volume, high-priced luxury products.    
 D.  B and C.   
 
16.   Primary reasons for relative changes in labor costs are increases or decreases in: 
 
A.  compensation.   
B.  productivity.   
C.  exchange rates.   
D.  A and C.   
 E.  all of the above.      
 
17.   According to the text, scarcity of foreign exchange can affect even firms that merely export to nations with high foreign debt because: 
 
A.  the government can not borrow more money to pay for the exports.   
 B.  governments of those nations are likely to impose import restrictions.      
C.  their export sales will depend on the ability of those governments to borrow foreign exchange.   
D.  they will have to pay more for their foreign exchange.   
 
18.   The Human Development Index is based on what three essential elements of human life? 
 
A.  A long and healthy life, the ability to acquire quality medical care, and access to resources needed for a decent standard of living.   
B.  Access to affordable education, the ability to acquire quality medical care, and access to resources needed for a decent standard of living.   
 C.  A long and healthy life, the ability to acquire knowledge, and access to resources needed for a decent standard of living.      
D.  A long and healthy life, the ability to acquire knowledge, and affordable rates of taxation.   
 
19.   With few exceptions, birthrates are now ____________ in developed nations and _______________ in developing nations. 
 
A.  increasing, decreasing.   
 B.  decreasing, increasing.      
C.  decreasing, decreasing.   
D.  increasing, increasing.   
 
20.   Communism as conceived by Karl Marx: 
 
A.  advocated seizure of power.   
B.  was a theory of social change leading to a classless society.   
C.  was further developed by Lenin.   
 D.  B and C.      
 
21.   Ideal capitalism calls for: 
 
A.  state ownership of major businesses.   
B.  all factors of production to be privately owned.   
 C.  B and D.      
D.  government to perform only those functions the private sector cannot.   
 
22.   Socialism as actually practiced: 
 
A.  advocates nationalizing all major business.   
B.  operates the same in every country with a socialist government.   
 C.  varies considerably from country to country.    
D.  is disappearing.   
 
23.   Privatization includes: 
 
A.  ownership transfer from public to private sector.   
B.  contracted out services.   
C.  state-owned plants leased to private entities.   
 D.  all of the above.    
 
24.   Terrorism is committed for a wide variety of reasons, including: 
 
A.  to overthrow a government.   
B.  to gain release of imprisoned colleagues.   
C.  to punish those not believing in the terrorists' religion.   
 D.  all of the above.      
 
25.   A government can be said to be stable when: 
 
A.  it maintains itself in power.   
B.  it is able to provide subsidies to the factors of production.   
C.  its policies are predictable.   
 D.  A and C.    
 
26.   Zimbabwe was a relatively rich African country which was self-sufficient in and an exporter of food. Then in the 1990s, President Mugabe seized most of the best land and the equipment and distributed it to his friends and allies. As a result, 
 
A.  food production has increased.   
 B.  there is now a severe food shortage.      
C.  his friends and allies gave the land to the poor people.   
D.  the type of food produced has changed.   
 
27.   Country risk assessment 
 
A.  is a service provided to business by country governments.   
 B.  helps companies decide where to conduct business and for which risks to insure.      
C.  is the focus of econometricians.   
D.  indicates that there is very little regulation of businesses and professions.   
 
28.   Income earned abroad by U.S. citizens: 
 
 
 
A.  incurs a tax liability as if they were resident in the U.S., with some adjustment.    
B.  incurs tax liability only on the portions earned in the U.S.   
 C.  incurs no tax liability.     
D.  is taxed only on the portion of income allocated to consumption.   
 
29.   From country to country, tax laws: 
 
A.  are much the same.   
B.  hit incomes at close to the same levels.   
C.  are enforced with the same rigor.   
 D.  vary tremendously.      
 
30.   The enforcement of tax laws is: 
 
A.  rigorous in all nations.   
B.  relatively lax everywhere.   
 C.  rigorous in some nations and relatively lax in others.      
D.  none of the above.   
 
31.   Antitrust and restrictive trade practices legislation: 
 
A.  involves taxpayers against the tax collectors.   
B.  involves government actions against business.   
C.  occasionally involves business actions against other businesses.   
 D.  B and C.      
 
32.   The efforts of the U.S. government to apply its antitrust laws extraterritorially are: 
 
A.  strongly resented by other governments.    
 B.  not different than European and Japanese efforts.   
C.  welcomed by other governments.   
D.  cooperated in by other governments.   
 
