International Business, 13e (Daniels/Radebaugh/Sullivan) Chapter 1 Globalization and International Business 1) The broadening set of interdependent relationships among

people from different parts of the world is known as ________. A) globalization B) offshoring C) franchising D) outsourcing Answer A Diff 1 !age "ef # $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1 .hat are international business and globalization/ .hat is the relationship between them/ AAC$B 0ulticultural and Di'ersit1 2) The term globalization is sometimes used to mean the ________. A) mo'ement of &obs to high3wage countries B) business being undertaken outside the confines of an1 nation C) une'en distribution of resources and this distribution4s influence on different products and ser'ices in different parts of the world D) integration of world economies through the reduction of barriers to the mo'ement of trade5 capital5 technolog15 and people Answer D Diff 1 !age "ef # $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1 .hat are international business and globalization/ .hat is the relationship between them/ AAC$B 0ulticultural and Di'ersit1 6) .hich of the following best defines international business/ A) ,t includes all public economic flows between two or more countries. B) ,t includes all pri'ate economic flows between two or more countries. C) ,t includes all business transactions in'ol'ing two or more countries5 whether the transactions are conducted b1 pri'ate or go'ernmental organizations. D) ,t includes all business transactions in countries other than 1our home countr1. Answer C Diff 1 !age "ef # $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1 .hat are international business and globalization/ .hat is the relationship between them/

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9) .hich of the following is the most accurate comparison of how pri'ate businesses and go'ernments conduct international business/ A) The ob&ecti'es for pri'ate businesses and go'ernments are the same. B) The ob&ecti'e of a pri'ate business is profit5 whereas a go'ernment ma1 or ma1 not seek profit as an ob&ecti'e. C) :o'ernments operate strictl1 for nonprofit moti'es5 but pri'ate businesses seek profits. D) :o'ernments undertake international business for more long3term ob&ecti'es than pri'ate businesses do. Answer B Diff 2 !age "ef # $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1 .hat are international business and globalization/ .hat is the relationship between them/ #) .hich of the following is -%T a reason to stud1 international business/ A) Business conducted outside the confines of an1 one countr1 is on the decline. B) :lobal e'ents affect almost all companies. C) B1 approaching operating strategies from an international standpoint5 1ou ma1 be able to better obtain the resources 1ou need. D) The ph1sical5 social5 and competiti'e conditions differ from countr1 to countr1. Answer A Diff 2 !age "ef #3; $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.2 .h1 should 1ou stud1 international business/ ;) %f the following5 it is most essential for a student of business to ________. A) tra'el widel1 in order to understand different business en'ironments B) take an internship with a multinational compan1 C) find emplo1ment with a compan1 free from global competition D) gain some understanding of international business Answer D Diff 1 !age "ef ; $kill Application %b&ecti'e $T(D) *(+$T,%- 1.2 .h1 should 1ou stud1 international business/ AAC$B Anal1tic $kills <) ,n terms of international business5 it is most accurate to sa1 that ________. A) there is a uni'ersal =best wa1= to conduct business B) global competition affects large companies but not small ones C) most companies5 regardless of industr15 depend either on foreign markets and supplies or compete against companies that do D) go'ernment regulation of international business has little effect on a compan14s profits Answer C Diff 1 !age "ef ; $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.2 .h1 should 1ou stud1 international business/
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>) +'en if 1ou ne'er ha'e direct international responsibilities5 an understanding of some of the comple?ities of international business ma1 be useful to 1ou because ________. A) it is essential for most managerial &ob inter'iews B) it ma1 help 1ou make more informed operational decisions C) 1ou will need to super'ise and e'aluate subordinates who ha'e international responsibilities D) 1ou should understand importing and e?porting in order to be promoted Answer B Diff 2 !age "ef < $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.2 .h1 should 1ou stud1 international business/ @) The shifting of national borders has created which of the following situations for international business/ A) ,t has left most people who reside in rural areas with onl1 the barest connection to the rest of the world. B) ,t has complicated the understanding of beha'ioral factors affecting business. C) ,t has made comparisons of historical data on international transactions problematic. D) ,t has slowed communications between a compan14s headAuarters and foreign operations. Answer C Diff 2 !age "ef < $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.6 +?plain how globalization has changed o'er time and differs both among countries and within countries. AAC$B 0ulticultural and Di'ersit1 18) .hich of the following is an indication of the increased globalization of business since the end of .orld .ar ,,/ A) .orld trade has grown more rapidl1 than world production in almost e'er1 1ear. B) 0ost countries now depend on foreign output for more than half their consumption. C) Boreign ownership of assets has le'eled off. D) Countries ha'e increased their import restrictions to counter the rising tide of imports. Answer A Diff 2 !age "ef < $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.6 +?plain how globalization has changed o'er time and differs both among countries and within countries. 11) 0ost of the world4s goods and ser'ices are sold ________. A) in international markets B) in the countries where the1 are produced C) through e?ports to small countries D) through e?ports to large countries Answer B Diff 2 !age "ef < $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.6 +?plain how globalization has changed o'er time and differs both among countries and within countries.
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12) According to the A.T. Cearn1DBoreign !olic1 :lobalization ,nde?5 which ranked countries on their e?tent of globalization across economic5 technological5 personal contact5 and political dimensions5 countries ________. A) tend to be ranked similarl1 on all four dimensions B) are more globalized on the political dimension than on personal contact C) that are large in land mass and population are less globalized than small countries D) sometimes rank high on one dimension and low on another Answer D Diff 2 !age "ef < $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.6 +?plain how globalization has changed o'er time and differs both among countries and within countries. AAC$B 0ulticultural and Di'ersit1 16) .hich of the following has -%T been a ma&or force increasing globalization in recent decades/ A) liberalization of cross3border trade B) increase in and e?pansion of technolog1 C) growing pressure from consumers D) decreasing global competition Answer D Diff 1 !age "ef <3> $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.9 ,dentif1 and e?plain the se'en forces that ha'e been causing the growth in globalization. AAC$B 0ulticultural and Di'ersit1 19) ,nstitutional de'elopment of ser'ices b1 business and go'ernment has aided the e?pansion of international business b1 ________. A) pro'iding a uni'ersall1 agreed upon language for conducting international transactions B) remo'ing immigration restrictions so that international firms can mo'e personnel where'er the1 are most needed C) de'eloping means to ease the flow of goods among countries D) spurring competition among domestic producers Answer C Diff 1 !age "ef @ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.9 ,dentif1 and e?plain the se'en forces that ha'e been causing the growth in globalization.

