Exam
Name___________________________________

MULTIPLE CHOICE.  Choose the one alternative that best completes the statement or answers the question. 

1) 

Paris is the host of the Olympic Games in the year ________. 

1) 

_______ 

A) 

2000 

B) 

2004 

C) 

2006 

D) 

2008 

E) 

2012 

2) 

________ was recognized for widespread unethical behaviors in its bid for the Olympic games. 

2) 

_______ 

A) 

Beijing 

B) 

Atlanta 

C) 

Sydney 

D) 

Salt Lake City 

E) 

None of the above 

3) 

The IOC is based in ________. 

3) 

_______ 

A) 

Greece 

B) 

Switzerland 

C) 

Germany 

D) 

United States 

E) 

Austria 

4) 

Which of the following is not one of the decisions made by the IOC concerning the Olympics? 

4) 

_______ 

A) 

location 

B) 

sports included 

C) 

selection of referees 

D) 

selection of judges 

E) 

All are decisions made by the IOC. 

5) 

The fee for "worldwide partner" sponsorship of the Olympics is ________ according to the text. 

5) 

_______ 

A) 

$25-35 million 

B) 

$55-70 million 

C) 

$60-80 million 

D) 

$80-100 million 

E) 

more than $100 million 

6) 

Which of the following brands is not a worldwide partner in the Olympics? 

6) 

_______ 

A) 

Coca-Cola 

B) 

Olympus 

C) 

Samsung 

D) 

Kodak 

E) 

Panasonic 

7) 

Olympic sponsorship is best suited for which type of companies? 

7) 

_______ 

A) 

retailers 

B) 

companies in the field of sports 

C) 

companies pursuing a worldwide market 

D) 

companies selling technological goods 

E) 

companies pursuing a niche market 

8) 

Coca-Cola benefits from its sponsorship of the Olympics because ________. 

8) 

_______ 

A) 

it pursues a worldwide market 

B) 

it sells high-tech products 

C) 

it pursues a niche market 

D) 

people drink more at sports events 

E) 

none of the above 

9) 

Cities wishing to host the Olympic Games must do all of the following except ________. 

9) 

_______ 

A) 

develop a volunteer workforce 

B) 

build high-speed rail links between event cities 

C) 

generate organizational support 

D) 

make substantial facilities commitments 

E) 

give elaborate presentations to the IOC 

10) 

Which of the following is not a benefit accruing to Olympic host cities? 

10) 

______ 

A) 

greater economic growth 

B) 

an improved city infrastructure 

C) 

the rationale to build high-speed rail links between cities 

D) 

increased tourism 

E) 

the opportunity to be in the international spotlight 

11) 

________ consist(s) of business transactions between parties from more than one country. 

11) 

______ 

A) 

Global ventures 

B) 

Currency exports 

C) 

Domestic business 

D) 

International business 

E) 

None of the above 

12) 

Which of the following is not an example of an international business transaction? 

12) 

______ 

A) 

borrowing money from one bank to finance capital improvements 

B) 

building a plant in a foreign country to capitalize on lower labor costs 

C) 

purchasing products in one country and assembling them in another 

D) 

buying materials in one country and shipping them to another for processing 

E) 

shipping finished products from one country to another for retail sale 

13) 

Which of the following are reasons that international business differs from domestic business? 

13) 

______ 

A) 

legal systems 

B) 

resources 

C) 

currencies 

D) 

cultures 

E) 

all of the above 

14) 

Which of the following is not a reason that international business is different from domestic business? 

14) 

______ 

A) 

One party will probably have to convert its currency into another. 

B) 

International transactions are typically significantly larger than domestic transactions. 

C) 

Differing legal systems might require one party to adapt to local laws. 

D) 

Products may be produced in different ways depending on resource availability in each country. 

E) 

Behavior may need to be adjusted to fit in with differing cultures. 

15) 

One reason it is important to study international business is ________. 

