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International Business
Q:
Which of the following is NOT a key stakeholder group that a company must work to satisfy in order to survive in a global environment?
A) employees
B) competitors
C) shareholders
D) customers
Q:
Which of the following statements about GE and its "Green is Green" movement is true?
A) GE is responding in part to the fact that it is operating in many countries which require compliance with higher environmental standards than exist in the United States.
B) GE has decided to develop new products that are environmentally friendly rather than adopt internal policies to reduce greenhouse gas emissions.
C) GE has moved aggressively to reduce greenhouse gas usage internally but has not been able to develop commercially viable "clean" technologies.
D) GE considered joining the U.S. Climate Action Partnership but decided the group was too radical in its approach to reducing greenhouse gas emissions.
Q:
General Electric has focused on being more "green" in recent years most likely because ________.
A) the industry has always looked to GE as a trend setter in green technology
B) GE executives believe the firm can strategically align investor and environmental interests
C) GE executives realize that the firm can save significant money through the use of solar technology
D) the U.S. government has decided to use GE as a test case to see if the adoption of the Kyoto Protocol can actually work for a U.S. firm
Q:
According to the text, which of the following has resulted from GE's Ecomagination initiative?
A) rising profitability for many GE products
B) increasing doubt among GE's foreign partners
C) reducing investments by GE due to poor returns
D) improving pollution levels near GE plants in China
Q:
Why is economic freedom an important factor to consider when analyzing a country's economic development, performance, and potential?
Q:
What is the difference between a command economy and state capitalism?
Q:
What issues complicate international economic analysis?
Q:
What is the difference between a developing country and a developed country? What significant trends are occurring in each type of market that relate to international business decisions?
Q:
What is state capitalism? Why do you think state capitalism is becoming increasingly popular around the world?
Q:
What is meant by the idea of economic freedom? What factors are used in the Economic Freedom Index? For managers, what role does the Economic Freedom Index play in analyzing the potential of a country?
Q:
Describe the three ways economies can be categorized. Which one do you believe is best? Why?
Q:
What is inflation? How does inflation affect international business?
Q:
What general characteristics of a country should managers consider when analyzing an economic environment? What specific indicators help managers measure the economic development, performance, and potential of a country?
Q:
What is gross national income? How is it calculated? Illustrate your answer with a specific example.
Q:
In most cases, if the misery index of a country is high, then consumers and businesses are less likely to spend and invest.
Q:
The Happy Planet Index measures well-being and perceptions of living conditions by assessing areas such as housing, incomes, security, and work-life balance.
Q:
Between 2000 and 2008, China's economy grew at a faster rate than Japan's economy.
Q:
The BRICs are the strongest developed economies in the world.
Q:
In response to the global credit crisis, the United States government took actions that increased economic freedom.
Q:
The collapse of communism in the late 1980s and early 1990s led to a more widespread adoption of the principles of capitalism.
Q:
There is a positive correlation between economic freedom and economic growth.
Q:
A mixed economy is a system where economic decisions are largely market driven and ownership is largely private, but the government intervenes in many private economic decisions.
Q:
In a mixed economy, all dimensions of economic activity, including pricing and production decisions, are determined by a central government plan.
Q:
The government considers itself a better judge of resource allocation than businesses or citizens in a market economy.
Q:
In a command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are all planned by the government.
Q:
A market economy is one in which resources are primarily owned and controlled by individuals and companies.
Q:
A market economy gives individuals the freedom to decide where to work doing what, how to spend or save money, and whether to consume now or later.
Q:
The range of economic systems in the world today, when represented on a spectrum, has one end anchored by the idea of capitalism, the other with that of socialism.
Q:
An economic system is the set of structures and processes that guides the allocation of resources and shapes the conduct of business activities within a country.
Q:
In a country's balance of payments, the current account and the capital account represent equal values.
Q:
The balance of trade records is a record of a country's international transactions that take place among companies, governments, or individuals.
Q:
There is a strong relationship between skewed income distributions and the split between those who live in urban settings versus those who live in rural areas.
Q:
Uneven income distribution is largely a problem confined to poorer nations.
Q:
External debt results when the government spends more than it collects in revenues, whereas internal debt results when a government borrows money from foreign lenders.
Q:
The so-called "misery index" is the sum of a country's inflation and unemployment rates.
Q:
Inflation affects interest rates, exchange rates, the cost of living, general economic confidence, and the stability of the current political system.