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1#) .hich of the following has caused consumers to demand access to foreign3made products/ A) Declining global affluence has caused consumers to seek out lower3priced products from abroad. B) Consumers ha'e become more efficient in using media and technologies to compare prices worldwide. C) Bearing that their go'ernments will enact restricti'e policies on imports5 consumers are stocking up on foreign products before restrictions are put in place. D) +?pectations of rising prices of foreign products ha'e caused consumers to seek foreign products before their prices become prohibiti'e. Answer B Diff 2 !age "ef @ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.9 ,dentif1 and e?plain the se'en forces that ha'e been causing the growth in globalization. AAC$B (se of ,T 1;) .hich of the following is a reason that international business has grown at such a rapid pace in the past few decades/ A) the end of the political schism between the Communist and non3Communist blocs B) stricter go'ernment policies on cross3border mo'ements C) decreasing global competition D) increased concerns about terrorism Answer A Diff 1 !age "ef 18 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.9 ,dentif1 and e?plain the se'en forces that ha'e been causing the growth in globalization. AAC$B 0ulticultural and Di'ersit1 1<) The recent e?pansion of technolog1 has contributed to growth in international business through ________. A) the creation of new products that are important in world trade B) reducing the effects of global competition C) the tabulation of international transactions that pre'iousl1 did not appear in statistics D) the liberalization of regulations of mo'ements of resources across borders Answer A Diff 2 !age "ef > $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.# Eow is technolog1 affecting the growth of international business/ AAC$B (se of ,T

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1>) Blower producers from +cuador5 ,srael5 and -ew Fealand all compete for sales in the same American markets. This is due primaril1 to ________. A) more effecti'e domestic production techniAues B) ad'ances in communications C) ad'ances in transportation D) cross3national cooperation in fighting insects that harm plants Answer C Diff 2 !age "ef > $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.9 ,dentif1 and e?plain the se'en forces that ha'e been causing the growth in globalization. 1@) All the following statements are true about the increase and e?pansion of technolog1 +GC+!T which one/ A) Technolog1 facilitates a compan14s headAuarters4 interactions with its foreign operations. B) $mall companies can more easil1 access global customers and suppliers. C) Companies from more countries can compete for sales in foreign markets. D) 0ost anal1sts agree that the rate of de'elopment of new products will drop off in the future. Answer D Diff 2 !age "ef > $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.# Eow is technolog1 affecting the growth of international business/ AAC$B (se of ,T 28) Because of economic growth5 a larger portion of the population can shift from ________ to ________. A) rec1cling old productsH disposing of old products B) disposing of old productsH rec1cling old products C) producing new productsH de'eloping new products D) de'eloping new productsH producing new products Answer C Diff 2 !age "ef > $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.# Eow is technolog1 affecting the growth of international business/ AAC$B (se of ,T

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21) Because their citizens want a greater 'ariet1 of goods and ser'ices at lower prices5 man1 go'ernments ha'e ________. A) reduced their restrictions on the international mo'ement of goods and ser'ices B) acted to reduce the pressures created b1 global competition C) sought to eliminate reciprocal ad'antages negotiated through international organizations and treaties D) increased their participation in multinational problem3sol'ing efforts Answer A Diff 2 !age "ef 18 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.; .h1 ha'e most go'ernments lowered restrictions on international trade and resource mo'ements/ 22) .hich of the following is a reason for recent go'ernmental rela?ation in restrictions on cross3border trade or resource mo'ements/ A) 0ost countries face shortages of workers5 so the1 seek foreign workers who can help them produce more. B) :o'ernments belie'e that this will decrease the need to make their own companies more inno'ati'e. C) Consumers increasingl1 want to bu1 goods and ser'ices produced in their own countries5 making restrictions less necessar1. D) :o'ernments belie'e that domestic producers will become more efficient as a result of foreign competition. Answer D Diff 2 !age "ef > $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.; .h1 ha'e most go'ernments lowered restrictions on international trade and resource mo'ements/ 26) .hich of the following is a reason for recent go'ernmental rela?ation in restrictions on cross3border trade or resource mo'ements/ A) :o'ernments t1picall1 welcome the opportunit1 to increase the offshoring of a countr14s domestic producers. B) All countries ha'e signed binding reciprocal trade agreements through international organizations. C) :o'ernments hope that other countries will lower their barriers in response. D) 0ost countries face surpluses of workers5 so the1 seek foreign markets in need of labor supplies. Answer C Diff 2 !age "ef > $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.; .h1 ha'e most go'ernments lowered restrictions on international trade and resource mo'ements/

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29) A compan1 starting out with a global focus5 usuall1 because of the international e?perience of its founders5 is called a ________. A) multinational enterprise B) transnational compan1 C) strategicall1 allied compan1 D) born3global compan1 Answer D Diff 1 !age "ef @ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.< .hat is the relationship between competition and globalization/ 2#) ,n a strateg1 known as ________5 man1 new companies locate themsel'es near competitors and suppliers. A) offshoring B) franchising C) clustering D) e?porting Answer C Diff 1 !age "ef @ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.< .hat is the relationship between competition and globalization/ 2;) Companies often e?pand their business internationall1 in response to ________. A) increased import restrictions in their domestic markets B) competiti'e international ad'antages gained b1 their competitors C) increased e?port restrictions in their domestic markets D) a decrease in domestic competition Answer B Diff 2 !age "ef @ $kill Application %b&ecti'e $T(D) *(+$T,%- 1.< .hat is the relationship between competition and globalization/ AAC$B Anal1tic $kills 2<) .hen a compan1 successfull1 responds to foreign production and market opportunities5 ________. A) other companies will likel1 emulate its successful practices B) it likel1 has a long3term ad'antage o'er competitors C) it t1picall1 downsizes its domestic operations D) its home go'ernment likel1 raises ta?es on the compan1 Answer A Diff 2 !age "ef @ $kill Application %b&ecti'e $T(D) *(+$T,%- 1.< .hat is the relationship between competition and globalization/ AAC$B Anal1tic $kills
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2>) According to 1our te?t5 which of the following is -%T one of the three main reasons go'ernments cooperate with each other/ A) to attack problems that one countr1 acting alone cannot sol'e B) to deal with areas of concern that lie outside the territor1 of an1 nation C) to gain reciprocal ad'antages D) to encourage cross3border mo'ement of resources in response to interest rate differences Answer D Diff 1 !age "ef 18 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.> .h1Dhow do countries cooperate with other countries/ Eow does this cooperation affect international business/ 2@) :o'ernments ha'e signed treaties to protect foreign3owned propert1 rights5 such as in'estments and patents. A primar1 reason for doing so is to ________. A) gain reciprocal ad'antages B) reduce the domestic effects of other countries4 economic policies C) deal with areas of concern outside the territor1 of an1 one countr1 D) reduce national conflicts leading to 'iolent encounters Answer A Diff 2 !age "ef 18 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.> .h1Dhow do countries cooperate with other countries/ Eow does this cooperation affect international business/ AAC$B Anal1tic $kills 68) .hich of the following is -%T a source of disagreement about the use of noncoastal areas of the oceans5 outer space5 and Antarctica/ A) There is little short3term business potential in these areas. B) There is disagreement about how commercial benefits should be shared among nations. C) There is disagreement about who should be allowed to de'elop where. D) The commercial 'iabilit1 of some areas has onl1 recentl1 been demonstrated. Answer A Diff 2 !age "ef 11 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.> .h1Dhow do countries cooperate with other countries/ Eow does this cooperation affect international business/