15) 

______ 

A) 

countries such as China are growing 

B) 

the United States relies on exports for its economic livelihood 

C) 

imports 

D) 

most transactions are now international 

E) 

you might work for a company that is headquartered in another country 

16) 

The number of Americans working for U.S. affiliates of foreign-owned corporations is about ________. 

16) 

______ 

A) 

1 million 

B) 

2 million 

C) 

3 million 

D) 

4 million 

E) 

5 million 

17) 

Small businesses are more involved in international business for all of the following reasons except ________. 

17) 

______ 

A) 

competitors may be from foreign markets 

B) 

it allows the small business to avoid head-to-head competition with large firms 

C) 

the small business may use foreign-made materials 

D) 

the market for the product could be overseas 

E) 

e-commerce has facilitated their entry into international markets 

18) 

Just-in-time systems were created in ________. 

18) 

______ 

A) 

Japan 

B) 

Germany 

C) 

the United States 

D) 

Great Britain 

E) 

China 

19) 

JIT stands for ________. 

19) 

______ 

A) 

Japanese information technology 

B) 

an inventory management technique 

C) 

just-in-time 

D) 

A and C 

E) 

none of the above 

20) 

JIT is a type of ________ system. 

20) 

______ 

A) 

inventory management 

B) 

warehousing 

C) 

manufacturing 

D) 

computer 

E) 

human resource 

21) 

If a firm has suppliers who deliver necessary inputs just as they are needed, the firm is probably using ________. 

21) 

______ 

A) 

on-demand delivery 

B) 

MTT 

C) 

LLC 

D) 

inventory management 

E) 

JIT 

22) 

________ is the selling of products made in one's own country for use or resale in other countries. 

22) 

______ 

A) 

Trading 

B) 

Merchandising 

C) 

Exporting 

D) 

Importing 

E) 

Transporting 

23) 

Black and Decker produces tools at a plant in North Carolina and ships the tools to retailers in England. This is an example of which type of international business activity? 

23) 

______ 

A) 

importing 

B) 

exporting 

C) 

merchandising 

D) 

trading 

E) 

transporting 

24) 

________ is the buying of products made in other countries for use or resale in one's own country. 

24) 

______ 

A) 

Importing 

B) 

Exporting 

C) 

Merchandising 

D) 

Trading 

E) 

Transporting 

25) 

Sam's Club purchases kalamata olives from Greece for sale in its stores. Which international business activity does this represent? 

25) 

______ 

A) 

merchandising 

B) 

exporting 

C) 

trading 

D) 

importing 

E) 

transporting 

26) 

The British term for the trading of tangible goods is ________. 

26) 

______ 

A) 

invisible trade 

B) 

merchandise exports/imports 

C) 

visible trade 

D) 

service exports/imports 

E) 

none of the above 

27) 

The British term for the trading of intangible goods is ________. 

27) 

______ 

A) 

invisible trade 

B) 

merchandise exports/imports 

C) 

service exports/imports 

D) 

visible trade 

E) 

none of the above 

28) 

Trade in products such as clothing, computers, and raw materials is known as ________. 

28) 

______ 

A) 

forward trade 

B) 

merchandise imports and exports 

C) 

intangible trade 

D) 

invisible trade 

E) 

inverse trade 

29) 

Trade in services such as banking, travel, and accounting is known as ________. 

29) 

______ 

A) 

tangible trade 

B) 

hollow trade 

C) 

reverse trade 

D) 

visible trade 

E) 

service imports and exports 

30) 

Boeing sells commercial aircraft to Lufthansa in Germany. This is an example of ________. 

30) 

______ 

A) 

importing 

B) 

merchandising 

C) 

trading 

D) 

transporting 

E) 

exporting 

31) 

Trade in goods includes products such as ________. 

31) 

______ 

A) 

clothing 

B) 

travel 

C) 

accounting 

D) 

banking 

E) 

all of the above 

32) 

Trade in services includes all of the following except ________. 