Q:
Inflation occurs because aggregate demand is growing as fast as aggregate supply.
Q:
The Human Development Index measures the average achievements in a country on three basic dimensions of human development: mortality, knowledge, and standard of living.
Q:
Economic indicators such as GNI, and its expression in terms of per capita, growth rate, and PPP, are not sufficient to develop a clear picture of the overall quality of life in a country.
Q:
The calculation of GNI per capita takes into account the differences in the cost of living from one country to another.
Q:
A car manufactured in the U.S. by Toyota would be included in the calculation of the GDP for the United States.
Q:
Gross domestic product is the value of production that takes place within a nation's border, without regard to whether the production is done by domestic or foreign factors of production.
Q:
When analyzing the key elements of a country's economic environment, it is best to apply a systems perspective.
Q:
In the aftermath of the recent worldwide credit crisis, there has been a significant reduction in the level of government involvement in economic affairs.
Q:
Which of the following governmental actions is LEAST likely to increase national debt?
A) macroeconomic stimulus plans
B) unemployment benefits
C) corporate bailouts
D) T-bond sales
Q:
During a time of reflation, the government is most likely to ________.
A) lower taxes
B) print money
C) reduce interest rates
D) support infrastructure
Q:
Which of the following ideas calls for assessing a country's performance based on factors such as life expectancy, leisure time, and income equality?
A) microeconomics
B) happynomics
C) macroeconomics
D) green economics
Q:
Which of the following calls for economic activity that meets present needs without hindering the future needs of society?
A) privatization
B) state capitalism
C) economic freedom
D) sustainable development
Q:
According to the concept of green economics, measuring a country's economic performance should also take into account ________.
A) market share
B) population size
C) ecological costs
D) cost-of-living increases
Q:
A firm with operations in Denmark can most likely expect all of the following EXCEPT ________.
A) high taxes
B) significant regulation
C) tough job-protection laws
D) minimal monetary policies
Q:
Presently, which of the following countries is best characterized as a pure example of a command economy?
A) Russia
B) Libya
C) China
D) Vietnam
Q:
Tatum Manufacturing recently opened a new facility in Hong Kong. The firm can most likely expect the Hong Kong government to ________.
A) monitor market prices
B) control natural resources
C) ensure fair competition
D) provide innovation incentives
Q:
Taylor Enterprises wants to expand its operations into Asia. Managers are focusing on countries with high degrees of economic freedom most likely because the firm is interested in a country with ________.
A) minimal government intervention
B) standardized minimum wages
C) laws favoring sustainability
D) state-run corporations
Q:
Pender Pharmaceuticals is considering expanding overseas and is focusing primarily on the BRICs. Which of the following countries is one that Pender is considering?
A) Indonesia
B) Chile
C) Russia
D) Bangladesh
Q:
An economic system is the set of structures and processes that ________ in a country.
A) guides the allocation of resources and shapes the conduct of business activities
B) directs the movement of specific products to specific consumers
C) sets the standards of competitive success for companies in the economy
D) stipulates the roles and responsibilities of consumers
Q:
In a country's balance of payments, the ________ tracks all trade activity in merchandise.
A) capital account
B) current account
C) payment account
D) deficit account
Q:
The two main categories in the balance of payments are the ________.
A) merchandise exchange account and the services account
B) external debt and the unilateral transfers account
C) merchandise trade account and the capital account
D) current account and the capital account
Q:
Which of the following is a statement that summarizes all economic transactions between a country and the rest of the world during a given period of time?
A) trade deficit
B) Gini coefficient
C) balance of payments
D) purchasing power parity
Q:
The ________ view calls for companies to develop low-cost, high-powered, resource-minimizing innovations that can be marketed to the billions of people living on less than a few dollars a day.
A) Base of the Pyramid
B) Hierarchy of Needs
C) Happy Planet Index
D) Gini coefficient
Q:
The Gini coefficient estimates a country's ________.
A) gross national product
B) economic development
C) political and legal risk
D) income inequality
Q:
The World Bank reports that approximately ________ percent of the world's population is poor.
A) 50
B) 75
C) 80
D) 95
Q:
Which of the following is most likely a FALSE statement about income inequality?
A) The richest 1% of the world's population claims as much income as the bottom 57%.
B) GNI is the most effective tool for estimating the relative wealth of a nation's citizens.
C) Among industrialized nations, the U.S. has the largest inequality gap between rich and poor.
D) Income inequality between metropolitan and rural areas threatens a country's social stability.