33.   The U.S. sometimes imposes a quota called "voluntary restraint agreement" to limit imports. The inevitable result is: 
 
A.  lower costs for American consumers.   
 B.  higher costs for American consumers.      
C.  no change in costs.   
D.  none of the above.   
 
34.   Accounting law in the U.S. has recently been modified by the 
 
A.  Fair trade Practices Act.   
B.  Rand Sperry Act.   
 C.  Sarbanes Oxley Act.      
D.  individual state legislatures.   
 
35.   The Foreign Corrupt Practices Act: 
 
A.  has helped American exporters.   
B.  was modeled after an English statue.   
 C.  is being enforced by the U.S. more vigorously than any other such law by other countries.      
D.  none of the above.   
 
36.   Common law and civil law have different roots. As time has passed, 
 
A.  many similarities between them have developed.    
 B.  they have become more and more different. 0%    
C.  all differences between them have disappeared.   
D.  they have been supplanted by UN conventions.   
 
37.   The Fisher Effect describes the relationship between: 
 
B.  the law of one price and PPP.   
 C.  real and nominal interest rates.      
D.  debt dominated in coins called "sovereigns."   
 
38.   The Big Mac Index: 
 
A.  uses a currency called the ECU.   
 B.  illustrates PPP.      
C.  violates U.S. trademark law.   
D.  shows that the price of a Big Mac in the U.S. in the world standard.   
 
39.   Some governments require permission to purchase foreign currency because: 
 
A.  they are concerned about ICs repatriating profits.   
B.  a limited amount of the currency has been printed.   
C.  they are concerned about their hard currency reserves.    
 D.  Article 14 mandates it.     
 
40.   The quotation, Canada (dollar) US$ equivalent rate .7261 means 
 
 A.  it costs US$ .7261 to buy one Canadian dollar.      
B.  it costs US$ 7.261 to buy one Canadian dollar.   
C.  it costs Canadian Dollar .7261 to buy US$ 1.   
D.  all of the above.   
 
41.   The spot rate is: 
 
A.  the rate for delivery in the future, approximately 180 days   
B.  the rate for delivery in the future, approximately 30 days   
C.  the rate between two currencies for delivery within two weeks   
 D.  the rate between two currencies for delivery within two days      
 
42.   If a currency is being quoted at a premium for future delivery, that means 
 
A.  it cannot be bought for immediate delivery.   
 B.  in the expectations of the world financial community, that currency's value will be higher in the future.      
C.  in the expectations of the world financial community, that currency's value will be lower in the future.   
D.  in the expectations of the world financial community, that currency's value will not be changed in value.   
 
43.   When you see the notation "official rate" beside a currency quotation, you know: 
 
A.  it is a widely traded currency.   
 B.  the country has currency exchange controls.    
C.  it is a strong official currency.   
D.  there is no unofficial rate.   
 
44.   If a country's BOP is in deficit, that means 
 
A.  it has a healthy economy.   
B.  more money is coming in than going out.   
C.  it does not have exchange controls.   
 D.  more money is going out than coming in.    
 
45.   As inflation rates escalate, lenders tend to: 
 
 A.  raise interest rates or decline to lend.      
B.  lower interest rates.   
C.  seek more borrowers.   
D.  none of the above.   
 
46.   If you have the contract right to receive a foreign currency in the future, 
 
A.  you hope it weakens in relation to your operating currency.   
 B.  you don't care whether it weakens or strengthens.     
C.  you hope it strengthens in relation to your operating currency.    
D.  there is no currency exchange risk.   
 
47.   International strategy: 
 
A.  needs to be consistent among the various functions, products, and regional units of the company.   
B.  needs to be consistent with the demands of the international competitive environment.   
C.  is concerned with the way firms make fundamental choices about developing and deploying scarce resources internationally.   
D.  has a goal of achieving and maintaining competitive advantage.   
 E.  all of the above.      
 
48.   To create a competitive advantage that is sustainable over time, the international company should try to develop competencies that: 
 
A.  create value for customers and for which they are willing to pay.   
B.  are difficult to imitate or substitute for.   
C.  are expensive to develop and maintain.   
D.  All of the above.   
 E.  Both A and B.    
 
49.   When there is strong pressure for a company to adapt its products or services for local markets, it should tend to use a: 
 
A.  global strategy   
 B.  multidomestic strategy      
C.  transnational strategy   
D.  differentiation strategy   
 
50.   When a company faces strong pressures for reducing costs and limited pressure to adapt products for local markets, it should tend to use a: 
 
 A.  global strategy      
B.  multidomestic strategy   
C.  transnational strategy   
D.  differentiation strategy   
 

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