32) 

______ 

A) 

travel 

B) 

accounting 

C) 

banking 

D) 

clothing 

E) 

all of the above 

33) 

The international business activity called ________ occurs when capital is supplied by residents of one country to residents of another country. 

33) 

______ 

A) 

international investment 

B) 

financial insurance 

C) 

foreign direct investment 

D) 

capitalism 

E) 

portfolio investment 

34) 

________ are investments made for the purpose of actively controlling property, assets, or companies located in host countries. 

34) 

______ 

A) 

Indirect investments 

B) 

Financial assets 

C) 

Portfolio investments 

D) 

Foreign direct investments 

E) 

International bonds 

35) 

________ is where the parent company's headquarters is located. 

35) 

______ 

A) 

The United States 

B) 

Parental country 

C) 

Home country 

D) 

Host country 

E) 

None of the above 

36) 

If a company is headquartered in Taiwan, then Taiwan is the company's ________. 

36) 

______ 

A) 

dominant country 

B) 

home country 

C) 

focus country 

D) 

competitive country 

E) 

host country 

37) 

Ford Motor Company is based in Detroit, Michigan. It also has offices in Germany, England, and China. ________ is the home country. 

37) 

______ 

A) 

England 

B) 

The United States 

C) 

Germany 

D) 

China 

E) 

All are home countries for Ford Motor Company. 

38) 

________ is where a company operates but is not headquartered. 

38) 

______ 

A) 

Home country 

B) 

Parental country 

C) 

European Union 

D) 

Host country 

E) 

None of the above 

39) 

Siemens is headquartered in Germany but maintains operations in the United States. The United States is the ________ country. 

39) 

______ 

A) 

parent 

B) 

subsidiary 

C) 

home 

D) 

host 

E) 

none of the above 

40) 

________ are purchases of foreign financial assets for a purpose other than control. 

40) 

______ 

A) 

Indirect investments 

B) 

International stocks 

C) 

Bonds 

D) 

Portfolio investments 

E) 

Foreign direct investments 

41) 

If a Dutch pension fund purchases 1,000 shares of Nissan's stock, the Dutch company has ________. 

41) 

______ 

A) 

made a foreign direct investment 

B) 

diversified its risk 

C) 

earned a higher return on assets 

D) 

earned a lower rate of return 

E) 

made a portfolio investment 

42) 

Which country has the highest level of exports as a percentage of GDP according to the text? 

42) 

______ 

A) 

the United States 

B) 

Japan 

C) 

the Netherlands 

D) 

Indonesia 

E) 

Mexico 

43) 

Compared to the Netherlands, the United States has a ________ level of exports of goods and services as a percentage of GDP. 

43) 

______ 

A) 

higher 

B) 

comparable 

C) 

similar 

D) 

significantly higher 

E) 

lower 

44) 

Ford Motor Company purchased all of the common stock of Sweden's Volvo Corporation. This is an example of ________. 

44) 

______ 

A) 

corporate takeover 

B) 

licensing 

C) 

foreign direct investment 

D) 

international expansion 

E) 

portfolio investment 

45) 

McDonald's has licensed its brand name, operational systems, and trademarks to individual restaurant owners in Europe. This is called ________. 

45) 

______ 

A) 

expanding 

B) 

renting 

C) 

contracting 

D) 

franchising 

E) 

leasing 

46) 

________ is a contractual arrangement in which a firm in one country licenses the use of its intellectual property to a firm in a second country, in return for a royalty payment. 

46) 

______ 

A) 

Renting 

B) 

Royalty expansion 

C) 

Leasing 

D) 

Licensing 

E) 

Franchising 

47) 

Licensing usually involves permission to use ________. 

47) 

______ 

A) 

trademarks 

B) 

brand names 

C) 

patents 

D) 

copyrights 

E) 

all of the above 

48) 

Walt Disney permits a German clothing manufacturer to market children's pajamas embroidered with Mickey Mouse in return for a percentage of company sales. This is an example of ________. 