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61) .hich of the following is a reason that go'ernments cooperate through treaties5 agreements5 and consultation/ A) to gain a di'ision of labor5 such as b1 performing research and de'elopment in one countr1 and production in another B) to be in compliance with (nited -ations4 reAuirements C) to attack problems &ointl1 that one countr1 acting alone cannot sol'e D) to assure that all countries get an eAuitable share of ta?es from multinational enterprises Answer C Diff 2 !age "ef 18 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.> .h1Dhow do countries cooperate with other countries/ Eow does this cooperation affect international business/ 62) $mall countries worr1 about o'erdependence caused b1 globalization. Their concerns include all of the following +GC+!T which of the following/ A) A large countr1 on whom the1 depend ma1 pressure them on political matters. B) A large international compan1 ma1 dictate its terms of operations in a small countr1. C) A large compan1 ma1 e?ploit legal loopholes to a'oid political o'ersight and ta?es. D) A large countr1 ma1 reduce its le'el of cultural homogeneit1. Answer D Diff 2 !age "ef 12316 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.@ .hat are the main criticisms of globalization/ AAC$B 0ulticultural and Di'ersit1 66) Although critics complain that globalization causes the consumption of too man1 nonrenewable resources while despoiling the en'ironment5 those in fa'or of globalization counter that ________. A) globalization encourages the adoption of uniform and superior standards for combating en'ironmental problems B) economic growth created b1 globalization is largel1 in ser'ices5 which neither use too man1 nonrenewable resources nor despoil the en'ironment C) the biggest problem of en'ironmental despoliation occurs in the countries that are least globalized D) pollution and to?ic runoff problems do not increase with economic growth Answer A Diff 2 !age "ef 16 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.@ .hat are the main criticisms of globalization/ AAC$B +thical "easoning

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69) Curtailment of logging in the Amazon region is generall1 'iewed as en'ironmentall1 beneficial for the planet as a whole. Eowe'er5 unemplo1ed Brazilian workers ha'e felt that &ob creation inside Brazil is more important than climate protection outside Brazil. This e?ample best illustrates which of the following/ A) wh1 smaller countries are concerned that large international countries are powerful enough to dictate operating terms B) wh1 globalization is needed to foster uniform standards for combating en'ironmental problems C) how global interests can conflict with a countr14s local interests D) how cultural homogeneit1 threatens the cultural foundation of smaller nations Answer C Diff 2 !age "ef 16 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.@ .hat are the main criticisms of globalization/ AAC$B "eflecti'e Thinking 6#) Although globalization ma1 bring economic growth5 critics ne'ertheless contend that ________. A) the growth is not fast enough B) the ineAualit1 of gains puts some people in a relati'el1 worse economic situation C) this growth is mainl1 for the future5 thus ignoring present economic growth needs D) the cultural foundations of so'ereignt1 are supported b1 globalization Answer B Diff 2 !age "ef 16 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.@ .hat are the main criticisms of globalization/ 6;) The process of shifting production from a domestic to a foreign location is known as ________. A) offshoring B) outsourcing C) licensing D) &oint 'enturing Answer A Diff 1 !age "ef 19 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.18 .hat is meant b1 offshoring/ .hat are the ma&or arguments for and against it/

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6<) !roponents of offshoring claim all +GC+!T which of the following/ A) Aggregate emplo1ment figures show that displaced workers find new &obs. B) %ffshoring increases the number of high3'alue &obs in the home countries of offshoring companies. C) %ffshoring is fundamentall1 better for workers than the introduction of labor3sa'ing technologies. D) There are upper limits on offshoring because there are not enough workers abroad with needed skills who will permanentl1 work for low wages. Answer C Diff 2 !age "ef 1931# $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.18 .hat is meant b1 offshoring/ .hat are the ma&or arguments for and against it/ 6>) A ma&or criticism of offshoring is that it ________. A) increases production costs B) e?changes good &obs for bad &obs C) threatens the so'ereignt1 of larger countries D) allows companies to a'oid pa1ment of an1 ta?es Answer B Diff 2 !age "ef 19 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.18 .hat is meant b1 offshoring/ .hat are the ma&or arguments for and against it/ 6@) Critics of offshoring claim all +GC+!T which of the following/ A) Cost sa'ings are seldom passed on to final consumers. B) .orkers who ha'e been displaced b1 offshoring do not ha'e the skills needed for higher3 'alue &obs. C) ,ncomes of workers in offshoring countries ha'e gone down as a percentage of national income. D) %ffshoring reduces the incomes of people in low3wage countries. Answer D Diff 2 !age "ef 1931# $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.18 .hat is meant b1 offshoring/ .hat are the ma&or arguments for and against it/

