download instant at www.easysemester.com
International Business: The New Realities, 2e (Cavusgil/Knight/Riesenberger)
Chapter 2 Globalization of Markets and the Internationalization of the Firm
1) The initial phase of globalization was triggered in part by the introduction of the railroad.
Answer: TRUE
Diff: 1 Page Ref: 31
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
2) The Great Depression marked the beginning of the second phase of globalization.
Answer: FALSE
Diff: 2 Page Ref: 32
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
3) A firm's decision to internationalize is generally made as a reaction to the phenomenon of market globalization.
Answer: FALSE
Diff: 1 Page Ref: 34
Skill: Concept
Objective: 2-2
AACSB: Dynamics of the global economy
4) Firms that pursue internationalization as a strategic move tend to approach global competition more aggressively than do firms that internationalize for reactive reasons.
Answer: TRUE
Diff: 2 Page Ref: 34
Skill: Concept
Objective: 2-2
AACSB: Dynamics of the global economy
5) In advanced regional economic integration blocs such as the "common market," barriers are removed to the cross-border flow of factors of production.
Answer: TRUE
Diff: 2 Page Ref: 35
Skill: Concept
Objective: 2-3
AACSB: Dynamics of the global economy
6) Converging lifestyles and preferences worldwide help to promote traditional values in individual countries.
Answer: FALSE
Diff: 2 Page Ref: 36
Skill: Concept
Objective: 2-3
AACSB: Dynamics of the global economy
7) One method used by global companies to drive down prices is product standardization.
Answer: TRUE
Diff: 1 Page Ref: 36
Skill: Concept
Objective: 2-3
AACSB: Dynamics of the global economy
8) One contribution of the World Trade Organization is to help maintain reduced trade barriers throughout the world.
Answer: TRUE
Diff: 1 Page Ref: 37
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
9) The end of the Cold War in 1989 hindered the forces of market liberalization in Eastern Europe.
Answer: FALSE
Diff: 2 Page Ref: 37
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
10) Industrialization implies that emerging market countries are increasing their dependence on low-cost labor.
Answer: FALSE
Diff: 1 Page Ref: 37
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
11) Technological advances have helped make internationalization affordable for all sizes of firms.
Answer: TRUE
Diff: 2 Page Ref: 40
Skill: Concept
Objective: 2-5
AACSB: Dynamics of the global economy; Use of information technology
12) China's consumer market is generally resistant to purchasing technologically advanced products.
Answer: FALSE
Diff: 2 Page Ref: 41
Skill: Concept
Objective: 2-5
AACSB: Dynamics of the global economy; Use of information technology
13) The rate of speed at which nations integrate into the global economy is relatively consistent, regardless of income level.
Answer: FALSE
Diff: 3 Page Ref: 44
Skill: Concept
Objective: 2-6
AACSB: Dynamics of the global economy
14) Globalization has led buyers to become more demanding and to shop for the best value worldwide.
Answer: TRUE
Diff: 2 Page Ref: 52
Skill: Concept
Objective: 2-7
AACSB: Dynamics of the global economy
15) The first phase of globalization was characterized by which of the following?
A) the rise of steel production
B) the growth of railroads
C) the spread of electricity
D) the rise of SMEs
Answer: B
Diff: 1 Page Ref: 31-32
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
16) The third phase of globalization was triggered by ______.
A) the end of World War II
B) the invention of electricity
C) the end of World War I
D) economic growth in emerging markets
Answer: A
Diff: 2 Page Ref: 32
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
17) Multinational firms first emerged in which phase of globalization?
A) first
B) second
C) third
D) fourth
Answer: B
Diff: 2 Page Ref: 32
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
18) Which of the following reflects the major contribution of GATT to globalization?
A) strict controls on international currencies
B) worldwide economic downturn
C) reduction of barriers to international trade
D) advent of new communications technology
Answer: C
Diff: 2 Page Ref: 32
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
19) The most recent phase of globalization is characterized by which of the following?
A) rise of multinational companies from Japan
B) reduction of barriers to trade by Western industrialized countries
C) trade of commodities by trading companies
D) enormous growth of cross-border trade and investment
Answer: D
Diff: 2 Page Ref: 33
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
20) Over time, the GATT evolved into which of the following?