48) 

______ 

A) 

leasing 

B) 

franchising 

C) 

piracy 

D) 

licensing 

E) 

royalty expansion 

49) 

McDonald's has grown worldwide through ________. 

49) 

______ 

A) 

licensing 

B) 

portfolio investment 

C) 

franchising 

D) 

management contracts 

E) 

leasing 

50) 

A(n) ________ is an agreement wherein a firm in one country agrees to operate facilities or provide other management services to a firm in another country for an agreed-upon fee. 

50) 

______ 

A) 

indirect investment 

B) 

licensing agreement 

C) 

franchising agreement 

D) 

portfolio investment 

E) 

management contract 

51) 

KFC has restaurants in South Korea, China, and Japan. What type of arrangement is most likely used by KFC and the restaurant owners? 

51) 

______ 

A) 

indirect investment 

B) 

licensing agreement 

C) 

franchising agreement 

D) 

management contract 

E) 

portfolio investment 

52) 

________ are common among hoteliers such as Marriott and Hilton. 

52) 

______ 

A) 

Portfolio investments 

B) 

Management contracts 

C) 

Franchises 

D) 

Licensing agreements 

E) 

Indirect investments 

53) 

In 2005, ________ was considered the world's largest corporation. 

53) 

______ 

A) 

McDonald's 

B) 

ExxonMobil 

C) 

Nike 

D) 

Wal-Mart 

E) 

Coca-Cola 

54) 

The top three worldwide corporations according to revenue figures are all based in ________. 

54) 

______ 

A) 

Germany 

B) 

France 

C) 

the European Union 

D) 

Canada 

E) 

the United States 

55) 

Any organization that engages in cross-border commercial transactions with individuals, private firms, and/or public sector organizations ________. 

55) 

______ 

A) 

is an international business 

B) 

has foreign direct investment 

C) 

is a multinational corporation 

D) 

is involved in management contracts 

E) 

is a global firm 

56) 

The term ________ is used to identify firms that have extensive involvement in international business. 

56) 

______ 

A) 

multidomestic organization 

B) 

multinational corporation 

C) 

global 

D) 

international conglomerate 

E) 

all of the above 

57) 

MNC stands for ________. 

57) 

______ 

A) 

multinational contracts 

B) 

multinational corporation 

C) 

mining national copper 

D) 

manufacturing news contracts 

E) 

none of the above 

58) 

Which of the following is not a common activity of MNCs? 

58) 

______ 

A) 

creating goods and/or services in a variety of countries 

B) 

buying resources in various countries 

C) 

owning and controlling foreign assets 

D) 

selling goods and/or services in various countries 

E) 

All are activities of MNCs. 

59) 

Nike, ExxonMobil, Mitsubishi, and Volkswagen are all examples of ________. 

59) 

______ 

A) 

firms that engage in franchises 

B) 

multinational companies 

C) 

portfolio investments 

D) 

firms that engage in licensing 

E) 

management contracts 

60) 

International nonprofit organizations are called ________. 

60) 

______ 

A) 

multinational corporations 

B) 

multinational enterprises 

C) 

multinational non-profits 

D) 

multinational organizations 

E) 

none of the above 

61) 

The integration of markets, nation-states, and technologies in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before is referred to as ________. 

61) 

______ 

A) 

economic integration 

B) 

international business 

C) 

globalization 

D) 

the internationalization of markets 

E) 

a borderless world 

62) 

The ratio of international trade to economic activity has ________ in recent years. 

62) 

______ 

A) 

risen slightly 

B) 

fallen significantly 

C) 

remained about the same 

D) 

risen dramatically 

E) 

fallen slightly 

63) 

The importance of foreign direct investment in the world's economy has ________ over time. 