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98) .hich of the following conditions must be met for a compan1 to increase profits through foreign sales/ A) The compan1 can obtain resources abroad. B) The costs to make the sales do not increase disproportionatel1. C) The compan1 can offshore its production. D) The foreign market can be reached through e?porting rather than direct in'estment. Answer B Diff 2 !age "ef 1; $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.11 .h1 do companies engage in international business/ I.hat ad'antages do the1 gain/) 91) The tele'ising of sports competitions to 'iewers in multiple countries is an e?ample of international business conducted to achie'e the ob&ecti'e of ________. A) acAuiring resources B) minimizing risk C) offshoring D) sales e?pansion Answer D Diff 2 !age "ef 1; $kill Application %b&ecti'e $T(D) *(+$T,%- 1.11 .h1 do companies engage in international business/ I.hat ad'antages do the1 gain/) AAC$B "eflecti'e Thinking 92) A moti'e for a compan1 to conduct international business is to acAuire resources abroad. .hich of the following is -%T an e?ample of a resource acAuisition moti'e/ A) producing with lower labor costs B) gaining knowledge that the compan1 can use elsewhere C) following a customer into a foreign market D) gaining the means to differentiate a product Answer C Diff 2 !age "ef 1; $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.11 .h1 do companies engage in international business/ I.hat ad'antages do the1 gain/) 96) B1 operating internationall15 a compan1 ma1 reduce its risks because it can ________. A) take ad'antage of business3c1cle differences among countries B) bu1 competiti'e risk insurance not a'ailable in its home countr1 C) pre'ent competitors from operating in the countries it has entered D) operate in less competiti'e en'ironments than those at home Answer A Diff 2 !age "ef 1< $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.11 .h1 do companies engage in international business/ I.hat ad'antages do the1 gain/)
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99) An e?ample of a (.$. merchandise import is an automobile made in ________ and sold ________. A) the (nited $tates b1 a Japanese compan1H in the (nited $tates B) the (nited $tates b1 a Japanese compan1H outside the (nited $tates C) Japan b1 a Japanese compan1 in the (nited $tates D) Japan b1 a (.$. compan1H outside the (nited $tates Answer C Diff 2 !age "ef 1< $kill Application %b&ecti'e $T(D) *(+$T,%- 1.12 Define and gi'e e?amples of merchandise and ser'ice imports and e?ports. AAC$B "eflecti'e Thinking 9#) Kisible e?ports and imports are ________. A) merchandise imports and e?ports B) the sum total of goods and ser'ices traded C) international transactions paid for in mone1 rather than barter D) t1picall1 a countr14s least common international economic transactions Answer A Diff 1 !age "ef 28 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.12 Define and gi'e e?amples of merchandise and ser'ice imports and e?ports. 9;) An e?ample of a Japanese ser'ice e?port is a 'isit b1 a ________. A) Japanese citizen to Disne1land in the (nited $tates B) Japanese citizen to the Japan !a'ilion at +pcot Center in the (nited $tates C) (.$. citizen to the Japan !a'ilion at +pcot Center in the (nited $tates D) (.$. citizen to Tok1o Disne1land in Japan Answer D Diff 2 !age "ef 1< $kill Application %b&ecti'e $T(D) *(+$T,%- 1.12 Define and gi'e e?amples of merchandise and ser'ice imports and e?ports. AAC$B "eflecti'e Thinking 9<) "o1alties from the use of assets abroad5 such as trademarks or patents5 are an e?ample of ________. A) merchandise trade B) ser'ice trade C) 'isible trade D) a &oint 'enture Answer B Diff 2 !age "ef 1> $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.12 Define and gi'e e?amples of merchandise and ser'ice imports and e?ports.
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9>) A foreign direct in'estment occurs ________. A) onl1 when a compan1 owns more than #8 percent of a foreign firm B) when a compan1 controls a compan1 abroad C) when foreign ownership is in pri'ate rather than go'ernment securities D) with the establishment of a partnership rather than the purchase of a foreign firm Answer B Diff 2 !age "ef 1> $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.16 .hat are the t1pes of foreign in'estment/ 9@) Boreign direct in'estment ________. A) is undertaken onl1 b1 large companies B) includes the ownership of foreign bonds C) includes partiall1 owned foreign operations as long as the owner has controlling interest D) in terms of 'alue5 is mainl1 undertaken b1 small companies Answer C Diff 2 !age "ef 1> $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.16 .hat are the t1pes of foreign in'estment/ #8) .hen two or more organizations share ownership of a foreign direct in'estment5 the operation is called a ________. A) portfolio in'estment B) transnational corporation C) turnke1 operation D) &oint 'enture Answer D Diff 1 !age "ef 1> $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.16 .hat are the t1pes of foreign in'estment/ #1) .hich of the following is an e?ample of an international portfolio in'estment/ A) foreign ownership of bonds B) ownership of patents used b1 a foreign compan1 C) a &oint 'enture with a foreign compan1 D) one of a group of se'eral foreign companies wholl1 owned b1 the same in'estor Answer A Diff 2 !age "ef 1@ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.16 .hat are the t1pes of foreign in'estment/

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#2) A multinational enterprise I0-+) is one that is ________. A) among the world4s #88 largest companies B) owned and managed b1 companies whose headAuarters are split among different countries C) licensed to operate b1 the (nited -ations Transnational Center D) willing to consider market and production locations an1where in the world Answer D Diff 1 !age "ef 1@ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.19 .hat is a multinational enterprise I0-+)/ #6) According to the definition used in 1our te?t5 a compan1 with operations in more than one countr1 is aIn) ________. A) multinational enterprise B) &oint 'enture partner C) international operator D) born3global compan1 Answer A Diff 1 !age "ef 1@ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.19 .hat is a multinational enterprise I0-+)/ #9) The term sometimes used b1 the (nited -ations as a s1non1m for multinational enterprise is ________. A) multinational corporation B) transnational compan1 C) stateless compan1 D) global enterprise Answer B Diff 2 !age "ef 1@ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.19 .hat is a multinational enterprise I0-+)/ ##) .hich of the following must be true about a compan1 in order for it to be considered a multinational enterprise/ A) The compan1 is large with 'ast resources. B) The compan1 holds direct in'estments in at least fi'e countries. C) The compan1 does not limit its e'aluation of markets and production to an1 one countr1. D) The organization must be a born3global compan1. Answer C Diff 2 !age "ef 1@ $kill Application %b&ecti'e $T(D) *(+$T,%- 1.19 .hat is a multinational enterprise I0-+)/ AAC$B Anal1tic $kills

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#;) !olitics5 law5 culture5 and econom1 are all e?amples of ________ factors that can affect the wa1s in which companies produce and sell their products in foreign markets. A) social B) ph1sical C) competiti'e D) political Answer A Diff 1 !age "ef 28 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1# .hat do we mean b1 a compan14s ph1sical and social en'ironments/ .h1 should companies understand them when engaging in international business/ #<) 0anagers who are knowledgeable about ________ are better able to identif1 the location5 Auantit15 Aualit15 and a'ailabilit1 of the world4s natural resources. A) political factors B) geographic factors C) competiti'e factors D) cultural factors Answer B Diff 1 !age "ef 28 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1# .hat do we mean b1 a compan14s ph1sical and social en'ironments/ .h1 should companies understand them when engaging in international business/ #>) Although (.$. films depend hea'il1 on re'enue in foreign countries5 re'enue from international markets is usuall1 low for a sports3themed film. This is due to ________ factors. A) political B) geographic C) beha'ioral D) legal Answer C Diff 2 !age "ef 21 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1# .hat do we mean b1 a compan14s ph1sical and social en'ironments/ .h1 should companies understand them when engaging in international business/ AAC$B "eflecti'e Thinking

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#@) ,n addition to understanding the laws affecting business in countries where their companies operate5 it is most important for managers to understand which of the following legal factors/ A) the methods for appointing &udges B) the ethical rationale behind the laws C) the histor1 of the countr14s legal s1stem D) the degree of enforcement of laws Answer D Diff 2 !age "ef 21 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1# .hat do we mean b1 a compan14s ph1sical and social en'ironments/ .h1 should companies understand them when engaging in international business/ AAC$B +thical "easoning ;8) $ome ke1 ________ factors in the e?ternal en'ironment of an international business are product strateg1 and resource base and e?perience. A) geographic B) political C) competiti'e D) beha'ioral Answer C Diff 1 !age "ef 22 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1; Eow does a compan14s competiti'e en'ironment affect its international operations/ Eow might its competiti'e en'ironment differ from one countr1 to another/ ;1) The same automobile compan1 produces Biats and Berraris. The compan1 built an engine plant in China with low production costs for Biats5 but not Berraris. The probable reason is that ________. A) Biat competes mainl1 on a focus strateg15 whereas Berrari competes mainl1 on a mass3market strateg1 B) Biat competes mainl1 on a mass3market strateg15 whereas Berrari competes mainl1 on a focus strateg1 C) Berrari faces global competitors in China5 whereas Biat competes in China mainl1 against Chinese competitors D) although Berrari did not build an engine plant5 it will use the same Biat engines in its models Answer B Diff 2 !age "ef 22 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1; Eow does a compan14s competiti'e en'ironment affect its international operations/ Eow might its competiti'e en'ironment differ from one countr1 to another/ AAC$B Anal1tic $kills

