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1 Copyright © 2017 Pearson Education, Inc.
International Business: The New Realities, 4e (Cavusgil)
Chapter 1 Introduction: What Is International Business?
1) International business is defined as the performance of ________ activities by firms across national borders.
- marketing and fiduciary
- trade and investment
- finance and operational
- accounting and auditing
Answer: B
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
2) International business is also known as which of the following?
- born global business
- laissez-faire business
- cross-border business
- multi-hub business
Answer: C
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
3) Which of the following best characterizes the development of international business?
- It has existed in some form for centuries.
- It first started in Europe.
- It developed after the year 2000.
- Its development has slowed in recent years.
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
4) A few decades ago, international business was largely the domain of ________.
- service firms
- multinational firms
- smaller firms
- all of the above
Answer: B
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
International Business The New Realities 4e Cavusgil, Knight, Riesenberger (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4
2 Copyright © 2017 Pearson Education, Inc.5) Which of the following is another term for importing?
- capital investment
- supply side development
- global sourcing
- unilateral procurement
Answer: C
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
6) Which of the following is subject to importing and exporting?
- both finished products and intermediate goods
- finished products but not intermediate goods
- intermediate goods but not raw materials
- raw materials and components, but not finished products
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
7) ________ refers to the transfer of assets to another country or the acquisition of assets in that country.
- International investment
- International trade
- Importing
- Exporting
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
8) Each of the following represents a factor of production EXCEPT ________.
- manufacturing infrastructure
- technology
- government regulations
- managerial talent
Answer: C
Diff: 2: Moderate
Skill: Application
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking 2 / 4
3 Copyright © 2017 Pearson Education, Inc.9) Which of the following would NOT be considered an example of foreign direct investment
(FDI)?
- cross-border purchase of a textile plant
- cross-border purchase of stocks
- purchase of capital assets of a foreign company
- purchase of foreign land for business operations
Answer: B
Diff: 2: Moderate
Skill: Application
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
10) ________ is the total value of products and services produced in a country over the course of a year.
A) GDP
B) CAD
C) FDI
D) PPP
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
11) Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades?
- Both world exports and domestic production have grown significantly over the past 30 years.
- The cost to import products is generally higher than the cost to produce domestic products.
- Growth in gross domestic product in most countries has steadily increased since 1970.
- Advanced economies now source many of their consumable products from low-cost
manufacturing nations.
Answer: D
Diff: 3: Hard
Skill: Critical Thinking
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking; Environments and Reflective Thinking
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4 Copyright © 2017 Pearson Education, Inc.12) Each of the following has contributed to the rapid growth of trade among nations EXCEPT
________.
- the growth of emerging market countries
- the increase in trade barriers
- advances in information technology
- the liberalization of markets
Answer: B
Diff: 2: Moderate
Skill: Application
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
Freehold Investment Corp. (Scenario) Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures.
13) At the meeting, Dan explains to the attendees that Freehold direct investment projects differ from international trade in that ________.
- the firm itself is crossing international borders to purchase foreign assets
- the firm is restricting its investments to stocks and does not purchase mutual funds
- the firm has chosen to focus strictly on the technology sector
- the firm is engaging in the transfer of products across national borders
Answer: A
Diff: 1: Easy
Skill: Concept
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
14) Dan discusses an investment opportunity that involves the purchase of selected securities from the Chinese stock market. This opportunity represents which type of international investment?
- indirect production
- international portfolio
- foreign direct
- domestic securities
Answer: B
Diff: 2: Moderate
Skill: Application
Objective: 1-1: Learn the key concepts in international business
AACSB: Analytical Thinking
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