63) 

______ 

A) 

fallen slightly 

B) 

fallen significantly 

C) 

remained about the same 

D) 

risen slightly 

E) 

risen significantly 

64) 

Which of the following is not a basic motive for firms to become more global? 

64) 

______ 

A) 

access to new markets 

B) 

acquisition of resources 

C) 

leverage of core competencies 

D) 

ability to compete 

E) 

All are basic motives for globalization. 

65) 

Nokia's expansion of its operations and sales outside Finland is an example of which strategic imperative? 

65) 

______ 

A) 

acquisition of resources 

B) 

access to new markets 

C) 

leverage of core competencies 

D) 

all of the above 

E) 

none of the above 

66) 

Access to cheap labor can be categorized as ________. 

66) 

______ 

A) 

leverage of core competencies 

B) 

access to new markets 

C) 

acquisition of resources 

D) 

all of the above 

E) 

none of the above 

67) 

Which of the following is the likely motive for Procter & Gamble's move into China? 

67) 

______ 

A) 

leverage of core competencies 

B) 

access to new markets 

C) 

acquisition of resources 

D) 

ability to compete 

E) 

All are basic motives for globalization. 

68) 

________ is a distinctive strength that is central to a firm's operations. 

68) 

______ 

A) 

Differential advantage 

B) 

Core competency 

C) 

Strategic imperative 

D) 

Distinctive advantage 

E) 

Global advantage 

69) 

Singapore Airlines' ________ is its award-winning standards of customer satisfaction. 

69) 

______ 

A) 

core competency 

B) 

differential advantage 

C) 

strategic imperative 

D) 

distinctive advantage 

E) 

global advantage 

70) 

Which of the following is not one of the benefits of acquiring resources and supplies in other countries? 

70) 

______ 

A) 

access to scarce items 

B) 

access to items unavailable in home country 

C) 

access to cheaper resources 

D) 

increased shipping costs 

E) 

All are benefits of acquiring resources from other countries. 

71) 

Which of the following is not one of the benefits for seeking new markets? 

71) 

______ 

A) 

economies of scale 

B) 

increased dependence on sales in home country 

C) 

access to new customers 

D) 

diversification of revenue stream 

E) 

All are benefits of seeking new markets. 

72) 

Pepsi's strategic imperative for following its rival Coca-Cola to new markets is referred to as ________. 

72) 

______ 

A) 

seeking new markets 

B) 

better competing with rivals 

C) 

globalization 

D) 

leveraging core competence 

E) 

acquiring resources and supplies 

73) 

After World War I, international business was restricted by ________. 

73) 

______ 

A) 

lack of transportation 

B) 

export barriers 

C) 

government supply contracts 

D) 

import barriers 

E) 

all of the above 

74) 

International business was encouraged by the ________ following World War II. 

74) 

______ 

A) 

minimization of high-quality Japanese goods in the marketplace 

B) 

reduced tariffs and quotas 

C) 

improved transportation options 

D) 

introduction of the Euro 

E) 

all of the above 

75) 

Influential regional trading accords include all of the following except ________. 

75) 

______ 

A) 

NAFTA 

B) 

WTO 

C) 

Mercosur 

D) 

EU 

E) 

GATT 

76) 

Advances in communications technology include all of the following except ________. 

76) 

______ 

A) 

information processing via computer 

B) 

facsimile transmission 

C) 

Web access 

D) 

electronic mail 

E) 

none of the above 

77) 

Countries whose recent growth or prospects for future growth exceed that of traditional markets such as Western Europe are known as ________. 

77) 

______ 

A) 

the Second World 

B) 

newly growing markets 

C) 

newly developing economies 

D) 

high growth markets 

E) 

emerging economies 

78) 

Mexico and Poland are examples of ________. 

78) 

______ 

A) 

First World economies 

B) 

Second World economies 

C) 

low growth markets 

D) 

traditional markets 

E) 

emerging economies 

TRUE/FALSE.  Write 'T' if the statement is true and 'F' if the statement is false. 