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;2) .hich of the following statements is true concerning the international business competiti'e en'ironment/ A) Although countries4 market sizes differ5 companies usuall1 face about the same number of competitors in each national market. B) ,n most industries5 companies face the same competitors in each countr1 where the1 operate. C) ,t takes about the same amount of resources to gain national distribution in a large countr1 as in a small one. D) Being a leader in one countr1 doesn4t guarantee 1ou4ll be a leader in an1 other countr1. Answer D Diff 2 !age "ef 22 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1; Eow does a compan14s competiti'e en'ironment affect its international operations/ Eow might its competiti'e en'ironment differ from one countr1 to another/ AAC$B Anal1tic $kills ;6) .hen companies face the same competitors in almost all countries where the1 operate5 ________. A) what the1 learn about each other in one countr1 is useful in predicting the other4s strategies and actions elsewhere B) the market leader is the same e'er1where C) there is less need to understand the ph1sical and societal factors of each countr1 D) the1 are less likel1 to enter &oint 'entures with other companies Answer A Diff 2 !age "ef 22 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1; Eow does a compan14s competiti'e en'ironment affect its international operations/ Eow might its competiti'e en'ironment differ from one countr1 to another/ AAC$B Anal1tic $kills ;9) The 'iew that globalization is ine'itable is based on the belief that ________. A) international organizations will replace nation states B) protesters against globalization will be persuaded to change their 'iews C) people want more global homogeneit1 of cultures D) technical ad'ances in transportation and communications are too per'asi'e for globalization4s growth to be hindered Answer D Diff 2 !age "ef 26 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1< .hat are the three main 'iewpoints about the future of globalization/ AAC$B (se of ,T

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;#) Critics of the 'iew that regionalization will pre'ail o'er globalization base their argument on the belief that ________. A) regionalization is a transition stage toward globalization B) neighboring countries are more apt to disagree politicall1 than countries that are distant from each other C) neighboring countries are too geographicall1 similar to ha'e man1 different goods to trade with each other D) business in non3territorial areas is not regional Answer A Diff 2 !age "ef 26 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1< .hat are the three main 'iewpoints about the future of globalization/ ;;) .hich of the following is -%T cited in 1our te?t as support for the belief that the pace of globalization will slow or re'erse/ A) Antiglobalization interests ha'e been successful in electing parties that oppose freer mo'ement of trade or people. B) Technological ad'ances will slow in the future. C) $ome ma&or countries ha'e either ignored international treaties or ha'e refused to sign them. D) The growing split between parties who succeed in a global en'ironment and those who do not will foster greater antiglobalization sentiments. Answer B Diff 2 !age "ef 26 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1< .hat are the three main 'iewpoints about the future of globalization/ AAC$B Anal1tic $kills ;<) $ome obser'ers feel that international institutions and the people working in them cannot adeAuatel1 handle the comple?ities of an interconnected world. Based on this5 these obser'ers belie'e that ________. A) international business will grow primaril1 on a regional basis B) globalization is ne'ertheless ine'itable C) globalization will slow in the future D) pri'ate companies will replace international organizations in running the world4s econom1 Answer C Diff 2 !age "ef 29 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1< .hat are the three main 'iewpoints about the future of globalization/ AAC$B Anal1tic $kills

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;>) ,n Chapter %ne4s opening case on the globalization of sports5 the owner of a (.$. football team and the owner of a Canadian hocke1 team bought a British soccer team. This is an e?ample of ________. A) ro1alties B) portfolio in'estment C) a turnke1 operation D) a &oint 'enture Answer D Diff 2 !age "ef 1> $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1> .hat lessons in chapter 1 are illustrated b1 the opening or closing case/ AAC$B "eflecti'e Thinking ;@) ,n Chapter %ne4s opening case on the globalization of sports5 we saw that man1 teams ha'e foreign pla1ers. These pla1ers ha'e mo'ed abroad primaril1 because of ________ factors. A) economic B) geographic C) international legal D) offshoring Answer A Diff 2 !age "ef 2 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1> .hat lessons in chapter 1 are illustrated b1 the opening or closing case/ <8) ,n Chapter %ne4s closing case on Carni'al Cruise Lines5 we saw that cruise lines pa1 little or no ta?es because ________. A) of international ta? treaties B) the1 take ad'antage of different ta?ation and emplo1ment laws in foreign countries C) international law does not appl1 in noncoastal areas of the oceans D) the1 use focus strategies Answer B Diff 2 !age "ef 2; $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1> .hat lessons in chapter 1 are illustrated b1 the opening or closing case/ AAC$B Anal1tic $kills

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<1) A flag of con'enience is ________. A) the declaration that a product is made in a countr1 that has easier legal access to a gi'en foreign market B) a designation for products originating within a particular trading group C) the registration of a shipping or cruise compan1 in a countr1 that charges low ta?es D) one representing the pirac1 of ships in international waters Answer C Diff 2 !age "ef 2; $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1> .hat lessons in chapter 1 are illustrated b1 the opening or closing case/ <2) :lobalization refers to all economic transactions among countries. Answer BAL$+ Diff 1 !age "ef # $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1 .hat are international business and globalization/ .hat is the relationship between them/ <6) ,nternational business includes all commercial transactions between two or more countries. Answer T"(+ Diff 1 !age "ef # $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1 .hat are international business and globalization/ .hat is the relationship between them/ <9) :aining some understanding of international business is important for an1 business student because global e'ents and competition affect almost all companies. Answer T"(+ Diff 1 !age "ef ; $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.2 .h1 should 1ou stud1 international business/ <#) The best wa1 of conducting business domesticall1 is also t1picall1 the best wa1 to conduct business internationall1. Answer BAL$+ Diff 1 !age "ef ; $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.2 .h1 should 1ou stud1 international business/ AAC$B 0ulticultural and Di'ersit1