A) World Bank
B) International Monetary Fund
C) World Trade Organization
D) NAFTA
Answer: C
Diff: 1 Page Ref: 33
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
21) In the third phase of globalization, multinational firms originated from all of the following except ______.
A) United States
B) Japan
C) Western Europe
D) Brazil
Answer: D
Diff: 1 Page Ref: 33
Skill: Concept
Objective: 2-1
AACSB: Dynamics of the global economy
22) Firms that are more successful at global competition display each of the following qualities except ______.
A) identifying foreign market opportunities aggressively
B) approaching internationalization from a reactive standpoint
C) actively pursuing partnerships with foreign firms
D) focusing intensively on building organizational capacities
Answer: B
Diff: 3 Page Ref: 34
Skill: Concept
Objective: 2-2
AACSB: Dynamics of the global economy
23) Value-chain activities are defined as which of the following?
A) the methods through which governments promote economic integration
B) the aggregate activities of internationally active firms
C) the process of designing a product for a global market
D) the sequence of value-adding activities performed by a firm
Answer: D
Diff: 2 Page Ref: 35
Skill: Concept
Objective: 2-3
AACSB: Dynamics of the global economy
24) A regional economic integration bloc is characterized by all of the following except ______.
A) the reduction of investment flows among members
B) the implementation of common business regulations
C) jointly harmonized fiscal and monetary policies
D) the reduction of trade barriers among members
Answer: A
Diff: 2 Page Ref: 36
Skill: Application
Objective: 2-3
AACSB: Dynamics of the global economy
25) All of the following represent examples of regional economic integration blocs except ______.
A) World Trade Organization
B) European Union
C) Mercosur
D) NAFTA
Answer: A
Diff: 2 Page Ref: 35
Skill: Application
Objective: 2-3
AACSB: Dynamics of the global economy
26) The free movement of capital around the world is known by which of the following terms?
A) bond-based debt financing
B) regional economic integration
C) the globalization of capital
D) common market arrangements
Answer: C
Diff: 1 Page Ref: 36
Skill: Concept
Objective: 2-3
AACSB: Dynamics of the global economy
27) Global firms shift their manufacturing and procurement to foreign locations in order to ______.
A) avoid the pressures of global competition
B) benefit from low labor costs
C) reduce the impact of regional recessions
D) avoid oversight by international agencies
Answer: B
Diff: 2 Page Ref: 36
Skill: Concept
Objective: 2-3
AACSB: Dynamics of the global economy
28) Which of the following is not a driver of market globalization?
A) market liberalization
B) technological advances
C) increased import tariffs
D) economic development
Answer: C
Diff: 2 Page Ref: 37
Skill: Application
Objective: 2-4
AACSB: Dynamics of the global economy
29) Reduction in trade barriers is associated with the emergence of which of the following?
A) Japan's transition to a command economy
B) regional economic integration blocs
C) member defection from the WTO
D) violation of GATT provisions
Answer: B
Diff: 2 Page Ref: 37
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
30) The end of the Cold War was signaled by each of the following except ______.
A) the collapse of the Soviet Union's economy
B) the tearing down of the Berlin Wall
C) free market reforms in China
D) China's move to join the WTO
Answer: D
Diff: 2 Page Ref: 37
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
31) At the time of the Berlin Wall collapse, which of the following countries had not already embarked on a program of market-based reforms?
A) India
B) Indonesia
C) South Korea
D) Malaysia
Answer: A
Diff: 1 Page Ref: 37
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
32) Which of the following countries has the lowest gross national income (GNI) per person?
A) Norway
B) Germany
C) India
D) Canada
Answer: C
Diff: 1 Page Ref: 38-39
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
33) Which of the following drivers of market globalization enables firms to engage in foreign currency transactions?
A) economic development
B) integration of world financial markets
C) market liberalization
D) reduction of barriers to investment
Answer: B
Diff: 1 Page Ref: 37
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
34) ______is a financial network through which individuals can transfer money to individual recipients in other countries.
A) International Monetary Fund
B) GNI
C) SWIFT
D) Vodafone
Answer: C
Diff: 2 Page Ref: 37
Skill: Concept
Objective: 2-4
AACSB: Dynamics of the global economy
35) Technological leapfrogging is defined as which of the following?