79) 

The Olympic Games obtain revenue through the sale of broadcast rights. 

79) 

______ 

80) 

Hosting the Olympics creates a financial hardship on that city. 

80) 

______ 

81) 

The highest profile level in corporate sponsorship of the Olympics is that of worldwide partner. 

81) 

______ 

82) 

Coca-Cola paid $60 million above its partnership fee for television advertising during the Olympics. 

82) 

______ 

83) 

The primary benefit of worldwide partnership is the right to use the Olympic logo on all advertising by the sponsor. 

83) 

______ 

84) 

One of the benefits of studying international business is the development of cultural literacy. 

84) 

______ 

85) 

Business transactions between parties from more than one country are known as international business. 

85) 

______ 

86) 

Borrowing from a bank in one country to finance operations in another is not an example of international business. 

86) 

______ 

87) 

International business is more complex than domestic business. 

87) 

______ 

88) 

Since English is the common language of international business it is not necessary for Americans and other English speakers to be familiar with cultural, legal, political, and social differences between countries. 

88) 

______ 

89) 

Small businesses are usually not involved in international business. 

89) 

______ 

90) 

It is important to study international business because you may work for a firm that is owned by a corporation that is headquartered in another country. 

90) 

______ 

91) 

The Internet has facilitated that entry of small businesses into international markets. 

91) 

______ 

92) 

JIT was created in the United States. 

92) 

______ 

93) 

Selling products made in one's own country for use or resale in other countries is known as importing. 

93) 

______ 

94) 

Exports are relatively unimportant to the Netherlands. 

94) 

______ 

95) 

The desire for control is the primary difference between foreign direct investments and portfolio investments. 

95) 

______ 

96) 

Licensing occurs when a firm in one country authorizes a firm in a second country to utilize its operating systems as well as its brand names, trademarks, and logos in return for a royalty payment. 

96) 

______ 

97) 

Management contracts are common in the international hotel industry. 

97) 

______ 

98) 

Exporting is often critical to a country's financial health. 

98) 

______ 

99) 

The British call merchandise exports and imports visible trade. 

99) 

______ 

100) 

The British call service exports and imports intangible trade. 

100) 

_____ 

101) 

The home country is where a foreign firm operates. 

101) 

_____ 

102) 

Exports make up a significant portion of GDP for well-developed countries. 

102) 

_____ 

103) 

MNO stands for multinational operations. 

103) 

_____ 

104) 

The IOC is a multinational enterprise. 

104) 

_____ 

105) 

The ratio of international trade to economic activity has been falling steadily in recent years. 

105) 

_____ 

106) 

Pepsi has chosen not to participate in foreign markets because of Coca-Cola's aggressive marketing. 

106) 

_____ 

107) 

Firms that enter new markets can benefit from economies of scale and diversified revenue streams. 

107) 

_____ 

108) 

The World Trade Organization is the successor to the General Agreement on Tariffs and Trade. 

108) 

_____ 

109) 

Trade agreements increase trade barriers among country members. 

109) 

_____ 

110) 

Globalization has allowed firms to expand into markets that, until recently, were insulated from the international marketplace. 

110) 

_____ 

111) 

Emerging markets include countries such as the United States and Britain that are leading the globalization charge. 

111) 

_____ 

112) 

Many companies attribute much of their sales and profit growth to emerging economies. 

112) 

_____ 

SHORT ANSWER.  Write the word or phrase that best completes each statement or answers the question. 

113) 

What is the name of the organization that governs the Olympic games? 

113)  

____________ 

114) 

Explain the meaning of the term cultural literacy. 

114)  

____________ 

115) 

What is the difference between exporting and importing? 

115)  

____________ 

116) 

What was the largest corporation in the world in 2005? 

116)  

____________ 

117) 

What is a portfolio investment? How does it differ from foreign direct investments? 