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<;) ,t is difficult to compare globalization of business o'er time because shifting national borders ha'e changed the nature of transactions from domestic to international and 'ice 'ersa. Answer T"(+ Diff 2 !age "ef < $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.6 +?plain how globalization has changed o'er time and differs both among countries and within countries. AAC$B 0ulticultural and Di'ersit1 <<) 0ost countries4 imports account for more than half of their citizens4 consumption. Answer BAL$+ Diff 2 !age "ef < $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.6 +?plain how globalization has changed o'er time and differs both among countries and within countries. <>) The lowering of ta? rates around the world is one of the se'en ma&or forces behind recent globalization. Answer BAL$+ Diff 2 !age "ef <3> $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.9 ,dentif1 and e?plain the se'en forces that ha'e been causing the growth in globalization. <@) :lobalization of business has been stimulated b1 institutional de'elopments that aid foreign trade and in'estment. Answer T"(+ Diff 1 !age "ef @ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.9 ,dentif1 and e?plain the se'en forces that ha'e been causing the growth in globalization. >8) The recent e?pansion of technolog1 has contributed to the growth in international business b1 creating new products that are important in world trade. Answer T"(+ Diff 1 !age "ef > $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.# Eow is technolog1 affecting the growth of international business/ AAC$B (se of ,T

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>1) ,mpro'ements in transportation and communications enable managers to better o'ersee foreign operations. Answer T"(+ Diff 1 !age "ef > $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.# Eow is technolog1 affecting the growth of international business/ AAC$B (se of ,T >2) ,mport restrictions are becoming less important because consumers increasingl1 want to bu1 goods and ser'ices produced in their own countries. Answer BAL$+ Diff 2 !age "ef @318 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.; .h1 ha'e most go'ernments lowered restrictions on international trade and resource mo'ements/ AAC$B Anal1tic $kills >6) Countries ha'e reduced import trade barriers in the e?pectation that other countries will do the same. Answer T"(+ Diff 2 !age "ef 18311 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.; .h1 ha'e most go'ernments lowered restrictions on international trade and resource mo'ements/ AAC$B Anal1tic $kills >9) 0an1 companies merge with or acAuire other companies to gain operating efficiencies that help them compete with or become global leaders. Answer T"(+ Diff 2 !age "ef @ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.< .hat is the relationship between competition and globalization/ AAC$B Anal1tic $kills >#) ,t is rare for a new compan1 to locate its operations near competitors and suppliers. Answer BAL$+ Diff 2 !age "ef @ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.< .hat is the relationship between competition and globalization/

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>;) :o'ernments sometimes cooperate to deal with areas of concern that lie outside the territor1 of an1 one countr1. Answer T"(+ Diff 1 !age "ef 18 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.> .h1Dhow do countries cooperate with other countries/ Eow does this cooperation affect international business/ AAC$B +thical "easoning ><) :o'ernments cooperate through treaties to create a global di'ision of labor. Answer BAL$+ Diff 1 !age "ef 18 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.> .h1Dhow do countries cooperate with other countries/ Eow does this cooperation affect international business/ >>) !eople fa'oring globalization claim that the process helps countries strengthen their so'ereignt1. Answer BAL$+ Diff 2 !age "ef 12 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.@ .hat are the main criticisms of globalization/ AAC$B 0ulticultural and Di'ersit1 >@) A criticism of globalization is that as economic growth increases5 too man1 nonrenewable resources are used. Answer T"(+ Diff 2 !age "ef 16 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.@ .hat are the main criticisms of globalization/ AAC$B +thical "easoning @8) The process of shifting production to a foreign countr1 is known as outsourcing. Answer BAL$+ Diff 1 !age "ef 19 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.18 .hat is meant b1 offshoring/ .hat are the ma&or arguments for and against it/ @1) A ma&or argument against offshoring is that cost sa'ings are not passed on to consumers. Answer T"(+ Diff 2 !age "ef 19 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.18 .hat is meant b1 offshoring/ .hat are the ma&or arguments for and against it/

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@2) 0an1 professional basketball teams recruit tall 1oungsters in foreign countries into basketball camps where the1 can de'elop basketball skills and perhaps become candidates for professional pla1. This is an e?ample of engaging in international business to acAuire resources. Answer T"(+ Diff 2 !age "ef 1; $kill Application %b&ecti'e $T(D) *(+$T,%- 1.11 .h1 do companies engage in international business/ I.hat ad'antages do the1 gain/) AAC$B "eflecti'e Thinking @6) B1 operating internationall15 a compan1 ma1 take ad'antage of business3c1cle differences among countries and thereb1 reduce its financial risks. Answer T"(+ Diff 2 !age "ef 1< $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.11 .h1 do companies engage in international business/ I.hat ad'antages do the1 gain/) @9) The production of goods b1 a Brench compan1 in ,tal1 for sale in ,tal1 is an e?ample of an ,talian merchandise import. Answer BAL$+ Diff 2 !age "ef 1< $kill Application %b&ecti'e $T(D) *(+$T,%- 1.12 Define and gi'e e?amples of merchandise and ser'ice imports and e?ports. AAC$B "eflecti'e Thinking @#) .hen a (.$. citizen flies Japan Airlines5 it is a ser'ice e?port for Japan. Answer T"(+ Diff 2 !age "ef 1<31> $kill Application %b&ecti'e $T(D) *(+$T,%- 1.12 Define and gi'e e?amples of merchandise and ser'ice imports and e?ports. AAC$B "eflecti'e Thinking @;) A &oint 'enture is an e?ample of a portfolio in'estment. Answer BAL$+ Diff 2 !age "ef 1> $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.16 .hat are the t1pes of foreign in'estment/ @<) The ownership of foreign bonds is an e?ample of a portfolio in'estment. Answer T"(+ Diff 2 !age "ef 1@ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.16 .hat are the t1pes of foreign in'estment/
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@>) A multinational enterprise is a compan1 that takes a global approach to markets and production. Answer T"(+ Diff 1 !age "ef 1@ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.19 .hat is a multinational enterprise I0-+)/ @@) The terms multinational corporation and multinational compan1 are freAuentl1 used s1non1ms for strategic alliances. Answer BAL$+ Diff 2 !age "ef 1@ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.19 .hat is a multinational enterprise I0-+)/ 188) :eographical barriers often affect distribution channels within countries5 but the1 rarel1 affect communication. Answer BAL$+ Diff 2 !age "ef 28 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1# .hat do we mean b1 a compan14s ph1sical and social en'ironments/ .h1 should companies understand them when engaging in international business/ 181) 0anagers need to understand not onl1 the laws of countries where the1 operate5 but also how those laws are enforced. Answer T"(+ Diff 2 !age "ef 21 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1# .hat do we mean b1 a compan14s ph1sical and social en'ironments/ .h1 should companies understand them when engaging in international business/ AAC$B 0ulticultural and Di'ersit1 182) A compan1 with limited resources is more likel1 to achie'e national distribution within a small countr1 than within a large countr1. Answer T"(+ Diff 2 !age "ef 22 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1; Eow does a compan14s competiti'e en'ironment affect its international operations/ Eow might its competiti'e en'ironment differ from one countr1 to another/ AAC$B Anal1tic $kills