A) combining analog and digital technologies in the same product
B) adopting new technology as soon as it is released
C) bypassing certain stages of technology when upgrading to new products
D) waiting to sell new technology until it has proven market success
Answer: C
Diff: 2 Page Ref: 40
Skill: Concept
Objective: 2-5
AACSB: Dynamics of the global economy; Use of information technology
36) Which of the following countries are considered to be the beachheads of technological advances?
A) Japan and China
B) Hungary and Poland
C) Brazil and Mexico
D) China and India
Answer: D
Diff: 1 Page Ref: 41
Skill: Concept
Objective: 2-5
AACSB: Dynamics of the global economy; Use of information technology
37) Technological advances have had their greatest impact in all of the following areas except ______.
A) manufacturing
B) financial services
C) transportation
D) communications
Answer: B
Diff: 2 Page Ref: 41
Skill: Concept
Objective: 2-5
AACSB: Dynamics of the global economy; Use of information technology
38) Which of the following is the most transformative technology for developing economies?
A) cell phone
B) Internet
C) extranet
D) e-mail
Answer: A
Diff: 1 Page Ref: 42
Skill: Concept
Objective: 2-5
AACSB: Dynamics of the global economy; Use of information technology
39) Which of the following has the fastest growth rate of cellular phone subscribers in the world?
A) Europe
B) North America
C) Africa
D) Asia
Answer: C
Diff: 1 Page Ref: 42
Skill: Concept
Objective: 2-5
AACSB: Dynamics of the global economy; Use of information technology
40) The ability of a nation to govern its own affairs is known as ______.
A) sovereignty
B) liberalization
C) interdependence
D) homogenization
Answer: A
Diff: 1 Page Ref: 45
Skill: Concept
Objective: 2-6
AACSB: Dynamics of the global economy
41) Which of the following terms refers to the relocation of manufacturing and other value-chain activities to cost-effective locations abroad?
A) protectionism
B) cultural imperialism
C) labor migration
D) offshoring
Answer: D
Diff: 2 Page Ref: 46
Skill: Concept
Objective: 2-6
AACSB: Dynamics of the global economy
42) Each of the following represents a firm-level consequence of market globalization except ______.
A) firms must proactively internationalize to reduce potential threats
B) firms must deal with new business risks
C) an international focus is viable only in certain industries
D) firms must manage intense rivalry from foreign competitors
Answer: C
Diff: 2 Page Ref: 52
Skill: Application
Objective: 2-7
AACSB: Dynamics of the global economy
43) Highly advanced internationalizing firms seek a simultaneous presence in which of the following trading regions?
A) North America, Europe, and Asia
B) North America, Africa, and Central America
C) Eastern Europe, Australia, and North America
D) Asia, Europe, and South America
Answer: A
Diff: 1 Page Ref: 52
Skill: Concept
Objective: 2-7
AACSB: Dynamics of the global economy
44) The most direct firm-level consequence of market globalization affects which of the following?
A) the firm's global sourcing contracts
B) the offshoring potential of particular activities
C) research and development costs faced by the firm
D) the firm's entire value chain
Answer: D
Diff: 3 Page Ref: 52
Skill: Concept
Objective: 2-7
AACSB: Dynamics of the global economy
45) Which stage comes before procurement in a firm's value chain?
A) research & development
B) marketing
C) manufacturing
D) distribution
Answer: A
Diff: 1 Page Ref: 53
Skill: Concept
Objective: 2-7
AACSB: Dynamics of the global economy
46) Which of the following represents the final stage in a firm's value chain?
A) marketing
B) procurement (sourcing)
C) research & development
D) distribution & after-sales service
Answer: D
Diff: 1 Page Ref: 53
Skill: Concept
Objective: 2-7
AACSB: Dynamics of the global economy
Internationalization Conference (Scenario)
At a conference on business internationalization strategies, representatives of three different businesses meet to discuss a joint venture between their companies. Business A is located in a country that internationalized during the second phase of globalization. Business B is based in a country that internationalized during the third phase of globalization. Business C is located in an emerging market country.
47) The representative from Business A is most likely from which of the following countries?
A) China
B) United Kingdom
C) Mexico
D) Brazil
Answer: B
Diff: 2 Page Ref: 32
Skill: Application
Objective: 2-1
AACSB: Dynamics of the global economy
48) The representative from Business B is most likely from which of the following countries?