117)  

____________ 

118) 

Into what two categories can international investments be divided? 

118)  

____________ 

119) 

What is the simplest form of international business activity? 

119)  

____________ 

120) 

Control is the primary difference between what two forms of international investments? 

120)  

____________ 

121) 

Explain the difference between licensing and franchising. 

121)  

____________ 

122) 

Explain the difference among the terms multinational corporation, multinational enterprise, and multinational organization. 

122)  

____________ 

123) 

What is globalization? 

123)  

____________ 

124) 

Explain the various activities undertaken by MNCs. 

124)  

____________ 

125) 

Why are companies willing to pay millions of dollars to be an Olympic sponsor? 

125)  

____________ 

126) 

Why do cities compete for the privilege of hosting the Olympic Games? 

126)  

____________ 

127) 

Why are small businesses becoming more involved in international business? 

127)  

____________ 

128) 

Explain the meaning of the term core competency. 

128)  

____________ 

ESSAY.  Write your answer in the space provided or on a separate sheet of paper. 

129) 

International business differs from domestic business in several ways. Identify at least four of these differences and describe their implications for companies. 

130) 

Why is it important for business students to study international business? 

131) 

Why is it easier than ever for small businesses to be part of the global economy? 

132) 

Licensing, franchising, and management contracts are all forms of international business activity. Using examples, briefly define each form. What are the advantages and disadvantages of using these forms of activity? 

133) 

Why is international business activity expected to grow rapidly during the next decade? 

134) 

Name the two primary types of international investments. Describe the primary difference between them. 

135) 

Discuss the basic motives that have forced firms to become more global in their orientations and actions. 

 

1) 

E 

2) 

D 

3) 

B 

4) 

E 

5) 

B 

6) 

B 

7) 

C 

8) 

A 

9) 

B 

10) 

C 

11) 

D 

12) 

A 

13) 

E 

14) 

B 

15) 

E 

16) 

E 

17) 

B 

18) 

A 

19) 

C 

20) 

A 

21) 

E 

22) 

C 

23) 

B 

24) 

A 

25) 

D 

26) 

C 

27) 

A 

28) 

B 

29) 

E 

30) 

E 

31) 

A 

32) 

D 

33) 

A 

34) 

D 

35) 

C 

36) 

B 

37) 

B 

38) 

D 

39) 

D 

40) 

D 

41) 

E 

42) 

C 

43) 

E 

44) 

C 

45) 

D 

46) 

D 

47) 

E 

48) 

D 

49) 

C 

50) 

E 

51) 

C 

52) 

B 

53) 

B 

54) 

E 

55) 

A 

56) 

B 

57) 

B 

58) 

E 

59) 

B 

60) 

D 

61) 

C 

62) 

D 

63) 

E 

64) 

E 

65) 

C 

66) 

C 

67) 

B 

68) 

B 

69) 

A 

70) 

D 

71) 

B 

72) 

B 

73) 

D 

74) 

B 

75) 

E 

76) 

A 

77) 

E 

78) 

E 

79) 

TRUE 

80) 

FALSE 

81) 

TRUE 

82) 

TRUE 

83) 

FALSE 

84) 

TRUE 

85) 

TRUE 

86) 

FALSE 

87) 

TRUE 

88) 

FALSE 

89) 

FALSE 

90) 

TRUE 

91) 

TRUE 

92) 

FALSE 

93) 

FALSE 

94) 

FALSE 

95) 

TRUE 

96) 

FALSE 

97) 

TRUE 

98) 

TRUE 

99) 

TRUE 

100) 

FALSE 

101) 

FALSE 

102) 

TRUE 

103) 

FALSE 

104) 

FALSE 

105) 

FALSE 

106) 

FALSE 

107) 

TRUE 

108) 

TRUE 

109) 

FALSE 

110) 

TRUE 

111) 

FALSE 

112) 

TRUE 

113) 

International Olympic Committee (IOC). 

