International Business: The New Realities, 5e

International Business: The New Realities, 5e

(Cavusgil) Chap

ter 1 Introduction: What Is International Business?

1)International business is defined as the performance of ________ activities by firms across na tional borders.A)marketing and fiduciary B)trade and investment C)finance and operational D)accounting and auditing

Answer: B

Diff: 1: Easy

Skill: Concept

Objective:

1-1: Describe the key concepts in international business

AA

CSB: Application of Knowledge

2)International business is also known as which of the following?A)born global business B)laissez-faire business C)cross-border business D)multi-hub business Answer: CDiff: 1: EasySkill: ConceptObjective:

1-1: Describe the key concepts in international business

AA

CSB: Application of Knowledge

3)Which of the following best characterizes the development of international business?A)It has existed in some form for centuries.B)It first started in Europe.C)It developed after the year 2000.D)Its development has slowed in recent years.Answer: ADiff: 1: EasySkill: ConceptObjective:

1-1: Describe the key concepts in international business

AA

CSB: Application of Knowledge

4)A few decades ago, international business was largely the domain of ________.A)service firms B)multinational firms

• smaller firmsD) all of the theseAnswer: BDiff: 1: EasySkill: Concept

Objective:

1-1: Describe the key concepts in international business

AA

CSB: Application of Knowledge

1 .International Business The New Realities, 5e Cavusgil, Knight, Riesenberger (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

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: Describe the key concepts in international business

AACSB: Application of Knowledge

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: Describe the key concepts in international business

AACSB: Application of Knowledge

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: Describe the key concepts in international business

AACSB: Application of Knowledge

8) Each of the following represents a factor of production EXCEPT ________.

• manufacturing infrastructure
• technology
• government regulations
• managerial talent

Answer: C

Diff: 2: Moderate

Skill: Concept

Objective: 1-1: Describe the key concepts in international business

AACSB: Application of Knowledge

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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: Describe the key concepts in international business

AACSB: Application of Knowledge

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: Describe the key concepts in international business

AACSB: Application of Knowledge

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: Describe the key concepts in international business

AACSB: Analytical Thinking

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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: Describe the key concepts in international business

AACSB: Application of Knowledge

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: Describe the key concepts in international business

AACSB: Application of Knowledge

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: Describe the key concepts in international business

AACSB: Analytical Thinking

4 .

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