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186) The fact that a compan1 is the market leader in one countr1 is no guarantee that it will be the leader in another countr1. Answer T"(+ Diff 2 !age "ef 22 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1; Eow does a compan14s competiti'e en'ironment affect its international operations/ Eow might its competiti'e en'ironment differ from one countr1 to another/ 189) The 'iew that globalization is ine'itable is primaril1 based on the belief that international organizations will replace nation states. Answer BAL$+ Diff 1 !age "ef 26 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1< .hat are the three main 'iewpoints about the future of globalization/ 18#) The 'iew that regionalization5 rather than globalization5 will pre'ail in the future is largel1 based on the use of common languages among countries in a region. Answer BAL$+ Diff 2 !age "ef 26 $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1< .hat are the three main 'iewpoints about the future of globalization/ AAC$B 0ulticultural and Di'ersit1 18;) ,n a short essa15 define international business. Answer ,nternational business is all commercial transactionspri'ate and go'ernmentalbetween two or more countries. !ri'ate businesses undertake such transactions for profitH go'ernments ma1 or ma1 not do the same in their transactions. These transactions include sales5 in'estments5 and transportation. Diff 1 !age "ef # $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.1 .hat are international business and globalization/ .hat is the relationship between them/ 18<) ,n a short essa15 discuss wh1 the stud1 of international business is important to managers. Answer A simple answer is that international business comprises a large and growing portion of the world4s total business. :lobal e'ents affect almost all companies. A more comple? answer is that a compan1 operating internationall1 will engage in modes of business5 such as e?porting and importing5 that differ from those it is accustomed to domesticall1. To operate effecti'el15 managers must understand these different modes. Diff 2 !age "ef #3; $kill Application %b&ecti'e $T(D) *(+$T,%- 1.2 .h1 should 1ou stud1 international business/ AAC$B Anal1tic $kills 18>) ,n a short essa15 list and describe se'en ma&or factors that ha'e led to the increased growth
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in international business in recent decades. Answer a. "apid increase in an e?pansion of technolog1B1 increasing the demand for new products and ser'ices5 technolog1 has tremendous impact on international business. As the demand increases5 so do the number of international business transactions. ,mpro'ed communications and transportation speed up interactions and impro'e managers4 abilit1 to control foreign operations. b. Liberalization of cross3border mo'ementsAlthough the past decrease in restrictions has been erratic5 go'ernments ha'e lowered barriers because their citizens ha'e e?pressed the desire for better access to a greater 'ariet1 of goods and ser'ices at lower prices. :o'ernments also reason that their domestic producers will become more efficient as a result of foreign competition5 and the1 hope to induce other countries to reduce their barriers to international mo'ements. c. ,ncrease in global competitionThe pressures of increased foreign competition can persuade a compan1 to e?pand its business into international markets. Toda1 companies can respond rapidl1 to man1 foreign sales opportunities. The1 can shift production Auickl1 among countries if the14re e?perienced in foreign markets and because the1 can transport goods efficientl1 from most places. d. :rowing consumer pressuresConsumers are sa''ier and ha'e more income. The1 want to be able to bu1 the 'ariet1 and low3cost products a'ailable from an1where in the world. e. De'elopment of supporting ser'icesCompanies and go'ernments ha'e de'eloped ser'ices that ease international business. Toda15 producers can be paid relati'el1 easil1 for goods and ser'ices sold abroad because of bank credit agreements5 clearing arrangements that con'ert one countr14s currenc1 into another4s5 and insurance that co'ers damage en route and nonpa1ment b1 the bu1er. f. Changing political situationsThe schism between communist and noncommunist countries is basicall1 o'er5 as communist countries ha'e mo'ed toward transitioning their economiesH therefore5 trade between these countries has increased. g. +?panded cross3national cooperationCountries realize the1 can4t go it alone. The1 cooperate to gain reciprocal ad'antages5 to attack problems &ointl15 and to deal with areas outside the confines of an1 countr1. Diff 6 !age "ef <311 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.9 ,dentif1 and e?plain the se'en forces that ha'e been causing the growth in globalization. AAC$B Anal1tic $kills

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18@) ,n a short essa15 discuss wh1 go'ernments ha'e been liberalizing cross3border mo'ements of goods5 ser'ices5 and resources. Answer :enerall15 go'ernments toda1 impose fewer restrictions on cross3border mo'ements than the1 did a decade or two ago. The1 ha'e lowered them for the following reasons a. Their citizens ha'e e?pressed the desire for easier access to a greater 'ariet1 of goods and ser'ices at lower prices. b. The1 reason that their domestic producers will become more efficient as a result of foreign competition. c. The1 hope to induce other countries to reduce their barriers to international mo'ements. Diff 2 !age "ef > $kill Application %b&ecti'e $T(D) *(+$T,%- 1.; .h1 ha'e most go'ernments lowered restrictions on international trade and resource mo'ements/ AAC$B Anal1tic $kills 118) :i'e at least two e?amples of business and go'ernment ser'ices that ease the conduct of international business. Answer Banks ha'e de'eloped efficient means for companies to recei'e pa1ment for their foreign sales. Toda15 most producers can be paid relati'el1 easil1 for goods and ser'ices sold abroad because of bank credit agreements5 clearing arrangements that con'ert one countr14s currenc1 into another4s5 and insurance that co'ers damage en route and nonpa1ment b1 the bu1er. Diff 2 !age "ef @ $kill Application %b&ecti'e $T(D) *(+$T,%- 1.; .h1 ha'e most go'ernments lowered restrictions on international trade and resource mo'ements/ AAC$B "eflecti'e Thinking 111) ,n a short essa15 list and describe the three primar1 reasons companies engage in international business. Answer a. To e?pand salesThe number of people and the amount of their purchasing power are higher for the world as a whole than for a single countr15 so companies ma1 increase their sales b1 reaching international markets. %rdinaril15 higher sales mean higher profits5 assuming the costs of international marketing and distribution do not outpace profits. b. To acAuire resources0anufacturers and distributors seek out products5 ser'ices5 and components produced in foreign countries. The1 also look for foreign capital5 technologies5 and information the1 can use at home. $ometimes the1 do this to reduce costs. AcAuiring resources ma1 enable a compan1 to impro'e its product Aualit1 and differentiate itself from competitorsin both cases5 potentiall1 increasing market share and profits. c. To minimize competiti'e risk0an1 companies enter into international business for defensi'e reasons. The1 want to counter ad'antages competitors might gain in foreign markets that5 in turn5 could hurt them domesticall1. Diff 2 !age "ef 1;31< $kill Application %b&ecti'e $T(D) *(+$T,%- 1.11 .h1 do companies engage in international business/ I.hat ad'antages do the1 gain/) AAC$B Anal1tic $kills
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112) ,n a short essa15 define and gi'e e?amples of merchandise and ser'ice imports and e?ports. Answer a. 0erchandise e?ports are tangible productsgoodssent out of a countr1. 0erchandise imports are goods brought into a countr1. .hen a Chinese contractor sends to1 action figures from China to Easbro in the (nited $tates5 the contractor e?ports and Easbro imports. b. $er'ice e?ports and imports generate nonproduct international earnings. The compan1 or indi'idual recei'ing pa1ment is making a ser'ice e?port. The compan1 or indi'idual pa1ing is making a ser'ice import. .hen an American tourist sta1s at a hotel in London5 the hotel sta1 is the ser'ice e?port. Diff 2 !age "ef 1< $kill Application %b&ecti'e $T(D) *(+$T,%- 1.12 Define and gi'e e?amples of merchandise and ser'ice imports and e?ports. AAC$B "eflecti'e Thinking 116) ,n a short essa15 list and discuss three sources of ser'ice e?ports and imports. Answer a. Tourism and transportation,nternational tourism and transportation are important sources of re'enue for airlines5 shipping companies5 tra'el agencies5 and hotels. b. !erformance of ser'ices$ome ser'ices5 such as banking5 insurance5 rentals5 engineering5 and management ser'ices5 net companies earnings in the form of fees. %n an international le'el5 for e?ample5 companies pa1 fees for engineering ser'ices that are often handled through turnke1 operations. Companies also pa1 fees for management contracts. c. (se of assets.hen companies allow others to use their assets5 such as trademarks5 patents5 cop1rights5 or e?pertise under contracts5 the1 recei'e earnings called ro1alties. Di'idends and interest paid on foreign in'estments are also treated as ser'ice e?ports and imports because the1 represent the use of assets. Diff 6 !age "ef 1<31> $kill Application %b&ecti'e $T(D) *(+$T,%- 1.12 Define and gi'e e?amples of merchandise and ser'ice imports and e?ports. AAC$B Anal1tic $kills