114) 

Cultural literacy refers to one's knowledge of other cultures. 

115) 

Exporting refers to products sent from the home country to other countries. Importing refers to products sent from other countries into the home country. 

116) 

The world's largest corporation in 2005 was ExxonMobil. 

117) 

Portfolio investment refers to investments made for reasons other than control (such as for an attractive rate of return). Foreign direct investment is investment for the purpose of control. 

118) 

International investments can be divided into portfolio investments and foreign direct investments. 

119) 

Exporting is the simplest form of international business. 

120) 

Control is the primary difference between portfolio investments and foreign direct investments. 

121) 

Licensing is a contractual arrangement in which a firm in one country licenses the use of its intellectual property to a firm in a second country in return for a royalty payment. Franchising is a specialized form of licensing which occurs when the franchisor authorizes the franchisee to utilize its operating system as well as its intellectual property. 

122) 

The difference is in the type of organization. A multinational corporation is an international for-profit company. Some large organizations are not actually corporations (such as accounting partnerships) and these are referred to as multinational enterprises. Multinational not-for-profits are referred to as multinational organizations. 

123) 

Globalization can be defined as the inexorable integration of markets, nation-states, and technologies in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before. 

124) 

MNCs buy resources in a variety of countries, create goods and services in a variety of countries, and sell those goods and services in a variety of countries. 

125) 

Because of the visibility, publicity, and goodwill generated from the sponsorship. 

126) 

Hosting the Olympics brings recognition and publicity to the city just as it does to a company brand name. In addition, the city benefits from increased travel, tourism, and investment by businesses supporting the Olympic games. 

127) 

Technology allows small businesses to have access to customers without the previous expense and investment. 

128) 

A core competency is a distinctive strength or advantage that is central to a firm's operations. 

129) 

The countries involved may use different currencies, requiring currency conversion and introducing exchange rate risk. Because the legal systems are different one or more parties must adjust their practices to comply with local laws. Cultural differences and the availability of resources affects production of various items and production methods. 

130) 

There are several reasons to study international business. Most large organizations will have international operations or be affected by the global economy. In addition, an understanding of international business will allow students to better assess career opportunities, interact more effectively with other managers, and keep pace with competitors. Furthermore, students may eventually work for a company headquartered in another country. Finally, small businesses are becoming more involved in international business. 

131) 

Many small businesses today can take advantage of opportunities in foreign markets that were previously closed to them. The Internet has in a sense leveled the playing field to some degree for small businesses. A good website allows companies to sell to consumers all over the world without the cost of developing a physical presence in each market. In addition, the Internet can allow companies to become more efficient in areas such as communication. 

132) 

Licensing is a contractual arrangement in which a firm in one country licenses the use of its intellectual property to a firm in a second country in exchange for royalty payments. Licensing occurs when Walt Disney allows a foreign company to use the Mickey Mouse image on clothing. Franchising is a specialized form of licensing. It occurs when a firm in one country authorizes a firm in a second country to utilize its operating system as well as its intellectual property in exchange for payments. McDonald's authorizes franchises around the globe. Management contracts involve an arrangement wherein a firm in one country operates facilities or provides other management services to a firm in another country for a fee. Hilton and Marriott utilize management contracts to operate overseas hotel properties. Each firm allows a company to earn fees for its assets (intellectual property, operating systems, and management services) while allowing another firm access to those assets. However, each allows the potential to create competition in another country by providing access to those assets. 

133) 

International business activity is expected to grow in the next decade because of strategic imperatives that motivate globalization, and environment changes that facilitate growth. 

134) 

The two types of international investments are foreign direct investment and portfolio investment. Foreign direct investment emphasizes control over assets while portfolio investment is investment for some purpose other than control. 

135) 

There are several strategic imperatives that have compelled companies to become more global in their actions and orientations including leveraging the firm's core competencies, acquiring resources at low cost, expanding into new markets, and competing with industry rivals.