Q:
Uneven income distribution ________.
A) exists in almost every country
B) is largely a problem for poorer nations
C) primarily affects people in urban settings
D) is limited to a small share of the world population
Q:
Country X has a significant amount of external debt. Which of the following is the most likely cause?
A) The government of Country X borrowed money from local banks.
B) The government of Country X borrowed money from other governments.
C) The government of Country X spent more than it collected in revenues.
D) The government of Country X received short-term credits from selling bonds.
Q:
A government increases its internal debt for all of the following reasons EXCEPT which of the following reasons EXCEPT ________.
A) The tax system is so poorly run that the government cannot collect all the revenues it expects.
B) Government costs such as security and social programs exceed total tax revenues.
C) The government borrows money from international financial institutions.
D) State-owned enterprises run large deficits.
Q:
The so-called "misery index" is the sum of a country's ________.
A) foreign and national debt
B) inflation and unemployment rates
C) unemployment level and total debt
D) trade deficit and long-term inflation rate
Q:
In the U.S., the unemployment rate indicates the ________.
A) percentage of the labor force that wants to work full-time but can only find part-time employment
B) number of people who have stopped looking for work because full-time jobs are unavailable
C) percentage of unemployed workers seeking paid work relative to the total labor force
D) number of workers eligible for government services and unemployment benefits
Q:
________ typically results when demand decreases and supply increases.
A) Inflation
B) Chronic inflation
C) Reflation
D) Deflation
Q:
In most cases, governments ________ in order to regulate inflation.
A) lower interest rates
B) increase taxes
C) raise interest rates
D) decrease taxes
Q:
A worrisome outcome of chronic inflation is that it tends to ________.
A) erode confidence in a country's currency
B) give central banking officials excessive flexibility to manage monetary policy
C) increase the real income of people, thereby inflating their spending and borrowing levels
D) lower consumer demand for foreign goods, which triggers lower prices and eventually lower employment
Q:
What is the most likely reason that a universal scheme for assessing the performance and potential of a country's economic environment does NOT exist?
A) difficulties of identifying a definitive set of predictive economic indicators
B) a lack of reliable economic data from most developed economies
C) the isolation of most markets from each other
D) static nature of the marketplace
Q:
________ is a general, sustained rise in prices measured against a standard level of purchasing power.
A) Deflation
B) Inflation
C) Expansion
D) Reflation
Q:
The ________ starts with the same accounting framework used to calculate GDP but then adjusts for values assigned to environmental quality, population health, livelihood security, equity, free time, and educational attainment.
A) Gross National Index
B) Net National Product
C) Genuine Progress Indicator
D) Human Development Index
Q:
The Human Development Index measures the average achievements in a country on three basic dimensions of human development, including ________.
A) promotion of cultural values
B) quantity of free time
C) extent of knowledge
D) sustainability
Q:
The United Nations' ________ measures life expectancy, educational attainment, and the standard of living in a given country.
A) Human Development Index
B) Emerging Economic Stability
C) Genuine Progress Indicator
D) Net National Product
Q:
Eileen, a manager at an international restaurant chain, wants to know if it will be most cost effective to buy 1,000 pounds of sugar in Country X or in Country Y using U.S. dollars. Which of the following is Eileen most likely trying to determine?
A) purchasing power parity
B) economic growth rate
C) gross domestic income
D) gross national product
Q:
To determine whether the standard of living within a country is rising or falling, economists would most likely use which of the following measures?
A) per capita GNI
B) GNI growth rate
C) purchasing power parity
D) degree of human development
Q:
The measure of the value of production that occurs within a country's borders without regard to whether the production is done by domestic or foreign factors of production is its________.
A) net national product (NNP)
B) gross national product (GNP)
C) gross domestic product (GDP)
D) gross national income (GNI)
Q:
In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would ________.
A) be added to the GNI of the United States as well as to the GNI and GDP of Mexico
B) not be added to the GNI of the United States but would be added to the GNI of Mexico
C) only affect the computation of GDP and have no bearing on GNI
D) be added to the GNI of the United States but not the GNI of Mexico
Q:
Gross national income (GNI), the broadest measure of economic activity for a country, is defined as the ________.
A) total of all consumption and investment that takes place in a national economy
B) income generated in one country, regardless of who owns the productive assets
C) total of all economic activity in one country less services, such as government administration, health services, and education
D) income generated by both total domestic production and the international production activities of national companies