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119) ,n a short essa15 describe the following modes of international business discussed in the te?t licensing and franchising5 turnke1 operations5 management contracts5 direct in'estment5 and portfolio in'estment. Answer a. Licensing and franchisingLicensing agreements are used when companies allow others to use their assets5 such as trademarks5 patents5 cop1rights5 or e?pertise under contract. Branchising is a mode of business in which one part1 allows another part1 the use of a trademark that is an essential asset for the franchisee4s business. b. Turnke1 operations"efers to business operations5 performed under contract5 that are transferred to the owner when the1 are read1 to begin operating. c. 0anagement contracts"efers to arrangements in which one compan1 pro'ides personnel to perform general or specialized management functions for another compan1. d. Direct and portfolio in'estmentA direct in'estment is one that gi'es the in'estor a controlling interest in a foreign compan1. A portfolio in'estment is a noncontrolling interest in a compan1 or ownership of a loan to another part1. Diff 6 !age "ef 1<31@ $kill Application %b&ecti'e $T(D) *(+$T,%- 1.16 .hat are the t1pes of foreign in'estment/ AAC$B Anal1tic $kills 11#) ,n a short essa15 define a multinational enterprise. Answer The multinational enterprise I0-+) is a compan1 that takes a global approach to foreign markets and production. ,t is willing to consider market and production locations an1where in the world. Eowe'er5 most writers use the term to mean an1 compan1 with operations in more than one countr1. Diff 1 !age "ef 1@ $kill Concept %b&ecti'e $T(D) *(+$T,%- 1.19 .hat is a multinational enterprise I0-+)/

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11;) ,n a short essa15 identif1 and discuss the fi'e ke1 ph1sical and social factors that affect how a compan1 conducts international business. Answer a. :eographical influences:eographical differences account for the une'en distribution of the world4s resources5 which greatl1 influences where different products and ser'ices are produced. :eographical barriers within a countr1 or between countries affect distribution and sometimes communication channels. Another geographical factor is the potential for natural disasterssuch as floods5 hurricanes5 or earthAuakesthat would disrupt business or affect the a'ailabilit1 of supplies or the prices of products. Binall15 population distribution and en'ironmental impact will likel1 become more important influences on international business. b. !olitical policiesA nation4s political policies of course affect how international business is conducted within its borders. ,n particular5 political disputes can disrupt the flow of international business. c. Legal policiesDomestic law5 which includes both home3 and host3countr1 regulations on issues such as ta?ation and emplo1ment5 affects how a compan1 can operate internationall1. ,nternational lawthe legal agreements between countriesalso ob'iousl1 affects multinational enterprises. Eowe'er5 all laws are not eAuall1 enforced throughout the world. Because some countries ha'e not &oined in international treaties or ha'e chosen to ignore some aspects of international law5 managers of an international business must understand how laws are enforced abroad. d. Beha'ioral factors,t is important for managers of an international business to understand 'alues5 attitudes5 and beliefs in foreign en'ironmentsH this understanding can help them make informed operating decisions in different countries. e. +conomic forces+conomics helps to e?plain a number of factors rele'ant to international business wh1 countries e?change goods and ser'ices5 wh1 one countr14s currenc1 has a certain worth in comparison to another4s5 and wh1 one countr1 can produce goods and ser'ices at a different cost than another. Diff 6 !age "ef 28321 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1# .hat do we mean b1 a compan14s ph1sical and social en'ironments/ .h1 should companies understand them when engaging in international business/ AAC$B 0ulticultural and Di'ersit1

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11<) ,n a short essa15 identif1 and e?plain three competiti'e factors that influence international businesses. Answer a. !roduct strateg1A compan14s choice of strateg15 either cost or differentiation5 pla1s a part in determining how and where the compan1 will operate. b. Compan1 resources and e?perienceA compan14s size5 resources5 and e?perience in comparison to competitors4 affects how it will operate in international markets. ,n addition5 a compan14s national market share and brand recognition will affect the operating tactics it emplo1s. c. Competitors faced in each market$uccess for a compan1 in an1 market will alwa1s be influenced b1 the strategies and operations of competitors within the market. Diff 2 !age "ef 22 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1; Eow does a compan14s competiti'e en'ironment affect its international operations/ Eow might its competiti'e en'ironment differ from one countr1 to another/ AAC$B Anal1tic $kills 11>) ,n a short essa15 identif1 the three main opinions about the future of globalization and e?plain at least one argument supporting each opinion. Answer The three main 'iews of the future of globalization are as follows further globalization is ine'itable5 or international business will grow regionall1 rather than globall15 or forces working against globalization will slow both trends. The 'iew that increased growth in international business is ine'itable is supported b1 the power of 0-+s who ha'e multiple production and distribution networks and are able to pressure go'ernments to place fewer restrictions on international business. The 'iew that growth will occur regionall1 rather than globall1 is based on studies that show that most =global= transactions actuall1 occur between neighboring countries. Binall15 the 'iew that globalization will be slowed b1 pressure from the antiglobalization mo'ement to raise barriers and re&ect international treaties and organizations stems from the success of such groups in the past. Diff 6 !age "ef 26 $kill Application %b&ecti'e $T(D) *(+$T,%- 1.1< .hat are the three main 'iewpoints about the future of globalization/ AAC$B Anal1tic $kills

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